-----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, S15eOuMegEfdy1yB7IlTi+AkPebQc6c4cmVgN+yaM3DG4UwLGPPE/yGdsTIfGJI/ 0uWZNKIjWvJ+VdWeqkLI2Q== 0000950172-03-002545.txt : 20030808 0000950172-03-002545.hdr.sgml : 20030808 20030808172143 ACCESSION NUMBER: 0000950172-03-002545 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030808 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030808 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03660 FILM NUMBER: 03832644 BUSINESS ADDRESS: STREET 1: OWENS CORNING WORLD HEADQUARTERS STREET 2: ONE OWENS CORNING PKWY 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 8-K 1 s422820.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ----------------------------------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 --------------------------------- Date of Report: August 8, 2003 (Date of earliest event reported) OWENS CORNING (Exact name of Registrant as specified in its charter) Delaware 1-3660 34-4323452 (State or Other Jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) One Owens Corning Parkway Toledo, Ohio 43659 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (419) 248-8000 ITEM 5. OTHER ITEMS AND REQUIRED FD DISCLOSURE As previously reported, on October 5, 2000, Owens Corning and certain of its United States subsidiaries (collectively, the "Debtors") filed voluntary petitions with the United States Bankruptcy Court for the District of Delaware (the "Court") seeking relief under Chapter 11 of the United States Bankruptcy Code. Also as previously reported: - On January 17, 2003, the Debtors, together with the Official Committee of Asbestos Claimants and the Legal Representative for the class of future asbestos claimants (collectively, the "Proponents"), filed with the Court a Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession. - On March 28, 2003, the Proponents filed with the Court an Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession (the "First Amended Plan") and a Disclosure Statement with respect to the First Amended Plan. - On May 23, 2003, the Proponents filed with the Court a Second Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession (the "Second Amended Plan") and a Disclosure Statement with respect to the Second Amended Plan. On August 8, 2003, the Proponents filed with the Court a Third Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession (the "Third Amended Plan"). A copy of the Third Amended Plan is being filed as Exhibit 2 to this Current Report on Form 8-K and is incorporated by reference herein. Also on August 8, 2003, the Proponents filed a Disclosure Statement with respect to the Third Amended Plan (the "Second Amended Disclosure Statement"). A copy of the Second Amended Disclosure Statement is being filed as Exhibit 99 to this Current Report on Form 8-K and is incorporated by reference herein. The Second Amended Disclosure Statement has been prepared in accordance with Section 1125 of the United States Bankruptcy Code and Rule 3016 of the Federal Rules of Bankruptcy Procedure and not in accordance with federal or state securities laws or other non-bankruptcy laws or regulations. The Second Amended Disclosure Statement has not been approved by the Court and is subject to amendment. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits. Exhibit Number Description - ------ ----------- 2 Third Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession 99 Disclosure Statement With Respect To Third Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors and Debtors-In-Possession SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Owens Corning has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. OWENS CORNING Date: August 8, 2003 By: /s/ Stephen K. Krull ---------------------- Name: Stephen K. Krull Title: Senior Vice President, General Counsel and Secretary EXHIBIT INDEX Exhibit Number Description - ------- ----------- 2 Third Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors And Debtors-In-Possession 99 Disclosure Statement With Respect To Third Amended Joint Plan Of Reorganization For Owens Corning And Its Affiliated Debtors and Debtors-In-Possession EX-2 3 s771445.txt EXHIBIT 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE - --------------------------------------------------- IN RE: ) ) Chapter 11 OWENS CORNING, et al., ) ) Case No. 00-03837 (JKF) ) Debtors. ) ) Jointly Administered ) ) - --------------------------------------------------- THIRD AMENDED JOINT PLAN OF REORGANIZATION FOR OWENS CORNING AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION SAUL EWING LLP SKADDEN, ARPS, SLATE, MEAGHER Norman L. Pernick (I.D. # 2290) & FLOM LLP J. Kate Stickles (I.D. # 2917) Ralph Arditi 222 Delaware Avenue D.J. Baker P.O. Box 1266 Four Times Square Wilmington, DE 19899-1266 New York, NY 10036-6522 (302) 421-6800 (212) 735-3000 Charles O. Monk, II Special Counsel to Debtors Jay A. Shulman and Debtors-in-Possession Edith K. Altice 100 South Charles Street COVINGTON & BURLING Baltimore, MD 21201-2773 1201 Pennsylvania Avenue, N.W. (410) 332-8600 Mitchell F. Dolin Anna P. Engh Adam H. Isenberg Washington, D.C. 20004-2401 MaryJo Bellew (202) 662-6000 Centre Square West 1500 Market Street, 38th Floor Special Insurance Counsel to Debtors Philadelphia, PA 19102-2186 and Debtors-in-Possession (215) 972-7777 Attorneys for the Debtors and Debtors-in-Possession KAYE SCHOLER LLP CAPLIN & DRYSDALE, CHARTERED Michael J. Crames Elihu Inselbuch Jane W. Parver 399 Park Avenue Andrew A. Kress New York, NY 10022 Edmund M. Emrich (212) 319-7125 425 Park Avenue New York, NY 10022 Peter Van N. Lockwood (212) 836-8000 Julie W. Davis One Thomas Circle, N.W. YOUNG, CONAWAY, Washington, D.C. 20005 STARGATT & TAYLOR LLP (202) 862-5000 James L. Patton, Jr. (I.D. # 2202) Edwin J. Harron (I.D. # 3396) CAMPBELL & LEVINE, LLC The Brandywine Building Marla Eskin (I.D. # 2989) 1000 West Street, 17th Floor Mark T. Hurford (I.D. # 3299) P.O. Box 391 800 King Street Wilmington, DE 19899-0391 Wilmington, DE 19801 (302) 571-6600 (302) 426-1900 (302) 426-1900 Attorneys for James J. McMonagle, Legal Representative for Future Claimants Attorneys for the Official Committee of Asbestos Claimants Dated as of: August 8, 2003
TABLE OF CONTENTS Page ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW.............................1 A. Scope of Definitions..........................................................................1 B. Definitions...................................................................................1 1.1 "$150 MILLION DEBENTURES"...........................................................1 1.2 "$250 MILLION NOTES"................................................................2 1.3 "$300 MILLION HIGH COUPON DEBENTURES"...............................................2 1.4 "$400 MILLION DEBENTURES"...........................................................2 1.5 "$550 MILLION TERM NOTES"...........................................................2 1.6 "130 MILLION DEM BEARER BONDS"......................................................2 1.7 "1997 CREDIT AGREEMENT".............................................................2 1.8 "ADMINISTRATIVE CLAIMS".............................................................2 1.9 "AFFILIATE".........................................................................3 1.10 "ALLOWED"...........................................................................3 1.11 "AMENDED AND RESTATED BYLAWS OF REORGANIZED OCD"....................................4 1.12 "AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF REORGANIZED OCD"..............5 1.13 "ASBESTOS CLAIMANTS' COMMITTEE".....................................................5 1.14 "ASBESTOS PERSONAL INJURY CLAIMS"...................................................5 1.15 "ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION"..........................5 1.16 "ASBESTOS PERSONAL INJURY TRUST"....................................................5 1.17 "ASBESTOS PERSONAL INJURY TRUST AGREEMENT"..........................................5 1.18 "ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES"............................5 1.19 "ASBESTOS PERSONAL INJURY TRUSTEES".................................................6 1.20 "AVAILABLE CASH"....................................................................6 1.21 "AVOIDANCE ACTIONS".................................................................6 1.22 "BALLOT"............................................................................6 1.23 "BALLOT DATE".......................................................................6 1.24 "BANK HOLDERS"......................................................................6 1.25 "BANK HOLDERS ACTION"...............................................................6 1.26 "BANK HOLDERS CLAIMS"...............................................................6 1.27 "BANKRUPTCY CODE"...................................................................6 1.28 "BANKRUPTCY COURT"..................................................................6 1.29 "BANKRUPTCY RULES"..................................................................7 1.30 "BOARD OF DIRECTORS"................................................................7 1.31 "BONDHOLDERS".......................................................................7 1.32 "BONDHOLDERS CLAIMS"................................................................7 1.33 "BUSINESS DAY"......................................................................7 1.34 "CASH"..............................................................................7 1.35 "CHAPTER 11"........................................................................7 1.36 "CHAPTER 11 CASES"..................................................................7 1.37 "CLAIM".............................................................................7 1.38 "CLAIMANT RELEASED PARTIES".........................................................7 1.39 "CLAIMS OBJECTION DEADLINE".........................................................7 1.40 "CLAIMS TRADING INJUNCTION".........................................................7 1.41 "CLASS".............................................................................8 1.42 "CLASS ___ FINAL DISTRIBUTION PERCENTAGE"...........................................8 1.43 "CLASS ___ INITIAL DISTRIBUTION PERCENTAGE".........................................8 1.44 "CLASS 7 AGGREGATE AMOUNT"..........................................................8 1.45 "CLASS 8 AGGREGATE AMOUNT"..........................................................8 1.46 "COMBINED DISTRIBUTION PACKAGE".....................................................8 1.47 "COMMERCIAL CLAIMS".................................................................8 1.48 "COMMITTED CLAIMS ACCOUNT"..........................................................9 1.49 "COMMITTEES"........................................................................9 1.50 "CONFIRMATION CONDITIONS"...........................................................9 1.51 "CONFIRMATION DATE".................................................................9 1.52 "CONFIRMATION HEARING"..............................................................9 1.53 "CONFIRMATION ORDER"................................................................9 1.54 "CONVENIENCE CLAIM".................................................................9 1.55 "CSFB"..............................................................................9 1.56 "CURE"..............................................................................9 1.57 "DEBT".............................................................................10 1.58 "DEBT AGREEMENTS"..................................................................10 1.59 "DEBTORS"..........................................................................10 1.60 "DEBTORS-IN-POSSESSION"............................................................10 1.61 "DEMAND"...........................................................................10 1.62 "DIP AGENT"........................................................................10 1.63 "DIP FACILITY".....................................................................10 1.64 "DIP FACILITY CLAIMS"..............................................................10 1.65 "DIP LENDERS"......................................................................10 1.66 "DISALLOWED CLAIM".................................................................11 1.67 "DISBURSING AGENT".................................................................11 1.68 "DISCLOSURE STATEMENT".............................................................11 1.69 "DISCLOSURE STATEMENT HEARING".....................................................11 1.70 "DISPUTED CLAIM"...................................................................11 1.71 "DISPUTED DISTRIBUTION RESERVE"....................................................11 1.72 "DISTRIBUTION RECORD DATE".........................................................11 1.73 "DISTRIBUTABLE SHARES".............................................................11 1.74 "DISTRICT COURT"...................................................................11 1.75 "EFFECTIVE DATE"...................................................................11 1.76 "ENCUMBRANCE"......................................................................11 1.77 "ENJOINED ACTION"..................................................................12 1.78 "ENVIRONMENTAL CLAIMS".............................................................12 1.79 "EPA"..............................................................................12 1.80 "ESTATES"..........................................................................12 1.81 "EXCESS AVAILABLE CASH"............................................................12 1.82 "EXCESS LITIGATION TRUST RECOVERIES"...............................................12 1.83 "EXCESS NEW OCD COMMON STOCK"......................................................12 1.84 "EXCESS SENIOR NOTES"..............................................................13 1.85 "EXCESS SENIOR NOTES AMOUNT".......................................................13 1.86 "EXISTING FIBREBOARD INSURANCE SETTLEMENT TRUST ASSETS"............................13 1.87 "EXISTING OCD COMMON STOCK"........................................................13 1.88 "EXISTING OCD OPTIONS".............................................................13 1.89 "EXISTING OCD PREFERRED STOCK".....................................................13 1.90 "EXIT FACILITY"....................................................................13 1.91 "FACE AMOUNT"......................................................................13 1.92 "FB ASBESTOS PERSONAL INJURY CLAIM"................................................13 1.93 "FB ASBESTOS PROPERTY DAMAGE CLAIM"................................................14 1.94 "FB ASBESTOS PROPERTY DAMAGE INSURANCE ASSETS".....................................14 1.95 "FB ASBESTOS PROPERTY DAMAGE TRUST"................................................15 1.96 "FB ASBESTOS PROPERTY DAMAGE TRUST AGREEMENT"......................................15 1.97 "FB ASBESTOS PROPERTY DAMAGE TRUST DISTRIBUTION PROCEDURES"........................15 1.98 "FB ASBESTOS PROPERTY DAMAGE TRUSTEE"..............................................15 1.99 "FB INDIRECT ASBESTOS PI TRUST CLAIM"..............................................15 1.100 "FB INDIRECT ASBESTOS PROPERTY DAMAGE CLAIM".......................................16 1.101 "FB PERSON"........................................................................16 1.102 "FB RESOLVED ASBESTOS PERSONAL INJURY CLAIM".......................................17 1.103 "FB RESTRICTED CASH"...............................................................17 1.104 "FB REVERSIONS"....................................................................17 1.105 "FB SUB-ACCOUNT"...................................................................17 1.106 "FB SUB-ACCOUNT SETTLEMENT PAYMENT"................................................17 1.107 "FIBREBOARD".......................................................................17 1.108 "FIBREBOARD INSURANCE SETTLEMENT TRUST"............................................17 1.109 "FILING"...........................................................................18 1.110 "FINAL DISTRIBUTION DATE"..........................................................18 1.111 "FINAL ORDER"......................................................................18 1.112 "FUTURE CLAIMANTS' REPRESENTATIVE".................................................18 1.113 "GENERAL UNSECURED CLAIM"..........................................................18 1.114 "HARTFORD ENTITIES"................................................................18 1.115 "HARTFORD POLICIES"................................................................19 1.116 "HARTFORD SETTLEMENT AGREEMENT"....................................................20 1.117 "IMPAIRED".........................................................................21 1.118 "INDEMNIFICATION OBLIGATIONS"......................................................21 1.119 "INITIAL DISTRIBUTION DATE"........................................................21 1.120 "INSOLVENT INSURER PD RIGHTS"......................................................21 1.121 "INSOLVENT INSURER PI RIGHTS"......................................................21 1.122 "INSURANCE GUARANTEE FUND PD RIGHTS"...............................................22 1.123 "INSURANCE GUARANTEE FUND PI RIGHTS"...............................................22 1.124 "INTERCOMPANY CLAIM"...............................................................22 1.125 "INTERESTED PARTY".................................................................22 1.126 "INTERESTS"........................................................................22 1.127 "IPM"..............................................................................22 1.128 "IRC"..............................................................................22 1.129 "IRS"..............................................................................22 1.130 "LITIGATION TRUST".................................................................22 1.131 "LITIGATION TRUST AGREEMENT".......................................................23 1.132 "LITIGATION TRUST ASSETS"..........................................................23 1.133 "LITIGATION TRUST EXPENSES"........................................................23 1.134 "LITIGATION TRUST INITIAL DEPOSIT".................................................23 1.135 "LITIGATION TRUST RECOVERIES"......................................................23 1.136 "LITIGATION TRUST REIMBURSEMENT OBLIGATION"........................................23 1.137 "LITIGATION TRUSTEE"...............................................................23 1.138 "MANAGEMENT ARRANGEMENTS"..........................................................23 1.139 "MATERIAL RIGHTS OF ACTION"........................................................24 1.140 "MIPS CLAIMS AND INTERESTS"........................................................24 1.141 "NET AVAILABLE DISTRIBUTABLE SHARES"...............................................24 1.142 "NET AVAILABLE SENIOR NOTES AMOUNT"................................................24 1.143 "NEW OCD COMMON STOCK".............................................................24 1.144 [INTENTIONALLY OMITTED]............................................................24 1.145 "NEW OCD SECURITIES"...............................................................24 1.146 "NON-DEBTOR SUBSIDIARIES"..........................................................24 1.147 "NSP"..............................................................................24 1.148 "NSP AGREEMENTS"...................................................................24 1.149 "OBJECTION DEADLINE"...............................................................25 1.150 "OC"...............................................................................25 1.151 "OC ASBESTOS PERSONAL INJURY CLAIM"................................................25 1.152 "OC ASBESTOS PERSONAL INJURY LIABILITY INSURANCE ASSETS"...........................25 1.153 "OC ASBESTOS PROPERTY DAMAGE CLAIM"................................................26 1.154 "OCD"..............................................................................26 1.155 "OCD INSURANCE ESCROW".............................................................26 1.156 "OCD INTERESTS"....................................................................26 1.157 "OCD RESTRICTED CASH"..............................................................27 1.158 "OCD REVERSIONS"...................................................................27 1.159 "OC INDIRECT ASBESTOS PI TRUST CLAIM"..............................................27 1.160 "OC INDIRECT ASBESTOS PROPERTY DAMAGE CLAIM".......................................27 1.161 "OC PERSON"........................................................................29 1.162 "OC RESOLVED ASBESTOS PERSONAL INJURY CLAIM".......................................29 1.163 "OC SUB-ACCOUNT"...................................................................29 1.164 "OTHER PRIORITY CLAIMS"............................................................29 1.165 "OTHER SECURED CLAIMS".............................................................29 1.166 "OTHER SECURED TAX CLAIMS".........................................................29 1.167 "PERSON"...........................................................................30 1.168 "PETITION DATE"....................................................................30 1.169 "PLAN".............................................................................30 1.170 "PLAN PROPONENTS"..................................................................30 1.171 "PLR"..............................................................................30 1.172 "POTENTIAL TAX REFUNDS"............................................................30 1.173 "PRE-PETITION BOND INDENTURES".....................................................30 1.174 "PRE-PETITION BONDS"...............................................................30 1.175 "PRE-PETITION INDENTURE TRUSTEES"..................................................31 1.176 "PRIORITY TAX CLAIM"...............................................................31 1.177 "PRO RATA".........................................................................31 1.178 "PROOF OF CLAIM"...................................................................31 1.179 "PROPOSED ASBESTOS-RELATED TAX LEGISLATION"........................................31 1.180 "PROTECTED PARTY"..................................................................31 1.181 "QUARTERLY DISTRIBUTION DATE"......................................................32 1.182 "RECORD DATE"......................................................................32 1.183 "REFERENCE ORDER"..................................................................33 1.184 "REINSTATEMENT"....................................................................33 1.185 "RELATED PERSONS"..................................................................33 1.186 "RELEASED ACTIONS".................................................................33 1.187 "RELEASED PARTIES".................................................................34 1.188 "REORGANIZED DEBTORS"..............................................................34 1.189 "REORGANIZED OCD"..................................................................34 1.190 "REORGANIZED SUBSIDIARY DEBTORS"...................................................34 1.191 "RESOLVED ASBESTOS PERSONAL INJURY CLAIMS".........................................34 1.192 "RESTRICTED CASH"..................................................................34 1.193 "RESTRUCTURING TRANSACTIONS".......................................................34 1.194 "SENIOR NOTES".....................................................................35 1.195 "SENIOR NOTES AMOUNT"..............................................................35 1.196 "SOFAS"............................................................................35 1.197 "SUBORDINATED CLAIMS"..............................................................35 1.198 "SUBSIDIARY".......................................................................35 1.199 "SUBSIDIARY DEBTORS"...............................................................35 1.200 "SUBSIDIARY INTERESTS".............................................................35 1.201 "TAC"..............................................................................36 1.202 "TOBACCO CAUSES OF ACTION".........................................................36 1.203 "UNCLASSIFIED CLAIMS"..............................................................36 1.204 "UNIMPAIRED".......................................................................36 1.205 "UNPAID FB RESOLVED ASBESTOS PERSONAL INJURY CLAIM"................................36 1.206 "UNPAID OC RESOLVED ASBESTOS PERSONAL INJURY CLAIM"................................36 1.207 "UNSECURED CREDITORS' COMMITTEE"...................................................37 1.208 "VOTING DEADLINE"..................................................................37 1.209 "VOTING PROCEDURES"................................................................37 1.210 "VOTING PROCEDURES ORDER"..........................................................37 1.211 "WILMINGTON TRUST/O.C. FUNDING B.V. CLAIM".........................................37 C. Rules of Interpretation......................................................................37 D. Computation of Time..........................................................................37 E. Governing Law................................................................................37 ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS................................................................38 2.1 Introduction.......................................................................38 2.2 Classification of Unimpaired Claims................................................39 2.3 Classification of Impaired Claims and Interests....................................39 ARTICLE III TREATMENT OF CLAIMS AND INTERESTS....................................................................40 3.1 Unclassified Claims................................................................40 3.2 Unimpaired Classes of Claims.......................................................41 3.3 Impaired Classes of Claims and Interests...........................................43 3.4 Reservation of Rights Regarding Claims.............................................48 ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN...................................................................49 4.1 Impaired Classes of Claims and Interests Entitled to Vote..........................49 4.2 Acceptance by an Impaired Class....................................................49 4.3 Presumed Acceptances by Unimpaired Classes.........................................49 4.4 Classes Deemed to Reject the Plan..................................................49 4.5 Summary of Classes Voting on the Plan..............................................49 4.6 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code....................49 ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN...................................................................50 5.1 Continued Corporate Existence......................................................50 5.2 Cancellation of Debt and Debt Agreements...........................................50 5.3 Cancellation of OCD Interests......................................................50 5.4 Certificates of Incorporation and Bylaws...........................................51 5.5 Exculpation and Limitation of Liability............................................51 5.6 Restructuring Transactions.........................................................51 5.7 Issuance of New OCD Securities.....................................................52 5.8 Litigation Trust...................................................................53 5.9 Revesting of Assets................................................................55 5.10 Rights of Action...................................................................55 5.11 Effectuating Documents; Further Transactions.......................................56 5.12 Exemption from Certain Transfer Taxes..............................................56 5.13 Releases and Injunction Related to Releases........................................56 5.14 Permanent Injunctions and Asbestos Personal Injury Permanent Channeling Injunction.........................................................................58 5.15 Directors and Officers of Reorganized Debtors......................................59 5.16 Compensation and Benefit Programs..................................................60 5.17 Continuation of Certain Orders.....................................................60 5.18 Exit Facility......................................................................60 ARTICLE VI SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING IMPAIRED CLAIMS AND PROCESS FOR RESOLUTION OF KEY ISSUES................................................................................60 6.1 Substantive Consolidation..........................................................60 ARTICLE VII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................................61 7.1 Assumed Contracts and Leases.......................................................61 7.2 Payments Related to Assumption of Contracts and Leases.............................62 7.3 Rejected Contracts and Leases......................................................62 7.4 Rejection Damages Bar Date.........................................................62 7.5 Indemnification Obligations........................................................63 7.6 Insurance Policies and Agreements..................................................63 ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS..................................................................64 8.1 Distributions for Claims Allowed as of the Initial Distribution Date...............64 8.2 Interest on Claims.................................................................64 8.3 Distributions under the Plan.......................................................65 8.4 Record Date for Distributions to Holders of Bank Holders Claims and Bondholders Claims.................................................................65 8.5 Means of Cash Payment..............................................................65 8.6 Fractional New OCD Common Stock; Other Distributions...............................66 8.7 Delivery of Distributions..........................................................66 8.8 Surrender of Pre-petition Bonds....................................................67 8.9 Withholding and Reporting Requirements.............................................68 8.10 Setoffs............................................................................68 ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS..........68 9.1 Prosecution of Objections to Certain Claims........................................68 9.2 No Distributions Pending Allowance.................................................69 9.3 Disputed Distribution Reserve......................................................69 9.4 Distributions on Account of Disputed Claims Once They are Allowed..................69 ARTICLE X THE ASBESTOS PERSONAL INJURY TRUST.....................................................................70 10.1 The Asbestos Personal Injury Trust.................................................70 10.2 Appointment of Asbestos Personal Injury Trustees...................................70 10.3 Transfers of Property to the Asbestos Personal Injury Trust........................70 10.4 Assumption of Certain Liabilities by the Asbestos Personal Injury Trust............71 10.5 Certain Property Held in Trust by the Reorganized Debtors or the Fibreboard Insurance Settlement Trust.........................................................72 10.6 Cooperation with Respect to Insurance Matters......................................72 10.7 Authority of the Debtors...........................................................73 ARTICLE XI FB ASBESTOS PROPERTY DAMAGE TRUST.....................................................................73 11.1 The FB Asbestos Property Damage Trust..............................................73 11.2 Appointment of FB Asbestos Property Damage Trustee.................................73 11.3 Transfer of Certain Property to the FB Asbestos Property Damage Trust..............74 11.4 Assumption of Certain Liabilities by the FB Asbestos Property Damage Trust.........74 11.5 Cooperation with Respect to Insurance Matters......................................74 11.6 Authority of the Debtors...........................................................75 ARTICLE XII CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN....................................75 12.1 Conditions to Confirmation.........................................................75 12.2 Conditions to Effective Date.......................................................79 12.3 Waiver of Conditions...............................................................80 ARTICLE XIII RETENTION OF JURISDICTION...........................................................................80 13.1 Exclusive Jurisdiction of the Bankruptcy Court and District Court..................80 13.2 Continued Reference to the Bankruptcy Court........................................82 ARTICLE XIV MISCELLANEOUS PROVISIONS.............................................................................82 14.1 Professional Fee Claims............................................................82 14.2 Administrative Claims Bar Date.....................................................83 14.3 Payment of Statutory Fees..........................................................83 14.4 Modifications and Amendments.......................................................83 14.5 Severability of Plan Provisions....................................................83 14.6 Successors and Assigns.............................................................84 14.7 Compromises and Settlements........................................................84 14.8 Corrective Action..................................................................84 14.9 Discharge of the Debtors...........................................................84 14.10 Special Provisions for Warranty Claims, Distributorship Indemnification Claims and Product Coupon Claims...................................................85 14.11 Committees and Future Claimants' Representative....................................85 14.12 Binding Effect.....................................................................86 14.13 Revocation, Withdrawal, or Non-Consummation........................................86 14.14 Plan Exhibits......................................................................86 14.15 Notices............................................................................87 14.16 Term of Injunctions or Stays.......................................................89 EXHIBITS Exhibit A Form of Amended and Restated Certificate of Incorporation of Reorganized OCD Exhibit B Form of Amended and Restated Bylaws of Reorganized OCD Exhibit C Form of Litigation Trust Agreement Exhibit D Form of Asbestos Personal Injury Trust Agreement Exhibit D-1 Form of Asbestos Personal Injury Trust Distribution Procedures Exhibit E Form of FB Asbestos Property Damage Trust Agreement Exhibit E-1 Form of FB Asbestos Property Damage Trust Distribution Procedures Exhibit F Management Arrangements including Form of Incentive Compensation Program and List of Participants in Incentive Compensation Program SCHEDULES Schedule I Schedule of Subsidiary Debtors Schedule II Schedule of Non-Debtor Subsidiaries Schedule III Schedule of Persons against Whom Claims are Not Released under the Plan Schedule IV Schedule of Executory Contracts and Unexpired Leases Not Assumed Schedule V Schedule of Avoidance Actions Commenced by the Debtors Schedule VI Schedule of Purchasers and Transferees Treated as Protected Parties Schedule VII Schedule of Insurance Companies Who Are Protected Parties Schedule VIII Schedule of FB Persons and OC Persons Schedule IX Schedule of Interested Parties Schedule X Schedule of Protected Parties Schedule XI List of Insurance Policies to Be Rejected to the Extent Executory Contracts Schedule XII Combined Distribution Package Schedule XIII Schedule of Exclusions from Intercompany Claims Schedule XIV Schedule of Avoidance Actions and Material Rights of Action Expressly Not Released Schedule XV Schedule of Fibreboard Insurance Policies Which Are FB Asbestos Property Damage Insurance Assets Schedule XVI Schedule of OCD Insurance Policies Which Are OC Asbestos Personal Injury Liability Insurance Assets Schedule XVII Schedule of FB Sub-Account Settlement Payment
INTRODUCTION Owens Corning, a Delaware corporation ("OCD"), and those entities listed on Schedule I hereto (collectively, the "Subsidiary Debtors" and, together with OCD, the "Debtors"), James J. McMonagle, the Legal Representative for Future Claimants ("Future Claimants' Representative"), and the Official Committee of Asbestos Claimants ("Asbestos Claimants' Committee"), hereby propose the following amended joint plan of reorganization (the "Plan") for the Debtors in their reorganization cases (the "Chapter 11 Cases") under Chapter 11 of the Bankruptcy Code ("Chapter 11") for the resolution of their creditors' Claims and Demands and their equity holders' Interests. The Debtors, the Future Claimants' Representative, and the Asbestos Claimants' Committee (collectively, "Plan Proponents") are the co-proponents of the Plan within the meaning of Section 1129 of the Bankruptcy Code. Certain of OCD's Subsidiaries (including IPM, Vytec Corporation, Owens-Corning Fibreglas Sweden Inc. and certain foreign entities and joint ventures) have not commenced cases under Chapter 11 of the Bankruptcy Code (collectively, the "Non-Debtor Subsidiaries"), and accordingly continue to operate their businesses in the ordinary course. A list of the Non-Debtor Subsidiaries is attached hereto as Schedule II. Although IPM and the other Non-Debtor Subsidiaries have not filed under Chapter 11 at the present time, one or more of the Non-Debtor Subsidiaries may file for reorganization under Chapter 11 in the future. Subject to certain restrictions and requirements set forth in Section 1127 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3019 and Section 14.4 of the Plan, the Plan Proponents reserve the right to alter, amend, modify, revoke or withdraw the Plan prior to its substantial consummation. ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW A. SCOPE OF DEFINITIONS For purposes of the Plan, all capitalized terms not otherwise defined shall have the meanings ascribed to them in Article I of the Plan, except as expressly provided or unless the context clearly requires otherwise. Whenever the context requires, such meanings shall be equally applicable to both the singular and plural form of such terms, and the masculine gender shall include the feminine and the feminine gender shall include the masculine. Any term used in initially capitalized form in this Plan that is not defined herein but that is used in the Bankruptcy Code shall have the meaning ascribed to such term in the Bankruptcy Code. B. DEFINITIONS 1.1 "$150 Million Debentures" means the 10% Guaranteed Debentures due 2001 in the aggregate principal amount of $150 Million due 2001, issued by O.C. Funding B.V. under an Indenture, dated as of May 15, 1991 between O.C. Funding B.V., OCD and the Bank of New York, as Trustee, as guaranteed by OCD. 1.2 "$250 MILLION NOTES" means the 7% Notes in the aggregate principal amount of $250 million due March 15, 2009, issued by OCD under an Indenture, dated as of May 5, 1997, between OCD and The Bank of New York, as trustee. 1.3 "$300 MILLION HIGH COUPON DEBENTURES" means two series of debentures in the aggregate principal amount of $300 million issued by OCD under an Indenture dated as of May 21, 1992, between OCD and The Bank of New York, as trustee, consisting of (i) 8.875% Debentures in the aggregate principal amount of $150 million due June 1, 2002 (the "8.875% Debentures"), and (ii) 9.375% Debentures in the aggregate principal amount of $150 million due June 1, 2012 (the "9.375% Debentures"). 1.4 "$400 MILLION DEBENTURES" means the 7.5% Debentures in the aggregate principal amount of $400 million due August 1, 2018, issued by OCD under the Indenture, dated as of May 5, 1997, between OCD and The Bank of New York, as trustee. 1.5 "$550 MILLION TERM NOTES" means two series of notes in the aggregate principal amount of $550 million issued by OCD under an Indenture, dated as of May 5, 1997, between OCD and The Bank of New York, as trustee, consisting of (i) 7.5% Term Notes in the aggregate principal amount of $300 million due May 1, 2005 (the "First Series"), and (ii) 7.7% Term Notes in the aggregate principal amount of $250 million due May 1, 2008 (the "Second Series"). 1.6 "130 MILLION DEM BEARER BONDS" means the 7.25% DEM Bearer Bonds in the aggregate principal amount of 130 million due December 2, 2000, issued by OCD pursuant to the Underwriting Agreement, dated as of November 15, 1985, between OCD, Dresdner Bank AG and the other banks listed therein, and the Agreement for the Listing, the Trusteeship and the Paying Agency, dated as of November 15, 1985, between OCD and Dresdner Bank AG. 1.7 "1997 CREDIT AGREEMENT" means the Credit Agreement, dated as of June 26, 1997, by and among OCD, the Subsidiary Debtors and Non-Debtor Subsidiaries named therein, the banks listed in Annex A thereto and CSFB, as agent, as amended by Amendment No. 1, dated as of February 20, 1998, and Amendment No. 2, dated as of November 30, 1998. 1.8 "ADMINISTRATIVE CLAIMS" means claims for payment of an administrative expense of a kind specified in Section 503(b), 507(b), or 1114(e)(2) of the Bankruptcy Code and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy Code, including, without limitation, (i) the actual, necessary costs and expenses, incurred after the Petition Date, of preserving the Debtors' Estates and operating the businesses of the Debtors or any indebtedness or obligations incurred or assumed by the Debtors in connection with the conduct of their business, (ii) all Cure amounts owed in respect of leases and contracts assumed by the Debtors, (iii) all compensation and reimbursement of expenses to the extent Allowed by the Bankruptcy Court under Section 330 or 503 of the Bankruptcy Code, (iv) any fees or charges assessed against the Estates of the Debtors under Section 1930 of Chapter 123 of Title 28 of the United States Code, and (v) all Allowed Claims that are entitled to be treated as Administrative Claims pursuant to a Final Order of the Bankruptcy Court under Section 546(c)(2)(A) of the Bankruptcy Code, but expressly excluding Asbestos Personal Injury Claims, OC Asbestos Property Damage Claims, FB Asbestos Property Damage Claims, and Intercompany Claims. 1.9 "AFFILIATE" of, or a Person "Affiliated" with, a specified Person, is a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified; provided, that with respect to an "Affiliate" of a Debtor or a Person "Affiliated" with a Debtor, such term shall include, without limiting the foregoing definition, the meaning ascribed thereto in Section 101(2) of the Bankruptcy Code. 1.10 "ALLOWED" means: (a) with respect to any Claim, other than an Administrative Claim, an Asbestos Personal Injury Claim or an FB Asbestos Property Damage Claim, proof of which was filed within the applicable period of limitation fixed in accordance with Federal Rule of Bankruptcy Procedure 3003(c)(3) by the Bankruptcy Court, (i) as to which no objection to the allowance thereof has been interposed on or before the Initial Distribution Date and as to which the Debtors have not sent a notice to the holder of such Claim by the Initial Distribution Date that the Claim is under review for possible objection, or (ii) as to which no objection is filed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court, to the extent asserted in the proof of such Claim or (iii) as to which an objection has been interposed, to the extent that such Claim has been allowed in whole or in part by a Final Order of the Bankruptcy Court; (b) with respect to any Claim, other than an Administrative Claim, an Asbestos Personal Injury Claim or an FB Asbestos Property Damage Claim, as to which no Proof of Claim was filed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court, to the extent that such Claim has been listed by one of the Debtors in its SOFAS as liquidated in amount and not disputed or contingent and (i) as to which no objection to the allowance thereof has been interposed on or before the Initial Distribution Date and as to which the Debtors have not sent a notice to the holder of such Claim by the Initial Distribution Date that the Claim is under review for possible objection, or (ii) as to which no objection to the allowance thereof has been interposed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court or (iii) as to which an objection has been interposed, to the extent that such Claim has been allowed in whole or in part by a Final Order of the Bankruptcy Court; (c) with respect to any other Claim that is asserted to constitute an Administrative Claim, other than a Claim of a professional person employed under Section 327 or 1103 of the Bankruptcy Code that is required to apply to the Bankruptcy Court for the allowance of compensation and reimbursement of expenses pursuant to Section 330 of the Bankruptcy Code, (a) that represents an actual or necessary expense of preserving the Estate or operating the business of the Debtors, to the extent that such Claim is reflected as a postpetition liability of any of the Debtors on the Debtors' books and records as of the Effective Date, or (b) that the Debtors dispute, to the extent that such Claim is allowed in whole or in part by a Final Order of the Bankruptcy Court and only to the extent that such allowed portion is deemed, pursuant to a Final Order of the Bankruptcy Court, to constitute a cost or expense of administration under Sections 503(b) and 507(a)(1) of the Bankruptcy Code; (d) with respect to any other Claim that is asserted to constitute an Administrative Claim that represents a Claim of a professional person employed under Section 327 or 1103 of the Bankruptcy Code that is required to apply to the Bankruptcy Court for the allowance of compensation and reimbursement of expenses pursuant to Section 330 of the Bankruptcy Code, to the extent that such Claim is allowed by a Final Order of the Bankruptcy Court under Section 330 of the Bankruptcy Code; (e) with respect to any Asbestos Personal Injury Claim, such Claim to the extent that it is Allowed in accordance with the procedures established pursuant to the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures; or (f) with respect to any FB Asbestos Property Damage Claim, proof of which was filed within the applicable period of limitation fixed in accordance with Bankruptcy Rule 3003(c)(3) by the Bankruptcy Court, such Claim to the extent that it is Allowed in accordance with the procedures established pursuant to the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. 1.11 "AMENDED AND RESTATED BYLAWS OF REORGANIZED OCD" means the Amended and Restated Bylaws of Reorganized OCD to be in effect upon the Effective Date, substantially in the form to be filed as Exhibit B at least ten (10) Business Days prior to the Objection Deadline. 1.12 "AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF REORGANIZED OCD" means the Amended and Restated Certificate of Incorporation of Reorganized OCD to be in effect upon the Effective Date, substantially in the form to be filed as Exhibit A at least ten (10) Business Days prior to the Objection Deadline. 1.13 "ASBESTOS CLAIMANTS' COMMITTEE" means the official creditors' committee representing holders of asbestos claims appointed on October 23, 2000, by the United States Trustee for the District of Delaware pursuant to Section 1102(a) of the Bankruptcy Code, as thereafter modified or reconstituted. 1.14 "ASBESTOS PERSONAL INJURY CLAIMS" means, collectively, OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims. 1.15 "ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION" means an order or orders of the Bankruptcy Court, established by the Confirmation Order and issued pursuant to this Plan and Section 524(g) of the Bankruptcy Code, pursuant to which all Persons will be permanently, forever and completely stayed, restrained, prohibited and enjoined from taking any Enjoined Action or proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the Asbestos Personal Injury Trust Agreement, including, without limitation, with respect to any Resolved Asbestos Personal Injury Claim, except in conformity and compliance therewith, against any Protected Party or property or interests in property of any Protected Party, whether directly or indirectly, derivatively or otherwise, for the purpose of, directly or indirectly, collecting, recovering, or receiving payment of, on, or with respect to any Asbestos Personal Injury Claim (other than pursuant to the provisions of the Asbestos Personal Injury Trust Agreement or to enforce the provisions of the Plan). 1.16 "ASBESTOS PERSONAL INJURY TRUST" means the trust established pursuant to the Asbestos Personal Injury Trust Agreement. 1.17 "ASBESTOS PERSONAL INJURY TRUST AGREEMENT" means the Asbestos Personal Injury Trust Agreement executed by the Debtors and the Asbestos Personal Injury Trustees, substantially in the form of the agreement to be filed as Exhibit D no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.18 "ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES" means the Asbestos Personal Injury Trust Distribution Procedures to be implemented by the Asbestos Personal Injury Trustees pursuant to the terms and conditions of the Plan and the Asbestos Personal Injury Trust Agreement to process, liquidate, and pay Asbestos Personal Injury Claims, substantially in the form of Exhibit D-1 to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.19 "ASBESTOS PERSONAL INJURY TRUSTEES" means the persons confirmed by the Bankruptcy Court to serve as trustees of the Asbestos Personal Injury Trust, pursuant to the terms of the Asbestos Personal Injury Trust Agreement, or as subsequently may be appointed pursuant to the provisions of the Asbestos Personal Injury Trust Agreement. 1.20 "AVAILABLE CASH" means Cash in the amount of the sum of (i) all Cash that would be shown as cash or cash equivalents on a consolidated balance sheet of OC as of the last day of the month prior to the month in which the Effective Date occurs, prepared in accordance with United States generally accepted accounting principles consistent with the past practices of OC, and (ii) the OCD Reversions, and excluding (a) the OCD Insurance Escrow, (b) the aggregate amount of Cash to be distributed to holders of Unclassified Claims, Unimpaired Claims and Allowed Class 3 Claims, (c) Restricted Cash, (d) the Existing Fibreboard Insurance Settlement Trust Assets, (e) the FB Reversions, and (f) the Litigation Trust Assets, and (g) necessary reserves for working capital and pension contributions as determined by the Debtors and approved by the other Plan Proponents. 1.21 "AVOIDANCE ACTIONS" means the adversary proceedings instituted by the Debtors on behalf of the Estates, listed on Schedule V hereto, as it may be amended. 1.22 "BALLOT" means the ballot form(s) distributed with the Disclosure Statement to holders of Impaired Claims entitled to vote as specified in Section 4.1 of the Plan, in connection with the solicitation of acceptance of the Plan. 1.23 "BALLOT DATE" means the date set by the Bankruptcy Court by which all Ballots must be received. 1.24 "BANK HOLDERS" means the holders of the Debtors' obligations under the 1997 Credit Agreement. 1.25 "BANK HOLDERS ACTION" means with the action entitled Owens Corning, et al. v. Credit Suisse First Boston, et al., in the United States District Court for the District of Delaware, A-02-5829, as such action may be amended. 1.26 "BANK HOLDERS CLAIMS" means those Claims of Bank Holders arising under or as a result of the Debtors' obligations under the 1997 Credit Agreement. 1.27 "BANKRUPTCY CODE" means Title 11 of the United States Code, as amended and in effect from time to time. 1.28 "BANKRUPTCY COURT" means the United States Bankruptcy Court for the District of Delaware, having jurisdiction over the Chapter 11 Case to the extent of any reference made to it by the District Court pursuant to 28 U.S.C. Section 157 as a unit of such District Court pursuant to 28 U.S.C. Section 151. 1.29 "BANKRUPTCY RULES" means, collectively, the Federal Rules of Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Cases or proceedings therein, and the Local Rules of the Bankruptcy Court, as amended, as applicable to the Chapter 11 Cases or proceedings therein, as the case may be. 1.30 "BOARD OF DIRECTORS" means the board of directors or its equivalent of a corporation or other legal entity, including managers of a limited liability company, general partners of a partnership or trustees of a business trust, or any duly authorized committee thereof. 1.31 "BONDHOLDERS" means the registered holders of Pre-petition Bonds. 1.32 "BONDHOLDERS CLAIMS" means the Claims held by the Bondholders arising under or as a result of the Debtors' obligations under the Pre-petition Bonds. 1.33 "BUSINESS DAY" means any day, excluding Saturdays, Sundays or "legal holidays" (as defined in Federal Rule of Bankruptcy Procedure 9006(a)) on which commercial banks are open for business in New York, New York. 1.34 "CASH" means legal tender of the United States or equivalents thereof. 1.35 "CHAPTER 11" means Chapter 11 of the Bankruptcy Code. 1.36 "CHAPTER 11 CASES" means the reorganization cases of the Debtors under Chapter 11. 1.37 "CLAIM" means a claim as defined in Section 101(5) of the Bankruptcy Code against the Debtors, or any of them, whether or not asserted. 1.38 "CLAIMANT RELEASED PARTIES" means (i) the Debtors, the Reorganized Debtors and their respective predecessors, successors and assigns (whether by operation of law or otherwise) and their respective present and former Affiliates as of the Petition Date or thereafter, and additionally (ii) if the Person granting the release votes in favor of the Plan, the Released Parties. 1.39 "CLAIMS OBJECTION DEADLINE" means the last day for filing objections to Disputed Claims, which day shall be one hundred and eighty (180) days after the Effective Date, unless extended by order of the Bankruptcy Court. 1.40 "CLAIMS TRADING INJUNCTION" means an order or orders of the Bankruptcy Court permanently and forever staying, restraining, and enjoining any Person from, directly or indirectly, purchasing, selling, transferring, assigning, conveying, pledging, or otherwise acquiring or disposing of any Asbestos Personal Injury Claim, provided, however, that the foregoing shall not apply to (i) the transfer of an Asbestos Personal Injury Claim to the holder of an OC Indirect Asbestos PI Trust Claim or FB Indirect Asbestos PI Trust Claim solely as a result of such holder's satisfaction of such Asbestos Personal Injury Claim, or (ii) the transfer of an Asbestos Personal Injury Claim by will or under the laws of descent and distribution. Any such order or orders also will provide that any action taken in violation thereof will be void ab initio. 1.41 "CLASS" means a category of holders of Claims or Interests, as described in Articles II and III of the Plan. 1.42 "CLASS ___ FINAL DISTRIBUTION PERCENTAGE" means for each applicable Class (Class 4, 5, 6 or 7), the percentage determined by dividing the total amount of all Allowed Claims in such Class (or in the case of Class 7 the Class 7 Aggregate Amount) by the sum of (i) the aggregate amount of all Allowed Claims in Classes 4, 5, and 6 and (ii) the Class 7 Aggregate Amount. 1.43 "CLASS ___ INITIAL DISTRIBUTION PERCENTAGE" means for each applicable Class (Class 4, 5, 6 or 7), the percentage determined by dividing the total amount of all Allowed Claims in such Class (or in the case of Class 7 the Class 7 Aggregate Amount) by the sum of (i) the aggregate amount of all Allowed Claims in Classes 4, 5, and 6, (ii) the Class 7 Aggregate Amount, and (iii) the aggregate amount of all Disputed Claims in Classes 4, 5, and 6. 1.44 "CLASS 7 AGGREGATE AMOUNT" means an amount equal to the present value of OC Asbestos Personal Injury Claims, as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing, less the OCD Insurance Escrow and the OC Asbestos Personal Injury Liability Insurance Assets, as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing. 1.45 "CLASS 8 AGGREGATE AMOUNT" means an amount equal to the present value of FB Asbestos Personal Injury Claims, as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing, less the sum of the Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions and the Committed Claims Account, as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing. 1.46 "COMBINED DISTRIBUTION PACKAGE" means the combination of total Available Cash, Senior Notes, New OCD Common Stock and Litigation Trust Recoveries to be paid or issued under the Plan on a pro rated basis (other than the FB Sub-Account Settlement Payment to be paid to the FB Sub-Account of the Asbestos Personal Injury Trust for the benefit of Class 8) to holders of Claims in Classes 4, 5, 6, and 7, the exact composition of which shall be set forth in Schedule XII, to be filed no later than the filing of the Disclosure Statement, as it may be amended up to five (5) Business Days prior to the date the Disclosure Statement is approved. 1.47 "COMMERCIAL CLAIMS" means rights, causes of action, suits or proceedings, (whether arising out of contract, tort or otherwise) accruing to any Debtor for the payment and collection of money or other consideration or the enforcement of rights and remedies in connection with, resulting from or arising out of, any commercial transaction with any of the Debtors or the performance of services by or for any of the Debtors. Commercial Claims shall include, without limitation, claims arising from damage or alleged damage to property of any Debtor, or personal injuries sustained by any employee, contractor or other business agent of any Debtor (other than Asbestos Personal Injury Claims) in any case resulting from or arising out of the conduct of business by such Debtor, the collection of debts owed to any Debtor from purchasers of goods and services from any Debtor or the collection of money or other consideration from vendors, suppliers or other parties for breaches of contract in commercial relationships with any of the Debtors or the recovery of money based on such other commercial relationship of a Debtor that arise in the ordinary course of business. Commercial Claims shall not include Avoidance Actions or any other rights, claims, causes of action, suits or proceedings created by title 11 of the United States Code. 1.48 "COMMITTED CLAIMS ACCOUNT" means the remaining balance of the account established pursuant to a certain Agreement Between Fibreboard and Continental [Casualty Corporation] On Remaining Issues dated December 13, 1999, which was the subject of a Stipulation and Agreed Order Between Debtors and Continental Casualty Company Regarding Status and Disposition of Funds in Committed Claims Account and Related Matters Under Buckets Agreement, entered by the Bankruptcy Court on June 27, 2001. 1.49 "COMMITTEES" means the Asbestos Claimants' Committee and the Unsecured Creditors' Committee. 1.50 "CONFIRMATION CONDITIONS" means those conditions to confirmation of the plan set forth in Section 12.1 of the Plan. 1.51 "CONFIRMATION DATE" means the date of entry of the Confirmation Order by the clerk of the Bankruptcy Court. 1.52 "CONFIRMATION HEARING" means the hearing on confirmation of the Plan scheduled by the Bankruptcy Court pursuant to Section 1128 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3017(c). 1.53 "CONFIRMATION ORDER" means the order entered by the Bankruptcy Court confirming the Plan. 1.54 "CONVENIENCE CLAIM" means a Claim against any of the Debtors that would otherwise be classified as a Class 6 Claim, which (i) is in an amount that is equal to or less than $5,000 or (ii) on the Ballot has been reduced to $5,000 by the holder of such Claim. 1.55 "CSFB" means Credit Suisse First Boston, the agent for the Bank Holders under the 1997 Credit Agreement. 1.56 "CURE" means, with respect to the assumption of an executory contract or unexpired lease, pursuant to Section 365(b) of the Bankruptcy Code, the distribution of Cash, or such other property as may be agreed upon by the parties or ordered by the Bankruptcy Court, in an amount equal to all unpaid monetary obligations, without interest, or such other amount as may be agreed upon by the parties, under such executory contract or unexpired lease, to the extent such obligations are enforceable under the Bankruptcy Code and applicable bankruptcy law. 1.57 "DEBT" means the Pre-petition Bonds and any other promissory note, bond, indenture, or other instrument or document evidencing or creating any indebtedness for borrowed money or capital lease obligation of a Debtor existing prior to the Effective Date, other than any such instrument or document that evidences or creates (i) any Intercompany Claim or (ii) any executory contract or lease that has been assumed or will be assumed pursuant to the Plan. 1.58 "DEBT AGREEMENTS" means the 1997 Credit Agreement, the Pre-petition Bonds, the Pre-Petition Bond Indentures and any other agreements, indentures or other instruments or documents governing, evidencing or creating any Debt. 1.59 "DEBTORS" means, collectively, OCD and the Subsidiary Debtors. 1.60 "DEBTORS-IN-POSSESSION" means the Debtors, each in its respective capacity as a debtor-in-possession pursuant to Section 1107(a) and 1108 of the Bankruptcy Code. 1.61 "DEMAND" means a present or future demand for payment that (i) was not a Claim during the Chapter 11 Cases; (ii) arises out of the same or similar conduct or events that gave rise to the Claims addressed by the Asbestos Personal Injury Permanent Channeling Injunction; and (iii) pursuant to the Plan, is to be paid or otherwise resolved by the Asbestos Personal Injury Trust. 1.62 "DIP AGENT" means Bank of America, N.A., as administrative agent of the DIP Facility. 1.63 "DIP FACILITY" means the debtor-in-possession credit facility pursuant to the Post-Petition Credit Agreement, dated December 8, 2000, by and among the financial institutions named therein, as the lenders, Bank of America, N.A., as the agent, and OCD and the Subsidiaries of OCD named therein, as the borrowers, as amended pursuant to the First Amendment to Post-Petition Credit Agreement by and among OCD as Borrower Representative on behalf of the borrowers under the Post-Petition Credit Agreement, Bank of America, N.A., as agent and the Lenders signatory thereto, dated as of October 28, 2002, as further amended, modified, renewed or otherwise in effect from time to time. 1.64 "DIP FACILITY CLAIMS" means those Claims arising under or as a result of the DIP Facility. 1.65 "DIP LENDERS" means the lenders party to the DIP Facility, and their successors and assigns. 1.66 "DISALLOWED CLAIM" means (i) all or such part of a Claim, other than an Asbestos Personal Injury Claim and an FB Asbestos Property Damage Claim, that is disallowed by a Final Order of the Bankruptcy Court or other court of competent jurisdiction, (ii) an Asbestos Personal Injury Claim that is disallowed in its entirety pursuant to the Asbestos Personal Injury Trust Distribution Procedures or (iii) an FB Asbestos Property Damage Claim that is disallowed in its entirety pursuant to the FB Asbestos Property Damage Trust Distribution Procedures. 1.67 "DISBURSING AGENT" means, as applicable, Reorganized OCD or any Person designated by the Plan Proponents to serve as a disbursing agent under the Plan. 1.68 "DISCLOSURE STATEMENT" means the disclosure statement filed or to be filed in the Bankruptcy Court by the Plan Proponents, as it may be amended from time to time, in connection with the Plan pursuant to Section 1125 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3018. 1.69 "DISCLOSURE STATEMENT HEARING" means the hearing before the Bankruptcy Court to be held in connection with the approval of the Disclosure Statement. 1.70 "DISPUTED CLAIM" means any Class 1, Class 2A, Class 2B, Class 3, Class 4, Class 5, or Class 6 Claim, or any portion thereof, that is neither an Allowed Claim nor a Disallowed Claim. 1.71 "DISPUTED DISTRIBUTION RESERVE" means the reserve established pursuant to Section 9.3 of the Plan. 1.72 "DISTRIBUTION RECORD DATE" means the record date for purposes of making distributions under the Plan on account of Allowed Claims (other than Asbestos Personal Injury Claims or FB Asbestos Property Damage Claims), which date shall be the Confirmation Date or such other date as may be designated in the Confirmation Order. 1.73 "DISTRIBUTABLE SHARES" means all New OCD Common Stock to be distributed as part of (i) the FB Sub-Account Settlement Payment and (ii) the Combined Distribution Package. 1.74 "DISTRICT COURT" means the United States District Court for the District of Delaware, having jurisdiction over the Chapter 11 Cases. 1.75 "EFFECTIVE DATE" means the Business Day on which all conditions to the consummation of the Plan have been satisfied or waived as provided in Article XII of the Plan, and is the effective date of the Plan. 1.76 "ENCUMBRANCE" means, with respect to any property, tangible or intangible, any mortgage, lien, pledge, charge, security interest, assignment, or encumbrance of any nature in respect of such property (including, without express or implied limitation, any conditional sale or other title retention agreement, any security agreement, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction). 1.77 "ENJOINED ACTION" means (i) the commencement, conduct, or continuation in any manner, directly or indirectly (including an action directly against a provider of insurance), of any suit, action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) in any forum; (ii) the enforcement, attachment (including, without limitation, any prejudgment attachment), collection or seeking to recover any judgment, award, decree, or other order; (iii) the creation, perfection or enforcement in any manner, directly or indirectly, of any Encumbrance; (iv) the setting off, seeking reimbursement of, contribution from, or subrogation against, or other recoupment in any manner, directly or indirectly, of any amount against any liability owed to any Protected Parties, and (v) the commencement or continuation, in any manner, in any place, of any action which, in any such case, does not comply with or is inconsistent with the provisions of the Plan. 1.78 "ENVIRONMENTAL CLAIMS" means, with respect to conduct of the Debtors prior to the Petition Date, (i) Claims against the Debtors by the EPA for the costs of environmental investigation and clean up of sites that may have been contaminated as a result of releases of hazardous substances by the Debtors, including releases at third-party disposal sites used by the Debtors; (ii) similar Claims by state and local environmental agencies; (iii) Claims by private parties against the Debtors asserting contribution or indemnification claims with respect to cleanup costs under statutory law or contractual agreements; and (iv) enforcement actions by federal, state and local environmental agencies with respect to alleged violations of environmental law; provided, however, that this definition excludes any Claim in clauses (i) - (iv) treated as an Administrative Claim. 1.79 "EPA" means the United States Environmental Protection Agency. 1.80 "ESTATES" means the Debtors' bankruptcy estates created pursuant to Section 541 of the Bankruptcy Code. 1.81 "EXCESS AVAILABLE CASH" means the amount of Available Cash, together with interest earned thereon, remaining in the Disputed Distribution Reserve after all Disputed Claims shall have been Allowed and paid or Disallowed pursuant to a Final Order of the Bankruptcy Court. 1.82 "EXCESS LITIGATION TRUST RECOVERIES" means the amount of Litigation Trust Recoveries, together with interest earned thereon, remaining in the Disputed Distribution Reserve after all Disputed Claims shall have been Allowed and paid or Disallowed pursuant to a Final Order of the Bankruptcy Court. 1.83 "EXCESS NEW OCD COMMON STOCK" means the aggregate number of shares of New OCD Common Stock remaining in the Disputed Distribution Reserve after all Disputed Claims shall have been Allowed and paid or Disallowed pursuant to a Final Order of the Bankruptcy Court. 1.84 "EXCESS SENIOR NOTES" means the Senior Notes remaining in the Disputed Distribution Reserve after all Disputed Claims shall have been Allowed and paid or Disallowed pursuant to a Final Order of the Bankruptcy Court. 1.85 "EXCESS SENIOR NOTES AMOUNT" means the aggregate principal amount of the Excess Senior Notes, together with any interest earned thereon subsequent to the Effective Date. 1.86 "EXISTING FIBREBOARD INSURANCE SETTLEMENT TRUST ASSETS" means all of the assets of the Fibreboard Insurance Settlement Trust as of the Effective Date, net of accrued administrative fees and expenses. 1.87 "EXISTING OCD COMMON STOCK" means the common stock, par value $0.10 per share, of OCD, of which 100 million shares were authorized and 55,423,132 shares were issued and outstanding as of September 30, 2000. 1.88 "EXISTING OCD OPTIONS" means any options, warrants, conversion rights, rights of first refusal or other rights, contractual or otherwise, to acquire or receive any Existing OCD Common Stock, Existing OCD Preferred Stock or any other capital stock of OCD outstanding as of the Petition Date. 1.89 "EXISTING OCD PREFERRED STOCK" means the preferred stock, without par value, of OCD, of which 8,000,000 shares were authorized and none were outstanding as of the Petition Date. 1.90 "EXIT FACILITY" means such bank financing agreements and commitments as the Debtors shall have arranged on the Effective Date, including term loans and revolving credit facilities, for general working capital and corporate purposes, in such amounts and on such terms as are satisfactory to the Debtors and the Plan Proponents. 1.91 "FACE AMOUNT" means (i) when used in reference to a Disputed Claim, the full stated amount claimed by the holder of such Claim in any Proof of Claim timely filed with the Bankruptcy Court or otherwise deemed timely filed by any Final Order of the Bankruptcy Court or other applicable bankruptcy law, and (ii) when used in reference to an Allowed Claim, the Allowed amount of such Claim. 1.92 "FB ASBESTOS PERSONAL INJURY CLAIM" means any present or future right to payment, claim, remedy, liability or Demand against any FB Person for death, bodily injury, or other personal damages (whether physical, emotional or otherwise), whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products that for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any FB Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Personal Injury Claims (i) include FB Indirect Asbestos PI Trust Claims and Unpaid FB Resolved Asbestos Personal Injury Claims, but (ii) exclude FB Resolved Asbestos Personal Injury Claims, FB Asbestos Property Damage Claims, FB Indirect Asbestos Property Damage Claims, workers' compensation claims, OC Asbestos Personal Injury Claims, OC Indirect Asbestos PI Trust Claims, OC Asbestos Property Damage Claims, and OC Indirect Asbestos Property Damage Claims. 1.93 "FB ASBESTOS PROPERTY DAMAGE CLAIM" means any present or future right to payment, claim, remedy, or liability against, or debt or obligation of, any FB Person, whether or not the facts or legal basis for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise for, relating to, or arising by reason of, directly or indirectly, damage to property, including, without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person prior to the Petition Date, or for which any FB Person is liable due to the acts or omissions of any FB Person, including, without express or implied limitation, any right, claim, remedy, liability against, or debt or obligation for compensatory damages (such as proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Property Damage Claims include FB Indirect Asbestos Property Damage Claims. 1.94 "FB ASBESTOS PROPERTY DAMAGE INSURANCE ASSETS" means rights to coverage for FB Asbestos Property Damage Claims under liability insurance policies issued to Fibreboard and identified in Schedule XV, to be filed at least ten (10) Business Days prior to the Objection Deadline. The foregoing includes, without limitation, (i) rights under such insurance policies, rights under settlement agreements made with respect to such insurance policies, Insolvent Insurer PD Rights, and Insurance Guarantee Fund PD Rights; (ii) the right, on behalf of the Debtors, to give a full release of the insurance rights of the Debtors for FB Asbestos Property Damage Claims under any such policies or related agreements, provided that a reciprocal release of the Debtors in connection with said policies or agreements is given in exchange by the insurer or other released insurance entity and further provided that any such release shall not encompass rights with respect to coverage for worker's compensation claims or with respect to coverage other than for FB Asbestos Property Damage Claims; and (iii) to the extent any of the foregoing cannot be assigned under applicable law as affected by the Bankruptcy Code, such proceeds as are recoverable by any of the Debtors in enforcement of its rights under such insurance policies, rights under settlement agreements made with respect to such insurance policies, Insolvent Insurer PD Rights, and Insurance Guarantee Fund PD Rights. 1.95 "FB ASBESTOS PROPERTY DAMAGE TRUST" means the trust established by Fibreboard in accordance with the FB Asbestos Property Damage Trust Agreement. 1.96 "FB ASBESTOS PROPERTY DAMAGE TRUST AGREEMENT" means that certain FB Asbestos Property Damage Settlement Trust Agreement, executed by Fibreboard and the FB Asbestos Property Damage Trustee, substantially in the form of Exhibit E to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.97 "FB ASBESTOS PROPERTY DAMAGE TRUST DISTRIBUTION PROCEDURES" means the FB Asbestos Property Damage Trust Distribution Procedures to be implemented by the FB Asbestos Property Damage Trustee pursuant to the terms and conditions of the Plan and the FB Asbestos Property Damage Trust Agreement to process, liquidate, and pay FB Asbestos Property Damage Claims, substantially in the form of Exhibit E-1, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.98 "FB ASBESTOS PROPERTY DAMAGE TRUSTEE" means the Person confirmed by the Bankruptcy Court to serve as trustee of the FB Asbestos Property Damage Trust, pursuant to the terms of the FB Asbestos Property Damage Trust Agreement, or as subsequently may be appointed pursuant to the provisions of the FB Asbestos Property Damage Trust Agreement. 1.99 "FB INDIRECT ASBESTOS PI TRUST CLAIM" means any present or future right to payment, claim, remedy, liability, or Demand against any FB Person, whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability, or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, that is (i) asserted by (a) any Person (other than (I) an FB Person or (II) Related Persons of the Debtors or Reorganized Debtors entitled to indemnification pursuant to Section 7.5 of the Plan) who has been, is or may be a defendant in an action seeking damages for death, bodily injury or other personal damages (whether physical, emotional or otherwise), to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any FB Person, or (b) any assignee or transferee of such Person, and (ii) on account of alleged liability of any FB Person for reimbursement, contribution, subrogation or indemnification of any portion of any damages such Person has paid or may pay to the plaintiff in such action. 1.100 "FB INDIRECT ASBESTOS PROPERTY DAMAGE CLAIM" means any present or future right to payment, claim, remedy or liability against, or debt or obligation of, any FB Person, whether or not the facts of or legal basis for such right, claim, remedy or liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise that is (i) asserted by (a) any Person (other than (I) an FB Person or (II) a Related Person of the Debtors or Reorganized Debtors entitled to indemnification pursuant to Section 7.5 of the Plan) who has been, is, or may be a defendant in an action seeking damages for, relating to, or arising by reason of, directly or indirectly, damage to property, including without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person, prior to the Petition Date, or for which any FB Person is otherwise liable due to the acts or omissions of any FB Person or (b) any assignee or transferee of such Person, and (ii) on account of alleged liability of any FB Person for reimbursement, contribution, subrogation or indemnification of any portion of any damages such Person has paid or may pay to the plaintiff in such action. 1.101 "FB PERSON" means each of (i) Fibreboard and its direct or indirect Subsidiaries, (ii) Fibreboard's and its direct or indirect Subsidiaries' respective predecessors in interest, but solely to the extent listed on Schedule VIII, to be filed no later than ten (10) Business Days prior to the approval of the Disclosure Statement, as it may be amended up to ten (10) Business Days prior to the Objection Deadline, (iii) Fibreboard's and its direct or indirect Subsidiaries' respective successors in interest, but solely to the extent they either (a) are listed on Schedule VIII, or (b) are post-Effective Date successors in interest, (iv) Fibreboard's and its direct or indirect Subsidiaries' respective controlled Affiliates, but solely to the extent listed on Schedule VIII, and (v) the respective former and present employees, directors or officers of the Persons identified in clauses (i), (ii), (iii) and (iv) of this Section 1.101, acting in such capacity. 1.102 "FB RESOLVED ASBESTOS PERSONAL INJURY CLAIM" means an FB Asbestos Personal Injury Claim with respect to which (i) the holder of such Claim (a) is represented by an attorney of record who has entered into an enforceable NSP Agreement with Fibreboard and (b) has satisfied all of the preconditions to payment under the applicable NSP Agreement prior to the Petition Date as determined by the Bankruptcy Court and (ii) such Claims are eligible to be paid from settlement accounts in respect of FB Asbestos Personal Injury Claims, to facilitate claims processing under the NSP, including settlement accounts maintained by (a) Baron & Budd, P.C., (b) Foster & Sear, LLP, (c) Waters & Kraus, LLP, or (d) Weitz & Luxenberg, and such monies are available to pay such claims and have not been, or are not subject to being, avoided and recovered for the benefit of the Fibreboard Insurance Settlement Trust. 1.103 "FB RESTRICTED CASH" means the amount of administrative deposits by Fibreboard in settlement accounts (together with earnings thereon) in respect of FB Asbestos Personal Injury Claims to facilitate claims processing under the NSP as of five (5) Business Days prior to the Effective Date. 1.104 "FB REVERSIONS" means such amounts as may from time to time be released from the settlement accounts in respect of FB Asbestos Personal Injury Claims to facilitate claims processing under the NSP and returned to the Fibreboard Insurance Settlement Trust or FB Sub-Account of the Asbestos Personal Injury Trust, whichever is applicable. FB Reversions shall include any recoveries, including any recoveries on account of Avoidance Actions, which recover funds paid from the Fibreboard Insurance Settlement Trust. 1.105 "FB SUB-ACCOUNT" means the sub-account of the Asbestos Personal Injury Trust established for the purposes of assuming any and all liabilities and responsibility for FB Asbestos Personal Injury Claims and making payments in respect of such Claims in accordance with the Plan and the Asbestos Personal Injury Trust Distribution Procedures. 1.106 "FB SUB-ACCOUNT SETTLEMENT PAYMENT" means the combination of Cash, Senior Notes and New OCD Common Stock in the respective amounts set forth in Schedule XVII, to be filed no later than the filing of the Disclosure Statement, to be paid into the FB Sub-Account of the Asbestos Personal Injury Trust for the benefit of the holders of FB Asbestos Personal Injury Claims. 1.107 "FIBREBOARD" means Fibreboard Corporation, a Delaware corporation. 1.108 "FIBREBOARD INSURANCE SETTLEMENT TRUST" means the Fibreboard Settlement Trust established by the Irrevocable Settlement Trust Agreement, dated as of December 30, 1996, among Fibreboard, as trustor, Michael R. Douglas, as interim trustee, and certain insurance companies, pursuant to the Settlement Agreement dated October 12, 1993. 1.109 "FILING" means the filing with the Bankruptcy Court of voluntary petitions for relief under Chapter 11 made by OCD and the Subsidiary Debtors. 1.110 "FINAL DISTRIBUTION DATE" means the fifteenth day after the date that all Disputed Claims shall have been Allowed or Disallowed pursuant to a Final Order of the Bankruptcy Court, provided that if such day is not a Business Day, then the next Business Day thereafter. 1.111 "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction, as entered on the docket in the Chapter 11 Cases, the operation or effect of which has not been stayed, reversed, or amended and as to which order or judgment (or any revision, modification, or amendment thereof) the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for review or rehearing was filed or, if filed, remains pending. 1.112 "FUTURE CLAIMANTS' REPRESENTATIVE" means James J. McMonagle, the legal representative for future claimants appointed by order of the Bankruptcy Court dated September 28, 2001, or his successors. 1.113 "GENERAL UNSECURED CLAIM" means a Claim against any of the Debtors that is not a DIP Facility Claim, an Administrative Claim, a Priority Tax Claim, an Other Priority Claim, an Other Secured Tax Claim, an Other Secured Claim, a Convenience Claim, a Bank Holders Claim, a Bondholders Claim, an OC Asbestos Personal Injury Claim, an FB Asbestos Personal Injury Claim, an FB Asbestos Property Damage Claim, an Intercompany Claim, a Subordinated Claim or an OCD Interest. General Unsecured Claims include, without limitation, all Environmental Claims and OC Asbestos Property Damage Claims. 1.114 "HARTFORD ENTITIES" means (i) the Hartford Financial Services Group, Inc., Excess Insurance Company, Ltd., Fencourt Reinsurance Company, Ltd., First State Insurance Company, Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Canada, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Insurance Company of the Southeast, Hartford Insurance, Ltd. (Bermuda), Hartford Lloyds Insurance Company, Hartford Underwriters Insurance Company (formerly New York Underwriters Insurance Company), New England Insurance Company, New England Reinsurance Corporation, Nutmeg Insurance Company, Pacific Insurance Company, Ltd., Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company, and Twin City Fire Insurance Company; as well as (ii) all of their respective predecessors, successors, assigns, subsidiaries, affiliates, holding companies (if any), parent companies (if any), merged companies and acquired companies, exclusive of any former asset, affiliate, or member company of Reliance Group Holdings, Inc.; and (iii) all of the respective employees, officials, agents, attorneys, representatives, officers, and directors, in their capacity as such, of the entities encompassed by clauses (i) and (ii). 1.115 "HARTFORD POLICIES" means the following policies issued to OCD: Issuer Policy Period Policy Number First State 06/18/74 to 10/22/74 921434 10/22/74 to 10/22/75 921434 10/22/75 to 10/22/76 921434 10/22/76 to 10/22/77 923542 10/22/77 to 9/01/78 925625 09/01/78 to 09/01/79 926735 03/08/79 to 09/01/79 927953 09/01/82 to 09/01/83 934962 Twin City 09/01/82 to 09/01/83 TXX111365 Excess 09/01/79 to 09/01/80 EL 10300 (EL 10-87) First State 09/01/82 to 09/01/83 933186 09/01/83 to 09/01/84 EU 935321 09/01/83 to 09/01/84 EU 935324 10/31/79 to 11/29/82 GC802752 04/01/81 to 04/01/84 GC802770 05/01/88 to 05/01/89 GC009556 05/01/89 to 05/01/90 GC010810 Hartford 12/01/74 to 12/01/75 57 IC 620122 Pacific 05/01/93 to 05/01/94 ZG 0001003 04/01/94 to 04/01/95 ZG 0002864 05/01/95 to 05/01/96 ZG 0004839 05/01/96 to 05/01/97 ZG 0006912 05/01/97 to 05/01/98 ZG 0008946 Twin City 09/01/83 to 09/01/84 TXX 102719 The foregoing term shall also include all insurance policies ("Unknown Policies") other than the above-listed policies, that were issued, prior to January 1, 2001, by and in the name of one of the specifically named Hartford Entities, either to OCD or that insure OCD, and such Unknown Policies shall include all known and unknown primary, umbrella, excess, or other insurance policies, contracts, and/or agreements of any nature, type, of kind (including but not limited to: all comprehensive general liability policies; general liability policies; casualty policies, environmental liability policies; environmental impairment policies; difference in conditions policies; directors' and officers' liability policies; errors and omissions liability policies; contractual liability policies; automobile liability policies; products liability policies; and workers' compensation policies). Notwithstanding any of the foregoing and for the avoidance of any doubt, Unknown Policies shall not include: (i) policies issued by one of the specifically named Hartford Entities to Persons other than OCD or the Debtors (except to the extent of the interest of OCD in such policies); (ii) policies issued to Persons that become Affiliates of OCD or Reorganized OCD after June 18, 2001; (iii) policies issued or subscribed by Excess Insurance Company Ltd. that are subject to a May 15, 1999 settlement agreement between OCD and London Market Insurers; (iv) First State policy number EU 935321 to the extent that it provides coverage for products/completed operations claims other than asbestos claims; and (v) policies issued to or insuring Fibreboard. 1.116 "HARTFORD SETTLEMENT AGREEMENT" means the Settlement Agreement between Owens Corning and the Hartford Financial Services Group, Inc., dated June 18, 2001, and approved by the Bankruptcy Court by Order dated July 16, 2001. 1.117 "IMPAIRED" means, when used with reference to a Claim or Interest, or a Class of Claims or Interests, a Claim or Interest, or a Class of Claims or Interests, that is impaired within the meaning of Section 1124 of the Bankruptcy Code. 1.118 "INDEMNIFICATION OBLIGATIONS" means any legally enforceable obligations of any of the Debtors under their charters, by-laws, contracts assumed by them pursuant to Section 365 of the Bankruptcy Code, or statute, to indemnify, reimburse or provide contribution to any or all persons who may serve or who have served at any time as directors, officers, employees, agents, professionals or advisors of such Debtor, or who at the request of any of the Debtors served as directors, officers, employees, agents, professionals or advisors of another corporation (including Subsidiaries of the Debtors) or of any partnership, joint venture, trust or other enterprise, and any directors, officers, employees, agents, professionals or advisors of any of the Debtors who at the request of such Debtor may serve or have served as agents or fiduciaries of an employee benefit plan of such Debtor or any of its Subsidiaries, from and against any of the expenses, liabilities or other matters arising under or in or covered by applicable law, provided that the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent, professional or advisor or in any other capacity while serving as a director, officer, employee, agent, professional or advisor, and provided that such obligations shall not cover willful misconduct. Notwithstanding anything to the contrary herein, Indemnification Obligations shall not include any obligations of the Debtors to pay or reimburse any party in connection with (i) funds recovered or to be recovered from such party pursuant to an Avoidance Action, or (ii) claims arising out of or in connection with the case of John Hancock Life Insurance Co., et al. v. Goldman, Sachs & Co., et al., in the United States District Court for the District of Massachusetts, C.A. No. 01-10729-RWZ. 1.119 "INITIAL DISTRIBUTION DATE" means with respect to holders of Allowed Class 1, 2A, 2B, 3, 4, 5, and 6 Claims, a date that is not later than thirty (30) days after the Effective Date. 1.120 "INSOLVENT INSURER PD RIGHTS" means all of the Debtors' rights and claims as of the Effective Date to coverage and causes of action and choses in action for accrued or future coverage claims, for demands, or for other entitlements to insurance proceeds from any insolvent insurance company, whether domestic or foreign, and whether in receivership, liquidation, rehabilitation, run-off, scheme of arrangement or any other form of proceeding, as well as the rights to any payments of initial dividends, or scheme payments from the Receiver, Liquidator or Scheme Administrator of any insolvent insurance company and the rights to any supplemental dividends or supplemental scheme payments that may be declared from time to time, on account of FB Asbestos Property Damage Claims. 1.121 "INSOLVENT INSURER PI RIGHTS" means all of the Debtors' rights and claims as of the Effective Date to coverage and causes of action and choses in action for accrued or future coverage claims, for demands, or for other entitlements to insurance proceeds from any insolvent insurance company, whether domestic or foreign, and whether in receivership, liquidation, rehabilitation, run-off, scheme of arrangement or any other form of proceeding, as well as the rights to any payments of initial dividends, or scheme payments from the Receiver, Liquidator or Scheme Administrator of any insolvent insurance company and the rights to any supplemental dividends or supplemental scheme payments that may be declared from time to time, on account of Asbestos Personal Injury Claims. 1.122 "INSURANCE GUARANTEE FUND PD RIGHTS" means all of the Debtors' rights, and claims to coverage and causes of action and choses in action for accrued or future coverage claims, for demands, or for other entitlements to payment (whether asserted on their own behalf or on behalf of others) from any state insurance guaranty association, arising under, or in connection with, any state insurance guaranty association statutes (including, without limitation, those statutes under which claims have been made previously by Debtors) on account of FB Asbestos Property Damage Claims. 1.123 "INSURANCE GUARANTEE FUND PI RIGHTS" means all of the Debtors' rights, and claims to coverage and causes of action and choses in action for accrued or future coverage claims, for demands, or for other entitlements to payment (whether asserted on their own behalf or on behalf of others) from any state insurance guaranty association, arising under, or in connection with, any state insurance guaranty association statutes (including, without limitation, those statutes under which claims have been made previously by Debtors) on account of Asbestos Personal Injury Claims. 1.124 "INTERCOMPANY CLAIM" means any Claim, including, without limitation, any Administrative Claim, by a Debtor against another Debtor or a non-Debtor Subsidiary against a Debtor (but excluding the Claims set forth on Schedule XIII, as it may be filed or amended at least ten (10) Business Days prior to the Objection Deadline, which shall be classified and treated as set forth in Schedule XIII, and Subordinated Claims). 1.125 "INTERESTED PARTY" means all parties listed on Schedule IX, to be filed no later than the filing of the Disclosure Statement, as it may be amended at least ten (10) Business Days prior to the Objection Deadline. 1.126 "INTERESTS" means, collectively, (i) the OCD Interests, (ii) the Subsidiary Interests and (iii) the legal, equitable, contractual or other rights of any Person to acquire or receive any of the foregoing. 1.127 "IPM" means IPM, Inc., a Delaware corporation. 1.128 "IRC" means the Internal Revenue Code of 1986, as amended. 1.129 "IRS" means the United States Internal Revenue Service. 1.130 "LITIGATION TRUST" means the trust that is created pursuant to the Plan and the Litigation Trust Agreement to be administered by the Litigation Trustee, all as more specifically set forth in Section 5.7 of the Plan and the Litigation Trust Agreement. 1.131 "LITIGATION TRUST AGREEMENT" means the trust agreement that is to govern the Litigation Trust, in substantially the form of Exhibit C, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.132 "LITIGATION TRUST ASSETS" means those rights, claims or other assets to be transferred to and owned by the Litigation Trust pursuant to Section 5.8 of the Plan for the benefit of each of Classes 4, 5, 6, and 7, which are comprised of (i) the Litigation Trust Initial Deposit, (ii) the Potential Tax Refunds, (iii) all of the Debtors' rights and standing to object to, litigate, settle and otherwise resolve (a) the Tobacco Causes of Action, (b) the Avoidance Actions and (c) the Material Rights of Action, and (iv) any and all proceeds of the foregoing and interest actually earned. Litigation Trust Assets shall not include the FB Reversions. 1.133 "LITIGATION TRUST EXPENSES" means all costs and expenses associated with the administration of the Litigation Trust, including those rights, obligations and duties described in Section 5.8 of the Plan and in accordance with the Litigation Trust Agreement. 1.134 "LITIGATION TRUST INITIAL DEPOSIT" means the distribution, in the amount of $500,000, or such other amount upon which the Plan Proponents may agree no later than ten (10) Business Days prior to the Objection Deadline, to be made by the Debtors to the Litigation Trust as set forth in Section 5.8 of the Plan. 1.135 "LITIGATION TRUST RECOVERIES" means (i) any and all proceeds received by the Litigation Trust from (a) the Potential Tax Refunds, (b) the Tobacco Causes of Action, (c) the Avoidance Actions and (d) the Material Rights of Action, and (ii) interest actually earned with respect to the foregoing and the Litigation Trust Initial Deposit. 1.136 "LITIGATION TRUST REIMBURSEMENT OBLIGATION" means the obligation of the Litigation Trust to pay to Reorganized OCD any and all Litigation Trust Recoveries until such time as the Litigation Trust Initial Deposit plus interest at the rate of 5% per annum, or such other rate upon which the Plan Proponents may agree no later than ten (10) Business Days prior to the Objection Deadline, has been repaid in full. 1.137 "LITIGATION TRUSTEE" means the trustee of the Litigation Trust appointed pursuant to Section 5.8 of the Plan. 1.138 "MANAGEMENT ARRANGEMENTS" means, collectively, the management compensation and benefit plans as set forth in Exhibit F, to be filed no later than five (5) Business Days prior to the date the Disclosure Statement is approved, as it may be amended up to ten (10) Business Days prior to the Objection Deadline. 1.139 "MATERIAL RIGHTS OF ACTION" means all rights, claims, causes of action, suits or proceedings accruing to the Debtors or any assets or other property of the Debtors pursuant to the Bankruptcy Code or pursuant to any statute or legal theory which, if determined in favor of the Debtors or the Estates, would reasonably be expected to result in a recovery in excess of $200,000, but excluding Commercial Claims. 1.140 "MIPS CLAIMS AND INTERESTS" means all Claims directly or indirectly against OCD (or Interests to the extent any such Claims may be characterized as Interests) by the holders of the 61/2% Convertible Monthly Income Preferred Securities issued by Owens-Corning Capital L.L.C. or any Person (including any trustee) asserting such Claims derivatively or otherwise on behalf of such holders, including (i) the Claims of Owens-Corning Capital L.L.C. for approximately $253 million original aggregate principal amount arising from OCD's 6.5% Convertible Subordinated Debentures due 2002, issued pursuant to an indenture dated as of May 10, 1995, between OCD, Owens-Corning Capital L.L.C. and Harris Trust and Savings Bank, as trustee, (ii) Claims arising under the guarantee agreement, dated as of May 10, 1995, in respect of such Convertible Subordinated Debentures executed by OCD as guarantor, (iii) the Claim of The Bank of New York, as Special Trustee on behalf of the holders of the 61/2% Convertible Monthly Income Preferred Securities, and (iv) any Interests of the foregoing to the extent any rights of such holders may be characterized as Interests. 1.141 "NET AVAILABLE DISTRIBUTABLE SHARES" means the amount of Distributable Shares remaining after distribution of the FB Sub-Account Settlement Payment to the FB-Sub Account. 1.142 "NET AVAILABLE SENIOR NOTES AMOUNT" means the Senior Notes Amount less the portion of the FB Sub-Account Settlement Payment to be paid in Senior Notes to the FB Sub-Account. 1.143 "NEW OCD COMMON STOCK" means the common stock, par value $[0.10] per share, of Reorganized OCD. 1.144 [INTENTIONALLY OMITTED] 1.145 "NEW OCD SECURITIES" means the New OCD Common Stock and the Senior Notes to be issued by Reorganized OCD and distributed pursuant to the Plan. 1.146 "NON-DEBTOR SUBSIDIARIES" means all direct and indirect Subsidiaries of OCD that are not Subsidiary Debtors. 1.147 "NSP" means the National Settlement Program pursuant to which OCD and Fibreboard entered into agreements with certain law firms prior to the Petition Date for the purpose of attempting to settle OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims, respectively. 1.148 "NSP AGREEMENTS" means the settlement agreements entered into between OCD and/or Fibreboard and each law firm participating in the NSP. 1.149 "OBJECTION DEADLINE" means the date set forth in the Order of the Bankruptcy Court or the District Court by which a creditor or interest holder or other party in interest must file an objection to confirmation of the Plan. 1.150 "OC" means, collectively, OCD and its Subsidiaries. 1.151 "OC ASBESTOS PERSONAL INJURY CLAIM" means any present or future right to payment, claim, remedy, liability or Demand against any OC Person for death, bodily injury, or other personal damages (whether physical, emotional or otherwise), whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any OC Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any OC Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. OC Asbestos Personal Injury Claims (i) include OC Indirect Asbestos PI Trust Claims and Unpaid OC Resolved Asbestos Personal Injury Claims, but (ii) exclude OC Resolved Asbestos Personal Injury Claims, OC Asbestos Property Damage Claims, OC Indirect Asbestos Property Damage Claims, workers' compensation claims, FB Asbestos Personal Injury Claims, FB Indirect Asbestos PI Trust Claims, FB Asbestos Property Damage Claims, and FB Indirect Asbestos Property Damage Claims. 1.152 "OC ASBESTOS PERSONAL INJURY LIABILITY INSURANCE ASSETS" means rights to coverage for OC Asbestos Personal Injury Claims and OC Resolved Asbestos Personal Injury Claims under excess liability insurance policies issued to OCD and identified in Schedule XVI, to be filed at least ten (10) ------------ Business Days prior to the Objection Deadline, including, without limitation, (i) rights under such policies, whether against the insurers that issued such policies and their successors and assigns, or, with respect to any insolvent insurers, against their liquidators and/or the state insurance guaranty funds that bear responsibility with respect to them; (ii) the right, on behalf of the Debtors, to give a full release of the insurance rights of the Debtors under any such policies, provided that a reciprocal release of the Debtors in connection with said policies is given in exchange by the insurer or other released insurance entity and further provided that any such release shall not encompass rights with respect to coverage for workers' compensation claims; and (iii) to the extent any of the foregoing cannot be assigned under applicable law as affected by the Bankruptcy Code, such proceeds as are recoverable by any of the Debtors in enforcement of its rights under such insurance policies, whether against the insurers that issued such policies and their successors and assigns, or, with respect to any insolvent insurers, against their liquidators and/or the state insurance guaranty funds that bear responsibility with respect to them, or rights under settlement agreements made with respect to such insurance policies. 1.153 "OC ASBESTOS PROPERTY DAMAGE CLAIM" means any present or future right to payment, claim, remedy or liability against, or debt or obligation of, any OC Person, whether or not the facts or legal basis for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise for, relating to, or arising by reason of, directly or indirectly, damage to property, including, without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any OC Person prior to the Petition Date, or for which any OC Person is liable due to the acts or omissions of any OC Person, including, without express or implied limitation, any right, claim, remedy, liability against, or debt or obligation for compensatory damages (such as proximate, consequential, general and special damages) and including punitive damages. OC Asbestos Property Damage Claims include OC Indirect Asbestos Property Damage Claims, but do not include FB Asbestos Property Damage Claims. 1.154 "OCD" means Owens Corning, a Delaware corporation. 1.155 "OCD INSURANCE ESCROW" means the approximately $59 million of escrowed insurance proceeds received from certain of OCD's excess insurance carriers which are reflected in OC's consolidated balance sheet as restricted assets, together with all accrued earnings thereon. 1.156 "OCD INTERESTS" means, (i) collectively, all Existing OCD Common Stock, Existing OCD Preferred Stock and Existing OCD Options, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, to acquire or receive any Existing OCD Common Stock, Existing OCD Preferred Stock, Existing OCD Options or other capital stock in OCD, or any contract subscription, commitment or agreement pursuant to which any Person was or could have been entitled to receive any share of the capital stock of OCD, or any such option, warrant, conversion right, right of first refusal or other right (including, without limitation, any rights of any 401(k) plan or the interest of any participant therein), in each case issued or entered into by, or otherwise the obligation of, OCD or another Debtor; and (ii) all shares of Preferred Stock and Class A Common Stock of Integrex, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, relating to such stock, held by Blue Ridge Investments, L.L.C. or its successors and assigns. 1.157 "OCD RESTRICTED CASH" means the amount of administrative deposits by OCD in settlement accounts (together with earnings therein) in respect of OC Asbestos Personal Injury Claims to facilitate claims processing under the NSP as of five (5) Business Days prior to the Effective Date. 1.158 "OCD REVERSIONS" means such amounts as may from time to time be released from the settlement accounts in respect of OC Asbestos Personal Injury Claims to facilitate claims processing under the NSP and returned to OCD. 1.159 "OC INDIRECT ASBESTOS PI TRUST CLAIM" means any present or future right to payment, claim, remedy, liability, or Demand against any OC Person, whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability, or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, that is (i) asserted by (A) any Person (other than (I) an OC Person or (II) Related Persons of the Debtors or Reorganized Debtors entitled to indemnification pursuant to Section 7.5 of the Plan) who has been, is or may be a defendant in an action seeking damages for death, bodily injury or other personal damages (whether physical, emotional or otherwise), to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any OC Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any OC Person, or (B) any assignee or transferee of such Person, and (ii) on account of alleged liability of any OC Person for reimbursement, contribution, subrogation or indemnification of any portion of any damages such Person has paid or may pay to the plaintiff in such action. 1.160 "OC INDIRECT ASBESTOS PROPERTY DAMAGE CLAIM" means any present or future right to payment, claim, remedy or liability against, or debt or obligation of, any OC Person, whether or not the facts of or legal basis for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise that is (i) asserted by (a) any Person (other than (I) a OC Person or (II) a Related Person of the Debtors or Reorganized Debtors entitled to indemnification pursuant to Section 7.5 of the Plan) who has been, is, or may be a defendant in an action seeking damages for, relating to, or arising by reason of, directly or indirectly, damage to property, including without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any OC Person, prior to the Petition Date, or for which any OC Person is otherwise liable due to the acts or omissions of any OC Person or (b) any assignee or transferee of such Person, and (ii) on account of alleged liability of any OC Person for reimbursement, contribution, subrogation or indemnification of any portion of any damages such Person has paid or may pay to the plaintiff in such action. 1.161 "OC PERSON" means each of (i) OCD and its direct or indirect Subsidiaries which is not an FB Person, (ii) the respective predecessors in interest of OCD and its direct or indirect Subsidiaries which are not FB Persons, but solely to the extent listed on Schedule VIII, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline, (iii) the respective successors in interest, but solely to the extent they either (a) are listed on Schedule VIII, or (b) are post-Effective Date successors in interest, (iv) OCD's and its direct or indirect Subsidiaries' respective controlled Affiliates which are not an FB Persons, but solely to the extent listed on Schedule VIII, and (v) the respective employees, directors or officers of the Persons identified in clauses (i), (ii), (iii) and (iv) of this Section 1.164, acting in such capacity. 1.162 "OC RESOLVED ASBESTOS PERSONAL INJURY CLAIM" means an OC Asbestos Personal Injury Claim with respect to which (i) the holder of such Claim (a) is represented by an attorney of record who has entered into an enforceable NSP Agreement with OC and (b) has satisfied all of the preconditions to payment under the applicable NSP Agreement prior to the Petition Date as determined by the Bankruptcy Court and (ii) such Claims are eligible to be paid from settlement accounts in respect of OC Asbestos Personal Injury Claims, to facilitate claims processing under the NSP, including settlement accounts maintained by (a) Baron & Budd, P.C., (b) Foster & Sear, LLP, (c) Waters & Kraus, LLP, or (d) Weitz & Luxenberg, and such monies are available to pay such claims and have not been or are not avoided and recovered for the benefit of the Debtors' Estates. 1.163 "OC SUB-ACCOUNT" means the sub-account of the Asbestos Personal Injury Trust established for purposes of assuming any and all liabilities and responsibility for OC Asbestos Personal Injury Claims and making payments in respect of such Claims in accordance with the Plan and the Asbestos Personal Injury Trust Distribution Procedures. 1.164 "OTHER PRIORITY CLAIMS" means all Claims entitled to priority pursuant to Section 507(a) of the Bankruptcy Code other than DIP Facility Claims, Administrative Claims or Priority Tax Claims. 1.165 "OTHER SECURED CLAIMS" means all Claims secured by a valid Encumbrance in or on any of the Debtors' property, which is not void or voidable under the Bankruptcy Code or any other applicable law, to the extent of the value of the Claim holder's interest in the Debtors' property, as determined pursuant to Section 506 of the Bankruptcy Code. Other Secured Claims do not include Other Secured Tax Claims. 1.166 "OTHER SECURED TAX CLAIMS" means all Claims secured by a valid Encumbrance in or on any of the Debtors' property, (i) which is not void or voidable under the Bankruptcy Code or any other applicable law, to the extent of the value of the Claim holder's interest in the Debtors' property, as determined pursuant to Section 506 of the Bankruptcy Code, and (ii) which absent such Claim's secured status, would be entitled to priority in right of payment under Section 507(a)(8) of the Bankruptcy Code. 1.167 "PERSON" means an individual, corporation, partnership, association, joint stock company, joint venture, limited liability company, limited liability partnership, trust, estate, unincorporated organization or other entity, or any government, governmental agency or any subdivision, department or other instrumentality thereof. 1.168 "PETITION DATE" means October 5, 2000, the date of the Filing. 1.169 "PLAN" means this Chapter 11 reorganization plan and all exhibits and schedules annexed hereto or referenced herein, as the same may be amended, modified or supplemented from time to time. 1.170 "PLAN PROPONENTS" means the Debtors, the Asbestos Claimants' Committee, and the Future Claimants' Representative, as co-proponents of the Plan. 1.171 "PLR" means the private letter ruling received by the Debtors from the IRS on July 23, 2002, as the same may be amended, modified or supplemented from time to time. 1.172 "POTENTIAL TAX REFUNDS" means the federal income tax refunds, if any, recovered by the Reorganized Debtors pursuant to the Proposed Asbestos-Related Tax Legislation. 1.173 "PRE-PETITION BOND INDENTURES" means all indentures relating to Pre-petition Bonds including but not limited to (i) the Indenture, dated as of May 5, 1997, between OCD and The Bank of New York, as trustee, pursuant to which OCD issued the $250 Million Notes, $400 Million Debenture and the $550 Million Term Notes; (ii) the Indenture, dated as of May 21, 1992, between OCD and The Bank of New York, as trustee, pursuant to which OCD issued the $300 Million High Coupon Debentures; and (iii) the Underwriting Agreement, dated as of November 15, 1985, between OCD, Dresdner Bank AG and the other banks listed therein, and the Agreement for the Listing, the Trusteeship and the Paying Agency, dated as of November 15, 1985, between OCD and Dresdner Bank AG, pursuant to which OCD issued the 130 Million DEM Bearer Bonds. 1.174 "PRE-PETITION BONDS" means, collectively, (i) all industrial revenue bonds issued prior to the Petition Date for which one or more of the Debtors is obligated; (ii) the $550 Million Term Notes, of which $300 million in aggregate principal amount was outstanding in the First Series as of the Petition Date and $250 million in aggregate principal amount was outstanding in the Second Series as of the Petition Date; (iii) the $400 Million Debentures, of which $400 million in aggregate principal amount was outstanding as of the Petition Date; (iv) the $250 Million Notes, of which $250 million in aggregate principal amount was outstanding as of the Petition Date; (v) the $300 Million High Coupon Debentures, consisting of the 8.875% Debentures, of which $40 million in aggregate principal amount was outstanding as of the Petition Date, and the 9.375% Debentures, of which $7 million in aggregate principal amount was outstanding as of the Petition Date; (vi) the 130 Million DEM Bearer Bonds, of which approximately $60 million in aggregate principal amount was outstanding as of the Petition Date; and (vii) OCD's guarantee of the $150 Million Debentures, of which $42 million in aggregate principal amount was outstanding as of the Petition Date. 1.175 "PRE-PETITION INDENTURE TRUSTEES" means collectively, the Persons serving from time to time as trustees or paying agents under the Pre-petition Bond Indentures, pursuant to the terms of the applicable Pre-Petition Bond Indentures. 1.176 "PRIORITY TAX CLAIM" means an unsecured Claim asserted by a federal or state governmental authority for taxes specified in Section 507(a)(8) of the Bankruptcy Code. 1.177 "PRO RATA" when used with respect to the treatment of a Claim, means the proportion that the Face Amount of a Claim in a particular Class bears to the aggregate Face Amount of all Claims (including Disputed Claims) in such Class. 1.178 "PROOF OF CLAIM" means the proof of claim that must be filed by a holder of a Claim by the date(s), if any, designated by the Bankruptcy Court as the last date(s) for filing proofs of claims or interests against the Debtors. 1.179 "PROPOSED ASBESTOS-RELATED TAX LEGISLATION" means (i) the bill denominated as HR 1412 (also known as the Asbestos Tax Fairness Act) introduced in the United States House of Representatives on April 4, 2001; (ii) the companion bill S 1048, identical to HR 1412, introduced in the United States Senate on June 14, 2001; and (iii) any substantially similar federal tax legislation. 1.180 "PROTECTED PARTY" means any of the following: (i) any Debtor and its Related Persons, but solely to the extent set forth on Schedule X, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline; (ii) any Reorganized Debtor and its Related Persons, but solely to the extent set forth on Schedule X; (iii) any Person that, pursuant to the Plan or after the Effective Date becomes a direct or indirect transferee of, or successor to, any assets of any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust (but only to the extent that liability is asserted to exist by reason of such Person's becoming or being such a transferee or successor); (iv) any Person that, pursuant to the Plan or after the Effective Date, makes a loan to any of the Reorganized Debtors or the Asbestos Personal Injury Trust or to a successor to, or transferee of, any assets of any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust (but only to the extent that liability is asserted to exist by reason of such Person's becoming or being such a lender or to the extent any pledge of assets made in connection with such a loan is sought to be upset or impaired); (v) any Person to the extent such Person is alleged to be directly or indirectly liable for the conduct of, Claims against, or Demands on any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust on account of Asbestos Personal Injury Claims by reason of one or more of the following: (a) such Person's ownership of a financial interest in any of the Debtors or Reorganized Debtors, a past or present Affiliate of any of the Debtors or the Reorganized Debtors, or predecessor in interest of any of the Debtors or the Reorganized Debtors, but solely to the extent set forth on Schedule X, (b) such Person's involvement in the management of any of the Debtors or the Reorganized Debtors or any predecessor in interest of any of the Debtors or the Reorganized Debtors, but solely to the extent set forth on Schedule X, or (c) such Person's service as an officer, director, or employee of any of the Debtors, the Reorganized Debtors or any Interested Party; (vi) any past, present or future purchaser or other transferee of the assets or business, in whole or in part, or all of the outstanding capital stock, of any one or more of the Debtors, Reorganized Debtors, or past or present Affiliates of the Debtors or Reorganized Debtors, however effectuated, by operation of law or otherwise, and any Related Person of such purchaser or transferee, including such Persons set forth in Schedule VI, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business days prior to the Objection Deadline, but only to the extent that liability is asserted to exist by reason of such Person becoming or being such a purchaser, transferee or successor; (vii) the Hartford Entities, to the extent set forth in the Hartford Settlement Agreement, with respect to the liability for any Asbestos Personal Injury Claims that arise out of or in connection with the Hartford Policies; and (viii) such other insurance companies, liquidators of insolvent insurance companies, and state guaranty associations, including, without limitation, those insurance companies, liquidators, and guaranty associations to the extent set forth in Schedule VII, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business days prior to the Objection Deadline, and with respect to liability for any Asbestos Personal Injury Claims, but only if and to the extent that any such insurance company, liquidator, or guaranty association has entered into a settlement agreement with one or more of the Debtors with respect to liability for Asbestos Personal Injury Claims prior to the Effective Date, or such later date to which the Plan Proponents may agree, and such agreement expressly provides for the payment by any such Person of insurance or other proceeds and either the comprehensive release of such Person's further liability for Asbestos Personal Injury Claims or such Person's entitlement to the protection of the Asbestos Permanent Channeling Injunction in the Chapter 11 Cases as a Protected Party. 1.181 "QUARTERLY DISTRIBUTION DATE" means the calendar quarters ending in March, June, September and December, on which dates the Reorganized Debtors shall make payments and distributions from the reserve established for Disputed Claims to each holder of a Disputed Claim that has become an Allowed Claim during the preceding calendar quarter. 1.182 "RECORD DATE" means the first Business Day following the Confirmation Date. 1.183 "REFERENCE ORDER" means the Order (i) Referring Certain Cases to the Bankruptcy Court and (ii) allocating responsibilities between the District Court and the Bankruptcy Court, entered by the District Court on December 10, 2001, as amended and modified by the Case Management Order entered December 24, 2002, and as it may be subsequently be modified or amended. 1.184 "REINSTATEMENT" means (i) leaving unaltered the legal, equitable, and contractual rights to which a Claim entitles the holder of such Claim so as to leave such Claim unimpaired in accordance with Section 1124 of the Bankruptcy Code or (ii) notwithstanding any contractual provision or applicable law that entitles the holder of such Claim to demand or receive accelerated payment of such Claim after the occurrence of a default (a) curing any such default that occurred before or after the Petition Date, other than a default of a kind specified in Section 365(b)(2) of the Bankruptcy Code; (b) reinstating the maturity of such Claim as such maturity existed before the default; (c) compensating the holder of such Claim for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or such applicable law; and (d) not otherwise altering the legal, equitable, or contractual rights to which such Claim entitles the holder of such Claim; provided, however, that any contractual right that does not pertain to the payment when due of principal and interest on the obligation on which such Claim is based, including, without limitation, financial coverage ratios, negative pledge covenants, covenants or restrictions on merger or consolidation, and affirmative covenants regarding corporate existence, prohibiting certain transactions or actions contemplated by the Plan, or conditioning such transactions or actions on certain factors, shall not be required to be reinstated in order to accomplish Reinstatement. 1.185 "RELATED PERSONS" means, with respect to any Person, such Person's predecessors, successors and assigns (whether by operation of law or otherwise) and their respective present and former Affiliates and each of their respective present and former members, partners, equity-holders, officers, directors, employees, representatives, advisors, attorneys, agents and professionals, acting in such capacity, and any Person claiming by or through any of them. 1.186 "RELEASED ACTIONS" means all Claims, obligations, suits, judgments, damages, debts, rights, causes of action and liabilities, and all Interests and rights of an equity security holder, whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other circumstance taking place or existing on or prior to the Effective Date in connection with or related to the Debtors and Reorganized Debtors and their respective Estates, the Chapter 11 Cases or the Plan, except for the (i) Tobacco Causes of Action, (ii) the Avoidance Actions listed on Schedule XIV, to be filed no later than the filing of the Disclosure Statement, as it may be amended up to ten (10) Business Days prior to the Objection Deadline, (iii) the claims against CSFB and/or the Bank Holders in the Bank Holders Action, (iv) the Material Rights of Action listed on Schedule XIV, and (v) Asbestos Personal Injury Claims. Released Actions includes the release of all Claims, obligations, suits, judgments, damages, debts, rights, causes of action and liabilities against the Debtors and the Non-Debtor Subsidiaries arising from the 1997 Credit Agreement or the guarantees of the 1997 Credit Agreement. 1.187 "RELEASED PARTIES" means (i) the Unsecured Creditors' Committee and its present and former members, representatives, advisors, attorneys, agents and professionals, acting in such capacity, (ii) the Asbestos Claimants' Committee and its present and former members, representatives, advisors, attorneys, agents and professionals, acting in such capacity, (iii) the Future Claimants' Representative and his present and former representatives, advisors, attorneys, agents and professionals, acting in such capacity, (iv) the respective Related Persons of the Debtors and the Reorganized Debtors and their respective Estates as of the Petition Date and thereafter and (v) the present and former officers and directors of the Debtors and Reorganized Debtors; except in each case for the Persons listed on Schedule III, to be filed no later than the filing of the Disclosure Statement, as it may be amended up to ten (10) Business days prior to the Objection Deadline, against which Claims, obligations, suits, judgments, damages, Demands, debts, rights, causes of action, liabilities, Interests and other rights of an equity security holder shall not be released under the Plan. 1.188 "REORGANIZED DEBTORS" means, collectively, Reorganized OCD and the Reorganized Subsidiary Debtors. 1.189 "REORGANIZED OCD" means reorganized OCD or its successor, on and after the Effective Date. 1.190 "REORGANIZED SUBSIDIARY DEBTORS" means the reorganized Subsidiary Debtors and their respective successors, on and after the Effective Date. 1.191 "RESOLVED ASBESTOS PERSONAL INJURY CLAIMS" means OC Resolved Asbestos Personal Injury Claims and FB Resolved Asbestos Personal Injury Claims. 1.192 "RESTRICTED CASH" means, collectively, OCD Restricted Cash and FB Restricted Cash. 1.193 "RESTRUCTURING TRANSACTIONS" means those transactions or other actions (including without limitation, mergers, consolidations, restructures, dispositions, liquidations, or dissolutions) that one or more applicable Reorganized Debtors may enter into on or prior to, or as soon as practicable after, the Effective Date outside the ordinary course of business of such Reorganized Debtors in accordance with Section 5.6 hereof, including, without limitation, actions to effect a corporate restructuring of their respective businesses, to simplify the overall corporate structure of the Reorganized Debtors or to reincorporate certain of the Subsidiary Debtors under the laws of jurisdictions other than the laws of which the applicable Subsidiary Debtors are presently incorporated. 1.194 "SENIOR NOTES" means such unsubordinated obligations for borrowed money as any of the Reorganized Debtors may issue or incur on or about the Effective Date in connection with the Plan. 1.195 "SENIOR NOTES AMOUNT" means the total principal amount of the Senior Notes, the amount of which shall be set forth in Schedule XII, to be filed no later than the filing of the Disclosure Statement, as they may be amended up to five (5) Business Days prior to the approval of the Disclosure Statement. 1.196 "SOFAS" means the Schedules and Statements of Financial Affairs filed in the Chapter 11 Cases by OCD and each of the Subsidiary Debtors, as amended from time to time. 1.197 "SUBORDINATED CLAIMS" means the Claims or Interests (in the event that a Claim might be characterized as an Interest) of any Person who has entered in a subordination agreement that is enforceable under applicable non-bankruptcy law and which subordinates such Claims or Interests to any holders of Claims who will not be paid in full on account of such holders Allowed Claims under the Plan. Subordinated Claims shall include, without limitation, the MIPS Claims and Interests. 1.198 "SUBSIDIARY" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of stock (or equivalent ownership or controlling interest) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more other Persons controlled by such Person or a combination thereof. 1.199 "SUBSIDIARY DEBTORS" means the direct and indirect Subsidiaries of OCD that are set forth in Schedule I hereto and such other Subsidiaries of OCD as may file for protection under Chapter 11 of the Bankruptcy Code subsequent to the date hereof and prior to the Confirmation Date. 1.200 "SUBSIDIARY INTERESTS" means, collectively, the issued and outstanding ownership interests in the Subsidiary Debtors, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, to acquire or receive any ownership interests in the Subsidiary Debtors, or any contract subscription, commitment or agreement pursuant to which any Person was or could have been entitled to receive any share of any ownership interests in the Subsidiary Debtors, or any such option, warrant, conversion right, right of first refusal or other right (including, without limitation, any rights of any 401(k) plan or the interest of any participant therein), in each case issued or entered into by, or otherwise the obligation of, the applicable Subsidiary Debtor; in each case, owned beneficially and of record, directly or indirectly, by OCD. 1.201 "TAC" means the Trustees' Advisory Committee established under the Asbestos Personal Injury Trust Agreement. 1.202 "TOBACCO CAUSES OF ACTION" means any and all claims by OCD and Fibreboard for restitution/unjust enrichment, fraud, and violations of state antitrust law against tobacco companies to obtain payment of monetary damages (including punitive damages) for payments made by OCD and Fibreboard to asbestos claimants who developed smoking-related diseases, including, without limitation, (i) the action brought by OCD in the Circuit Court of Jefferson County, Mississippi, styled Ezell Thomas, et al. v. R.J. Reynolds Tobacco Company, et al. and Owens Corning v. RJ Reynolds Tobacco Company , Docket No. 96-0065; and (ii) the lawsuit brought by OCD and Fibreboard in the Superior Court of California, County of Alameda, styled Fibreboard Corp., et al. v. R.J. Reynolds Tobacco Company, et al., Case No. 791919-8. 1.203 "UNCLASSIFIED CLAIMS" means the DIP Facility Claims, Administrative Claims and Priority Tax Claims, collectively. 1.204 "UNIMPAIRED" means, when used with reference to a Claim, Class or Interest, a Claim, Class or Interest that is not impaired within the meaning of Section 1124 of the Bankruptcy Code. 1.205 "UNPAID FB RESOLVED ASBESTOS PERSONAL INJURY CLAIM" means an FB Asbestos Personal Injury Claim (i) with respect to which the holder of such Claim (a) is represented by an attorney of record who has entered into an enforceable NSP Agreement with Fibreboard, and (b) has satisfied all of the preconditions to payment under the applicable NSP Agreement prior to the Petition Date (including, without limitation, the submission of information about the Claim holder's exposure and injury as well as the delivery of a properly executed release relating to such Claim), and (ii) to the extent such Claim has not been, and will not be, paid from settlement accounts in respect of FB Asbestos Personal Injury Claims, to facilitate claims processing under the NSP, including settlement accounts maintained by (a) Baron & Budd, P.C., (b) Foster & Sear, LLP, (c) Waters & Kraus, LLP, or (d) Weitz & Luxenberg. 1.206 "UNPAID OC RESOLVED ASBESTOS PERSONAL INJURY CLAIM" means an OC Asbestos Personal Injury Claim (i) with respect to which the holder of such Claim (a) is represented by an attorney of record who has entered into an enforceable NSP Agreement with OC, and (b) has satisfied all of the preconditions to payment under the applicable NSP Agreement prior to the Petition Date (including, without limitation, the submission of information about the Claim holder's exposure and injury as well as the delivery of a properly executed release relating to such Claim), and (ii) to the extent such Claim has not been, and will not be, paid from settlement accounts in respect of OC Asbestos Personal Injury Claims, to facilitate claims processing under the NSP, including settlement accounts maintained by (a) Baron & Budd, P.C., (b) Foster & Sear, LLP, (c) Waters & Kraus, LLP, or (d) Weitz & Luxenberg. 1.207 "UNSECURED CREDITORS' COMMITTEE" means the official creditors' committee representing general unsecured creditors, which was appointed pursuant to Section 1102(a) of the Bankruptcy Code by the United States Trustee for the District of Delaware on October 23, 2000 and which includes the unofficial sub-committee representing the Bank Holders and the unofficial sub-committee representing the Bondholders and trade creditors, each of which sub-committees is represented by separate counsel and financial advisors. 1.208 "VOTING DEADLINE" means the date set forth in the Voting Procedures Order by which a creditor or interest holder must deliver a ballot voting to accept or reject the Plan. 1.209 "VOTING PROCEDURES" means the detailed instructions and procedures relating to the solicitation of votes with respect to the Plan. 1.210 "VOTING PROCEDURES ORDER" means the order of the Bankruptcy Court or District Court approving the Voting Procedures. 1.211 "WILMINGTON TRUST/O.C. FUNDING B.V. CLAIM" means the claim asserted against the Debtors by the Wilmington Trust Company on behalf of the holders of 10% guaranteed debentures due 2001 issued pursuant to an indenture dated as of May 15, 1991, between O.C. Funding B.V, Owens-Corning Fiberglas Corporation and the Bank of New York. C. RULES OF INTERPRETATION For purposes of the Plan (i) any reference in the Plan to a contract, instrument, release, indenture or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (ii) any reference in the Plan to an existing document or exhibit filed or to be filed means such document or exhibit as it may have been or may be amended, modified or supplemented; (iii) unless otherwise specified, all references in the Plan to sections, articles, schedules and exhibits are references to sections, articles, schedules and exhibits of or to the Plan; (iv) the words "herein" and "hereto" refer to the Plan in its entirety rather than to a particular portion of the Plan; (v) captions and headings to articles and sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan; and (vi) the rules of construction set forth in Section 102 of the Bankruptcy Code and in the Bankruptcy Rules shall apply. D. COMPUTATION OF TIME In computing any period of time prescribed or allowed by the Plan, the provisions of Federal Rule of Bankruptcy Procedure 9006(a) shall apply. E. GOVERNING LAW Unless the application of a specific rule of law or procedure is required by federal law (including the Bankruptcy Code and the Bankruptcy Rules), or is otherwise expressly provided for, (i) the laws of the State of Delaware shall govern the construction and implementation of the Plan and any agreements, documents and instruments executed in connection with the Plan (unless such agreement, document or instrument shall specify another state's law) and (ii) the laws of the state of incorporation of each Debtor and Reorganized Debtor shall govern corporate governance matters with respect to such Debtor or Reorganized Debtor, in each case without giving effect to the principles of conflicts of law thereof. ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS 2.1 Introduction The Plan is premised upon the substantive consolidation of the Debtors, as set forth in more detail in Section 6.1 below, for the purposes of voting, determining which Claims and Interests will be entitled to vote to accept or reject the Plan, confirmation of the Plan and the resultant discharge of and cancellation of Claims and Interests and distribution of assets, interests and other property under the terms herein. Substantive consolidation under the Plan will not result in the merger of or the transfer or commingling of any assets of any of the Debtors or Non-Debtor Subsidiaries, and all assets (whether tangible or intangible) will continue to be owned by the respective Debtors or Non-Debtor Subsidiaries, as the case may be. In accordance with Section 1123(a)(1) of the Bankruptcy Code, DIP Facility Claims, Administrative Claims and Priority Tax Claims have not been classified, and the respective treatment of such Unclassified Claims is set forth in Section 3.1 of the Plan. A Claim or Interest is placed in a particular Class only to the extent that the Claim or Interest falls within the description of that Class, and is classified in other Classes to the extent that any portion of the Claim or Interest falls within the description of such other Classes. A Claim is also placed in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim is an Allowed Claim in that Class and such Claim has not been paid, released or otherwise settled prior to the Effective Date. 2.2 Classification of Unimpaired Claims (a) Class 1: Other Priority Claims Class 1 consists of all Other Priority Claims. (b) Class 2A: Other Secured Tax Claims Class 2A consists of all Other Secured Tax Claims. (c) Class 2B: Other Secured Claims Class 2B consists of all Other Secured Claims. 2.3 Classification of Impaired Claims and Interests (a) Class 3: Convenience Claims Class 3 consists of all Convenience Claims. (b) Class 4: Bank Holders Claims Class 4 consists of all Bank Holders Claims. (c) Class 5: Bondholders Claims Class 5 consists of all Bondholders Claims. (d) Class 6: General Unsecured Claims Class 6 consists of all General Unsecured Claims. (e) Class 7: OC Asbestos Personal Injury Claims Class 7 consists of all OC Asbestos Personal Injury Claims. (f) Class 8: FB Asbestos Personal Injury Claims Class 8 consists of all FB Asbestos Personal Injury Claims. (g) Class 9: FB Asbestos Property Damage Claims Class 9 consists of all FB Asbestos Property Damage Claims. (h) Class 10: Intercompany Claims Class 10 consists of all Intercompany Claims. (i) Class 11: Subordinated Claims Class 11 consists of all Subordinated Claims. (j) Class 12: OCD Interests Class 12 consists of all OCD Interests ARTICLE III TREATMENT OF CLAIMS AND INTERESTS 3.1 Unclassified Claims (a) DIP Facility Claims On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which a DIP Facility Claim becomes an Allowed DIP Facility Claim or (iii) the date on which a DIP Facility Claim becomes payable pursuant to any agreement between a Debtor and the holder of such DIP Facility Claim, each holder of an Allowed DIP Facility Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed DIP Facility Claim (x) Cash equal to the unpaid portion of such Allowed DIP Facility Claim or (y) such other treatment as the applicable Debtor and such holder shall have agreed in writing. (b) Administrative Claims Except as otherwise provided herein and subject to the requirements hereof, on, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which an Administrative Claim becomes an Allowed Administrative Claim or (iii) the date on which an Administrative Claim becomes payable pursuant to any agreement between a Debtor and the holder of such Administrative Claim, each holder of an Allowed Administrative Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Administrative Claim (a) Cash equal to the unpaid portion of such Allowed Administrative Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing; provided, however, that Allowed Administrative Claims with respect to liabilities incurred by a Debtor in the ordinary course of business during the Chapter 11 Cases shall be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto. Holders of Administrative Claims based on liabilities incurred by the Debtors in the ordinary course of their businesses will not be required to file or serve any request for payment of such Claims, as such liabilities will be paid, performed or settled when due in accordance with the terms and conditions of the particular agreements governing such obligations. (c) Priority Tax Claims Except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Initial Distribution Date or has agreed in writing to a different treatment, each holder of an Allowed Priority Tax Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Priority Tax Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Priority Tax Claim on the later of the Initial Distribution Date and the date such Priority Tax Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Priority Tax Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. 3.2 Unimpaired Classes of Claims (a) Class 1: Other Priority Claims (i) TREATMENT On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 1 Claim becomes an Allowed Class 1 Claim, or (iii) the date on which such Class 1 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 1 Claim, each holder of an Allowed Class 1 Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 1 Claim (a) Cash equal to the unpaid portion of such Allowed Class 1 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. All Allowed Class 1 Claims which are not by their terms due and payable on or before the Effective Date will be paid in the ordinary course of business in accordance with the terms thereof. (ii) STATUS Class 1 Claims are Unimpaired. Holders of the Claims in Class 1 shall be deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. (b) Class 2A: Other Secured Tax Claims (i) TREATMENT Except to the extent that a holder of an Allowed Class 2A Claim has been paid by the Debtors prior to the Initial Distribution Date or has agreed in writing to a different treatment, each holder of an Allowed Class 2A Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 2A Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Class 2A Claim, including any interest on such Allowed Class 2A Claims required to be paid pursuant to Section 506(b) of the Bankruptcy Code, on the later of the Initial Distribution Date and the date such Class 2A Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Class 2A Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. The Debtors' failure to object to any Class 2A Claim in the Chapter 11 Cases shall be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Nothing in the Plan or elsewhere shall preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or Reorganized Debtor or the value of any collateral. Each holder of an Allowed Class 2A Claim shall retain the Encumbrances (or replacement Encumbrances as may be contemplated under nonbankruptcy law) securing its Allowed Class 2A Claim as of the Effective Date until full and final payment of such Allowed Class 2A Claim is made as provided in the Plan, and upon such full and final payment, such Encumbrances shall be deemed null and void and shall be unenforceable for all purposes. (ii) STATUS Class 2A Claims are Unimpaired. Holders of the Claims in Class 2A shall be deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. (c) Class 2B: Other Secured Claims (i) TREATMENT On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 2B Claim becomes an Allowed Class 2B Claim or (iii) the date on which such Class 2B Claim becomes due and payable pursuant to any agreement between a Debtor and the holder of an Allowed Class 2B Claim, each holder of an Allowed Class 2B Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 2B Claim, at the sole discretion of the Debtors, (a) Cash equal to the unpaid portion of such Allowed Class 2B Claim, (b) Reinstatement of the legal equitable and contractual rights of the holder of such Allowed Class 2B Claim, subject to the provisions of Article VII of the Plan, or (c) such other treatment as the applicable Debtor and such holder shall have agreed in writing. The Debtors' failure to object to any Class 2B Claim in the Chapter 11 Cases shall be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Nothing in the Plan or elsewhere shall preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or the value of any collateral. (ii) STATUS Class 2B Claims are Unimpaired. Holders of the Claims in Class 2B shall be deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. 3.3 Impaired Classes of Claims and Interests (a) Class 3: Convenience Claims (i) TREATMENT On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, or (ii) the date on which such Class 3 Claim becomes an Allowed Class 3 Claim, or (iii) the date on which such Class 3 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 3 Claim, each holder of an Allowed Class 3 Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 3 Claim (a) Cash equal to the amount of such Allowed Class 3 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. (ii) ELECTION Any holder of a Claim in Class 6 that desires treatment of such Claim as a Convenience Claim shall make such election on the Ballot to be provided to holders of Impaired Claims entitled to vote to accept or reject the Plan (as specified in Section 4.1 of the Plan) and return such Ballot to the address specified therein on or before the Voting Deadline. Any election made after the Voting Deadline shall not be binding on the Debtors unless the Voting Deadline is expressly waived in writing by the Debtors with respect to any such Claim. (iii) STATUS Class 3 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 3 shall be entitled to vote to accept or reject the Plan. (b) Class 4: Bank Holders Claims (i) TREATMENT In full satisfaction, release and discharge of, and in exchange for, its Allowed Class 4 Claim, each holder of an Allowed Class 4 Claim shall receive the following: On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 4 Claim becomes an Allowed Class 4 Claim, or (iii) the date on which such Class 4 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 4 Claim, such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 4 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 4 claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 4 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 4 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 4 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 4 Final Distribution Percentage of the Excess Litigation Trust Recoveries. (ii) STATUS Class 4 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 4 shall be entitled to vote to accept or reject the Plan. (c) Class 5: Bondholders Claims (i) TREATMENT In full satisfaction, release and discharge of, and in exchange for, its Allowed Class 5 Claim, each holder of an Allowed Class 5 Claim who has complied with Section 8.8 of the Plan shall receive the following: On, or as soon as reasonably practicable after, the later of (i) the Initial Distribution Date, (ii) the date on which such Class 5 Claim becomes an Allowed Class 5 Claim, or (iii) the date on which such Class 5 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 5 Claim, such holder's Pro Rata share of the Combined Distribution Package equal to the Class 5 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 5 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 5 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 5 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 5 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 5 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Holders of Class 5 Bond Holder Claims may have their distributions under the Plan reduced to the extent Pre-petition Indenture Trustees exercise any applicable rights under the Pre-petition Bond Indentures to recover their costs and/or expenses from the distributions to be paid to Holders of Class 5 Bond Holder Claims under the Plan. Any payment of such costs or expenses will commensurately reduce the recovery realized under the Plan by holders of Class 5 Bond Holder Claims. (ii) STATUS Class 5 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 5 shall be entitled to vote to accept or reject the Plan. (d) Class 6: General Unsecured Claims (i) TREATMENT In full satisfaction, release and discharge of, and in exchange for, its Allowed Class 6 Claim, each holder of an Allowed Class 6 Claim shall receive the following: On, or as soon as reasonably practicable after, the later of (i) the Initial Distribution Date, (ii) the date on which such Class 6 Claim becomes an Allowed Class 6 Claim, or (iii) the date on which such Class 6 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 6 Claim, such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 6 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 6 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 6 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount to the Class 6 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 6 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 6 Final Distribution Percentage of the Excess Litigation Trust Recoveries. (ii) STATUS Class 6 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 6 shall be entitled to vote to accept or reject the Plan. (e) Class 7: OC Asbestos Personal Injury Claims (i) TREATMENT ALL CLASS 7 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. THE ASBESTOS PERSONAL INJURY TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF A CLASS 7 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 7 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS HEREOF). Nothing contained in this Section 3.3(e) shall constitute or be deemed a waiver of any claim, right, or cause of action that the Debtors, the Reorganized Debtors or the Asbestos Personal Injury Trust may have against any Person in connection with or arising out of a Class 7 Claim, and the injunction shall not apply to the assertion of any such claim, right, or cause of action by the Debtors, the Reorganized Debtors, the Asbestos Personal Injury Trust, or the Litigation Trust. (ii) STATUS Class 7 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 7 shall be entitled to vote to accept or reject the Plan. (f) Class 8: FB Asbestos Personal Injury Claims (i) TREATMENT ALL CLASS 8 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. THE ASBESTOS PERSONAL INJURY TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF A CLASS 8 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 8 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS HEREOF). Nothing contained in this Section 3.3(f) shall constitute or be deemed a waiver of any claim, right, or cause of action that the Debtors, the Reorganized Debtors or the Asbestos Personal Injury Trust may have against any Person in connection with or arising out of a Class 8 Claim, and the injunction shall not apply to the assertion of any such claim, right, or cause of action by the Debtors, the Reorganized Debtors, the Asbestos Personal Injury Trust, or the Litigation Trust. (ii) STATUS Class 8 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 8 shall be entitled to vote to accept or reject the Plan. (g) Class 9: FB Asbestos Property Damage Claims (i) TREATMENT ALL CLASS 9 CLAIMS SHALL BE CHANNELED TO FB ASBESTOS PROPERTY DAMAGE TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE FB ASBESTOS PROPERTY DAMAGE TRUST AGREEMENT AND THE FB ASBESTOS PROPERTY DAMAGE TRUST DISTRIBUTION PROCEDURES. THE FB ASBESTOS PROPERTY DAMAGE TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF AN ALLOWED CLASS 9 CLAIM SHALL BE THE FB ASBESTOS PROPERTY DAMAGE TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLASS 9 CLAIM AGAINST ANY FB PERSON. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY FB ASBESTOS PROPERTY DAMAGE CLAIMS (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE FB ASBESTOS PROPERTY DAMAGE TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS HEREOF). (ii) STATUS Class 9 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 9 shall be entitled to vote to accept or reject the Plan. (h) Class 10: Intercompany Claims (i) TREATMENT Under the Plan, on the Effective Date, all Intercompany Claims other than such Claims set forth in Schedule XIII, to be filed or amended at least ten (10) Business Days prior to the Objection Deadline, shall be deemed cancelled and extinguished in accordance with Section 5.2 of the Plan. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such Intercompany Claim. Schedule XIII shall indicate the classification and/or treatment of the Claims set forth therein. (ii) STATUS Class 10 Claims are Impaired. The holders of the Claims in Class 10 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. (i) Class 11: Subordinated Claims (i) TREATMENT On the Effective Date, all of the Subordinated Claims shall be deemed cancelled and extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such Subordinated Claims. (ii) STATUS Class 11 Claims are Impaired. The holders of the Claims in Class 11 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. (j) Class 12: OCD Interests (i) TREATMENT On the Effective Date, all of the OCD Interests outstanding at the Effective Date shall be deemed cancelled and extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of such OCD Interests. (ii) STATUS Class 12 Interests are Impaired. The holders of the Interests in Class 12 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. 3.4 Reservation of Rights Regarding Claims Except as otherwise expressly provided in the Plan, nothing will affect the Debtors' or Reorganized Debtors' rights and defenses, both legal and equitable, with respect to any Claims, including, without limitation, all rights with respect to legal and equitable defenses to alleged rights of setoff or recoupment. Notwithstanding the substantive consolidation of the Debtors, the Claims against any particular Debtor that are Unimpaired shall remain the obligations solely of such Debtor and shall not become obligations of any other Debtor or Reorganized Debtor. ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN 4.1 Impaired Classes of Claims and Interests Entitled to Vote Subject to Sections 4.3 and 4.4 hereof, holders of Claims in each Impaired Class of Claims shall be entitled to vote as a Class to accept or reject the Plan. 4.2 Acceptance by an Impaired Class Acceptance of the Plan by any Impaired Class of Claims shall be determined in accordance with the Voting Procedures Order and the Bankruptcy Code. 4.3 Presumed Acceptances by Unimpaired Classes Classes 1, 2A and 2B are Unimpaired by the Plan. Under Section 1126(f) of the Bankruptcy Code, holders of Claims in Classes 1, 2A and 2B are conclusively presumed to accept the Plan, and the votes of such Claim holders will not be solicited. 4.4 Classes Deemed to Reject the Plan Holders of Claims and Interests in Classes 10, 11 and 12 are not entitled to receive or retain any property under the Plan. Under Section 1126(g) of the Bankruptcy Code, holders of Claims and Interests in Classes 10, 11 and 12 are deemed to reject the Plan, and the votes of such Claim or Interest holders will not be solicited. 4.5 Summary of Classes Voting on the Plan As a result of the provisions of Sections 4.1, 4.3 and 4.4 hereof, the votes of holders of Claims in Classes 3, 4, 5, 6, 7, 8 and 9 will be solicited with respect to the Plan. 4.6 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code To the extent that any Impaired Class rejects the Plan or is deemed to have rejected the Plan, the Plan Proponents will request confirmation of the Plan, as it may be modified from time to time, under Section 1129(b) of the Bankruptcy Code. The Plan Proponents reserve the right to alter, amend, modify, revoke or withdraw the Plan or any exhibits or schedules attached to the Plan, including to amend or modify it to satisfy the requirements of Section 1129(b) of the Bankruptcy Code, if necessary. ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN 5.1 Continued Corporate Existence Following confirmation and consummation of the Plan, subject to the Restructuring Transactions, the Reorganized Debtors will continue to exist as separate corporate entities in accordance with the laws of their respective states of incorporation and pursuant to their respective certificates or articles of incorporation and bylaws in effect prior to the Effective Date, except to the extent such certificates or articles of incorporation and bylaws are amended pursuant to the Plan. OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines. The planning for this restructuring is in a preliminary stage. It is anticipated that the restructuring plan which is adopted will be announced at least ten (10) Business Days prior to the date the Disclosure Statement is approved and will be described in an amendment to the Plan. 5.2 Cancellation of Debt and Debt Agreements (a) On the Effective Date, (i) the Debt shall be cancelled and extinguished and (ii) the obligations of the Debtors, CFSB as agent for the Bank Holders and the Pre-petition Indenture Trustees under the Debt Agreements shall be discharged. Notwithstanding the foregoing, each of the Pre-petition Bond Indentures shall continue in effect solely for the purposes of (x) allowing the Pre-petition Indenture Trustee to make distributions to holders of Allowed Class 5 Claims pursuant to the Plan and (y) permitting the Pre-petition Indenture Trustee to maintain any rights or liens it may have for fees, costs, expenses and indemnification under its indenture or other agreement or applicable law, but the foregoing shall not result in any expense or liability to any Reorganized Debtor other than as expressly provided for in the Plan. (b) No Reorganized Debtor shall have any obligations to any Pre-petition Indenture Trustee, agent or service (or to any disbursing agent replacing a Pre-petition Indenture Trustee, agent or service) for any fees, costs or expenses, except as expressly provided in the Plan. Except as provided in any contract, instrument or other agreement or document entered into or delivered in connection with the Plan, on the Effective Date and immediately following the completion of distributions to holders of Claims in Class 5, the Pre-petition Indenture Trustees shall be released from all duties, without any further action on the part of the Debtors or Reorganized Debtors. 5.3 Cancellation of OCD Interests As of the Effective Date, by virtue of the Plan, and without any action necessary on the part of the holders thereof or any corporate action, except as specified in the Plan, all of the OCD Interests outstanding at the Effective Date shall be cancelled, extinguished and retired, and no consideration will be paid or delivered with respect thereto. Holders of OCD Interests shall not be required to surrender their certificates or other instruments evidencing ownership of such OCD Interests. 5.4 Certificates of Incorporation and Bylaws The certificate or articles of incorporation and bylaws of each Debtor will be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code and will include, among other things, pursuant to Section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity securities, but only to the extent required by Section 1123(a)(6) of the Bankruptcy Code. The Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD will also include provisions (i) creating the New OCD Common Stock, and (ii), to the extent necessary or appropriate, effectuating the provisions of the Plan. The Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD shall be in substantially the forms of Exhibit A and Exhibit B, to be filed at least ten (10) Business Days prior to the Objection Deadline. 5.5 Exculpation and Limitation of Liability (a) No Claimant Released Party shall have or incur any liability to any Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or other right of an equity security holder, or any other party in interest, or any Person claiming by or through them, or any of their respective Related Persons, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan, the solicitation of acceptances of the Plan, the pursuit of confirmation of the Plan, the confirmation of the Plan, the consummation of the Plan or the administration of the Plan or the property to be distributed under the Plan, except for willful misconduct or gross negligence, and, in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. (b) Notwithstanding any other provision herein, no Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or other right of an equity security holder, no person claiming by or through them, nor any of their respective Related Persons, shall have any right of action against any Claimant Released Party for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan, solicitation of acceptances of the Plan, the pursuit of confirmation of the Plan, the consummation of the Plan, the confirmation of the Plan or the administration of the Plan or the property to be distributed under the Plan, except for willful misconduct or gross negligence. (c) The foregoing exculpation and limitation on liability shall not, however, limit, abridge or otherwise affect the rights of the Reorganized Debtors to enforce, sue on, settle or compromise the rights, claims and other matters retained by Reorganized Debtors pursuant to Section 5.10 of the Plan. 5.6 Restructuring Transactions On or after the Effective Date, any Reorganized Debtor may enter into Restructuring Transactions and may take such actions as may be necessary or appropriate to effect such Restructuring Transactions, as may be determined by such Reorganized Debtor to be necessary or appropriate. The actions to effect the Restructuring Transactions may include: (i) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, disposition, liquidation or dissolution containing terms that are consistent with the terms herein and that satisfy the applicable requirements of applicable law and such other terms to which the applicable entities may agree; (ii) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, duty or obligation on terms consistent with the terms herein and having such other terms to which the applicable entities may agree; (iii) the filing of appropriate certificates or articles of merger, consolidation or dissolution pursuant to applicable law; and (iv) all other actions which the applicable entities may determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law in connection with such transactions. The Restructuring Transactions may include one or more mergers, consolidations, restructures, dispositions, liquidations or dissolutions, as may be determined by the Reorganized Debtors to be necessary or appropriate to result in substantially all of the respective assets, properties, rights, liabilities, duties and obligations of all or certain of the Reorganized Debtors vesting in one or more surviving, resulting or acquiring corporations. In each case in which the surviving, resulting or acquiring corporation in any such transaction is a successor to a Reorganized Debtor, such surviving, resulting or acquiring corporation will perform the obligations of the applicable Reorganized Debtor pursuant to the Plan to pay or otherwise satisfy the Allowed Claims against such Reorganized Debtor, except as provided in any contract, instrument or other agreement or document effecting a disposition to such surviving, resulting or acquiring corporation, which may provide that another Reorganized Debtor will perform such obligations. OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines as described in the Disclosure Statement, with a detailed description of the actions and steps required to implement the Restructuring Transactions to be filed al least ten (10) Business Days prior to the Objection Deadline. On or prior to, or as soon as practicable after, the Effective Date, the Reorganized Debtors may take such steps as may be necessary or appropriate to effectuate Restructuring Transactions that satisfy the requirements set forth in this Section 5.6. 5.7 Issuance of New OCD Securities (a) On the Initial Distribution Date, Reorganized OCD shall issue for distribution in accordance with the terms of the Plan (i) the New OCD Common Stock, and (ii) Senior Notes in the Senior Notes Amount. (b) All of the shares of New OCD Common Stock issued as of the Effective Date, the Initial Distribution Date or the Final Distribution Date, as the case may be, will be fully paid and non-assessable. (c) The issuance of all of the New OCD Securities, and the distribution thereof, shall be exempt from registration under applicable securities laws pursuant to Section 1145 of the Bankruptcy Code. 5.8 Litigation Trust On the Effective Date, the Reorganized Debtors will transfer and assign, or cause to be transferred and assigned to the Litigation Trust, all their right, title and interest in and to the Litigation Trust Assets. (a) Appointment of Litigation Trustee The Litigation Trustee for the Litigation Trust shall be designated by the Plan Proponents and approved by the Bankruptcy Court. On or prior to the date of the Disclosure Statement Hearing, the Plan Proponents shall file with the Bankruptcy Court a notice designating the Person they have selected as Litigation Trustee and seeking approval of such designation at the Confirmation Hearing. Once approved by the Bankruptcy Court, the Litigation Trustee shall have and perform all of the duties, responsibilities, rights and obligations set forth in the Litigation Trust Agreement. (b) Transfer of Litigation Trust Assets to the Litigation Trust On the Effective Date, the Debtors shall irrevocably transfer the Litigation Trust Assets (except such assets as have been previously settled) to the Litigation Trust, for and on behalf of the beneficiaries of the Litigation Trust. Upon such transfer, the Debtors, the Disbursing Agent and the Reorganized Debtors shall have no further interests therein or rights or obligations with respect thereto other than the right of the Reorganized Debtors to recover the Litigation Trust Reimbursement Obligation as set forth in Section 5.8(e) hereof. (c) The Litigation Trust (i) Without any further action of the directors or shareholders of the Debtors, on the Effective Date, the Litigation Trust Agreement in the form of Exhibit C, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business Days prior to the Objection Deadline, shall become effective. The Litigation Trustee shall accept the Litigation Trust and sign the Litigation Trust Agreement as of the Effective Date and the Litigation Trust will then be deemed created and effective. (ii) The Litigation Trustee shall have full authority to take any steps necessary to administer the Litigation Trust Agreement, including, without limitation, the duty and obligation to liquidate Litigation Trust Assets, to make distributions therefrom to the holders of Allowed Claims in Classes 4, 5, 6, and 7 and to pursue and settle any of the rights and claims with respect to the Litigation Trust Assets. (iii) All costs and expenses associated with the administration of the Litigation Trust, including those rights, obligations and duties described in this Section 5.8, shall be the responsibility of and paid by the Litigation Trust. Notwithstanding the foregoing, the Reorganized Debtors shall make available to the Litigation Trustee and to representatives of the Litigation Trust reasonable access during normal business hours, upon reasonable notice, personnel and books and records of the Reorganized Debtors to enable the Litigation Trustee to perform the Litigation Trustee's tasks under the Litigation Trust Agreement and the Plan; provided, however, that the Reorganized Debtors shall not be required to make expenditures in response to such requests determined by them in good faith to be unreasonable. (iv) The Litigation Trustee may retain such law firms, accounting firms, experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as it may deem necessary, in its sole discretion, to aid in the performance of its responsibilities pursuant to the terms of the Plan including, without limitation, the liquidation and distribution of Litigation Trust Assets. (v) For federal income tax purposes, it is intended that the Litigation Trust be classified as a liquidating trust under Section 301.7701-4 of the Treasury Regulations and that such trust is owned by its beneficiaries. Accordingly, for federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a distribution of an undivided interest in the Litigation Trust Assets and then contributed such interests to the Litigation Trust. (vi) The Litigation Trustee shall be responsible for filing all federal, state and local tax returns for the Litigation Trust. (vii) The Litigation Trustee may invest the corpus of the Litigation Trust in prudent investments in addition to those described in Section 345 of the Bankruptcy Code. (viii) The Litigation Trustee may be removed by the Bankruptcy Court for cause shown. In the event of the resignation or removal of the Litigation Trustee, the Bankruptcy Court shall designate a person to serve as successor Litigation Trustee. (d) Funding of the Litigation Trust The Debtors shall deliver the Litigation Trust Initial Deposit to the Litigation Trustee on the Effective Date. The Litigation Trustee shall use the Litigation Trust Initial Deposit consistent with the purpose of the Litigation Trust and subject to the terms and conditions of the Plan and the Litigation Trust Agreement. (e) Distributions of Litigation Trust Assets The Litigation Trustee shall make distributions of Litigation Trust Recoveries in accordance with the Litigation Trust Agreement. The Litigation Trust Agreement shall provide for distributions to be made as soon as practicable after receipt of Litigation Trust Recoveries as follows: (i) first, to pay the Litigation Trust Expenses; (ii) second, to repay the Litigation Trust Reimbursement Obligation until such time as the Litigation Trust Reimbursement Obligation is paid in full; and (iii) third, to (a) holders of Allowed Claims in each of Classes 4, 5, and 6 (and reserving for holders of Disputed Claims in each of such Classes) in accordance with Sections 3.3(b), 3.3(c) and 3.3(d) of the Plan, and, (b) the Asbestos Personal Injury Trust for distribution in accordance with Section 3.3(e) of the Plan. 5.9 Revesting of Assets Pursuant to Section 1141(b) of the Bankruptcy Code, all property of the respective Estate of each Debtor, together with any property of each Debtor that is not property of its Estate and that is not specifically disposed of pursuant to the Plan, shall revest in the applicable Reorganized Debtor on the Effective Date. Thereafter, the Reorganized Debtors may operate their businesses and may use, acquire and dispose of property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules and the Bankruptcy Court. As of the Effective Date, all property of each Reorganized Debtor shall be free and clear of all Encumbrances, Claims and Interests, except as specifically provided in the Plan or the Confirmation Order. Without limiting the generality of the foregoing, each Reorganized Debtor may, without application to or approval by the Bankruptcy Court, pay fees that it incurs after the Effective Date for professional services and expenses. 5.10 Rights of Action Except as otherwise provided in the Plan or the Confirmation Order, or in any contract, instrument, release, indenture or other agreement entered into in connection with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code, the Reorganized Debtors shall retain and may enforce, sue on, settle or compromise (or decline to do any of the foregoing) all rights, claims, causes of action, suits or proceedings accruing to the Debtors or the Estates pursuant to the Bankruptcy Code or pursuant to any statute or legal theory, including, without limitation, any avoidance or recovery actions under Sections 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code and any suits or proceedings for recovery under any policies of insurance issued to or on behalf of the Debtors. Except to the extent such rights, title and interest in the Litigation Trust Assets are transferred and assigned to the Litigation Trust, the Reorganized Debtors shall be deemed the appointed representative to, and may pursue, litigate, compromise and settle any such rights, claims, causes of action, suits or proceedings as appropriate, in accordance with the best interests of the Reorganized Debtors or their respective successors who hold such rights. The Reorganized Debtors will transfer and assign, or cause to be transferred and assigned, all their right, title and interest in and to the Litigation Trust Assets to the Litigation Trust in accordance with Section 5.8, or, if deemed necessary, any right, title and interest in and to Litigation Trust Assets shall be pursued in the name of the Debtors or the Reorganized Debtors for the benefit of the Litigation Trust. Notwithstanding anything in the Plan to the contrary, the Debtors, upon such transfer and assignment, shall forgo any interest they may have in the Litigation Trust Assets, except with respect to the Litigation Trust Reimbursement Obligation. 5.11 Effectuating Documents; Further Transactions The chairman of the OCD Board of Directors, the chief executive officer, chief restructuring officer, president, chief financial officer or any other appropriate officer of OCD or any applicable Debtor, as the case may be, shall be authorized to execute, deliver, file or record such contracts, instruments, releases, indentures and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions herein. The secretary or assistant secretary of OCD or any applicable Debtor, as the case may be, shall be authorized to certify or attest to any of the foregoing actions. 5.12 Exemption from Certain Transfer Taxes Pursuant to Section 1146(c) of the Bankruptcy Code, any transfers in the United States from a Debtor to a Reorganized Debtor or any other Person or entity pursuant to the Plan shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment, and the Confirmation Order shall direct the appropriate state or local governmental officials or agents to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. 5.13 Releases and Injunction Related to Releases (a) Releases by Debtors Effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, to the fullest extent permissible under applicable law, each of the Debtors and Reorganized Debtors and their respective Estates and each of their respective Related Persons will be deemed to completely and forever release, waive, void, extinguish and discharge all Released Actions (other than the rights to enforce the Plan and any right or obligation under the Plan, and the securities, contracts, instruments, releases, indentures and other agreements or documents delivered thereunder or contemplated thereby) that may be asserted by or on behalf of the Debtors or Reorganized Debtors or their respective Estates or each of their respective Related Persons against (i) the Released Parties, (ii) the Pre-petition Indenture Trustees, (iii) the DIP Agent and the holders of DIP Facility Claims and (iv) the Persons who are Related Persons of Persons listed in clauses (ii) - (iii) above. (b) Releases by Holders of Claims and Interests Effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, to the fullest extent permissible under applicable law, each Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability that is discharged or an Interest or other right of an equity security holder that is terminated, and each of their respective Related Persons will be deemed to completely and forever release, waive, void, extinguish and discharge all Released Actions (other than the rights to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan, and any right or obligation of such holder under the Plan, and the securities, contracts, instruments, releases, indentures and other agreements or documents delivered thereunder or contemplated thereby) that otherwise may be asserted against the Claimant Released Parties. (c) Injunction Related to Releases Except as otherwise provided herein or in the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, each Person that has held, currently holds or may hold a Claim that is released pursuant to this Section 5.13 of the Plan or other obligation, suit, judgment, damages, debt, right, cause of action, liability, Interest or other right of an equity security holder released pursuant to this Section 5.13 of the Plan, and each other party in interest and each of their respective Related Persons are permanently, forever and completely stayed, restrained, prohibited and enjoined from taking any of the following actions, whether directly or indirectly, derivatively or otherwise on account of or based on the subject matter of any such released Claims or other released obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or Interests or other rights of an equity security holder: (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including, without limitation, to any judicial, arbitral, administrative or other proceeding) in any forum; (ii) enforcing, attaching (including, without limitation, any prejudgment attachment), collecting, or in any way seeking to recover any judgment, award, decree, or other order; (iii) creating, perfecting or in any way enforcing in any matter, directly or indirectly, any Encumbrance; (iv) setting off, seeking reimbursement or contributions from, or subrogation against, or otherwise recouping in any manner, directly or indirectly, any amount against any liability or obligation owed to any Person released under Section 5.13(a) or Section 5.13(b), as applicable; and (v) commencing or continuing in any manner, in any place of any action, which in any such case does not comply with or is inconsistent with the provisions of the Plan. (d) Injunction Relating to Hartford Entities Except as to any rights with respect to which the Debtors explicitly declined to give a release to the Hartford Entities pursuant to Section VI of the Hartford Settlement Agreement, effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, pursuant to Section 105(a) of the Bankruptcy Code, to the fullest extent permissible under applicable law, each Person that has held, currently holds or may hold a Claim shall be permanently enjoined pursuant to 11 U.S.C. ss.105(a) from taking any action or seeking any recovery against or from any of the Hartford Entities that seeks to enforce any rights under, through or related to the Hartford Policies. (e) Deemed Consent By voting to accept the Plan, each holder of a Claim will be deemed, to the fullest extent permitted by applicable law, to have specifically consented to the releases and injunctions set forth in this Section 5.13. (f) No Waiver The release set forth in Subsection (a) of this Section 5.13 shall not, however, limit, abridge or otherwise affect the rights of the Reorganized Debtors to enforce, sue on, settle or compromise the rights, claims and other matters retained by Reorganized Debtors pursuant to the Plan. 5.14 Permanent Injunctions and Asbestos Personal Injury Permanent Channeling Injunction (a) General Injunction Except as provided in the Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons and any Person claiming by or through them, that have held, currently hold or may hold a Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability (other than a Demand) that is discharged or an Interest or other right of an equity security holder that is terminated pursuant to the terms of the Plan will be permanently, forever and completely stayed, restrained, prohibited and enjoined from taking any Enjoined Action against any of the Released Parties or Claimant Released Parties whether directly or indirectly, derivatively or otherwise for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any such discharged Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability, or terminated Interest or right of an equity security holder on account of, or based on the subject matter of, any such discharged Claims, obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or terminated Interests or rights of an equity security holder. (b) Asbestos Personal Injury Permanent Channeling Injunction PURSUANT TO SECTION 524(G) OF THE BANKRUPTCY CODE AND PURSUANT TO AND IN CONJUNCTION WITH THE CONFIRMATION ORDER, ALL PERSONS WILL BE PERMANENTLY, FOREVER AND COMPLETELY STAYED, RESTRAINED, PROHIBITED AND ENJOINED FROM TAKING ANY ENJOINED ACTION, OR PROCEEDING IN ANY MANNER IN ANY PLACE WITH REGARD TO ANY MATTER THAT IS SUBJECT TO RESOLUTION PURSUANT TO THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY RESOLVED ASBESTOS PERSONAL INJURY CLAIM, EXCEPT IN CONFORMITY AND COMPLIANCE THEREWITH, AGAINST ANY PROTECTED PARTY OR PROPERTY OR INTERESTS IN PROPERTY OF ANY PROTECTED PARTY, WHETHER DIRECTLY OR INDIRECTLY, DERIVATIVELY OR OTHERWISE, FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING OR RECEIVING PAYMENT OF, ON OR WITH RESPECT TO ANY ASBESTOS PERSONAL INJURY CLAIMS (OTHER THAN PURSUANT TO THE PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT OR TO ENFORCE THE PROVISIONS OF THE PLAN). (c) No Waiver Nothing contained in the Asbestos Personal Injury Permanent Channeling Injunction shall be deemed a waiver of any claim, right or cause of action that the Debtors, the Reorganized Debtors or the Asbestos Personal Injury Trust may have against any Person in connection with or arising out of an Asbestos Personal Injury Claim. 5.15 Directors and Officers of Reorganized Debtors (a) Directors of Reorganized Debtors (i) Appointment. The initial Board of Directors of Reorganized OCD shall consist of twelve (12) members. The majority of the initial Board of Directors shall be appointed by the Asbestos Claimants' Committee and the Future Claimants' Representative; and the remaining initial directors shall be appointed by the existing Board of Directors of OCD and shall include David T. Brown, the Chief Executive Officer of Reorganized OCD. The initial Board of Directors shall have at least three individuals who at that time would qualify under New York Stock Exchange rules and applicable laws as independent outside directors and who would be eligible to serve on the audit committee of the Board of Directors of an SEC-reporting public company and at least three individuals who would qualify as independent directors under Section 162(m) of the IRC eligible to serve on the committee of the Board of Directors responsible for matters of executive compensation. The identities of the members of the initial Board of Directors of Reorganized OCD shall be set forth in the Disclosure Statement. The boards of directors of the other Reorganized Debtors shall consist of directors as determined by the Plan Proponents. The Plan Proponents shall file with the Bankruptcy Court the identities of such board members on a date not less than ten (10) Business Days prior to the Objection Deadline. (ii) Terms. Commencing on the Effective Date, Reorganized OCD board members shall serve for initial terms set forth in the Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated By-Laws of Reorganized OCD, as approved in the Confirmation Order. (iii) Vacancies. The procedures for filling any vacancy in the directorship prior to the expiration of the initial term shall be as set forth in the Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated By-Laws of Reorganized OCD, as approved in the Confirmation Order. (b) Officers of Reorganized Debtors The existing senior officers of OCD who will serve initially in the same capacities after the Effective Date for Reorganized OCD shall be identified in the Disclosure Statement, and shall include David T. Brown as Chief Executive Officer. The executive officers of the other Reorganized Debtors shall consist of executive officers as determined by Reorganized OCD on the Effective Date or thereafter. 5.16 Compensation and Benefit Programs (a) Except and to the extent previously assumed or rejected by an order of the Bankruptcy Court, on or before the Confirmation Date, all employee compensation and benefit programs of the Debtors as amended or modified, including programs subject to Sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition Date and not since terminated, shall be deemed to be, and shall be treated as though they are, executory contracts that are assumed except for (i) executory contracts or plans specifically rejected pursuant to the Plan, and (ii) executory contracts or plans as have previously been rejected, are the subject of a motion to reject or have been specifically waived by the beneficiaries of any plans or contracts; provided, however, that the Debtors may pay all "retiree benefits" (as defined in Section 1114(a) of the Bankruptcy Code). (b) On the Effective Date, Reorganized OCD will adopt Management Arrangements to be determined at a later date and be incorporated into the Plan by amendment. On the Effective Date, management and designated employees of Reorganized OCD and the other Reorganized Debtors shall receive the benefits provided under such Management Arrangements on the terms and conditions provided for therein. 5.17 Continuation of Certain Orders Notwithstanding anything in the Plan to the contrary, the Debtors will continue to pay any Claims authorized to be paid by an order of the Bankruptcy Court during the Chapter 11 Cases, pursuant to the terms and conditions of any such order. 5.18 Exit Facility On or prior to the Effective Date, OCD and those Subsidiaries which are parties to the Exit Facility shall enter into all necessary and appropriate documentation to obtain, and in connection with, the Exit Facility. ARTICLE VI SUBSTANTIVE CONSOLIDATION FOR PURPOSES OF TREATING IMPAIRED CLAIMS AND PROCESS FOR RESOLUTION OF KEY ISSUES 6.1 Substantive Consolidation (a) The Debtors (but not the Fibreboard Insurance Settlement Trust) all shall be substantively consolidated for the purposes of voting, determining which Claims and Interests will be entitled to vote to accept or reject the Plan, confirmation of the Plan and the resultant discharge of and cancellation of Claims and Interests and distribution of assets, interests and other property under the terms herein. Subject to Section 5.6, substantive consolidation under the Plan will not result in the merger of or the transfer or commingling of any assets of any of the Debtors or Non-Debtor Subsidiaries, and, subject to Section 5.6, all assets (whether tangible or intangible) will continue to be owned by the respective Debtors or Non-Debtor Subsidiaries, as the case may be. In that regard, OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines. The planning for this restructuring is in a preliminary stage. It is anticipated that the restructuring plan which is adopted will be announced at least ten (10) days prior to the date the Disclosure Statement is approved and will be described in an amendment to the Plan. (b) On the Effective Date and for purposes set forth in Subsection (a), (i) all assets and liabilities of each Subsidiary Debtor (excluding the Fibreboard Insurance Settlement Trust) will be treated as though they were merged into and with the assets and liabilities of OCD; (ii) except as otherwise provided in the Plan, no distributions will be made under the Plan on account of Intercompany Claims among any of the Debtors; (iii) all guarantees of the Debtors of the obligations of any other Debtor will be deemed eliminated, so that any claim against any such Debtor and any guarantee thereof executed by any other such Debtor and any joint or several liability of any of such Debtors will be deemed to be one obligation of the Debtors with respect to the consolidated estate. Such substantive consolidation will not (other than for purposes of the Plan) affect (i) the legal and corporate structures of the Reorganized Debtors, subject to the right of the Debtors or Reorganized Debtors to effect Restructuring Transactions as provided in Section 5.6, (ii) Intercompany Claims, (iii) Subsidiary Interests or (iv) pre- and post-Petition Date guarantees that are required to be maintained in connection with executory contracts or unexpired leases that have been or will be assumed pursuant to the Plan. ARTICLE VII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 7.1 Assumed Contracts and Leases (a) Except as otherwise provided in the Plan, or in any contract, instrument, release, indenture or other agreement or document entered into in connection with the Plan, as of the Effective Date, each Debtor shall be deemed to have assumed each executory contract and unexpired lease to which it is a party, unless such contract or lease (i) was previously assumed or rejected by such Debtor, (ii) previously expired or terminated pursuant to its own terms, (iii) is the subject of a motion pending before the Bankruptcy Court as of the Confirmation Date to assume or reject such contract or lease or (iv) is listed on Schedule IV, to be filed at least ten (10) Business Days prior to the Objection Deadline, as being an executory contract or unexpired lease to be rejected; provided, however, that the Plan Proponents reserve the right, at any time prior to the Confirmation Date, to amend Schedule IV to add or delete any unexpired lease or executory contract. The Confirmation Order shall constitute an order of the Bankruptcy Court under Section 365 of the Bankruptcy Code approving the contract and lease assumptions described above, as of the Effective Date. (b) Each executory contract and unexpired lease that is assumed and relates to the use, ability to acquire, or occupancy of real property shall include (i) all modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affect such executory contract or unexpired lease and (ii) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, usufructs, reciprocal easement agreements, vaults, tunnel or bridge agreements or franchises and any other interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements has been rejected pursuant to an order of the Bankruptcy Court. 7.2 Payments Related to Assumption of Contracts and Leases Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to the Plan is in default will be satisfied, under Section 365(b)(1) of the Bankruptcy Code, at the option of the Debtors or the assignee of a Debtor assuming such contract or lease, by Cure. If there is a dispute regarding (i) the nature or amount of any Cure, (ii) the ability of a Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be assumed or (iii) any other matter pertaining to assumption, Cure will occur following the entry of a Final Order of the Bankruptcy Court resolving the dispute and approving the assumption or assumption and assignment, as the case may be. The Confirmation Order shall contain provisions for notices of proposed assumptions and proposed Cure amounts to be sent to applicable third parties and for procedures for objecting thereto and resolution of disputes by the Bankruptcy Court. If no proposed Cure amount is proposed by the Debtors, it shall be presumed that the Debtors are asserting that no Cure amount is required to be paid under Section 365(b)(1) of the Bankruptcy Code. 7.3 Rejected Contracts and Leases On the Effective Date, each executory contract and unexpired lease that is listed on Schedule IV, shall be rejected pursuant to Section 365 of the Bankruptcy Code. Each contract or lease listed on Schedule IV shall be rejected only to the extent that any such contract or lease constitutes an executory contract or unexpired lease. The Plan Proponents reserve their right, at any time prior to the Confirmation Date, to amend Schedule IV to delete any unexpired lease or executory contract therefrom or add any unexpired lease or executory contract thereto. To the extent that an executory contract or unexpired lease (i) is not listed on Schedule IV, (ii) has not been previously rejected or (iii) is not subject to a motion to reject at the time of the Confirmation Date, such executory contract or unexpired lease shall be deemed assumed. Listing a contract or lease on Schedule IV shall not constitute an admission by a Debtor nor a Reorganized Debtor that such contract or lease is an executory contract or unexpired lease or that such Debtor or Reorganized Debtor has any liability thereunder. Without limiting the foregoing, any agreement entered into prior to the Petition Date by or on behalf of the Debtors with a holder of an Asbestos Personal Injury Claim with respect to the settlement of any OC Asbestos Personal Injury Claim or FB Asbestos Personal Injury Claim shall be deemed rejected as of the Effective Date to the extent such settlement agreement is deemed to be an executory contract within the meaning of Section 365(a) of the Bankruptcy Code. The Confirmation Order shall constitute an order of the Bankruptcy Court approving such rejections as of the Effective Date, pursuant to Section 365 of the Bankruptcy Code. 7.4 Rejection Damages Bar Date If the rejection by a Debtor, pursuant to the Plan, of an executory contract or unexpired lease results in a Claim, then such Claim shall be forever barred and shall not be enforceable against any Debtor or Reorganized Debtor, or the properties of any of them, unless a Proof of Claim is filed and served upon counsel to the Debtors, counsel to the Unsecured Creditors' Committee and counsel to the Asbestos Claimants' Committee, within thirty (30) days after service of the notice that the executory contract or unexpired lease has been rejected. 7.5 Indemnification Obligations Indemnification Obligations shall be deemed to be, and shall be treated as though they are, executory contracts that are assumed pursuant to Section 365 of the Bankruptcy Code under the Plan and such obligations shall survive confirmation of the Plan, remain unaffected by the Plan and shall not be discharged or impaired by the Plan, irrespective of whether indemnification or reimbursement obligation is owed in connection with an event occurring before, on or after the Petition Date; provided, however, that, except as otherwise provided in this Plan, indemnification obligations that are not Indemnification Obligations within the meaning of Section 1.120 hereof shall be deemed to be, and shall be treated as though they are, executory contracts that are rejected pursuant to Section 365 of the Bankruptcy Code as of the Effective Date. 7.6 Insurance Policies and Agreements (a) Assumed Insurance Policies and Agreements. The Debtors do not believe that the insurance policies issued to, or insurance agreements entered into by, the Debtors prior to the Petition Date constitute executory contracts. To the extent that such insurance policies or agreements are considered to be executory contracts, then, notwithstanding anything contained in Section 7.1 or 7.3 of the Plan to the contrary, the Plan shall constitute a motion to assume such insurance policies and agreements, and, subject to the occurrence of the Effective Date, the entry of the Confirmation Order shall constitute approval of such assumption pursuant to Section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such assumption is in the best interest of each Debtor, its Estate, and all parties in interest in the Chapter 11 Cases. Unless otherwise determined by the Bankruptcy Court pursuant to a Final Order or agreed to by the parties thereto prior to the Effective Date, no payments are required to cure any defaults of the Debtors existing as of the Confirmation Date with respect to each such insurance policy or agreement. To the extent that the Bankruptcy Court determines otherwise as to any such insurance policy or agreement, the Debtors reserve the right to seek rejection of such insurance policy or agreement or other available relief. In accordance with Sections 10.3 and 11.3 of the Plan, the rights under the insurance policies and agreements constituting (i) the OC Asbestos Personal Injury Liability Insurance Assets shall, to the extent necessary, be deemed assigned to the OC Sub-Account of the Asbestos Personal Injury Trust as of the Effective Date and (ii) the FB Asbestos Property Damage Insurance Assets shall, to the extent necessary, be deemed assigned to the FB Asbestos Property Damage Trust as of the Effective Date, and, pursuant to Section 365 of the Bankruptcy Code, the Debtors shall have no further liability thereunder from and after June 18, 2001. (b) Rejected Insurance Policies and Agreements To the extent that any or all of the insurance policies and agreements set forth on Schedule XI, to be filed no later than ten (10) Business days prior to the Objection Deadline, are considered to be executory contracts, then, notwithstanding anything contained in Section 7.1 or 7.3 of the Plan to the contrary, the Plan shall constitute a motion to reject the insurance policies and agreements set forth on Schedule XI, and the entry of the Confirmation Order by the clerk of the Bankruptcy Court shall constitute approval of such rejection pursuant to section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such rejected insurance policy or agreement set forth on Schedule XI is burdensome and that the rejection thereof is in the best interest of each Debtor, its estate, and all parties in interest in the Chapter 11 Cases. (c) Reservation of Rights Nothing contained in the Plan, including this Section 7.6, shall constitute a waiver of any claim, right, or cause of action that the Debtors, the Asbestos Personal Injury Trust, the FB Asbestos Property Damage Trust, or the Reorganized Debtors, as the case may be, may hold against the insurer under any policy of insurance or insurance agreement. ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS 8.1 Distributions for Claims Allowed as of the Initial Distribution Date Except as otherwise provided herein or as ordered by the Bankruptcy Court, distributions to be made on account of Claims that are Allowed Claims as of the Initial Distribution Date shall be made on, or as soon as practicable after, the Initial Distribution Date. Notwithstanding anything herein to the contrary, distributions on account of Administrative Claims that are Allowed Claims as of the Effective Date shall be made on, or as soon as practicable after, the Effective Date, with no action to enforce a right to such payment until at least thirty (30) days after the Effective Date. Notwithstanding anything herein to the contrary, distributions on account of (i) Class 7 and 8 Claims shall be made in accordance with the terms or conditions of the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures, and (ii) Class 9 Claims shall be made in accordance with the terms or conditions of the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. Distributions on account of Claims that first become Allowed Claims after the Effective Date shall be made pursuant to Section 9.4 of the Plan. Notwithstanding the date on which any distribution of New OCD Securities is actually made to a holder of a Claim that is an Allowed Claim on the Initial Distribution Date , as of the date of the distribution such holder shall be deemed to have the rights of a holder of such securities distributed as of the Initial Distribution Date. 8.2 Interest on Claims Unless otherwise specifically provided for in the Plan, the Confirmation Order, or the Asbestos Personal Injury Trust Distribution Procedures, or required by applicable bankruptcy law, post-petition interest shall not accrue or be paid on Claims, and no holder of a Claim shall be entitled to interest accruing on or after the Petition Date on any Claim. Interest shall not accrue or be paid upon any Disputed Claim in respect of the period from the Petition Date to the date a final distribution is made thereon if and after such Disputed Claim becomes an Allowed Claim. 8.3 Distributions under the Plan (a) The Disbursing Agent or, in the case of the Bondholders Claims, the appropriate Pre-petition Indenture Trustee, shall make all distributions required under the Plan, except to holders of Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims. Asbestos Personal Injury Claims shall be satisfied in accordance with the distribution procedures described in the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures. FB Asbestos Property Damage Claims shall be satisfied in accordance with the distribution procedures described in the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. (b) If the Disbursing Agent is an independent third party designated by the Reorganized Debtors to serve in such capacity, such Disbursing Agent will be entitled to receive, without further Bankruptcy Court approval, reasonable compensation for distribution services rendered pursuant to the Plan as well as reimbursement of reasonable out-of-pocket expenses incurred in connection with rendering such services from the Reorganized Debtors on terms acceptable to the Reorganized Debtors. No Disbursing Agent will be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. 8.4 Record Date for Distributions to Holders of Bank Holders Claims and Bondholders Claims At the close of business on the Distribution Record Date, the transfer records for the Bank Holders Claims and Bondholders Claims will be closed, and there shall be no further changes in the record holders of Bank Holders Claims or Bondholders Claims. None of the Reorganized Debtors, the Disbursing Agent, if any, CSFB, as agent for the Bank Holders nor the applicable Pre-petition Indenture Trustee under the Pre-petition Bond Indenture for the Bondholders will have any obligation to recognize any transfer of Allowed Bank Holders Claims or Allowed Bondholders Claims, as applicable, occurring after the Distribution Record Date, and they will be entitled instead to recognize and deal for all purposes hereunder with only those record holders as of the close of business on the Distribution Record Date. Distributions to holders of Bondholder Claims administered by the Pre-petition Indenture Trustees will be made by means of book-entry exchange through the facilities of the Depository Trust Corporation ("DTC") in accordance with the customary practices of the DTC, as and to the extent practicable. In connection with such book-entry exchange, each Pre-petition Indenture Trustee will deliver instructions to the DTC directing the DTC to effect distributions (net of Pre-petition Indenture Trustee fees and expenses) on a pro rata basis as provided under the Plan with respect to the Bondholder Claims upon which such Indenture Trustee acts as trustee. 8.5 Means of Cash Payment Cash payments made pursuant to the Plan will be in United States funds by means agreed to by the payor and the payee, including by check or wire transfer, or, in the absence of an agreement, such commercially reasonable manner as the payor shall determine in its sole discretion. 8.6 Fractional New OCD Common Stock; Other Distributions (a) No fractional shares of New OCD Common Stock will be issued or distributed under the Plan. If any distribution pursuant to the Plan would otherwise result in the issuance of New OCD Common Stock that is not a whole number, the actual distribution of shares of such stock shall be rounded to the next higher or lower whole number as follows: (i) fractions of greater than one-half (1/2) shall be rounded to the next higher whole number, and (ii) fractions of one-half (1/2) or less shall be rounded to the next lower whole number. The total number of shares of New OCD Common Stock and the Senior Notes to be distributed pursuant to the Plan shall be adjusted as necessary to account for the rounding provided for herein. (b) No consideration shall be provided in lieu of fractional shares that are rounded down. The Senior Notes will only be issued with a principal amount in multiples of $1,000 or integral multiples thereof. The principal amount of the Senior Notes that would have been distributed in amounts of other than $1,000 shall be rounded as follows: (i) amounts equal to or less than $500 shall be reduced to $0.00 and (ii) amounts greater than $500 shall be increased to $1,000. (c) In addition, the payment of fractions of dollars shall not be made. Whenever any payment of a fraction of a dollar under the Plan would otherwise be called for, the actual payment made shall reflect a rounding of the fraction to the nearest whole dollar (up and down), with half dollars rounded down. (d) The Disbursing Agent, or any agent or servicer, as the case may be, shall not make any payment of less than thirty dollars ($30.00) with respect to any Claim. 8.7 Delivery of Distributions Distributions to holders of Allowed Claims in Classes 1, 2A, 2B, 3, 4, 5 and 6, shall be made by the Disbursing Agent or the applicable Pre-petition Indenture Trustee, as the case may be. If any holder's distribution is returned as undeliverable, no further distributions to such holder shall be made until the Disbursing Agent (or Pre-petition Indenture Trustee as applicable) is notified of such holder's then current address, at which time all missed distributions shall be made to such holder without interest. Amounts in respect of undeliverable distributions made by the Disbursing Agent (or the Pre-petition Indenture Trustee as applicable) shall be returned to the Reorganized Debtors until such distributions are claimed. All the claims for undeliverable distributions made by the Disbursing Agent or the Pre-petition Indenture Trustee, as the case may be, must be made on or before the first (1st) anniversary of the Effective Date, after which date all unclaimed property shall revert to the Reorganized Debtors free of any restrictions thereon and the claim of any holder or successor to such holder with respect to such property shall be discharged and forever barred, notwithstanding any federal or state escheat laws to the contrary. Nothing contained in the Plan shall require the Debtors, Reorganized Debtors, any Disbursing Agent, the Administrative Agent for the Bank Holders or any Pre-petition Indenture Trustee to attempt to locate any holder of an Allowed Claim after the first (1st) anniversary of the Effective Date. 8.8 Surrender of Pre-petition Bonds (a) Pre-petition Bonds Except as provided in Section 8.8(b) hereof in connection with lost, stolen, mutilated or destroyed Pre-petition Bonds, each holder of an Allowed Claim evidenced by a Pre-petition Bond shall tender such Pre-petition Bond to the respective Pre-petition Indenture Trustee in accordance with written instructions to be provided in a letter of transmittal to such holders by the Pre-petition Indenture Trustee as promptly as practicable following the Effective Date. Such letter of transmittal shall specify that delivery of such Pre-petition Bonds will be effected, and risk of loss and title thereto will pass, only upon the proper delivery of such Pre-petition Bonds with the letter of transmittal in accordance with such instructions. Such letter of transmittal shall also include, among other provisions, customary provisions with respect to the authority of the holder of the applicable note or Pre-petition Bonds to act and the authenticity of any signatures required on the letter of transmittal. All surrendered Pre-petition Bonds shall be marked as cancelled and delivered by the respective Pre-petition Indenture Trustee to the Reorganized Debtors. (b) Lost, Mutilated or Destroyed Pre-petition Bonds In addition to any requirements under the applicable certificate or articles of incorporation or bylaws of the applicable Debtor, any holder of indebtedness or obligation of a Debtor evidenced by a Pre-petition Bond that has been lost, stolen, mutilated or destroyed shall, in lieu of surrendering the Pre-petition Bond, deliver to the Pre-petition Indenture Trustee (i) evidence satisfactory to the Pre-petition Indenture Trustee of the loss, theft, mutilation or destruction; and (ii) such indemnity as may be required by the Pre-petition Indenture Trustee to hold the Pre-petition Indenture Trustee harmless from any damages, liabilities or costs incurred in treating such individual as a holder of a Pre-petition Bond. (c) Failure to Surrender Cancelled Pre-petition Bonds Any holder of a Pre-petition Bond that fails to surrender or be deemed to have surrendered such Pre-petition Bond before the first (1st) anniversary of the Effective Date shall have its Claim for a distribution on account of such Pre-petition Bond discharged and shall be forever barred from asserting any such Claim against any Reorganized Debtor or their respective property. (d) Distributions upon Receipt of Pre-petition Bonds No distribution of property under the Plan shall be made to or on behalf of any such holders unless and until such Pre-petition Bond is received by the appropriate Pre-petition Indenture Trustee, or the unavailability of such Pre-petition Bond is established to the reasonable satisfaction of the appropriate Pre-petition Indenture Trustee or such requirement is waived by the Reorganized Debtors. 8.9 Withholding and Reporting Requirements In connection with the Plan and all distributions thereunder, the Disbursing Agent shall, to the extent applicable, comply with all tax withholding and backup withholding and reporting requirements imposed by any federal, state, provincial, local or foreign taxing authority, and all distributions thereunder shall be subject to any such withholding and reporting requirements. The Disbursing Agent shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements. 8.10 Setoffs The Reorganized Debtors may, but shall not be required to, set off against any Claim and the payments or other distributions to be made pursuant to the Plan in respect of such Claim, claims of any nature whatsoever that the Debtors or Reorganized Debtors may have against the holder of such Claim; provided, however, that neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Reorganized Debtors of any such claim that the Debtors or Reorganized Debtors may have against such holder. ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS AND DISPUTED INTERESTS 9.1 Prosecution of Objections to Certain Claims (a) Unless otherwise ordered by the Bankruptcy Court, only the Debtors, the Reorganized Debtors or the Disbursing Agent shall have the authority to file objections to settle, compromise, withdraw or litigate objections to Claims, other than with respect to (i) the applications for the allowance of compensation and reimbursement of expenses of professionals under Section 330 of the Bankruptcy Code, (ii) Asbestos Personal Injury Claims, and (iii) FB Asbestos Property Damage Claims. (b) From and after the Confirmation Date, the Reorganized Debtors or the Disbursing Agent may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. (c) All objections to Claims, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims, must be filed and served on the holders of such Claims by the Claims Objection Deadline. Nothing contained herein, however, shall limit the Debtors' or Reorganized Debtors' right to object to any Claims, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims filed or amended after the Claims Objection Deadline. If an objection has not been filed to a Proof of Claim or a scheduled Claim, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims, by the Claims Objection Deadline, the Claim to which the Proof of Claim or scheduled Claim relates will be treated as an Allowed Claim if such Claim has not been Allowed earlier. 9.2 No Distributions Pending Allowance Notwithstanding any other provision in this Plan, no payments or distributions shall be made with respect to all or any portion of a Disputed Claim unless and until all objections to such Disputed Claim have been settled or withdrawn or have been determined by Final Order, and the Disputed Claim, or some portion thereof, has become an Allowed Claim. 9.3 Disputed Distribution Reserve (a) The Disbursing Agent shall establish appropriate reserves for Disputed Claims by withholding the lesser of (i) 100% of distributions to which holders of Disputed Claims would be entitled under the Plan if such Disputed Claims were Allowed Claims, or (ii) such other amount as may be approved by the Bankruptcy Court. (b) On, or as soon as practicable after, the Initial Distribution Date, the Reorganized Debtors shall transmit to the Disbursing Agent, and the Disbursing Agent shall reserve for the account of each holder of a Disputed Claim, (i) Cash, Senior Notes, New OCD Common Stock, or such other property which would otherwise be distributable to such holder on such date in accordance with the Plan were such Disputed Claim an Allowed Claim on such date, in the Face Amount thereof, or (ii) Cash, Senior Notes, New OCD Common Stock, or such other property of a lesser value as such holder and the Reorganized Debtors may agree. Cash, Senior Notes, New OCD Common Stock, or such other property reserved under this Section 9.3(b) shall be set aside and segregated by Class of Claims and, in the case of Cash, Cash dividends or Cash payments in respect thereof, to the extent practicable, held by the Disbursing Agent in an interest bearing escrow fund (which may be a single account for each Class, provided, that separate book entries for each Claim are maintained by the Disbursing Agent) to be established and maintained by the Disbursing Agent pending resolution of such Disputed Claims. 9.4 Distributions on Account of Disputed Claims Once They are Allowed On each Quarterly Distribution Date, the Disbursing Agent shall make payments and distributions from the reserve established for Disputed Claims to each holder of a Disputed Claim that has become an Allowed Claim during the preceding calendar quarter. After the date that the order or judgment of the Bankruptcy Court allowing such Claim becomes a Final Order, the Reorganized Debtors shall distribute to the holder of such Claim any property in the reserve established for Disputed Claims that would have been distributed to the holder of such claim had such Claim been an Allowed Claim. Such distributions will be made pursuant to the provisions of Article III governing the applicable Class. Holders of such Claims that are ultimately Allowed will also be entitled to receive, on the basis of the amount ultimately Allowed, the amount of any dividends or other distributions received on account of the property in reserve between the Effective Date and the date such distribution is made to such holder of Claim. ARTICLE X THE ASBESTOS PERSONAL INJURY TRUST 10.1 The Asbestos Personal Injury Trust The Asbestos Personal Injury Trust is intended to be a "qualified settlement fund" within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the IRC. Pursuant to the Asbestos Personal Injury Trust Agreement, the Asbestos Personal Injury Trust will have two separate sub-accounts: the OC Sub-Account and the FB Sub-Account. The purpose of the Asbestos Personal Injury Trust shall be to, among other things, (i) process, liquidate, and pay all Asbestos Personal Injury Claims in accordance with the Plan, the Asbestos Personal Injury Trust Distribution Procedures, and the Confirmation Order and (ii) preserve, hold, manage, and maximize the assets of the Asbestos Personal Injury Trust (including both the OC Sub-Account and the FB Sub-Account) for use in paying and satisfying Asbestos Personal Injury Claims. The Asbestos Personal Injury Trust shall comply in all respects with the requirements set forth in Section 524(g)(2)(B)(i) of the Bankruptcy Code. 10.2 Appointment of Asbestos Personal Injury Trustees On the Confirmation Date, effective as of the Effective Date, the Bankruptcy Court shall appoint the individuals selected jointly by the Asbestos Claimants' Committee and the Future Claimants' Representative (as identified in the Asbestos Personal Injury Trust Agreement), which individuals shall be appointed to serve as the Asbestos Personal Injury Trustees for the Asbestos Personal Injury Trust. 10.3 Transfers of Property to the Asbestos Personal Injury Trust (a) Transfer of the Plan Consideration to the OC Sub-Account of the Asbestos Personal Injury Trust On the Effective Date, or as soon as practicable thereafter, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) the portion of the Combined Distribution Package equal to the Class 7 Initial Distribution Percentage, (ii) the OC Asbestos Personal Injury Liability Insurance Assets and (iii) the OCD Insurance Escrow. On or as soon as reasonably practicable after the Final Distribution Date, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) Cash in an amount equal to the Class 7 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 7 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 7 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 7 Final Distribution Percentage of the Excess Litigation Trust Recoveries. The Reorganized Debtors will also execute and deliver to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request to issue the Distributable Shares to be distributed to the Asbestos Personal Injury Trust in the name of the Asbestos Personal Injury Trust or a nominee and transfer and assign to the Asbestos Personal Injury Trust all other assets which constitute the assets of the Asbestos Personal Injury Trust. (b) Transfer of the Plan Consideration to the FB Sub-Account of the Asbestos Personal Injury Trust On the Effective Date, or as soon as practicable thereafter, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the FB Sub-Account the following: (i) the FB Reversions; (ii) the Committed Claims Account; and (iii) the FB Sub-Account Settlement Payment. The Reorganized Debtors will, or will use all commercially reasonable efforts to, cause the trustee of the Fibreboard Insurance Settlement Trust to irrevocably transfer and assign (i) the Existing Fibreboard Insurance Settlement Trust Assets, and (ii) any and all of the Fibreboard Insurance Settlement Trust's rights in the FB Reversions, to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, on the Effective Date or as soon as practicable thereafter. The Reorganized Debtors will also execute and deliver, or will use all commercially reasonable efforts to cause the trustee of the Fibreboard Insurance Settlement Trust to execute and deliver, to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request in connection with the transfer and assignment of the Existing Fibreboard Insurance Settlement Trust Assets and the FB Reversions. (c) Transfer of Books and Records to the Asbestos Personal Injury Trust On the Effective Date, or as soon thereafter as is practicable, at the sole cost and expense of the Asbestos Personal Injury Trust and in accordance with written instructions provided to the Reorganized Debtors by the Asbestos Personal Injury Trust, the Reorganized Debtors will transfer and assign, and will use all commercially reasonable efforts to cause the trustee of the Fibreboard Insurance Settlement Trust to transfer and assign, to the Asbestos Personal Injury Trust all books and records of the Debtors and the Fibreboard Insurance Settlement Trust that pertain directly to Asbestos Personal Injury Claims that have been asserted against the Debtors and/or the Fibreboard Insurance Settlement Trust. The Debtors will request that the Bankruptcy Court, in the Confirmation Order, rule that such transfers shall not result in the invalidation or waiver of any applicable privileges pertaining to such books and records. 10.4 Assumption of Certain Liabilities by the Asbestos Personal Injury Trust (a) OC Asbestos Personal Injury Claims In consideration for the property transferred to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account, and in furtherance of the purposes of the Asbestos Personal Injury Trust and the Plan, the Asbestos Personal Injury Trust will assume all liability and responsibility for (i) all OC Asbestos Personal Injury Claims and the Reorganized Debtors shall have no further financial or other responsibility or liability therefor. The Asbestos Personal Injury Trust shall also assume all liability for premiums, deductibles, retrospective premium adjustments, security or collateral arrangements, or any other charges, costs, fees, or expenses (if any) that become due to any insurer in connection with (i) the OC Asbestos Personal Injury Liability Insurance Assets as a result of OC Asbestos Personal Injury Claims, (ii) asbestos-related personal injury claims against Persons insured under policies included in the OC Asbestos Personal Injury Liability Insurance Assets by reason of vendors' endorsements, or (iii) the indemnification provisions of settlement agreements that OC made prior to the Confirmation Date with any insurers, to the extent that those indemnity provisions relate to Asbestos Personal Injury Claims, and the Reorganized Debtors shall have no further financial or other responsibility or liability for any of the foregoing. (b) FB Asbestos Personal Injury Claims In consideration for the property transferred to the Asbestos Personal Injury Trustees for allocation to the FB Sub-Account, and in furtherance of the purposes of the Asbestos Personal Injury Trust and the Plan, the Asbestos Personal Injury Trust will assume all liability and responsibility for all FB Asbestos Personal Injury Claims and the Reorganized Debtors shall have no further financial or other responsibility or liability therefor. 10.5 Certain Property Held in Trust by the Reorganized Debtors or the Fibreboard Insurance Settlement Trust If and to the extent that any assets, claims, rights or other property of the Reorganized Debtors or of the Fibreboard Insurance Settlement Trust to be transferred to the Asbestos Personal Injury Trust, under applicable law or any binding contractual provision, cannot be effectively transferred, or if for any reason after the Effective Date the Reorganized Debtors or the trustees of the Fibreboard Insurance Settlement Trust, as the case may be, shall retain or receive any assets, claims, rights or other property that is owned by the Reorganized Debtors, the Debtors or the Fibreboard Insurance Settlement Trust (as the case may be) and is to be transferred pursuant to the Plan, then the Reorganized Debtors or the trustees of the Fibreboard Insurance Settlement Trust, as the case may be, shall hold such property (and any proceeds thereof) in trust for the benefit of the party entitled to receive the transfer of such asset under the Plan (or the benefit of such asset) and will take such actions with respect to such property (and any proceeds thereof) as such party entitled to receive the transfer of such asset under the Plan (or the benefit of such asset) shall direct in writing. 10.6 Cooperation with Respect to Insurance Matters The Reorganized Debtors shall cooperate with the Asbestos Personal Injury Trust and use commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary or appropriate to effectuate the transfer of the OC Asbestos Personal Injury Liability Insurance Assets to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account. By way of enumeration and not of limitation, the Reorganized Debtors each shall be obligated (i) to provide the Asbestos Personal Injury Trust with copies of insurance policies and settlement agreements included within or relating to the OC Asbestos Personal Injury Liability Insurance Assets; (ii) to provide the Asbestos Personal Injury Trust with information necessary or helpful to the Asbestos Personal Injury Trust in connection with its efforts to obtain insurance coverage for Asbestos Personal Injury Claims; (iii) to execute further assignments or allow the Asbestos Personal Injury Trust to pursue claims relating to the OC Asbestos Personal Injury Liability Insurance Assets in its name (subject to appropriate disclosure of the fact that the Asbestos Personal Injury Trust is doing so and the reasons why it is doing so), including by means of arbitration, alternative dispute resolution proceedings or litigation, to the extent necessary or helpful to the efforts of the Asbestos Personal Injury Trust to obtain insurance coverage under the OC Asbestos Personal Injury Liability Insurance Assets for Asbestos Personal Injury Claims; and (iv) to pursue and recover insurance coverage in its own name or right to the extent that the transfer and assignment of the OC Asbestos Personal Injury Liability Insurance Assets to the Asbestos Personal Injury Trust is not able to be fully effectuated. The Asbestos Personal Injury Trust shall be obligated to compensate the Reorganized OCD for costs reasonably incurred in connection with providing assistance to the Asbestos Personal Injury Trust pursuant to this Section 10.6, including, without limitation, out-of-pocket costs and expenses, consultant fees, and attorneys' fees. 10.7 Authority of the Debtors On the Confirmation Date, the Debtors will be empowered and authorized to take or cause to be taken, prior to the Effective Date, all actions necessary to enable them to implement effectively the provisions of the Plan and the Asbestos Personal Injury Trust Agreement. ARTICLE XI FB ASBESTOS PROPERTY DAMAGE TRUST 11.1 The FB Asbestos Property Damage Trust Effective as of the later of (i) the date the FB Asbestos Property Damage Trustee has executed the FB Asbestos Property Damage Trust Agreement and (ii) the Effective Date, the FB Asbestos Property Damage Trust shall be created. The FB Asbestos Property Damage Trust is intended to be a "qualified settlement fund" within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the IRC. The purpose of the FB Asbestos Property Damage Trust shall be to, among other things, (i) process, liquidate, and pay all FB Asbestos Property Damage Claims in accordance with the Plan, the FB Asbestos Property Damage Trust Distribution Procedures, and the Confirmation Order and (ii) preserve, hold, manage, and maximize the assets of the FB Asbestos Property Damage Trust for use in paying and satisfying FB Asbestos Property Damage Claims. 11.2 Appointment of FB Asbestos Property Damage Trustee On the Confirmation Date, effective as of the Effective Date, the Bankruptcy Court shall appoint the individual selected jointly by the Plan Proponents (as identified in the FB Asbestos Property Damage Trust Agreement), which individual shall be appointed to serve as the FB Asbestos Property Damage Trustee for the FB Asbestos Property Damage Trust. 11.3 Transfer of Certain Property to the FB Asbestos Property Damage Trust (a) Transfer of Books and Records On the Effective Date, or as soon thereafter as is practicable, at the sole cost and expense of the FB Asbestos Property Damage Trust and in accordance with written instructions provided to the Reorganized Debtors by the FB Asbestos Property Damage Trust, the Reorganized Debtors will transfer and assign to the FB Asbestos Property Damage Trust copies of all books and records of the Debtors that pertain directly to FB Asbestos Property Damage Claims that have been asserted against the Debtors and/or the Fibreboard Insurance Settlement Trust. The Debtors will request that the Bankruptcy Court, in the Confirmation Order, rule that such transfers shall not result in the invalidation or waiver of any applicable privileges pertaining to such books and records. (b) Transfer of Certain Property to the FB Asbestos Property Damage Trust On the later of the Effective Date and the date by which the FB Asbestos Property Damage Trustee has executed the FB Asbestos Property Damage Trust Agreement, the Reorganized Debtors shall transfer and assign, or cause to be transferred and assigned, the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. 11.4 Assumption of Certain Liabilities by the FB Asbestos Property Damage Trust In consideration for the property transferred to the FB Asbestos Property Damage Trust pursuant to Section 11.3 hereof, and in furtherance of the purposes of the FB Asbestos Property Damage Trust and the Plan, the FB Asbestos Property Damage Trust shall assume all liability and responsibility for all FB Asbestos Property Damage Claims, and the Reorganized Debtors shall have no further financial or other responsibility or liability therefor. The FB Asbestos Property Damage Trust shall also assume all liability for premiums, deductibles, retrospective premium adjustments, security or collateral arrangements, or any other charges, costs, fees, or expenses (if any) that become due to any insurer in connection with the FB Asbestos Property Damage Insurance Assets as a result of FB Asbestos Property Damage Claims, asbestos-related property damage claims against Persons insured under policies included in the FB Asbestos Property Damage Insurance Assets by reason of vendors' endorsements, or under the indemnity provisions of settlement agreements that the Debtors made with any insurers prior to the Confirmation Date to the extent that those indemnity provisions relate to FB Asbestos Property Damage Claims, and the Reorganized Debtors shall have no further financial or other responsibility or liability for any of the foregoing; provided, however, that such liability of the FB Asbestos Property Damage Trust shall be limited to the extent of the benefits of such Trust, as reasonably determined by the Trustee of such Trust, so that the Trust may elect to terminate such liability in the event that the Trustee determines the benefits of maintaining the insurance policies are no longer worth the costs. 11.5 Cooperation with Respect to Insurance Matters The Reorganized Debtors shall cooperate with the FB Asbestos Property Damage Trust and use commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary or appropriate to effectuate the transfer of the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. By way of enumeration and not of limitation, the Reorganized Debtors each shall be obligated (i) to provide the FB Asbestos Property Damage Trust with copies of insurance policies and settlement agreements included within or relating to the FB Asbestos Property Damage Insurance Assets; (ii) to provide the FB Asbestos Property Damage Trust with information necessary or helpful to the FB Asbestos Property Damage Trust in connection with its efforts to obtain insurance coverage for FB Asbestos Property Damage Claims; (iii) to execute further assignments or allow the FB Asbestos Property Damage Trust to pursue claims relating to the FB Asbestos Property Damage Insurance Assets in its name (subject to appropriate disclosure of the fact that the FB Asbestos Property Damage Trust is doing so and the reasons why it is doing so), including by means of arbitration, alternative dispute resolution proceedings or litigation, to the extent necessary or helpful to the efforts of the FB Asbestos Property Damage Trust to obtain insurance coverage under the FB Asbestos Property Damage Insurance Assets for FB Asbestos Property Damages Claims; and (iv) to pursue and recover insurance coverage in its own name or right to the extent that the transfer and assignment of the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust is not able to be fully effectuated. The FB Asbestos Property Damage Trust shall be obligated to compensate the Reorganized Debtors for costs reasonably incurred in connection with providing assistance to the FB Asbestos Property Damage Trust pursuant to this Section 11.5, including without limitation, out-of-pocket costs and expenses, consultant fees, and attorneys' fees. 11.6 Authority of the Debtors On the Confirmation Date, the Debtors will be empowered and authorized to take or cause to be taken, prior to the Effective Date, all actions necessary to enable them to implement effectively the provisions of the Plan and the FB Asbestos Property Damage Trust Agreement. ARTICLE XII CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN 12.1 Conditions to Confirmation The Plan will not be confirmed, and the Confirmation Order will not be entered, until and unless the Confirmation Conditions set forth below have been satisfied or waived by the Plan Proponents. These Confirmation Conditions are designed to, inter alia, ensure that the Asbestos Personal Injury Permanent Channeling Injunction will be effective, binding and enforceable and will be based on the following general findings of the Bankruptcy Court, each of which will be contained in the Confirmation Order in form and substance acceptable to the Plan Proponents: (a) The Asbestos Personal Injury Permanent Channeling Injunction is to be implemented in connection with the Asbestos Personal Injury Trust and the Plan. (b) At the time of the order for relief with respect to OC and Fibreboard, OC and Fibreboard had been named as defendants in personal injury, wrongful death or property damage actions seeking recovery for damages allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products. (c) The Asbestos Personal Injury Trust, as of the Effective Date, will assume the liabilities of all of the OC Persons with respect to OC Asbestos Personal Injury Claims, and upon such assumption, the Reorganized Debtors and the OC Persons shall have no liability for any OC Asbestos Personal Injury Claims. (d) The Asbestos Personal Injury Trust, as of the Effective Date, will assume the liabilities of all of the FB Persons with respect to FB Asbestos Personal Injury Claims, and, upon such assumption, the Reorganized Debtors and the FB Persons shall have no liability for any FB Asbestos Personal Injury Claims. (e) The OC Sub-Account of the Asbestos Personal Injury Trust is to be funded in whole or in part with Cash, Senior Notes, New OCD Common Stock, the OCD Insurance Escrow, the OC Asbestos Personal Injury Liability Insurance Assets, distributable proceeds of the Litigation Trust Assets, and by the obligation of Reorganized OCD to make future payments, including dividends. (f) The FB Sub-Account is to be funded in whole or in part with the Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions, the Committed Claims Account, and the FB-Sub-Account Settlement Payment. (g) The Asbestos Personal Injury Trust is to own, upon the Initial Distribution Date, a majority of the voting shares of Reorganized OCD. (h) In light of the benefits provided, or to be provided, to the Asbestos Personal Injury Trust on behalf of each Protected Party, the Asbestos Personal Injury Permanent Channeling Injunction is fair and equitable with respect to the persons that might subsequently assert Asbestos Personal Injury Claims against any Protected Party. (i) Reorganized OCD and Reorganized Fibreboard are likely to be subject to substantial Demands for payment arising out of the same or similar conduct or events that gave rise to (a) OC Asbestos Personal Injury Claims and (b) FB Asbestos Personal Injury Claims, respectively, that are addressed by the Asbestos Personal Injury Permanent Channeling Injunction. (j) The actual amounts, numbers, and timing of such Demands cannot be determined. (k) Pursuit of such Demands outside the procedures prescribed by the Plan is likely to threaten the Plan's purpose to deal equitably with Claims and Demands. (l) The terms of the Asbestos Personal Injury Permanent Channeling Injunction, including any provisions barring actions against the Protected Parties pursuant to Section 524(g)(4)(A), are set forth in the Plan and in any disclosure statement supporting the Plan. (m) The Plan establishes, in Classes 7 and 8, separate Classes of claimants whose Claims are to be addressed by the Asbestos Personal Injury Trust. (n) Class 7 and Class 8 claimants have each voted, by at least 75 percent (75%) of those voting, in favor of the Plan. (o) Pursuant to court orders or otherwise, the Asbestos Personal Injury Trust will operate through mechanisms such as structured, periodic or supplemental payments, pro rata distributions, matrices or periodic review of estimates of the numbers and values of present Claims and Demands, or other comparable mechanisms, that provide reasonable assurance that the Asbestos Personal Injury Trust will value, and be in a financial position to pay, present Claims and Demands that involve similar Claims in substantially the same manner. (p) The Future Claimants' Representative was appointed as part of the proceedings leading to the issuance of the Asbestos Personal Injury Permanent Channeling Injunction for the purpose of protecting the rights of persons that might subsequently assert Demands of the kind that are addressed in the Asbestos Personal Injury Permanent Channeling Injunction and channeled to and assumed by the Asbestos Personal Injury Trust. The Future Claimants' Representative has in all respects fulfilled his duties, responsibilities, and obligations as the future representative in accordance with Section 524(g) of the Bankruptcy Code. (q) Identifying or describing each Protected Party in the Asbestos Personal Injury Permanent Channeling Injunction is fair and equitable with respect to persons that might subsequently assert Demands against each such Protected Party, in light of the benefits provided, or to be provided, to the Asbestos Personal Injury Trust by or on behalf of any such Protected Party. (r) The Plan complies in all respects with Section 524(g) of the Bankruptcy Code. (s) The Asbestos Personal Injury Trust is to use its assets and income to pay Asbestos Personal Injury Claims. (t) With respect to any FB Asbestos Property Damage Claim that is Allowed in accordance with the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures by the Bankruptcy Court, other court of competent jurisdiction or otherwise, such allowance shall establish the amount of legal liability against the FB Asbestos Property Damage Trust in the Allowed amount of such FB Asbestos Property Damage Claim. (u) The Plan and its Exhibits constitute a fair, equitable, and reasonable resolution of the liabilities of the Debtors for Asbestos Personal Injury Claims. (v) The confirmation and consummation of the Plan, including the discharge of the Debtors pursuant to the Plan and the issuance of Asbestos Personal Injury Permanent Channeling Injunction, shall not provide the insurers a defense to liability for insurance coverage based upon the alleged elimination of the liability of the insured(s). (w) The duties and obligations of the insurers that issued policies and their successors and assigns, or, with respect to any insolvent insurers, their liquidators and/or the state insurance guaranty funds that bear responsibility with respect to such rights under such policies which constitute the OC Asbestos Personal Injury Liability Insurance Assets are not eliminated or diminished by (i) the discharge, release and extinguishment of all the liabilities of the Debtors or Reorganized Debtors pursuant to the Plan in respect to the OC Asbestos Personal Injury Claims; (ii) the assumption of liability for the OC Asbestos Personal Injury Claims by the Asbestos Personal Injury Trust; or (iii) the transfer pursuant to the Plan of the Debtors' rights to the OC Asbestos Personal Injury Liability Insurance Assets to the extent determined and permitted under applicable bankruptcy law. (x) The Debtors do not need the consent of their insurers to transfer the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. Alternatively, the Debtors' insurers have an obligation not to withhold consent to such transfer unreasonably, and the refusal to consent to the transfer under the circumstances would be unreasonable. (y) Upon confirmation and consummation of the Plan, including the effectuation of the transfer of the FB Asbestos Property Damage Insurance Assets, the FB Asbestos Property Damage Trust shall have access to insurance coverage and/or insurance payments pursuant to the transfer of the FB Asbestos Property Damage Insurance Assets so that the proceeds of such insurance may be used to defend, resolve, and satisfy (subject to any applicable policy limits) the FB Asbestos Property Damage Trust's obligations to defend, resolve and satisfy FB Asbestos Property Damage Claims, and no insurer shall have any insurance coverage defense based on the Plan, the transfer of the FB Asbestos Property Damage Insurance Assets, the FB Asbestos Property Damage Trust Agreement, or the FB Asbestos Property Damage Trust Distribution Procedures or allowance of claims thereunder, or the negotiations that produced any of the foregoing. (z) All insurers of the Debtors affording insurance coverage that is the subject of the OC Asbestos Personal Injury Insurance Assets and all insurers of the Debtors whose policies provide coverage for the FB Asbestos Property Damage Claims have been given notice and an opportunity to be heard on matters relating to the Plan and its Exhibits. (aa) the sum of the Class 7 Aggregate Amount and the Class 8 Aggregate Amount as determined by the Bankruptcy Court and the District Court shall be an amount not less than $16 billion prior to the deductions of (a) the OCD Insurance Escrow, (b) the OC Asbestos Personal Injury Liability Insurance Assets, (c) the Existing Fibreboard Insurance Settlement Trust Assets, (d) the FB Reversions and (e) the Committed Claims Account. (bb) Class 6 Claims shall be Allowed or estimated in such maximum aggregate amount as the Plan Proponents shall agree and have filed at least ten (10) Business Days prior to the Objection Deadline. 12.2 Conditions to Effective Date The following are conditions precedent to the occurrence of the Effective Date, each of which may be satisfied or waived in accordance with Section 12.3 of the Plan: (a) The Confirmation Order shall have been entered, shall have become a Final Order, shall be in form and substance reasonably satisfactory to the Plan Proponents. (b) The Asbestos Personal Injury Permanent Channeling Injunction shall be in full force and effect. (c) All agreements or other instruments which are exhibits to the Plan shall be in form and substance reasonably acceptable to the Plan Proponents and shall have been executed and delivered. (d) All actions, documents and agreements necessary to implement the Plan shall have been effected or executed. (e) The Asbestos Personal Injury Trustees shall have accepted their appointment as Asbestos Personal Injury Trustees and shall have executed the Asbestos Personal Injury Trust Agreement. (f) The individuals designated to serve as members of the TAC shall have accepted their appointment as TAC members. (g) The Future Claimants' Representative shall have agreed to continue to serve in such capacity following the Confirmation Date. (h) The PLR with respect to the qualification of the trust formed pursuant to Section 524(g) of the Bankruptcy Code described therein as a "qualified settlement fund" within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the IRC, shall not have been cancelled, withdrawn or revoked and shall remain in full force and effect. Alternatively, the Reorganized Debtors shall have received an opinion of counsel with respect to the tax status of the Asbestos Personal Injury Trust as a "qualified settlement fund" reasonably satisfactory to the Plan Proponents, and, (i) if Class 4 accepts the Plan, the Bank Holders, and/or (ii) if Class 6 accepts the Plan, the Unsecured Creditors' Committee. (i) The FB Asbestos Property Damage Trustee shall have accepted his appointment as FB Asbestos Property Damage Trustees and shall have executed the FB Asbestos Property Damage Trust Agreement. (j) The Reorganized Debtors shall have entered into and shall have credit availability under the Exit Facility in an amount sufficient to meet the needs of Reorganized Debtors, as determined by the Plan Proponents. (k) Each of the Exhibits shall be in form and substance acceptable to the Plan Proponents. (l) The Existing Fibreboard Insurance Settlement Trust Assets will be irrevocably assigned and transferred on the Effective Date to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, or the Existing Fibreboard Insurance Settlement Trust Assets will be treated in accordance with Section 10.5. 12.3 Waiver of Conditions Notwithstanding anything contained in Section 12.2 hereof, the Plan Proponents reserve, in their sole discretion, the right, with the written consent of (i) if Class 4 accepts the Plan, the Bank Holders, and/or (ii) if Classes 4, 5 and 6 all accept the Plan, the Unsecured Creditors' Committee, to waive the occurrence of any of the foregoing conditions precedent to the Effective Date or to modify any of such conditions precedent. Any such written waiver of a condition precedent set forth in this section may be effected at any time, without notice, without leave or order of the Bankruptcy Court, and without any formal action other than proceeding to consummate the Plan. Any actions required to be taken on the Effective Date shall take place and shall be deemed to have occurred simultaneously, and no such action shall be deemed to have occurred prior to the taking of any other such action. If the Plan Proponents decide that one of the foregoing conditions cannot be satisfied, and the occurrence of such condition is not waived in the manner set forth above, then the Plan Proponents shall file a notice of the failure of the Effective Date with the Bankruptcy Court, at which time the Plan and the Confirmation Order shall be deemed null and void. ARTICLE XIII RETENTION OF JURISDICTION 13.1 Exclusive Jurisdiction of the Bankruptcy Court and District Court Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, the District Court, together with the Bankruptcy Court to the extent of any reference made to it by the District Court and the Reference Order, will retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan, including, among other things, jurisdiction to: (a) interpret, enforce, and administer the terms of the Asbestos Personal Injury Trust Agreement (including all annexes and exhibits thereto); (b) allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim (other than an Asbestos Personal Injury Claim and an FB Asbestos Property Damage Claim) or Interest not otherwise Allowed under the Plan, including the resolution of any request for payment of any Administrative Claim and the resolution of any objections to the allowance or priority of Claims or Interests; (c) hear and determine all applications for compensation and reimbursement of expenses of professionals under the Plan or under Sections 330, 331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; provided, however, that from and after the Effective Date, the payment of the fees and expenses of the retained professionals of the Reorganized Debtors shall be made in the ordinary course of business and shall not be subject to the approval of the Bankruptcy Court; (d) hear and determine all matters with respect to the assumption or rejection of any executory contract or unexpired lease to which a Debtor is a party or with respect to which a Debtor may be liable, including, if necessary, the nature or amount of any required Cure or the liquidation or allowance of any Claims arising therefrom; (e) effectuate performance of and payments under the provisions herein; (f) hear and determine any and all adversary proceedings, motions, applications, and contested or litigated matters arising out of, under, or related to, the Chapter 11 Cases; (g) enter such orders as may be necessary or appropriate to execute, implement, or consummate the provisions herein and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement or the Confirmation Order; (h) hear and determine disputes arising in connection with the interpretation, implementation, consummation, or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan; (i) consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order; (j) issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any entity with implementation, consummation, or enforcement of the Plan or the Confirmation Order; (k) enter and implement such orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed, revoked, modified or vacated; (l) hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order; (m) enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings entered in connection with the Chapter 11 Cases; (n) except as otherwise limited herein, recover all assets of the Debtors and property of the Debtors' Estates, wherever located; (o) hear and determine matters concerning state, local and federal taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code; (p) hear and determine all disputes involving the existence, nature or scope of the Debtors' discharge; (q) hear and determine such other matters as may be provided in or that may arise in connection with the Plan, Confirmation Order, the Claims Trading Injunction, the Asbestos Personal Injury Permanent Channeling Injunction, or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code; (r) enter a final decree closing the Chapter 11 Cases; and (s) to hear and determine all objections to the termination of the Asbestos Personal Injury Trust and/or the FB Asbestos Property Damage Trust. 13.2 Continued Reference to the Bankruptcy Court Notwithstanding entry of the Confirmation Order and/or the occurrence of the Effective Date, the reference to the Bankruptcy Court pursuant to the Reference Order shall continue, but subject to any modifications or withdrawals of the reference specified in the Confirmation Order, Reference Order, Case Management Order or other Order of the District Court; provided, however, that nothing in this Plan, the Reference Order or other Order shall affect the procedures established pursuant to the Asbestos Personal Injury Trust Agreement, the Asbestos Personal Injury Trust Distribution Procedures, the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. ARTICLE XIV MISCELLANEOUS PROVISIONS 14.1 Professional Fee Claims All final requests for compensation or reimbursement of the fees of any professional employed in the Chapter 11 Cases pursuant to Section 327 or 1103 of the Bankruptcy Code or otherwise, including the professionals seeking compensation or reimbursement of costs and expenses relating to services performed after the Petition Date and prior to and including the Effective Date in connection with the Chapter 11 Cases, pursuant to Sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code for services rendered to the Debtors, the Unsecured Creditors' Committee, the Asbestos Claimants' Committee, the Future Claimants' Representative, the advisors to the Bank Holders' sub-committee and the advisors to the Bondholders' and trade creditors' sub-committee prior to the Effective Date and Claims for making a substantial contribution under Section 503(b)(4) of the Bankruptcy Code must be filed and served on the Reorganized Debtors and their counsel not later than sixty (60) days after the Effective Date, unless otherwise ordered by the Bankruptcy Court. Objections to applications of such professionals or other entities for compensation or reimbursement of expenses must be filed and served on the Reorganized Debtors and their counsel and the requesting professional or other entity not later than twenty (20) days after the date on which the applicable application for compensation or reimbursement was served. Nothing herein shall be construed as limiting the right of the United States Trustee to be heard under Section 307 or 502(a) of the Bankruptcy Code with regard to any Professional Fee Claims or other similar claims or requests for payment of administrative expenses. 14.2 Administrative Claims Bar Date All requests for payment of an Administrative Claim (other than as set forth in Sections 3.1 and 14.1 of the Plan) must be filed with the Bankruptcy Court and served on counsel for the Debtors not later than forty-five (45) days after the Effective Date. Unless the Debtors object to an Administrative Claim within forty-five (45) days after receipt, such Administrative Claim shall be deemed Allowed in the amount requested. In the event that the Debtors object to an Administrative Claim, the Bankruptcy Court shall determine the Allowed amount of such Administrative Claim. Notwithstanding the foregoing, no request for payment of an Administrative Claim need be filed with respect to an Administrative Claim which is paid or payable by a Debtor in the ordinary course of business. 14.3 Payment of Statutory Fees All fees payable pursuant to Section 1930 of title 28 of the United States Code, as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid on or before the Effective Date. After the Effective Date, the Reorganized Debtors shall pay all required fees pursuant to Section 1930 of title 28 of the United States Code or any other statutory requirement and comply with all statutory reporting requirements. 14.4 Modifications and Amendments The Plan Proponents may alter, amend or modify the Plan or any exhibits or schedules thereto under Section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation Date. After the Confirmation Date and prior to substantial consummation of the Plan, as defined in Section 1101(2) of the Bankruptcy Code, the Plan Proponents may, under Section 1127(b) of the Bankruptcy Code, institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, and such matters as may be necessary to carry out the purposes and effects of the Plan so long as such proceedings do not materially adversely affect the treatment of holders of Claims under the Plan; provided, however, that prior notice of such proceedings shall be served in accordance with the Bankruptcy Rules or order of the Bankruptcy Court. 14.5 Severability of Plan Provisions If, prior to the Confirmation Date, any term or provision herein is held by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at the request of the Plan Proponents, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision herein, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. 14.6 Successors and Assigns The rights, benefits and obligations of any Person named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such Person. 14.7 Compromises and Settlements Pursuant to Federal Rule of Bankruptcy Procedure 9019(a), the Debtors may compromise and settle various Claims (other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims) against them and/or claims that they may have against other Persons. The Debtors shall have the right (with Bankruptcy Court approval, following appropriate notice and opportunity for a hearing) to compromise and settle Claims against them and claims that they may have against other Persons up to and including the Effective Date. After the Effective Date, such right shall pass to the Reorganized Debtors pursuant to the provisions of Article V of the Plan. 14.8 Corrective Action The Debtors are authorized to take such actions as necessary and appropriate to carry out the Plan, including the correction of mistakes or other inadvertent action. In making distributions or transfers under the Plan, the Debtors may seek return of transfers to the extent of any errors, notwithstanding that the transfer is otherwise irrevocable under the Plan. 14.9 Discharge of the Debtors (a) Except as otherwise provided herein or in the Confirmation Order, all consideration distributed under the Plan and the treatment of the Claims thereunder will be in exchange for, and in complete satisfaction, settlement, discharge, and release of, all Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities (other than Demands), or Interests or other rights of an equity security holder, relating to the Debtors or the Reorganized Debtors or their respective Estates, and regardless of whether any property will have been distributed or retained pursuant to the Plan on account of such Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities (other than Demands), or Interests or other rights of an equity security holder, and upon the Effective Date, the Debtors and the Reorganized Debtors shall (i) be deemed discharged under Section 1141(d)(1)(A) of the Bankruptcy Code and released from any and all Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or Interests or other rights of an equity security holder of any nature whatsoever, including, without limitation, liabilities that arose before the Confirmation Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a Proof of Claim based upon such debt is filed or deemed filed under Section 501 of the Bankruptcy Code, (b) a Claim based upon such debt is Allowed under Section 502 of the Bankruptcy Code, or (c) the holder of a Claim based upon such debt voted to accept the Plan and (ii) terminate all rights and interests of holders of OCD Interests. (b) As of the Confirmation Date, except as otherwise provided herein or in the Confirmation Order, all Persons shall be precluded from asserting against the Debtors or the Reorganized Debtors or their respective Related Persons any other or further Claims or other obligations, suits, judgments, damages, debts, Demands, rights, causes of action or liabilities or Interests or other rights of an equity security holder relating to the Debtors or the Reorganized Debtors or their respective Estates based upon any act, omission, transaction or other activity of any nature that occurred prior to the Confirmation Date. In accordance with the foregoing, except as otherwise provided herein or in the Confirmation Order, the Confirmation Order shall be a judicial determination of discharge of all such Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities (other than Demands) or Interests or other rights of an equity security holder against the Debtors or the Reorganized Debtors or their respective Estates and termination of all OCD Interests, pursuant to Sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void any judgment obtained against the Debtors or the Reorganized Debtors or their respective Estates at any time, to the extent that such judgment relates to a discharged Claim or terminated OCD Interest. 14.10 Special Provisions for Warranty Claims, Distributorship Indemnification Claims and Product Coupon Claims (a) The Debtors shall have the right after the Confirmation Date to fulfill any pre-Petition Date and pre-Confirmation Date warranty claims based on the Debtors' business judgment notwithstanding discharge of the Claims and release of the Debtors pursuant to the Bankruptcy Code and the Plan. (b) The Debtors shall have the right after the Confirmation Date to fulfill any pre-Petition Date product coupons issued in settlement of asbestos property damage actions based on the Debtors' business judgment notwithstanding discharge of the Claims and release of the Debtors pursuant to the Bankruptcy Code and the Plan. (c) The Debtors shall have the right after the Confirmation Date to fulfill any pre-Petition Date and pre-Confirmation Date distributorship indemnification claims that are not Asbestos Personal Injury Claims or FB Asbestos Property Damage Claims based on the Debtors' business judgement notwithstanding discharge of the Claims and release of the Debtors pursuant to the Bankruptcy Code and the Plan. 14.11 Committees and Future Claimants' Representative (a) Committees On the Effective Date, each of the Unsecured Creditors' Committee and the Asbestos Claimants' Committee will dissolve and its respective members will be released and discharged from all duties and obligations arising from or related to the Chapter 11 Cases, except for the purpose of completing any matters, including, without limitation, litigation or negotiations, pending as of the Effective Date. The professionals retained by each of the Unsecured Creditors' Committee and the Asbestos Claimants' Committee and the respective members thereof will not be entitled to compensation or reimbursement of expenses for any services rendered after the Effective Date, except (i) as authorized in the preceding sentence or (ii) to the extent such services are rendered in connection with the hearing on final allowances of compensation pursuant to Section 330 of the Bankruptcy Code. (b) Future Claimants' Representative On the Effective Date, the existence of the Future Claimants' Representative and his rights to ongoing reimbursement of expenses and the rights of his professionals to ongoing compensation and reimbursement of expenses shall continue after the Effective Date only for (i) the purposes set forth in the Asbestos Personal Injury Trust Agreement and the annexes thereto and (ii) the purposes of completing any matters, including, without limitation, litigation or negotiations, pending as of the Effective Date, and shall otherwise terminate on the Effective Date. 14.12 Binding Effect The Plan will be binding upon and inure to the benefit of each of the Debtors and Reorganized Debtors and their respective Estates and each of their respective Related Persons and any Person claiming by or through them, and any Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or any right of an equity security holder, against or in the Debtors whether or not such Person will receive or retain any property or interest in property under the Plan and each of their respective successors and assigns; in each case, including, without limitation, all parties-in-interest in the Chapter 11 Cases. 14.13 Revocation, Withdrawal, or Non-Consummation The Plan Proponents reserve the right to revoke or withdraw the Plan at any time prior to the Confirmation Date and to file subsequent plans of reorganization. If the Plan Proponents revoke or withdraw the Plan, or if confirmation or consummation of the Plan does not occur, then (i) the Plan shall be null and void in all respects, (ii) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Class of Claims), assumption or rejection of executory contracts or leases effected by the Plan, and any document or agreement executed pursuant to the Plan shall be deemed null and void, and (iii) nothing contained in the Plan and no acts taken in preparation for consummation of the Plan, shall (a) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Interests in, any Debtor or any other Person, (b) prejudice in any manner the rights of the Plan Proponents, any Debtor or any Person in any further proceedings involving a Debtor, or (c) constitute an admission of any sort by the Plan Proponents, any Debtor or any other Person. 14.14 Plan Exhibits Any and all exhibits to the Plan or other lists or schedules not filed with the Plan shall be filed with the Clerk of the Bankruptcy Court at least ten (10) Business Days prior to the Objection Deadline, unless the Plan provides otherwise. Upon such filing, such documents may be inspected in the office of the Clerk of the Bankruptcy Court during normal court hours. Holders of Claims or Interests may obtain a copy of any such document upon written request to the Debtors in accordance with Section 14.15 of the Plan. The Plan Proponents explicitly reserve the right to modify or make additions to or subtractions from any schedule to the Plan and to modify any exhibit to the Plan prior to the Objection Deadline. 14.15 Notices Any notice, request or demand required or permitted to be made or provided to or upon a Debtor or Reorganized Debtor or the Plan Proponents under the Plan shall be (i) in writing, (ii) served by (a) certified mail, return receipt requested, (b) hand delivery, (c) overnight delivery service, (d) first-class mail or (e) facsimile transmission, and (iii) deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: OWENS CORNING One Owens Corning Parkway Toledo, OH 43659 Att'n: Corporate Secretary Telephone: (419) 248-7201 Facsimile: (419) 248-8445 with a copy to: Law Department OWENS CORNING One Owens Corning Parkway Toledo, OH 43659 Telephone: (419) 248-8650 Facsimile: (419) 325-4650 SAUL EWING LLP 222 Delaware Avenue P.O. Box 1266 Wilmington, DE 19899-1266 Att'n: Norman L. Pernick, Esq. Telephone: (301) 421-6800 Facsimile: (301) 421-6813 100 South Charles Street Baltimore, MD 21201-2773 Att'n: Charles O. Monk II, Esq. Telephone: (410) 332-8600 Facsimile: (410) 332-8862 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, NY 10036-6522 Att'n: Ralph Arditi, Esq. D.J. Baker, Esq. Telephone: (212) 735-3000 Facsimile: (212) 735-2000 ASBESTOS CLAIMANTS' COMMITTEE: Caplin & Drysdale, Chartered 399 Park Avenue New York, NY 10022-4614 Att'n: Elihu Inselbuch, Esq. Telephone: (212) 319-7125 Facsimile: (212) 644-6755 One Thomas Circle, N.W. Washington, D.C. 20005 Att'n: Peter Van N. Lockwood Julie W. Davis Telephone: (202) 862-5000 Facsimile: (202) 420 -3301 Campbell & Levine, LLC 800 King Street Wilmington, DE 19801 Att'n: Marla Eskin, Esq. Telephone: (302) 426-1900 Facsimile: (302) 426-9947 FUTURE CLAIMANTS' REPRESENTATIVE: James J. McMonagle Vorys Sater Seymour & Pease LLP 2100 One Cleveland Center 1375 E. Ninth Street Cleveland, OH 44114 Telephone: (216) 479-6158 (office) Facsimile: (216) 937-3734 (office) with a copy to: Kaye Scholer LLP 425 Park Avenue New York, NY 10022 Att'n: Michael J. Crames Esq. Telephone: (212) 836-8000 Facsimile: (212) 836-7151 Young Conaway Stargatt & Taylor, LLP P.O. Box 391 The Brandywine Building 1000 West Street, 17th Floor Wilmington, DE 19801 Att'n: James L. Patton, Jr., Esq. Telephone: (302) 571-6684 Facsimile: (302) 571-1253 14.16 Term of Injunctions or Stays Unless otherwise provided herein or in the Confirmation Order, all injunctions or stays provided for in the Chapter 11 Cases under Sections 105 or 362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order), shall remain in full force and effect until the Effective Date. All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.
Dated: August 8, 2003 SAUL EWING LLP OWENS CORNING, et al. (for itself and on behalf of the Subsidiary Debtors) By: /s/ Norman L. Pernick By: /s/ Stephen Krull _______________________________ _______________________________ Norman L. Pernick (I.D. # 2290) Name: Stephen Krull J. Kate Stickles (I.D. # 2917) Title: Senior Vice President 222 Delaware Avenue and General Counsel P.O. Box 1266 Wilmington, DE 19899-1266 SKADDEN, ARPS, SLATE, MEAGHER (302) 421-6800 & FLOM LLP Ralph Arditi Charles O. Monk, II D.J. Baker Jay A. Shulman Four Times Square Edith K. Altice New York, NY 10036-6522 100 South Charles Street (212) 735-3000 Baltimore, MD 21201-2773 (410) 332-8600 Special Counsel to Debtors and Debtors-in-Possession Adam H. Isenberg MaryJo Bellew COVINGTON & BURLING Centre Square West 1500 Market Street, 38th Floor Philadelphia, PA 19102-2186 By: /s/ Anna P. Engh (215) 972-7777 _______________________________ Mitchell F. Dolin Attorneys for the Debtors and Anna P. Engh Debtors-in-Possession 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2401 (202) 662-6000 Special Insurance Counsel to Debtors KAYE SCHOLER LLP and Debtors-in-Possession Michael J. Crames Jane W. Parver CAPLIN & DRYSDALE, CHARTERED Andrew A. Kress Elihu Inselbuch Edmund M. Emrich 399 Park Avenue 425 Park Avenue New York, NY 10022 New York, NY 10022 (212) 319-7125 (212) 836-8000 Peter Van N. Lockwood YOUNG, CONAWAY, Julie W. Davis STARGATT & TAYLOR LLP One Thomas Circle, N.W. Washington, D.C. 20005 By: /s/ Edwin J. Harron (202) 862-5000 _______________________________ James L. Patton, Jr. (I.D. # 2202) Edwin J. Harron (I.D. #3396) CAMPBELL & LEVINE, LLC The Brandywine Building 1000 West Street, 17th Floor By:/s/ Marla R. Eskin P.O. Box 391 _______________________________ Wilmington, DE 19899-0391 Marla R. Eskin (I.D. # 2989) (302) 571-6600 Mark T. Hurford (I.D. # 3299) 800 King Street Wilmington, DE 19801 Attorneys for James J. McMonagle, (302) 426-1900 Legal Representative for Future Claimants Attorneys for the Official Committee of Asbestos Claimants
EXHIBIT C OWENS CORNING LITIGATION TRUST AGREEMENT Litigation Trust Agreement (the "Litigation Trust Agreement"), dated as of [_____], 2003, by and among Owens Corning, a Delaware corporation ("OCD"), on behalf of itself and certain of its Subsidiary Debtors (as defined below) (collectively, the Subsidiary Debtors together with OCD, the "Debtors"), as settlors, and [_____], as Litigation Trustee. W I T N E S S E T H: WHEREAS, the Joint Plan of Reorganization for Owens Corning and its Affiliated Debtors and Debtors-in-Possession (as amended, modified or supplemented, the "Plan") provides for the establishment of the Litigation Trust (as defined below) and the retention and preservation of the Litigation Trust Assets (as defined below) by the Litigation Trustee, as successor to, and representative of, the Debtors' bankruptcy estates in accordance with Section 1123(b)(3)(B) of the United States Bankruptcy Code, 11 U.S.C. ss.ss. 101-1330, as amended (the "Bankruptcy Code"), all for the benefit of the holders of Allowed Claims in each of Classes 4, 5, 6 and 7 under the Plan (collectively the "Claimholders"); and WHEREAS, the Plan contemplates, among other things, the litigation, settlement or other resolution of the Tobacco Causes of Action, the Avoidance Actions and the Material Rights of Action and the transfer to the Litigation Trust of Potential Tax Refunds, if and when recovered by the Reorganized Debtors, and the distribution of the Litigation Trust Recoveries to the Disbursing Agent for distribution of the same to the Claimholders, all as described in greater detail in the Plan and this Litigation Trust Agreement; and WHEREAS, on [_______], 2003, the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") entered the Confirmation Order; NOW, THEREFORE, in consideration of the premises and agreements contained herein, the parties hereto agree as follows: ARTICLE I Establishment of Litigation Trust Section 1.1 Creation and Name. There is hereby created a trust which shall be known as the ["Owens Corning Litigation Trust,"] which is the Litigation Trust created by the Plan. Section 1.2 Declaration of Litigation Trust. In order to declare the terms and conditions hereof, and in consideration of the confirmation of the Plan under the Bankruptcy Code, the Debtors and the Litigation Trustee have executed this Litigation Trust Agreement and effective on the Effective Date of the Plan, the Debtors hereby irrevocably transfer to the Litigation Trustee, and to its successors and assigns, all the right, title and interests of the Debtors in and to the Litigation Trust Assets, to have and to hold unto the Litigation Trustee and its successors and assigns forever, in trust nevertheless, under and subject to the terms and conditions set forth in this Litigation Trust Agreement and in the Plan for the benefit of the Claimholders and their successors and assigns as provided for in this Litigation Trust Agreement and in the Plan. The distribution of Litigation Trust Recoveries shall be made in accordance with this Litigation Trust Agreement and the Plan. Section 1.3 Purpose of Litigation Trust. The Litigation Trust is organized for the purpose of (a) holding, preserving, managing and maximizing the value of the Litigation Trust Assets for distribution; (b) liquidating the Litigation Trust Assets; and (c) distributing the Litigation Trust Recoveries to the Claimholders as described in the Plan and this Litigation Trust Agreement. In furtherance of this purpose, the Litigation Trustee shall be responsible for (a) being representative of all Beneficiaries of the Litigation Trust in all claims and litigation relating to the Litigation Trust Assets, (b) for performing all obligations specified for the Litigation Trustee under the Plan and (c) for taking such steps as are reasonably necessary to accomplish such purposes in accordance with the provisions of this Litigation Trust Agreement. In the event of any inconsistency between the recitation of the duties and powers of the Litigation Trustee as set forth in the Litigation Trust Agreement and the Plan, the provisions of this Litigation Trust Agreement shall govern. Section 1.4 Litigation Trustee's Acceptance. The Litigation Trustee accepts the trust imposed on it by this Litigation Trust Agreement and agrees to observe and perform that trust, on and subject to the terms and conditions set forth in this Litigation Trust Agreement. In connection with and in furtherance of the purposes of the Litigation Trust, the Litigation Trustee hereby expressly accepts the transfer of the Litigation Trust Assets, subject to the provisions of the Confirmation Order, and the Litigation Trustee hereby further expressly assumes, undertakes and shall control the pursuit, litigation, settlement or other resolution of the Litigation Trust Assets. ARTICLE II Definitions The capitalized terms used but not defined in this Litigation Trust Agreement shall have the meanings given to them in the Plan. Section 2.1 Avoidance Actions means the adversary proceedings instituted by the Debtors on behalf of the Estates, listed on Schedule V to the Plan, as it may be amended. Section 2.2 Bankruptcy Code means the United States Bankruptcy Code, 11 U.S.C.ss.ss.101-1330, as amended and in effect from time to time. Section 2.3 Bankruptcy Court means the United States Bankruptcy Court for the District of Delaware. Section 2.4 Beneficiaries means those Claimholders and their successors who are entitled to distributions of the Litigation Trust Assets pursuant to the Plan. Section 2.5 Board of Directors means the board of directors of Reorganized OCD. Section 2.6 Business Day means any day, excluding Saturdays, Sundays or "legal holidays" (as defined in Federal Rule of Bankruptcy Procedure 9006(a)) on which commercial banks are open for business in New York, New York. Section 2.7 Causes of Action means any and all actions, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise, as well as any defenses, objections or other rights to contest to any action or claims. Section 2.8 Claimholders has the meaning ascribed to such term in the first recital of this Litigation Trust Agreement. Section 2.9 Code means the Internal Revenue Code of 1986, as amended, and any successor thereto. Section 2.10 Commercial Claims means rights, causes of action, suits or proceedings, (whether arising out of contract, tort or otherwise) accruing to any Debtor for the payment and collection of money or other consideration or the enforcement of rights and remedies in connection with, resulting from or arising out of, any commercial transaction with any of the Debtors or the performance of services by or for any of the Debtors, in each case, in the ordinary course of business of the Debtors. "Commercial Claims" shall include, without limitation, claims arising from damage or alleged damage to property of any Debtor, or personal injuries sustained by any employee, contractor or other business agent of any Debtor (other than Asbestos Personal Injury Claims) in any case resulting from or arising out of the conduct of business by such Debtor, the collection of debts owed to any of the Debtors from purchasers of goods and services from any Debtor or the collection of money or other consideration from vendors, suppliers or other parties for breaches of contract in commercial relationships with any of the Debtors or the recovery of money based on such other commercial relationship of a Debtor that arise in the ordinary course of business. For avoidance of doubt, "Commercial Claims" shall not include Avoidance Actions or any other rights, claims, causes of action, suits or proceedings arising pursuant to title 11 of the United States Code. Section 2.11 Confirmation Order means the order entered by the Bankruptcy Court confirming the Plan. Section 2.12 Debtors means collectively, OCD and the Subsidiary Debtors. Section 2.13 Effective Date means the Business Day on which all conditions to the consummation of the Plan have been satisfied or waived as provided in Article XII of the Plan, and is the effective date of the Plan. Section 2.14 Litigation Trust means the trust established pursuant this Litigation Trust Agreement and the Plan. Section 2.15 Litigation Trust Agreement means this agreement. Section 2.16 Litigation Trust Assets means those rights, claims or other assets to be transferred to and owned by the Litigation Trust pursuant to Section 1.2 hereof and Section 5.8 of the Plan for the benefit of each of Classes 4, 5, 6 and 7, which are comprised of (i) the Litigation Trust Initial Deposit, (ii) the Potential Tax Refunds, if and when recovered by the Reorganized Debtors, (iii) all of the Debtors' rights and standing to object to, litigate, settle and otherwise resolve (a) the Tobacco Causes of Action, (b) the Avoidance Actions and (c) subject to Section 4.01(c) hereof, the Material Rights of Action, and (iv) any and all proceeds of the foregoing, including interest actually earned thereon. Litigation Trust Assets do not include the FB Reversions. Section 2.17 Material Rights of Action means all rights, claims, causes of action, suits or proceedings accruing to any Debtor pursuant to the Bankruptcy Code or pursuant to any statute or legal theory which, if determined in favor of the debtors or the Estates, would reasonably be expected to result in a recovery in excess of $200,000, but excluding Commercial Claims. Section 2.18 Litigation Trust Expenses means all reasonable costs and expenses associated with the administration of the Litigation Trust, including those rights, obligations and duties described in Section 5.8 of the Plan and in accordance with this Litigation Trust Agreement. Section 2.19 Litigation Trust Initial Deposit means the distribution in the amount of $[500,000], to be made to the Litigation Trust as set forth in Section 5.8 of the Plan. Section 2.20 Litigation Trust Recoveries means (i) any and all proceeds received by the Litigation Trust from (a) the Potential Tax Refunds, (b) the Tobacco Causes of Action, (c) the Avoidance Actions and (d) the Material Rights of Action, and (ii) interest actually earned with respect to the foregoing and the Litigation Trust Initial Deposit. Section 2.21 Litigation Trust Reimbursement Obligation means the obligation of the Litigation Trust to pay Reorganized OCD any and all Litigation Trust Recoveries until such time as the Litigation Trust Initial Deposit plus interest at the annual rate of 5% per annum has been repaid in full. Section 2.22 Litigation Trustee means the trustee under the Litigation Trust, or any successor, as approved by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust). Section 2.23 Net Litigation Trust Recoveries has the meaning ascribed thereto in Section 5.1(a) of this Agreement. Section 2.24 OCD means Owens Corning, a Delaware corporation. Section 2.25 Person means an individual, corporation, partnership, association, joint stock company, joint venture, limited liability company, limited liability partnership, trust, estate, unincorporated organization or other entity, or any government, governmental agency or any subdivision, department or other instrumentality thereof. Section 2.26 Plan means the Amended Joint Plan of Reorganization of Owens Corning, et al., filed with the Bankruptcy Court on March 28, 2003, as amended, modified or supplemented. Section 2.27 Potential Tax Refunds means the federal income tax refunds, if any, recovered by the Reorganized Debtors pursuant to the Proposed Asbestos-Related Tax Legislation and, to the extent not otherwise encompassed within the definition of the term "Litigation Trust Expenses", net of reasonable costs and expenses paid or incurred by the Reorganized Debtors in connection with obtaining and recovering such refunds]. Section 2.28 Proposed Asbestos-Related Tax Legislation means (i) the bill denominated as HR 1412 (also known as the Asbestos Tax Fairness Act) introduced in the United States House of Representatives on April 4, 2001; (ii) the companion bill S 1048, identical to HR 1412, introduced in the United States Senate on June 14, 2001; and (iii) any substantially similar federal tax legislation. Section 2.29 Reorganized Debtors means, collectively, Reorganized OCD and the Reorganized Subsidiary Debtors. Section 2.30 Reorganized OCD means reorganized OCD or its successor, on and after the Effective Date. Section 2.31 Reorganized Subsidiary Debtors means the reorganized Subsidiary Debtors and their respective successors, on and after the Effective Date. Section 2.32 Subsidiary means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of stock (or equivalent ownership or controlling interest) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more other Persons controlled by such Person or a combination thereof. Section 2.33 Subsidiary Debtors means the direct and indirect Subsidiaries of OCD that are set forth in Schedule I to the Plan and such other Subsidiaries of OCD as may file for protection under Chapter 11 of the Bankruptcy Code subsequent to the date of the filing of the Plan and prior to the Confirmation Date. Section 2.34 Tobacco Causes of Action means any and all claims by OCD and Fibreboard for restitution/unjust enrichment, fraud, and violations of state antitrust law against tobacco companies to obtain payment of monetary damages (including punitive damages) for payments made by OCD and Fibreboard to asbestos claimants who developed smoking-related diseases, including, without limitation, (i) the action brought by OCD in the Circuit Court of Jefferson County, Mississippi, styled Ezell Thomas, et al. v. R.J. Reynolds Tobacco Company, et al. and Owens Corning v. RJ Reynolds Tobacco Company, Docket No. 96-0065; and (ii) the lawsuit brought by OCD and Fibreboard in the Superior Court of California, County of Alameda, styled Fibreboard Corp., et al. v. R.J. Reynolds Tobacco Company, et. al., Case No. 791919-8. Section 2.32 Trustee's Professionals means the professionals retained by the Litigation Trustee pursuant to Section 6.4 of this Litigation Trust Agreement. ARTICLE III Funding of the Litigation Trust Section 3.1 Litigation Trust Initial Deposit. The Litigation Trust Initial Deposit shall be funded by the Debtors or Reorganized Debtors by delivering to the Litigation Trustee $[500,000] on the Effective Date. The Litigation Trustee shall use the Litigation Trust Initial Deposit consistent with the purposes of the Litigation Trust and subject to the terms and conditions of the Plan and this Litigation Trust Agreement. ARTICLE IV The Litigation Trust Assets Section 4.1 Liquidating Litigation Trust Assets (a) Subject to Section 4.1(c), the Litigation Trustee shall take such steps as it deems necessary to pursue, litigate, settle, or otherwise resolve the Litigation Trust Assets, and to make distributions as required under this Litigation Trust Agreement. (b) Subject to Section 4.1(c), the Litigation Trustee may transfer, sell, dispose of, settle or otherwise resolve or compromise the Litigation Trust Assets. The Litigation Trustee's actions with respect to disposition of the Litigation Trust Assets, shall be taken in a manner so as to maximize the value of the Litigation Trust Assets and maximize the Litigation Trust Recoveries. (c) In determining whether and how to pursue, litigate, settle, transfer, sell, dispose of, resolve, or compromise any Material Right of Action or Avoidance Action, the Litigation Trustee shall consider the effect of such action on the business, operations, properties, assets or prospects of the Debtors, which shall be determined in consultation with designated representatives of the Debtors. Section 4.2 Intervention. On the Effective Date, and without having to obtain any further order of the Bankruptcy Court, the Litigation Trustee shall be deemed to have intervened as plaintiff, movant or additional party, as appropriate, in any Causes of Action, including adversary proceedings, contested matters, avoidance actions or motions which were filed prior to the Effective Date, where the subject matter of such action involves the Litigation Trust Assets. ARTICLE V Distribution of Litigation Trust Assets Section 5.1 Distribution of Litigation Trust Recoveries (a) Distributions of Litigation Trust Recoveries. The Litigation Trustee shall apply of Litigation Trust Recoveries as follows: (i) first, to pay Litigation Trust Expenses; (ii) second, to repay the Litigation Trust Reimbursement Obligation until such time as the Litigation Trust Reimbursement Obligation is paid in full; and (iii) third, any remaining amount ("Net Litigation Trust Recoveries") shall be paid to the Disbursing Agent for further disbursement to (a) holders of Allowed Claims in each of Classes 4, 5 and 6 in accordance with Sections 3.3(b), 3.3(c) and 3.3(d), respectively, of the Plan (provided, that the Disbursing Agent shall reserve in the Disputed Distribution Reserve any payment of Litigation Trust Recoveries for holders of Disputed Claims in each such Classes), and (b) the Asbestos Personal Injury Trust for further disbursement in accordance with Section 3.3(e) of the Plan. (b) Time of Distributions. Distributions to the Disbursing Agent by the Litigation Trustee of Net Litigation Trust Recoveries shall be made as soon practicable after receipt of the Litigation Trust Recoveries; provided, however, that the Litigation Trustee may withhold any such distribution, or any portion thereof, to the extent it reasonably believes it necessary to pay Litigation Trust Expenses or the Litigation Trust Reimbursement Obligation that the Litigation Trustee will not be required to make any such distribution in the event that the aggregate proceeds and income available for distribution is not sufficient, in the Litigation Trustee's discretion to distribute monies to the Claimholders. Section 5.2 Delivery of Distributions. Distributions by the Litigation Trustee shall be made to the Disbursing Agent at the address listed for the Disbursing Agent in the Plan. ARTICLE VI General Powers, Rights and Obligations of the Litigation Trustee Section 6.1 Appointment of Litigation Trustee. The Person designated as Litigation Trustee pursuant to the procedures described in the Plan, shall become the Litigation Trustee on the Effective Date and shall have and perform all the duties, responsibilities, rights and obligations set forth in this Litigation Trust Agreement. Section 6.2 Legal Title. The Litigation Trustee shall hold legal title to all Litigation Trust Assets except that the Litigation Trustee may cause legal title or evidence of title to any of the Litigation Trust Assets to be held by any nominee or person, on such terms, in such manner and with such power as the Litigation Trustee may determine advisable. Section 6.3 General Powers. (a) Except as otherwise provided in this Litigation Trust Agreement or the Plan, and subject to Section 4.01(c) of this Litigation Trust Agreement and the retained jurisdiction of the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) as provided for in the Plan, but without prior or further authorization, the Litigation Trustee may control and exercise authority over the Litigation Trust Assets, over the acquisition, management and disposition thereof and over the management and conduct of the business of the Litigation Trust to the same extent as if the Litigation Trustee were the sole owner of the Litigation Trust Assets in its own right. No person dealing with the Litigation Trust shall be obligated to inquire into the Litigation Trustee's authority in connection with the acquisition, management or disposition of Litigation Trust Assets. (b) In connection with the management and use of the Litigation Trust Assets, the Litigation Trustee, except as otherwise expressly limited in this Litigation Trust Agreement, the Plan and the Confirmation Order, and, subject to Section 4.01(c) of this Litigation Trust Agreement, shall have, in addition to any powers conferred on it by any other provision of this Litigation Trust Agreement, the power to take any and all actions as are necessary or advisable to effectuate the purposes of the Litigation Trust, including, without limitation, the power and authority: (i) to accept the assets transferred and provided to the Litigation Trust under this Litigation Trust Agreement and the Plan; (ii) to distribute the Litigation Trust Recoveries in accordance with the terms of this Litigation Trust Agreement and the Plan; (iii) to sell, convey, transfer, assign, liquidate, collect or abandon any Litigation Trust Asset or any part thereof or any interest therein, on such terms and for such consideration as the Litigation Trustee deems desirable or appropriate; (iv) to prosecute all suits as may be necessary, appropriate or incident to the purposes of the Litigation Trust; (v) to endorse the payment of notes or other obligations of any person or to make contracts with respect thereto; (vi) to engage in all acts that would constitute ordinary course of business in performing the obligations of a trustee under a trust of this type; (vii) to remove all or any of the Litigation Trust Assets or the situs of administration of the Litigation Trust from one jurisdiction to another jurisdiction at any time or from time to time; (viii) in connection with any property held under this Litigation Trust Agreement that is distributable or payable to a minor, to transfer and pay over all or any portion of the property to the minor, or to a guardian of the minor's property, whenever appointed, without requiring ancillary guardianship, or to the minor's parent or the person with whom the minor resides, or to any custodian under any Uniform Gifts to Minors Act or Uniform Transfer to Minor Act with power to select any person or trust company (including any fiduciary hereunder) to be such custodian and with power to extend such custodianship to age twenty-one (21) years, without any obligation to see to the use or application of the property or to make inquiry with respect to any other property available for the use of the minor, the receipt by such minor, guardian, parent, person or custodian to be a complete discharge as to such transfer or payment; (ix) to borrow sums of money, at any time and from time to time, for periods of time and on terms and conditions from persons or corporations (including any fiduciary hereunder) for purposes as may be deemed advisable, and secure such loans by the pledge or hypothecation of any property held under this Litigation Trust Agreement; (x) to change the state of domicile of the Litigation Trust; (xi) to establish the funds, reserves and accounts within the Litigation Trust as deemed by the Litigation Trustee, in its discretion, to be useful in carrying out the purposes of the Litigation Trust; (xii) to sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitration or other proceeding; (xiii) in accordance with this Agreement, to indemnify (and purchase insurance indemnifying) the Litigation Trustee, and the employees, agents and representatives of the Litigation Trust or the Litigation Trustee to the fullest extent that a corporation organized under the laws of the Litigation Trust's domicile is from time to time entitled to indemnify its directors, officers, employees, agents and representatives; (xiv) to delegate any or all of the discretionary power and authority herein conferred at any time with respect to all or any portion of the Litigation Trust to any one or more reputable individuals or recognized institutional advisors or investment managers without liability for any action taken or omission made because of such delegation, except for such liability as is provided herein; (xv) to consult with the Reorganized Debtors at such times and with respect to such issues relating to the conduct of the Litigation Trust as the Litigation Trustee considers desirable; and (xvi) to perform such other acts and undertake such other conduct as the Litigation Trustee believes is necessary to carry out the purposes and intent of this Litigation Trust. The Litigation Trustee shall not at any time, on behalf of the Litigation Trust or the Holders, enter into or engage in any trade or business, and the Litigation Trustee shall not use or dispose of any part of the Litigation Trust Assets in furtherance of any trade or business. Section 6.4 Retention of Attorneys, Accountants and Other Professionals. The Litigation Trustee may retain such law firms, accounting firms, experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as it may deem necessary (collectively, the "Trustee Professionals"), in its sole discretion, to aid in the performance of its responsibilities pursuant to the terms of the Plan and this Litigation Trust Agreement, including, without limitation, the liquidation and distribution of Litigation Trust Assets (a) such law firm(s) as counsel to the Litigation Trust as the Litigation Trustee may deem advisable to aid in the pursuit, litigation, settlement or other resolution of the Litigation Trust Assets and to perform such other functions as may be appropriate to carry out the primary purposes of the Litigation Trust. The Litigation Trustee may commit the Litigation Trust to and shall pay such law firm(s) reasonable compensation from the Litigation Trust Assets for services rendered and expenses incurred. The Litigation Trustee may also engage such law firm(s) on a contingent fee basis as permitted by applicable law; (b) an independent public accounting firm to audit the financial books and records of the Litigation Trust and to perform such other reviews and/or audits as the Litigation Trustee may deem advisable to carry out the primary purposes of the Litigation Trust. The Litigation Trustee may commit the Litigation Trust to and shall pay such accounting firm reasonable compensation from the Litigation Trust Assets for services rendered and expenses incurred; and (c) such experts, advisors, consultants, investigators, appraisers, auctioneers or other professionals as are advisable to carry out the purposes of the Litigation Trust. The Litigation Trustee may commit the Litigation Trust to and shall pay all such persons or entities reasonable compensation from the Litigation Trust Assets for services rendered and expenses incurred. Section 6.5 Co-Trustees or Separate Trustees. (a) In order to (and only to the extent necessary to) meet any legal requirements of any jurisdiction in which any of the Litigation Trust Assets may from time to time be located, the Litigation Trustee shall have the power to appoint one or more individuals or corporations either to act as co-trustee jointly with the Litigation Trustee of all or any part of the Litigation Trust Assets or to act as separate trustee of all or any part of the Litigation Trust Assets and to vest in such person or persons, in such capacity, such title to the Litigation Trust Assets or any part thereof, and such rights, powers, duties, trusts or obligations as may be necessary for the Litigation Trustee to perform its duties under this Litigation Trust Agreement, subject to the remaining provisions of this Section 6.5. (b) Unless otherwise provided in the instrument appointing such co-trustee or separate trustee, every co-trustee or separate trustee shall, to the extent permitted by law, be appointed subject to the following terms: (i) all rights, powers, trusts, duties and obligations conferred or imposed by this Litigation Trust Agreement on the Litigation Trustee in respect of the custody, control or management of monies, papers, securities and other personal property shall be exercised solely by the Litigation Trustee; (ii) all rights, powers, trusts, duties and obligations conferred or imposed by this Litigation Trust Agreement on such trustees shall be conferred or imposed on and exercised or performed by the Litigation Trustee, or by the Litigation Trustee and such co-trustee or separate trustee jointly, except when, under the law of any jurisdiction in which any particular act or acts are to be performed, the Litigation Trustee shall be incompetent or unqualified to perform such act or acts, in which event, subject to clause (iv), such act or acts as shall be performed by such co-trustee or separate trustee; (iii) any request in writing by the Litigation Trustee to any co-trustee or separate trustee to take or to refrain from taking any action hereunder shall be sufficient warrant for the taking, or the refraining from taking, of such action by such co-trustee or separate trustee; (iv) any co-trustee or separate trustee to the extent permitted by law shall delegate to the Litigation Trustee the exercise of any right, power, trust, duty or obligation, discretionary or otherwise; (v) the Litigation Trustee, at any time, by an instrument in writing, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 6.5. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section 6.5; (vi) neither the Litigation Trustee nor any co-trustee or separate trustee appointed hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder selected by it with reasonable care; (vii) any demand, request, direction, appointment, removal, notice, consent, waiver or other action in writing delivered to the Litigation Trustee shall be deemed to have been delivered to each such co-trustee or separate trustee; (viii) any moneys, papers, securities or other items of personal property received by any such co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by law, be turned over to the Litigation Trustee to be held pursuant to the terms hereof; and (ix) any co-trustee appointed solely to qualify the Litigation Trust as a statutory business trust shall have no liability or responsibility for any of the duties and responsibilities under Article VI of this Litigation Trust Agreement or otherwise, except to maintain such offices and to execute such certificates as are required to be executed by all trustees and to take such other actions as are required under the applicable statute authorizing such business trust. (c) Upon the Litigation Trustee's acceptance in writing of such appointment by any such co-trustee or separate trustee, it or such person shall be vested with the Litigation Trust's right, title and interest in the Litigation Trust Assets, or portion thereof, and with such rights, powers, duties, trusts or obligations, jointly or separately with the Litigation Trustee, all as shall be specified in the instrument of appointment, subject to all the terms of this Litigation Trust Agreement. Every such acceptance shall be filed with the Litigation Trustee. (d) In case any co-trustee or separate trustee shall die, become incapable of acting, resign or be removed, the estate, right, title and interest in the Litigation Trust Assets and all rights, power, trusts, duties and obligations of the co-trustee or separate trustee shall, so far as permitted by law, vest in and be exercised by the Litigation Trustee unless and until a successor co-trustee or separate trustee shall be appointed pursuant to this Section 6.5. Section 6.6 Compensation of Litigation Trustee and the Trustee's Professionals. [NOTE: The following is for illustrative purposes only and will be amended upon appointment of a Trustee.] (a) The Board of Directors shall negotiate with and authorize the payment of reasonable compensation from the Litigation Trust Assets to the Litigation Trustee for services rendered and expenses incurred in fulfilling its duties pursuant to this Litigation Trust Agreement. [For the first six full months following the month in which the Effective Date occurs, the Litigation Trustee shall receive compensation of $[_____] per month. The fee payable for the month in which the Effective Date occurs shall be payable on the first day of the month following the Effective Date, and shall be prorated based on a $[_____] monthly fee and calculated for the actual number of days during the month that the Litigation Trustee has served. In all other cases, the fee will be payable on the first business day of the month (being the first day on which banking institutions in the [State of New York] are not authorized or required by law or regulation to be closed) following the month for which service has been rendered. Six months following the Effective Date, and annually thereafter, the Board of Directors and the Litigation Trustee shall negotiate the amount and payment terms of the compensation to the Litigation Trustee for the following one-year period. If no agreement is reached, the parties may seek the determination of the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) as to reasonable compensation.] The compensation and reimbursement of expenses of the Litigation Trustee shall be paid out of Litigation Trust Assets. (b) On or before the last day of each month following the month for which compensation is sought, each of the Litigation Trustee's Professionals seeking compensation shall serve a monthly statement on the Litigation Trustee, and the Board of Directors. The Litigation Trustee, and the Board of Directors will have fifteen (15) days from the date such statement is received to review the statement and object to such statement by serving an objection setting forth the precise nature of the objection and the amount at issue on the Trustee's Professional. At the expiration of the fifteen (15) day period, the Litigation Trust shall promptly pay 100% of the amounts requested, except for the portion of such fees and disbursements to which an objection has been made. The parties shall attempt to consensually resolve objections, if any, to any monthly statement. If the parties are unable to reach a consensual resolution of any such objection, the party who received an objection to its fees may seek payment of such fees by filing a motion with the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) and providing notice to the Litigation Trustee. Any professional who fails to submit a monthly statement shall be ineligible to receive further payment of fees and expenses as provided in this Litigation Trust Agreement until the monthly statement is submitted. Section 6.7 Standard of Care; Exculpation. The Litigation Trustee shall perform the duties and obligations imposed on the Litigation Trustee by this Litigation Trust Agreement with reasonable diligence and care under the circumstances. The Litigation Trustee shall not be personally liable to the Litigation Trust or to any Beneficiary (or any successor of such entities) except for such of its own acts as shall constitute bad faith, willful misconduct, gross negligence, willful disregard of its duties or material breach of this Litigation Trust Agreement. Except as aforesaid, the Litigation Trustee shall be defended, held harmless and indemnified from time to time from the Litigation Trust Assets but not from or by the Beneficiaries or any of the parties released in the Plan, against any and all losses, claims, costs, expenses and liabilities to which the Litigation Trustee may be subject by reason of the Litigation Trustee's execution in good faith of its duties under this Litigation Trust Agreement. The Litigation Trustee's officers, employees and agents may be likewise defended, held harmless and indemnified. The Litigation Trustee shall not be obligated to give any bond or surety or other security for the performance of any of its duties, unless otherwise ordered by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust); if so otherwise ordered, all costs and expenses of procuring any such bond shall be deemed Litigation Trust Expenses. Section 6.8 Reliance by Litigation Trustee. The Litigation Trustee may rely, and shall be fully protected personally in acting upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order or other instrument or document that it has no reason to believe to be other than genuine and to have been signed or presented other than by the proper party or parties or, in the case of facsimile transmissions, to have been sent other than by the proper party or parties, in each case without obligation to satisfy itself that the same was given in good faith and without responsibility for errors in delivery, transmission or receipt. In the absence of its bad faith, willful misconduct, gross negligence, willful disregard of its duties or material breach of this Litigation Trust Agreement, the Litigation Trustee may rely as to the truth of statements and correctness of the facts and opinions expressed therein and shall be fully protected personally in acting thereon. The Litigation Trustee may consult with legal counsel and shall be fully protected in respect of any action taken or suffered by it in accordance with the written opinion of legal counsel. The Litigation Trustee may at any time seek instructions from the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) concerning the acquisition, management or disposition of the Litigation Trust Assets. Section 6.9 Action upon Instructions. If in performing the Litigation Trustee's duties under this Litigation Trust Agreement, the Litigation Trustee is required to decide between alternative courses of action, or the Litigation Trustee is unsure of the application of any provision of this Litigation Trust Agreement or the Plan, then the Litigation Trustee may promptly deliver a notice to the Board of Directors, requesting written instructions as to the course of action to be taken by the Litigation Trustee. If the Litigation Trustee does not receive such written directions within 10 business days after it has delivered such notice, the Litigation Trustee may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Litigation Trust Agreement as the Litigation Trustee shall deem advisable. Section 6.10 Bankruptcy Court (or District Court) Approval. If the Litigation Trustee does not receive direction described in Section 6.9 or any other approval required by this Litigation Trust Agreement from the Board of Directors, within the requisite time period or the Litigation Trustee believes that a court order is necessary or advisable to protect the interests of the Beneficiaries, the Litigation Trustee may apply to the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) for a determination as to the course of action to be taken by the Litigation Trustee. Section 6.11 Investment Obligations. The Litigation Trustee shall invest and re-invest the liquid Litigation Trust Assets consistent with the obligations of a trustee under Section 345 of the Bankruptcy Code. In addition, the Litigation Trustee may invest the corpus of the Litigation Trust in prudent investments in addition to those described in Section 345 of the Bankruptcy Code. The Litigation Trustee shall not be liable in any way for any loss or other liability arising from any investment, or the sale or other disposition of any investment, made in accordance with this Section 6.11, except for any such loss or liability arising from the Litigation Trustee's gross negligence, willful misconduct or bad faith. Section 6.12 Quarterly Reports. The Litigation Trustee shall submit quarterly status reports to the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) and Reorganized OCD. Each quarterly status report shall be due on the thirtieth (30th) day following the last day of any calendar quarter (or the next Business Day if the thirtieth day following the last day of any calendar quarter is not a Business Day). The Litigation Trustee shall continue to submit quarterly status reports until the assets of the Litigation Trust are fully administered or the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) determines on motion that such reports are no longer necessary. Each quarterly status report shall contain a summary of all activity by the reporting party during the previous quarter, a summary of the professional fees sought and obtained in the prior quarter and a summary of cash receipts and disbursements of the Litigation Trustee, a summary of cash receipts and disbursements of the Litigation Trust, a summary of any distributions and such other information as the Litigation Trustee deems appropriate for inclusion or as reasonably requested by the parties to whom such reports are to be submitted. Section 6.13 Tax Filings and Notices. The Litigation Trustee shall prepare and provide to, or file with, the appropriate parties such notices, tax returns and other filings, including all federal, state and local tax returns of the Litigation Trust, as may be required under the Code, the Plan, or as may be required by applicable law of other jurisdictions including, if required under applicable law, notices required to report interest or dividend income. The Litigation Trustee shall, when specifically requested by, to the extent required by applicable law, provide such Beneficiary with such tax information as is necessary for the preparation by such Beneficiary of its income tax return. Section 6.14 Compliance with Securities Laws. The Litigation Trustee shall, to the extent required by law, file with the Securities and Exchange Commission and other applicable federal and state governmental agencies any reports and other documents that may be required in connection with the holding, management or distribution of trust assets, and shall take any and all other actions necessary to comply with federal or state securities laws. Section 6.15 Section 6.16 Resignation or Removal. The Litigation Trustee may resign as Litigation Trustee by giving written notice of its resignation to the Board of Directors. The Litigation Trustee shall continue to serve as trustee for the shorter of (a) 90 days following the tender of the notice of resignation or (b) until the appointment of a successor Litigation Trustee shall become effective in accordance with Section [__] of this Litigation Trust Agreement. The Litigation Trustee may be removed by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) for acts that constitute bad faith, willful misconduct, gross negligence, willful disregard of its duties or material breach of this Litigation Trust Agreement. In the event of the resignation or removal of the Litigation Trustee, the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) shall designate a person to serve as successor Litigation Trustee. ARTICLE VII Coordination with Reorganized Debtors Section 7.1 Duty to Provide Access. Subject to Section 8.2 of this Litigation Trust Agreement, the Reorganized Debtors shall make available reasonable access during normal business hours, on reasonable notice, to personnel and books and records of the Reorganized Debtors to representatives of the Litigation Trust to enable the Litigation Trustee to perform the Litigation Trustee's tasks under the Litigation Trust Agreement and the Plan; provided, however, that the Reorganized Debtors shall not be required to make expenditures in response to such requests determined by them in good faith to be unreasonable. Section 7.2 Preservation of Confidential and Privileged Information. The Litigation Trustee shall enter into an agreement with the Reorganized Debtors for the purpose of maintaining the confidentiality of, and retaining the protection of any applicable privilege in connection with, the information provided by the Reorganized Debtors pursuant to Section 8.1 of this Litigation Trust Agreement. ARTICLE VIII Retention of Jurisdiction Pursuant to the Plan and Confirmation Order, the District Court, together with the Bankruptcy Court to the extent of any reference made to it by the District Court and the Reference Order, will retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan, including, among other things, jurisdiction to: (a) enter such orders as may be necessary or appropriate to execute, implement, or consummate the provisions in the Plan and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement or the Confirmation Order, including this Litigation Trust Agreement; (b) hear and determine disputes arising in connection with the interpretation, implementation, consummation, or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan, including this Litigation Trust Agreement; (c) hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order, including this Litigation Trust Agreement; (d) effectuate performance of and payments under the provisions of the Plan, including the Litigation Trust Expenses. ARTICLE IX Termination The Litigation Trust shall continue until termination of the Litigation Trust is approved by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) after distribution of all the Litigation Trust Assets and[, in any event,] must be terminated no later than [___] (__) years from the date of creation of the Litigation Trust, which termination date may be extended for one or more finite terms subject to the approval of the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) upon a finding that the extension is necessary to its liquidating purpose. Each such extension must be approved by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) within [six (6)] months of the beginning of the extended term. The Litigation Trustee shall at all times endeavor to liquidate the Litigation Trust Assets expeditiously, and in no event shall the Litigation Trustee unduly prolong the duration of the Litigation Trust. On termination of this Litigation Trust, the Litigation Trustee shall advise the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) in writing of its termination. Notwithstanding the foregoing, after the termination of the Litigation Trust, the Litigation Trustee shall have the power to exercise all the powers, authorities and discretions herein conferred solely for the purpose of liquidating and winding up the affairs of the Litigation Trust. On distribution of all of the Litigation Trust Assets, the Litigation Trustee shall retain the books, records and files that shall have been delivered to or created by the Litigation Trustee. At the Litigation Trustee's discretion, all such records and documents may be destroyed at any time after[ years] from the distribution of all of the Litigation Trust Assets. ARTICLE X Miscellaneous Section 10.1 Notices. All notices, requests or other communications required or permitted to be made in accordance with this Litigation Trust Agreement shall be in writing and shall be delivered personally or by facsimile transmission or mailed by first-class mail or by overnight delivery service: If to the Litigation Trustee, at: [name] [address] [city, state, zip] with copies to: [name] [address] [city, state, zip] If to the Reorganized Debtors, at: OWENS CORNING One Owens Corning Parkway Toledo, OH 43659 Att'n: Corporate Secretary Telephone: (419) 248-7201 Facsimile: (419) 248-8445 with copies to: Law Department OWENS CORNING One Owens Corning Parkway Toledo, OH 43659 Telephone: (419) 248-8650 Facsimile: (419) 325-4650 SAUL EWING LLP 222 Delaware Avenue P.O. Box 1266 Wilmington, DE 19899-1266 Att'n: Norman L. Pernick, Esq. Telephone: (301) 421-6800 Facsimile: (301) 421-6813 100 South Charles Street Baltimore, MD 21201-2773 Att'n: Charles O. Monk II, Esq. Telephone: (410) 332-8600 Facsimile: (410) 332-8862 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, NY 10036-6522 Att'n: Ralph Arditi, Esq. D.J. Baker, Esq. Telephone: (212)735-3000 Facsimile: (212) 735-2000 Notices sent out by facsimile transmission shall be deemed delivered when actually received, and notices sent by first-class mail shall be deemed delivered three business days after mailing and notices sent by overnight delivery service shall be deemed delivered the next business day after mailing. Section 10.2 Effectiveness. This Litigation Trust Agreement shall become effective on the Effective Date. Section 10.3 Intention of Parties to Establish Litigation Trust. This Litigation Trust Agreement is intended to create a trust, and the Litigation Trust created hereunder shall be governed and construed in all respects as a trust. Section 10.4 Investment Company Act. The Litigation Trust is organized as a liquidating entity in the process of liquidation, and therefore should not be considered, and the Litigation Trust does not and will not hold itself out as, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act. Section 10.5 Taxation. For United States federal income tax purposes, it is intended that the Litigation Trust be classified as a liquidating trust under section 301.7701-4 of the Procedure and Administration Regulations and that such trust is owned by its beneficiaries. Accordingly, for United States federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a distribution of an undivided interest in the Litigation Trust Assets and then contributed such interests to the Litigation Trust. Section 10.6 Counterparts. This Litigation Trust Agreement may be executed in one or more counterparts (via facsimile or otherwise), each of which shall be deemed an original but which together shall constitute but one and the same instrument. Section 10.7 Governing Law. This Litigation Trust Agreement shall be governed by, construed under and interpreted in accordance with the laws of the State of . Section 10.8 Headings. Sections, subheadings and other headings used in this Litigation Trust Agreement are for convenience only and shall not affect the construction of this Litigation Trust Agreement. Section 10.9 Severability. Any provision of this Litigation Trust Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions of this Litigation Trust Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable any such provision in any other jurisdiction. Section 10.10 Amendments. This Litigation Trust Agreement may be amended from time to time by the Trust Advisory Board, if any, by majority vote. Section 10.11 Successors. This Litigation Trust Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. Section 10.12 No Suits by Claimholders. No Claimholder shall have any right by virtue of any provision of this Litigation Trust Agreement to institute any action or proceeding in law or in equity against any party other than the Litigation Trustee on or under or with respect to the Litigation Trust Assets. Section 10.13 Irrevocability. The Litigation Trust is irrevocable, but is subject to amendment as provided for herein. Section 10.14 Litigation Trust Continuance. The death, dissolution, resignation, incompetency or removal of the Litigation Trustee shall not operate to terminate the Litigation Trust created by this Litigation Trust Agreement or to revoke any existing agency created under the terms of this Litigation Trust Agreement or invalidate any action theretofore taken by the Litigation Trustee. In the event of the resignation or removal of the Litigation Trustee, the Litigation Trustee shall promptly (a) execute and deliver such documents, instruments and other writings as may be requested by the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) or a successor Litigation Trustee to effect the termination of the Litigation Trustee's capacity under this Litigation Trust Agreement and the conveyance of the Litigation Trust Assets then held by the Litigation Trustee to the successor, (b) deliver to the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) or the successor Litigation Trustee all documents, instruments, records and other writings related to the Litigation Trust as may be in the possession of the Litigation Trustee and (c) otherwise assist and cooperate in effecting the assumption of its obligations and functions by such successor Litigation Trustee. Section 10.15 Enforcement and Administration. The [Bankruptcy Court] [District Court] shall enforce and administer the provisions of this Litigation Trust Agreement as set forth in the Plan. IN WITNESS WHEREOF, the parties hereto have executed this Litigation Trust Agreement or caused this Litigation Trust Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written. OWENS CORNING By: _________________________________________ Name: Title: [LITIGATION TRUSTEE] By: _________________________________________ Name: Title: EXHIBIT D OWENS CORNING/FIBREBOARD FORM OF ASBESTOS PERSONAL INJURY TRUST AGREEMENT [THE ATTACHED ASBESTOS PERSONAL INJURY TRUST AGREEMENT IS IN DRAFT FORM AND IS NOT COMPLETE. IT IS IN THE PROCESS OF BEING REVIEWED BY THE ASBESTOS CLAIMANTS COMMITTEE AND THE FUTURE CLAIMANTS' REPRESENTATIVE, AND HAS NOT BEEN APPROVED BY EITHER OF THEM. ALL RIGHTS WITH RESPECT TO THIS DOCUMENT AND EACH OF THE PROVISIONS THEREOF ARE FULLY RESERVED.]
OWENS CORNING/FIBREBOARD ASBESTOS PERSONAL INJURY TRUST AGREEMENT ---------------------------------------- TABLE OF CONTENTS ----------------- SECTION 1-- Agreement of Trust ................................................... 4 1.1 Creation and Name ............................................... 4 1.2 Purpose ............................................................ 4 1.3 Transfer of Assets ................................................. 4 1.4 Acceptance of Assets and Assumption of Liabilities ................. 5 SECTION 2-- Powers and Trust Administration ...................................... 6 2.1 Powers ............................................................. 6 2.2 General Administration ............................................. 10 2.3 Claims Administration............................................... 15 SECTION 3-- Accounts, Investments, and Payments .................................. 16 3.1 Accounts ........................................................... 16 3.2 Investments ........................................................ 16 3.3 Source of Payments ................................................. 18 SECTION 4-- Trustees ............................................................. 19 4.1 Number ............................................................. 19 4.2 Term of Service .................................................... 19 4.3 Appointment of Successor Trustees .................................. 20 4.4 Liability of Trustees, Officers and Employees ...................... 21 4.5 Compensation and Expenses of Trustees .............................. 21 4.6 Indemnification of Trustees and Additional Indemnitiees ............ 22 4.7 Trustees' Lien ..................................................... 23 4.8 Trustees' Employment of Experts .................................... 23 4.9 Trustees' Independence ............................................. 24 4.10 Bond ............................................................. 24 SECTION 5-- Trust Advisory Committee............................................... 24 5.1 Members............................................................. 24 5.2 Duties ............................................................ 24 5.3 Term of Office ..................................................... 25 5.4 Appointment of Successor ........................................... 26 5.5 TAC's Employment of Professionals ................................. 26 5.6 Compensation and Expenses of TAC .................................. 28 5.7 Procedures for Consultation With and Obtaining the Consent of the TAC ................................................. 28 (a) Consultation Process ........................................ 28 (b) Consent Process ............................................. 29 SECTION 6-- The Future Claimants' Representative ................................. 30 6.1 Duties ............................................................ 30 6.2 Term of Office ..................................................... 30 6.3 Appointment of Successor ........................................... 31 6.4 Future Claimants' Representative's Employment of Professionals ..... 31 6.5 Compensation and Expenses of the Future Claimants' Representative ..................................................... 33 6.6 Procedures for Consultation With and Obtaining the Consent of the Future Claimants' Representative .................... 34 (a) Consultation Process ....................................... 34 (b) Consent Process ............................................ 34 SECTION 7-- General Provisions .................................................... 36 7.1 Irrevocability .................................................... 36 7.2 Termination ....................................................... 36 7.3 Amendments ......................................................... 37 7.4 Meetings .......................................................... 38 7.5 Severability ....................................................... 38 7.6 Notices ............................................................ 39 7.7 Successors and Assigns ............................................. 40 7.8 Limitation on Claim Interests for Securities Laws Purposes ...................................................... 40 7.9 Entire Agreement; No Waiver ........................................ 40 7.10 Headings ....................................................... 41 7.11 Governing Law ...................................................... 41 7.12 Settlors' Representations and Cooperation .......................... 41 7.13 Dispute Resolution ................................................. 41 7.14 Enforcement and Administration ..................................... 42 7.15 Effectiveness ...................................................... 42 7.16 Counterpart Signatures ............................................. 42
OWENS CORNING/FIBREBOARD ASBESTOS PI TRUST AGREEMENT --------------------------- This Owens Corning/Fibreboard Asbestos PI Trust Agreement (hereinafter referred to as the "PI Trust Agreement"), dated the date set forth on the signature page hereof and effective as of the later of the Effective Date or the date this Agreement is executed by the Trustees ("Trustees"), is entered into by Owens Corning ("OC," the "Settlor," or the "Debtor"), a Delaware corporation, the Debtor and debtor-in-possession in Case No. 00-03837 in the United States Bankruptcy Court for the District of Delaware as Settlor; the Future Claimants' Representative; the Official Committee of Asbestos Creditors ("Committee"); and the Trustees and the members of the PI Trust Advisory Committee ("TAC"), who are further identified on the signature pages hereof and appointed at Confirmation pursuant to the Amended Joint Plan of Reorganization for Owens Corning and Its Affiliated Debtors and Debtors-In-Possession ("Plan"), as such Plan may be amended, modified or supplemented from time to time. All capitalized terms not otherwise defined herein shall have their respective meanings as set forth in the Plan, and such definitions are incorporated herein by reference. All capitalized terms not defined herein or defined in the Plan, but defined in the Bankruptcy Code or Rules, shall have the meanings ascribed to them by the Bankruptcy Code and Rules, and such definitions are incorporated herein by reference. WHEREAS, at the time of the entry of the order for relief in the Chapter 11 case, Owens Corning ("OC")and its wholly-owned subsidiary Fibreboard Corporation ("Fibreboard") were named as a defendants in actions involving personal injury ("PI") or death claims caused by exposure to asbestos-containing products for which OC and Fibreboard, their predecessors, successors and assigns have legal liability ("OC Asbestos Personal Injury Claims" and "Fibreboard Asbestos Personal Injury Claims" as defined in the Plan); and WHEREAS, OC has reorganized under the provisions of Chapter 11 of the Bankruptcy Code in a case pending in the United States Bankruptcy Court for the District of Delaware, known as In re Owens Corning, et al, Debtor, Case No. 00-03837 JKF; and WHEREAS, the Plan has been confirmed by the Bankruptcy Court; and WHEREAS, the Plan provides, inter alia, for the creation of the Asbestos Personal Injury Settlement Trust ("PI Trust"); and WHEREAS, pursuant to the Plan, the PI Trust is to use its assets and income to satisfy all Asbestos Personal Injury Claims; and WHEREAS, pursuant to the Plan, the PI Trust shall be funded with the consideration described in Section 10.3 of the Plan; WHEREAS, pursuant to the Plan, the PI Trust will use that consideration to establish two separate Sub-Accounts, the OC Sub-Account which shall be funded with the consideration described in Section 10.3(a) of the Plan, and the Fibreboard Sub-Account which shall be funded with the consideration described in Section 10.3(b) of the Plan; WHEREAS, pursuant to the Plan, OC Asbestos Personal Injury Claims shall be paid from the OC Sub-Account and Fibreboard Asbestos Personal Claims shall be paid from the Fibreboard Sub-Account; WHEREAS, it is the intent of OC, the Trustees, the Committee, the TAC, and the Future Claimants' Representative that the PI Trust be administered, maintained, and operated at all times through mechanisms that provide reasonable assurance that the PI Trust will satisfy all PI Trust Claims pursuant to the Owens Corning/Fibreboard Asbestos Personal Injury Trust Distribution Procedures ("TDP") that are attached to the Disclosure Statement as Exhibit D-1 in a substantially similar manner, and in strict compliance with the terms of this PI Trust Agreement; and WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a "qualified settlement fund" within the meaning of Section 1.468B-1 et seq. of the Treasury Regulations promulgated under Section 468B of the Internal Revenue Code ("IRC"); and WHEREAS, the Bankruptcy Court has determined that the PI Trust and the Plan satisfy all the prerequisites for an injunction pursuant to Section 524(g) of the Bankruptcy Code, and such injunction has been entered in connection with the Confirmation Order; NOW, THEREFORE, it is hereby agreed as follows: SECTION 1 AGREEMENT OF TRUST ------------------ 1.1 CREATION AND NAME. OC as Settlor hereby creates a trust known as the Asbestos Personal Injury Settlement Trust or PI Trust, which is provided for and referred to in the Plan. The Trustees of the PI Trust may transact the business and affairs of the PI Trust in the name of the PI Trust. 1.2 PURPOSE. The purpose of the PI Trust is to assume the liabilities of OC and Fibreboard, their predecessors and successors in interest, for all PI Trust Claims (as defined in the Plan), and to use the PI Trust Assets and income to pay the holders of all PI Trust Claims in accordance with this PI Trust Agreement and the TDP in such a way that such holders of PI Trust Claims are treated fairly, equitably and reasonably in light of the limited assets available to satisfy such claims, and to otherwise comply in all respects with the requirements of a trust set forth in Section 524(g)(2)(B) of the Bankruptcy Code. 1.3 TRANSFER OF ASSETS. Pursuant to the Plan, the PI Trust Share (as defined in the Plan) has been transferred and assigned to the PI Trust to settle and discharge all Asbestos Personal Injury Claims. Pursuant to the Plan, OC, its successors in interest thereto, from and after the Effective Date ("Reorganized OC") and others may also transfer and assign additional assets to the PI Trust from time to time (the "PI Trust Assets"). In all events, the PI Trust Assets will be transferred to the PI Trust free and clear of any liens or other claims by OC, Reorganized OC, any creditor, or other entity. OC, Reorganized OC, and any other transferors shall also execute and deliver such documents to the PI Trust as the Trustees reasonably request to transfer and assign the PI Trust Assets to the PI Trust. 1.4 ACCEPTANCE OF ASSETS AND ASSUMPTION OF LIABILITIES (a) In furtherance of the purposes of the PI Trust, the Trustees, on behalf of the PI Trust, hereby expressly accept the transfer and assignment to the PI Trust of the PI Trust Assets in the time and manner contemplated in the Plan. (b) In furtherance of the purposes of the PI Trust, the Trustees, on behalf of the PI Trust, expressly assume all liability for all Asbestos Personal Injury Claims. Except as otherwise provided in this PI Trust Agreement and the TDP, the PI Trust shall have all defenses, cross-claims, offsets, and recoupments, as well as rights of indemnification, contribution, subrogation, and similar rights, regarding such claims that OC and Reorganized OC have or would have had under applicable law. Regardless of the foregoing, however, a claimant must meet otherwise applicable federal, state and foreign statutes of limitations and repose, except as otherwise provided in Section 5.1(a)(2) of the TDP. (c) No provision herein or in the TDP shall be construed to mandate distributions on any claims or other actions that would contravene the PI Trust's compliance with the requirements of a qualified settlement fund within the meaning of section 1.468B-1 et seq. of the Treasury Regulations promulgated under section 468B of the IRC. (d) OC and Reorganized OC shall be entitled to indemnification from the PI Trust for any expenses, costs, and fees (including reasonable attorneys' fees and costs, but excluding any such expenses, costs, and fees incurred prior to the Effective Date), judgments, settlements, or other liabilities arising from or incurred in connection with any action related to OC and Fibreboard Asbestos Personal Injury Claims, including, but not limited to, indemnification or contribution for such claims prosecuted against Reorganized OC (e) Nothing in this PI Trust Agreement shall be construed in any way to limit the scope, enforceability, or effectiveness of the Section 524(g) injunction issued in connection with the Plan or the PI Trust's assumption of all liability for PI Trust Claims, subject to the provisions of Section 1.4(b) above. SECTION 2 POWERS AND TRUST ADMINISTRATION ------------------------------- 2.1 POWERS. (a) The Trustees are and shall act as the fiduciaries to the PI Trust in accordance with the provisions of this PI Trust Agreement and the Plan. The Trustees shall, at all times, administer the PI Trust and the PI Trust Assets in accordance with the purposes set forth in Section 1.2 above. Subject to the limitations set forth in this PI Trust Agreement, the Trustees shall have the power to take any and all actions that, in the judgment of the Trustees, are necessary or proper to fulfill the purposes of the PI Trust, including, without limitation, each power expressly granted in this Section 2.1, any power reasonably incidental thereto, and any trust power now or hereafter permitted under the laws of the State of Delaware. (b) Except as required by applicable law or otherwise specified herein, the Trustees need not obtain the order or approval of any court in the exercise of any power or discretion conferred hereunder. (c) Without limiting the generality of Section 2.1(a) above, and except as limited below, the Trustees shall have the power to: (i) receive and hold the PI Trust Share and the PI Trust Assets, vote the Reorganized OC common stock, and exercise all rights with respect to, and sell, any securities issued by Reorganized OC that are included in the PI Trust assets, subject to any restrictions set forth in the Restated Certificate of Reorganized OC; (ii) invest the monies held from time to time by the PI Trust; (iii) sell, transfer, or exchange any or all of the PI Trust Assets at such prices and upon such terms as the Trustees may consider proper, consistent with the other terms of this PI Trust Agreement; (iv) enter into leasing and financing agreements with third parties to the extent such agreements are reasonably necessary to permit the PI Trust to operate; (v) pay liabilities and expenses of the PI Trust, including, but not limited to, PI Trust expenses; (vi) establish such funds, reserves and accounts within the PI Trust estate, as deemed by the Trustees to be useful in carrying out the purposes of the PI Trust; (vii) sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitrative, or other proceeding; (viii) establish, supervise and administer the PI Trust in accordance with the TDP and the terms thereof; (ix) appoint such officers and hire such employees and engage such legal, financial, accounting, investment, auditing and forecasting, and other consultants and agents as the business of the PI Trust requires, and delegate to such persons such powers and authorities as the fiduciary duties of the Trustees permit and as the Trustees, in their discretion, deem advisable or necessary in order to carry out the terms of this PI Trust; (x) pay employees, legal, financial, accounting, investment, auditing, and forecasting, and other consultants, advisors, and agents, including those engaged by the PI Trust in connection with its alternative dispute resolution activities, reasonable compensation; (xi) compensate the Trustees, the TAC members, and the Future Claimants' Representative as provided below, and their employees, legal, financial, accounting, investment and other advisors, consultants, independent contractors, and agents, and reimburse the Trustees, the TAC members and the Future Claimants' Representative all reasonable out-of-pocket costs and expenses incurred by such persons in connection with the performance of their duties hereunder; (xii) execute and deliver such instruments as the Trustees consider proper in administering the PI Trust; (xiii) enter into such other arrangements with third parties as are deemed by the Trustees to be useful in carrying out the purposes of the PI Trust, provided such arrangements do not conflict with any other provision of this PI Trust Agreement; (xiv) in accordance with Section 4.6 below, defend, indemnify and hold harmless (and purchase insurance indemnifying) (A) the Trustees and (B) the TAC, the Future Claimants' Representative, the officers and employees of the PI Trust, and any agents, advisors and consultants of the PI Trust, the TAC or the Future Claimants' Representative (the "Additional Indemnitees"), to the fullest extent that a corporation or trust organized under the law of the PI Trust's situs is from time to time entitled to indemnify and/or insure its directors, trustees, officers, employees, agents, advisors and representatives; (xv) indemnify Reorganized OC by reason of any present or future PI Trust Claims against all expenses, costs, fee (including attorneys' fees), judgments, awards, settlements, and other liabilities incurred in connection therewith. (xvi) delegate any or all of the authority herein conferred with respect to the investment of all or any portion of the PI Trust Share or PI Trust Assets to any one or more reputable individuals or recognized institutional investment advisors or investment managers without liability for any action taken or omission made because of any such delegation, except as provided in Section 4.4 below; (xvii) consult with Reorganized OC, the TAC and the Future Claimants' Representative at such times and with respect to such issues relating to the conduct of the PI Trust as the Trustees consider desirable; and (xviii) make, pursue (by litigation or otherwise), collect, compromise or settle, in the name of the PI Trust or in the name of Reorganized OC, any claim, right, action, or cause of action included in the PI Trust assets including, but not limited to, insurance recoveries, before any court of competent jurisdiction; provided that settlement of actions before the Bankruptcy Court require the approval of the Bankruptcy Court after notice to Reorganized OC as the case may be. (d) The Trustees shall not have the power to guarantee any debt of other persons. (e) The Trustees shall give the TAC, the Future Claimants' Representative, and Reorganized OC prompt notice of any act performed or taken pursuant to Sections 2.1(c)(i), (iii), (vii), or (xv) above, and any act proposed to be performed or taken pursuant to Section 2.2(f) below. 2.2 GENERAL ADMINISTRATION. (a) The Trustees shall adopt and act in accordance with the PI Trust Bylaws. To the extent not inconsistent with the terms of this PI Trust Agreement, the PI Trust Bylaws shall govern the affairs of the PI Trust. In the event of an inconsistency between the PI Trust Bylaws and this PI Trust Agreement, the PI Trust Agreement shall govern. (b) The Trustees shall (i) timely file income tax and other returns and statements and shall timely pay all taxes required to be paid, (ii) comply with all withholding obligations, as required under the applicable provisions of the IRC and of any state law and the regulations promulgated thereunder, (iii) meet without limitation all requirements necessary to qualify and maintain qualification of the PI Trust as a qualified settlement fund within the meaning of Section 1.468B-1 et seq. of the Treasury Regulations promulgated under Section 468B of the IRC, and (iv) take no action that could cause the PI Trust to fail to qualify as a qualified settlement fund within the meaning of Section 1.468B-1 et seq. of the Treasury Regulations promulgated under Section 468B of the IRC. (c) The Trustees shall timely account to the Bankruptcy Court as follows: (i) The Trustees shall cause to be prepared and filed with the Bankruptcy Court, as soon as available, and in any event within one hundred and twenty (120) days following the end of each fiscal year, an annual report containing financial statements of the PI Trust (including, without limitation, a balance sheet of the PI Trust as of the end of such fiscal year and a statement of operations for such fiscal year) audited by a firm of independent certified public accountants selected by the Trustees and accompanied by an opinion of such firm as to the fairness of the financial statements' presentation of the cash and investments available for the payment of claims and as to the conformity of the financial statements with generally accepted accounting principles. The Trustees shall provide a copy of such report to the TAC, the Future Claimants' Representative, and Reorganized OC when such reports are filed with the Bankruptcy Court. (ii) Simultaneously with delivery of each set of financial statements referred to in Article 2.2(c)(i) above, the Trustees shall cause to be prepared and filed with the Bankruptcy Court a report containing a summary regarding the number and type of claims disposed of during the period covered by the financial statements. The Trustees shall provide a copy of such report to the TAC, the Future Claimants' Representatives, and Reorganized OC when such report is filed. (iii) All materials required to be filed with the Bankruptcy Court by this Section 2.2(c) shall be available for inspection by the public in accordance with procedures established by the Bankruptcy Court and shall be filed with the Office of the United States Trustee for the District of Delaware. (d) The Trustees shall cause to be prepared as soon as practicable prior to the commencement of each fiscal year a budget and cash flow projections covering such fiscal year and the succeeding four fiscal years. The budget and cash flow projections shall include determining the Maximum Annual Payment pursuant to Section 2.4 of the TDP, and the Asbestos Personal Injury Claims Payment Ratio pursuant to Section 2.5 of the TDP. The Trustees shall provide a copy of the budget and cash flow projections to the TAC and the Future Claimants' Representative. (e) The Trustees shall consult with the TAC and the Future Claimants' Representative (i) on the general implementation and administration of the PI Trust; (ii) on the general implementation and administration of the TDP; and (iii) on such other matters as may be required under this PI Trust Agreement and the TDP. (f) The Trustees shall be required to obtain the consent of the TAC and the Future Claimants' Representative pursuant to the Consent Process set forth in Section 5.7(b) and 6.6(b) below, in addition to any other instances elsewhere enumerated, in order: (i) To change the Claims Payment Ratio described in Section 2.5 of the TDP in the event that the requirements for such a change as set forth in said provision have been met; (ii) to change the Disease Levels, Medical/Exposure Criteria set forth in Section 5.3(a)(3) of the TDP, and/or the Scheduled, Average and/or Maximum Values set forth in Sections 5.3(b)(4) and 5.3(b)(5) of the TDP; (iii) to change the Payment Percentage described in Section 4.2 of the TDP; (iv) to establish and/or to change the Proof of Claim Forms and other claims materials to be provided holders of PI Trust Claims under Section 6.1 of the TDP; (v) to require that claimants provide additional kinds of medical or exposure evidence pursuant to Section 5.7 of the TDP; (vi) to change the form of release to be provided pursuant to Section 7.8 of the TDP; (vii) to terminate the PI Trust pursuant to Section 7.2 below; (viii) to settle the liability of any insurer under any insurance policy or legal action related thereto; (ix) to change the compensation of the members of the TAC, the Future Claimants' Representative or Trustees, other than to reflect cost-of-living increases or changes approved by the Bankruptcy Court as otherwise provided herein; (x) to take structural or other actions to minimize any tax on the PI Trust Assets; (xi) to amend the PI Trust Bylaws in accordance with the terms thereof; (xii) to amend any provision of the PI Trust Agreement or the TDP in accordance with the terms thereof; (xiii) to vote the shares of Reorganized OC held by the PI Trust for purposes of electing members of the Board of Directors of Reorganized OC; and (xiv) to merge any asbestos claims resolution organization formed by the PI Trust with another asbestos claims resolution organization that is not specifically created by this PI Trust Agreement or the TDP, or to contract with another asbestos claims resolution organization or other entity that is not specifically created by this PI Trust Agreement or the TDP, or permit any other party to join in any asbestos claims resolution organization that is formed by the PI Trust pursuant to the PI Trust Agreement or the TDP; provided that such merger, contract or joinder shall not (a) subject Reorganized OC or any successors in interest thereto, to any risk of having any PI Trust Claim asserted against it or them, or (b) otherwise jeopardize the validity or enforceability of the Section 524(g) injunction; and provided further that the terms of such merger will require the surviving organization to make decisions about the allowability and value of claims in accordance with Section 2.1 of the TDP which requires that such decisions be based on the provisions of the TDP. (g) The Trustees shall meet with the TAC and the Future Claimants' Representative no less often than quarterly. The Trustees shall meet in the interim with the TAC and the Future Claimants' Representative when so requested by either. (h) The Trustees, upon notice from either the TAC or the Future Claimants' Representative, if practicable in view of pending business, shall at their next meeting with the TAC or the Future Claimants' Representative consider issues submitted by the TAC or the Future Claimants' Representative. (i) Periodically, but not less often than once a year, the Trustees shall make available to claimants and other interested parties the number of claims by disease levels that have been resolved both by individual review and by arbitration, as well as by trial, indicating the amounts of the awards and the averages of the awards by jurisdiction pursuant to Section 7.10 of the TDP. 2.3 CLAIMS ADMINISTRATION. The Trustees shall promptly proceed to implement the TDP. SECTION 3 ACCOUNTS, INVESTMENTS, AND PAYMENTS ----------------------------------- 3.1 ACCOUNTS. The Trustees may, from time to time, create such accounts and reserves within the PI Trust estate as they may deem necessary, prudent, or useful in order to provide for the payment of expenses and payment of PI Trust Claims and may, with respect to any such account or reserve, restrict the use of monies therein. 3.2 INVESTMENTS. Investment of monies held in the PI Trust shall be administered in the manner in which individuals of ordinary prudence, discretion, and judgment would act in the management of their own affairs, subject to the following limitations and provisions: (a) The PI Trust shall not acquire, directly or indirectly, equity in any entity (other than Reorganized OC, or any successor to Reorganized OC) or business enterprise if, immediately following such acquisition, the PI Trust would hold more than 5% of the equity in such entity or business enterprise. The PI Trust shall not hold, directly or indirectly, more than 10% of the equity in any entity (other than Reorganized OC, or any successor to Reorganized OC) or business enterprise. (b) The PI Trust shall not acquire or hold any long-term debt securities unless (i) such securities are included in the PI Trust Share or PI Trust Assets under the Plan, (ii) such securities are rated "Baa" or higher by Moody's, "BBB" or higher by Standard & Poor's ("S&P's"), or have been given an equivalent investment grade rating by another nationally recognized statistical rating agency, or (iii) have been issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof. (c) The PI Trust shall not acquire or hold for longer than ninety (90) days any commercial paper unless such commercial paper is rated "Prime-1" or higher by Moody's or "A-1" or higher by S&P's or has been given an equivalent rating by another nationally recognized statistical rating agency. (d) Excluding any securities of OC or Reorganized OC, the PI Trust shall not acquire or hold any common or preferred stock or convertible securities unless such stock or securities are rated "A" or high by Moody's or "A" or higher by S&P's or have been given an equivalent investment grade rating by another nationally recognized statistical rating agency. (e) Excluding any securities of OC or Reorganized OC, the PI Trust shall not acquire any debt securities or other instruments issued by any entity (other than debt securities or other instruments issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof) if, following such acquisition, the aggregate market value of all debt securities and instruments issued by such entity held by the PI Trust would exceed 2% of the aggregate value of the PI Trust estate. The PI Trust shall not hold any debt securities or other instruments issued by any entity (other than debt securities or other instruments issued or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof and other than debt securities or other instruments of Reorganized OC, or any successor to Reorganized OC) to the extent that the aggregate market value of all securities and instruments issued by such entity held by the PI Trust would exceed 5% of the aggregate value of the PI Trust Assets. (f) The PI Trust shall not acquire or hold any certificates of deposit unless all publicly held, long-term debt securities, if any, of the financial institution issuing the certificate of deposit and the holding company, if any, of which such financial institution is a subsidiary, meet the standards set forth in Section 3.2(b) above. (g) The PI Trust may acquire and hold any securities or instruments issued by Reorganized OC or any successor to Reorganized OC, or obtained as proceeds of litigation or otherwise to resolve disputes, without regard to the limitations set forth in Subsections (a)-(f) above. (h) The PI Trust shall not acquire or hold any repurchase obligations unless, in the opinion of the Trustees, they are adequately collateralized. (i) The PI Trust shall not acquire or hold any options. 3.3 SOURCE OF PAYMENTS. All PI Trust expenses and payments and all liabilities with respect to claims shall be payable solely by the Trustees out of the PI Trust Assets. Neither OC, Reorganized OC, or their subsidiaries, any successor in interest, or the present or former shareholders, directors, officers, employees or agents of OC, Reorganized OC, or their subsidiaries, nor the Trustees, the TAC or Future Claimants' Representative, or any of their officers, agents, advisors, or employees shall be liable for the payment of any PI Trust expense or any other liability of the PI Trust. SECTION 4 TRUSTEES 4.1 NUMBER. There shall be five (5) Trustees. The initial Trustees shall be those persons named on the signature page hereof. 4.2 TERM OF SERVICE. (a) The five initial Trustees named pursuant to Article 4.1 above shall each serve an initial two (2) year term. At the expiration of these initial two (2) year terms, the number of Trustees shall be reduced from five (5) to three (3). At that time, the five initial Trustees, after consultation with the TAC and the Future Claimants' Representative, shall decide which three individuals among their number shall continue to serve, and the three (3) Trustees so selected shall then serve staggered terms of three (3), four (4) and five (5) years each. Thereafter, each Trustee's term of service shall be five (5) years. The initial Trustees shall serve from the Effective Date until the earlier of (i) the end of his or her term, (ii) his or her death, (iii) his or her resignation pursuant to Section 4.2(b) below, (iv) his or her removal pursuant to Section 4.2(c) below, or (v) the termination of the PI Trust pursuant to Section 7.2 below. (b) A PI Trustee may resign at any time by written notice to the remaining Trustees, the TAC and the Future Claimants' Representative. Such notice shall specify a date when such resignation shall take place, which shall not be less than 90 days after the date such notice is given, where practicable. (c) A Trustee may be removed by unanimous vote of the remaining Trustees in the event that he or she becomes unable to discharge his or her duties hereunder due to accident or physical or mental deterioration, or for other good cause. Good cause shall be deemed to include, without limitation, any substantial failure to comply with the general administration provisions of Section 2.2 above, a consistent pattern of neglect and failure to perform or participate in performing the duties of the Trustees hereunder, or repeated non-attendance at scheduled meetings. Such removal shall require the approval of the Bankruptcy Court and shall take effect at such time as the Bankruptcy Court shall determine. 4.3 APPOINTMENT OF SUCCESSOR TRUSTEES. (a) In the event of a vacancy in the position of PI Trustee, whether by term expiration, resignation or removal, the remaining Trustees shall consult with the TAC and the Future Claimants' Representative concerning appointment of a successor Trustee. The vacancy shall be filled by the unanimous vote of the remaining Trustees unless a majority of the TAC or the Future Claimants' Representative vetoes the appointment. In the event that the remaining Trustees cannot agree on a Successor PI Trustee, or a majority of the TAC or the Future Claimants' Representative vetoes the appointment of the proposed successor PI Trustee, the Bankruptcy Court shall make the appointment. Nothing shall prevent the reappointment of a PI Trustee for an additional term or terms pursuant to the provisions of this Section 4.3(a). (b) Immediately upon the appointment of any Successor PI Trustee, all rights, titles, duties, powers and authority of the predecessor PI Trustee hereunder shall be vested in, and undertaken by, the Successor PI Trustee without any further act. No Successor PI Trustee shall be liable personally for any act or omission of his or her predecessor Trustees. (c) Each Successor PI Trustee shall serve until the earlier of (i) the end of a full term of five (5) years if the predecessor PI Trustee completed his or her term, (ii) the end of the remainder of the term of the PI Trustee whom he or she is replacing if said predecessor PI Trustee did not complete said term, (iii) his or her death, (iv) his or her resignation pursuant to Section 4.2(b) above, (v) his or her removal pursuant to Section 4.2(c) above, or (vi) the termination of the PI Trust pursuant to Section 7.2 below. 4.4 LIABILITY OF TRUSTEES, OFFICERS AND EMPLOYEES. The Trustees and the individuals identified as Additional Indemnitees in Section 2.1(c)(xiv) above shall not be liable to the PI Trust, to any individual holding an asbestos claim, or to any other person, except for such individual's own breach of trust committed in bad faith or willful misappropriation. In addition, the Trustees and the Additional Indemnitees shall not be liable for any act or omission of any other Trustee or Additional Indemnitee unless such person acted with bad faith in the selection or retention of such other Trustee or Additional Indemnitee. 4.5 COMPENSATION AND EXPENSES OF TRUSTEES. (a) The Trustees shall receive compensation from the PI Trust for their services as Trustees in the amount of $_____________ per annum, plus a per diem allowance for meetings or other PI Trust business performed in the amount of $__________. For purposes of the per diem allowance, PI Trust business includes, but is not limited to, attendance at meetings of Reorganized OC's Board of Directors. For purposes of Section 7.4 below, the Trustees shall determine the scope and duration of activities that constitute a meeting and, if the Trustees elect to provide for payment for activities of less than a full day's duration, may provide for partial payment of per diem amounts on a proportional basis for activities of less than a full day's duration. The per annum and per diem compensation payable to the Trustees hereunder shall be reviewed every three (3) years and appropriately adjusted for changes in the cost of living. Any other changes in compensation of the Trustees shall be made subject to the approval of the Bankruptcy Court. (b) The PI Trust will promptly reimburse the Trustees for all reasonable out-of-pocket costs and expenses incurred by the Trustees in connection with the performance of their duties hereunder. (c) The PI Trust shall include a description of the amounts paid under this Section 4.5 in the accounts to be filed with the Bankruptcy Court and provided to the TAC, the Future Claimants' Representative, and Reorganized OC pursuant to Section 2.2(c)(i). 4.6 INDEMNIFICATION OF TRUSTEES AND ADDITIONAL INDEMNITEES. (a) The PI Trust shall indemnify and defend the Trustees, as well as the Additional Indemnitees in the performance of their duties hereunder to the fullest extent that a corporation or trust organized under the laws of the PI Trust's situs is from time to time entitled to indemnify and defend such persons against any and all liabilities, expenses, claims, damages or losses incurred by them in the performance of their duties. Notwithstanding the foregoing, the Trustees and the Additional Indemnitees shall not be indemnified or defended in any way for any liability, expense, claim, damage, or loss for which he or she is ultimately held liable under Section 4.4 above. (b) Reasonable expenses, costs and fees (including attorneys' fees and costs) incurred by or on behalf of a PI Trustee or Additional Indemnitee in connection with any action, suit, or proceeding, whether civil, administrative or arbitrative from which they are indemnified by the PI Trust pursuant to Section 4.6(a) above, shall be paid by the PI Trust in advance of the final disposition thereof upon receipt of an undertaking, by or on behalf of the Trustees or Additional Indemnitee, to repay such amount in the event that it shall be determined ultimately by final order that such PI Trustee or Additional Indemnitee is not entitled to be indemnified by the PI Trust. (c) The Trustees may purchase and maintain reasonable amounts and types of insurance on behalf of an individual who is or was a PI Trustee or Additional Indemnitee including against liability asserted against or incurred by such individual in that capacity or arising from his or her status as a PI Trustee, TAC member, Future Claimants' Representative, or officer, employee, agent or other representative of the PI Trustees or Additional Indemnitees. 4.7 TRUSTEES' LIEN. The Trustees and the Additional Indemnitees shall have a first priority lien upon the PI Trust Assets to secure the payment of any amounts payable to them pursuant to Section 4.6 above. 4.8 TRUSTEES' EMPLOYMENT OF EXPERTS. The Trustees may, but shall not be required to, retain and/or consult with counsel, accountants, appraisers, auditors and forecasters, and other parties deemed by the Trustees to be qualified as experts on the matters submitted to them, and the written opinion of or information provided by any such parties on any matters submitted to them by the Trustees shall be full and complete authorization and protection in respect of any action taken or not taken by the Trustees hereunder in good faith and in accordance with the written opinion of or information provided by any such party. 4.9 TRUSTEES' INDEPENDENCE. The Trustees shall not, during the term of their service, hold a financial interest in, act as attorney or agent for, or serve as any other professional for Reorganized OC. Notwithstanding the foregoing, any PI Trustee may serve, without any additional compensation other than the per diem compensation to be paid by the PI Trust pursuant to Section 4.5(a) above, as a director of Reorganized OC. No PI Trustee shall act as an attorney for any person who holds an asbestos claim. 4.10 BOND. The Trustees shall not be required to post any bond or other form of surety or security unless otherwise ordered by the Bankruptcy Court. SECTION 5 TRUST ADVISORY COMMITTEE ------------------------ 5.1 MEMBERS. The TAC shall consist of seven (7) members, who shall initially be the persons named on the signature page hereof. 5.2 DUTIES. The members of the TAC shall serve in a fiduciary capacity representing all holders of present PI Trust Claims. The Trustees must consult with the TAC on matters identified in Section 2.2(e) above and in other provisions herein, and must obtain the consent of the TAC on matters identified in Section 2.2(f) above. Where provided in the TDP, certain other actions by the Trustees are also subject to the consent of the TAC. 5.3 TERM OF OFFICE. (a) A member of the TAC shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 5.3(b) below, (iii) his or her removal pursuant to Section 5.3(c) below, or (iv) the termination of the PI Trust pursuant to Section 7.2 below. (b) A member of the TAC may resign at any time by written notice to the other members of the TAC, the Trustees and the Future Claimants' Representative. Such notice shall specify a date when such resignation shall take effect, which shall not be less than ninety (90) days after the date such notice is given, where practicable. (c) A member of the TAC may be removed in the event that he or she becomes unable to discharge his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to participate in performing the duties of such member hereunder, such as repeated non-attendance at scheduled meetings, or other good cause. Such removal shall be made at the recommendation of the remaining members of the TAC with the approval of the Bankruptcy Court. 5.4 APPOINTMENT OF SUCCESSOR. (a) In the event of a vacancy caused by the resignation, removal or death of a TAC member, his or her successor shall be pre-selected by the resigning, removed or deceased TAC member, or by his or her law firm in the event that the individual members has not pre-selected a successor. If neither the member nor his or her law firm has made a selection, the successor shall be chosen by a majority vote of the remaining TAC members. If a majority of the remaining members cannot agree, the Bankruptcy Court shall appoint the successor. (b) Each successor TAC member shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 5.3(b) above, (iii) his or her removal pursuant to Section 5.3(c) above, or (iv) the termination of the PI Trust pursuant to Section 7.2 below. 5.5 TAC'S EMPLOYMENT OF PROFESSIONALS. (a) The TAC may but is not required to retain and/or consult counsel, accountants, appraisers, auditors, forecasters, experts, and financial and investment advisors, and such other parties deemed by the TAC to be qualified as experts on matters submitted to the TAC (the "Professionals"). The TAC and its Professionals shall at all times have complete access to the PI Trust's officers, employees and agents, as well as to the Professionals retained by the PI Trust, and shall also have complete access to all information generated by them or otherwise available to the PI Trust or the Trustees. In the absence of gross negligence, the written opinion of or information provided by any Professional deemed by the TAC to be qualified as an expert on the particular matter submitted to the TAC shall be full and complete authorization and protection in support of any action taken or not taken by the TAC in good faith and in accordance with the written opinion of or information provided by the Professional. (b) The Trust shall promptly reimburse, or pay directly if so instructed, the TAC for all reasonable fees and costs associated with the TAC's employment of legal counsel pursuant to this provision in connection with the TAC's performance of its duties hereunder. The Trust shall also promptly reimburse, or pay directly if so instructed, the TAC for all reasonable fees and costs associated with the TAC's employment of any other Professional pursuant to this provision in connection with the TAC's performance of its duties hereunder; provided, however, that (i) the TAC has first submitted to the Trust a written request for such reimbursement setting forth the reasons (A) why the TAC desires to employ such Professional, and (B) why the TAC cannot rely on Professionals retained by the Trust to meet the need of the TAC for such expertise or advice, and (ii) the Trust has approved the TAC's request for reimbursement in writing. If the Trust agrees to pay for the TAC Professional, such reimbursement shall be treated as a Trust Expense. If the Trust declines to pay for the TAC Professional, it must set forth its reasons in writing. If the TAC still desires to employ such Professional at Trust expense, the TAC and the Trustees shall resolve their dispute pursuant to Section 7.13 below. 5.6 COMPENSATION AND EXPENSES OF TAC. The members of the TAC shall receive compensation from the PI Trust for their services as TAC members in the form of a reasonable hourly rate set by the Trustees for attendance at meetings or other conduct of PI Trust business. The members of the TAC shall also be reimbursed promptly for all reasonable out-of-pocket costs and expenses incurred by the TAC members in connection with the performance of their duties hereunder. Such reimbursement or direct payment shall be deemed a PI Trust expense. The PI Trust shall include a description of the amounts paid under this Section 5.6 in the accounts to be filed with the Bankruptcy Court and provided to the Trustees, the Future Claimants' Representative, and Reorganized OC pursuant to Section 2.2(c)(i). 5.7 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF THE TAC. (a) CONSULTATION PROCESS. (i) In the event the Trustees are required to consult with the TAC pursuant to Section 2.2(e) above or on other matters as provided herein, the Trustees shall provide the TAC with written advance notice of the matter under consideration, and with all relevant information concerning the matter as is reasonably practicable under the circumstances. The Trustees shall also provide the TAC with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustees are considering such matter, and shall also provide the TAC the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such matter with the Trustees. (ii) The Trustees shall take into consideration the time required for the TAC, if its members so wish, to engage and consult with its own independent financial or investment advisors as to such matter. (b) CONSENT PROCESS. (i) In the event the Trustees are required to obtain the consent of the TAC pursuant to Section 2.2(f) above, the Trustees shall provide the TAC with a written notice stating that their consent is being sought pursuant to that provision, describing in detail the nature and scope of the action the Trustees propose to take, and explaining in detail the reasons why the Trustees desire to take such action. The Trustees shall provide the TAC as much relevant additional information concerning the proposed action as is reasonably practicable under the circumstances. The Trustees shall also provide the TAC with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustees are considering such action, and shall also provide the TAC the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such action with the Trustees. (ii) The TAC must consider in good faith and in a timely fashion any request for its consent by the Trustees, and must in any event advise the Trustees in writing of its consent or its objection to the proposed action within 30 days of receiving the original request for consent from the Trustees. The TAC may not withhold its consent unreasonably. If the TAC decides to withhold its consent, it must explain in detail its objections to the proposed action. If the TAC does not advise the Trustees in writing of its consent or its objections to the action within 30 days of receiving notice regarding such request, the TAC's consent to the proposed actions shall be deemed to have been affirmatively granted. (iii) If, after following the procedures specified in this Section 5.7(b), the TAC continues to object to the proposed action and to withhold its consent to the proposed action, the Trustees and/or the TAC shall resolve their dispute pursuant to Section 7.13. However, the burden of proof with respect to the validity of the TAC's objection and withholding of its consent shall be on the TAC. SECTION 6 THE FUTURE CLAIMANTS' REPRESENTATIVE ------------------------------------ 6.1 DUTIES. The Future Claimants' Representative shall be the individual identified on the signature pages hereto. He or she shall serve in a fiduciary capacity, representing the interests of the holders of future PI Trust Claims for the purpose of protecting the rights of such persons. The Trustees must consult with the Future Claimants' Representative on matters identified in Section 2.2(e) above and on certain other matters provided herein, and must obtain the consent of the Future Claimants' Representative on matters identified in Section 2.2(f) above. Where provided in the TDP, certain other actions by the Trustees are also subject to the consent of the Future Claimants' Representative. 6.2 TERM OF OFFICE. (a) The Future Claimants' Representative shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 6.2(b) below, (iii) his or her removal pursuant to Section 6.2(c) below, or (iv) the termination of the PI Trust pursuant to Section 7.2 below. (b) The Future Claimants' Representative may resign at any time by written notice to the Trustees. Such notice shall specify a date when such resignation shall take effect, which shall not be less than ninety (90) days after the date such notice is given, where practicable. (c) The Future Claimants' Representative may be removed by the Bankruptcy Court in the event he or she becomes unable to discharge his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to participate in performing the duties hereunder, such as repeated non-attendance at scheduled meetings. 6.3 APPOINTMENT OF SUCCESSOR. A vacancy caused by death, resignation or removal shall be filled with an individual nominated prior to the effective date of the resignation by the Future Claimants' Representative who is deceased, removed or resigned. In the event that the Future Claimants' Representative has not made such a nomination, the vacancy shall be filled with an individual nominated by a majority of the Trustees in consultation with the TAC. In any case, the nominee shall be subject to the approval of the Court. 6.4 FUTURE CLAIMANTS' REPRESENTATIVE'S EMPLOYMENT OF PROFESSIONALS. (a) The Future Claimants' Representative may but is not required to retain and/or consult counsel, accountants, appraisers, auditors, forecasters, experts, and financial and investment advisors, and such other parties deemed by the Future Claimants' Representative to be qualified as experts on matters submitted to the Future Claimants' Representative (the "Professionals"). The Future Claimants' Representative and his or her experts shall at all times have complete access to the PI Trust's officers, employees and agents, as well as to the Professionals retained by the PI Trust, and shall also have complete access to all information generated by them or otherwise available to the PI Trust or the Trustees. In the absence of gross negligence, the written opinion of or information provided by any Professional deemed by the Future Claimants' Representative to be qualified as an expert on the particular matter submitted to the Future Claimants' Representative shall be full and complete authorization and protection in support of any action taken or not taken by the Future Claimants' Representative in good faith and in accordance with the written opinion of or information provided by the Professional. (b) The Trust shall promptly reimburse, or pay directly if so instructed, the Future Claimants' Representative for all reasonable fees and costs associated with the Future Claimants' Representative's employment of legal counsel pursuant to this provision in connection with the Future Claimants' Representative's performance of his or her duties hereunder. The Trust shall also promptly reimburse, or pay directly if so instructed, the Future Claimants' Representative for all reasonable fees and costs associated with the Future Claimants' Representative's employment of any other Professionals pursuant to this provision in connection with the Future Claimants' Representative's performance of his or her duties hereunder; provided, however, that (i) the Future Claimants' Representative has first submitted to the Trust a written request for such reimbursement setting forth the reasons (A) why the Future Claimants' Representative desires to employ the Professional, and (B) why the Future Claimants' Representative cannot rely on Professionals retained by the Trust to meet the need of the Future Claimants' Representative for such expertise or advice, and (ii) the Trust has approved the Future Claimants' Representative's request for reimbursement in writing. If the Trust agrees to pay for the Future Claimants' Representative's Professional, such reimbursement shall be treated as a Trust Expense. If the Trust declines to pay for the Future Claimants' Representative's Professional, it must set forth its reasons in writing. If the Future Claimants' Representative still desires to employ the Professional at Trust expense, the Future Claimants' Representative and the Trustees shall resolve their dispute pursuant to Section 7.13 below. 6.5 COMPENSATION AND EXPENSES OF THE FUTURE CLAIMANTS' REPRESENTATIVE. (a) The Future Claimants' Representative shall receive compensation from the PI Trust in the form of the Future Claimants' Representative's normal hourly rate for services performed. The PI Trust will promptly reimburse the Future Claimants' Representative for all reasonable out-of-pocket costs and expenses incurred by the Future Claimants' Representative in connection with the performance of his or her duties hereunder. Such reimbursement or direct payment shall be deemed a PI Trust expense. The PI Trust shall include a description of the amounts paid under this Section 6.5 in the accounts to be filed with the Bankruptcy Court and provided to the Trustees, the Future Claimants' Representative, and Reorganized OC pursuant to Section 2.2(c)(i). 6.6 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF THE FUTURE CLAIMANTS' REPRESENTATIVE. (a) Consultation Process. -------------------- (i) In the event the Trustees are required to consult with the Future Claimants' Representative pursuant to Section 2.2(e) above or on any other matters specified herein, the Trustees shall provide the Future Claimants' Representative with written advance notice of the matter under consideration, and with all relevant information concerning the matter as is reasonably practicable under the circumstances. The Trustees shall also provide the Future Claimants' Representative with such reasonable access to Professionals and other experts retained by the PI Trust and its staff (if any) as the Future Claimants' Representative may reasonably request during the time that the Trustees are considering such matter, and shall also provide the Future Claimants' Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such matter with the Trustees. (ii) The Trustees shall take into consideration the time required for the Future Claimants' Representative, if he or she so wishes, to engage and consult with his or her own independent financial or investment advisors as to such matter. (b) Consent Process. --------------- (i) In the event the Trustees are required to obtain the consent of the Future Claimants' Representative pursuant to Section 2.2(f) above, the Trustees shall provide the Future Claimants' Representative with a written notice stating that his or her consent is being sought pursuant to that provision, describing in detail the nature and scope of the action the Trustees propose to take, and explaining in detail the reasons why the Trustees desire to take such action. The Trustees shall provide the Future Claimants' Representative as much relevant additional information concerning the proposed action as is reasonably practicable under the circumstances. The Trustees shall also provide the Future Claimants' Representative with such reasonable access to Professional and other experts retained by the PI Trust and its staff (if any) as the Future Claimants' Representative may reasonably request during the time that the Trustees are considering such action, and shall also provide the Future Claimants' Representative the opportunity, at reasonable times and for reasonable periods of time, to discuss and comment on such action with the Trustees. (ii) The Future Claimants' Representative must consider in good faith and in a timely fashion any request for his or her consent by the Trustees, and must in any event advise the Trustees in writing of his or her consent or objection to the proposed action within 30 days of receiving the original request for consent from the Trustees. The Future Claimants' Representative may not withhold his or her consent unreasonably. If the Future Claimants' Representative decides to withhold consent, he or she must explain in detail his or her objections to the proposed action. If the Future Claimants' Representative does not advise the Trustees in writing of his or her consent or objections to the proposed action within 30 days of receiving the notice from the Trustees regarding such consent, the Future Claimants' Representative's consent shall be deemed to have been affirmatively granted. (iii) If, after following the procedures specified in this Section 5.7(b), the Future Claimants' Representative continues to object to the proposed action and to withhold its consent to the proposed action, the Trustees and/or the Future Claimants' Representative shall resolve their dispute pursuant to Section 7.13. However, the burden of proof with respect to the validity of the Future Claimants' Representative's objection and withholding of his or her consent shall be on the Future Claimants' Representative. SECTION 7 GENERAL PROVISIONS ------------------ 7.1 IRREVOCABILITY. The PI Trust is irrevocable. 7.2 TERMINATION. (a) The PI Trust shall automatically terminate on the date ninety (90) days after the first to occur of the following events: (i) the Trustees decide to terminate the PI Trust because (A) they deem it unlikely that new asbestos claims will be filed against the PI Trust, (B) all PI Trust Claims duly filed with the PI Trust have been liquidated and paid to the extent provided in this PI Trust Agreement and the TDP or disallowed by a final, non-appealable order, to the extent possible based upon the funds available through the Plan, and (C) twelve (12) consecutive months have elapsed during which no new asbestos claim has been filed with the PI Trust; or (ii) if the Trustees have procured and have in place irrevocable insurance policies and have established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses of the PI Trust in a manner consistent with this PI Trust Agreement and the TDP, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a final order; or (iii) to the extent that any rule against perpetuities shall be deemed applicable to the PI Trust, twenty-one (21) years less ninety-one (91) days pass after the death of the last survivor of all of the descendants of Joseph P. Kennedy, Sr., of Massachusetts, father of the late President John F. Kennedy, living on the date hereof. (b) On the Termination Date, after payment of all the PI Trust's liabilities have been provided for, all monies remaining in the PI Trust estate shall be given to such organization(s) exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, which tax-exempt organization(s) shall be selected by the Trustees using their reasonable discretion; provided, however, that (i) if practicable, the activities of the selected tax-exempt organization(s) shall be related to the treatment of, research on, or the relief of suffering of individuals suffering from asbestos related lung disorders, and (ii) the tax-exempt organization(s) shall not bear any relationship to Reorganized OC within the meaning of Section 468B(d)(3) of the Internal Revenue Code. Notwithstanding any contrary provision of the Plan and related documents, this Section 7.2(b) cannot be modified or amended. 7.3 AMENDMENTS. The Trustees, after consultation with the TAC and the Future Claimants' Representative, and subject to the consent of the TAC and the Future Claimants' Representative, may modify or amend this PI Trust Agreement and the PI Trust By-laws. The Trustees, after consultation with the TAC and the Future Claimants' Representative, and subject to the consent of the TAC and the Future Claimants' Representative, may modify or amend the TDP, provided, however, that no amendment to the TDP shall be inconsistent with the limitations on amendments provided therein, and, in particular, the provisions limiting amendment of the Claims Payment Ratio set forth in Section 2.5 of the TDP and of the Payment Percentage set forth in Section 4.2 of the TDP. Any modification or amendment made pursuant to this Article must be done in writing. Notwithstanding anything contained in this PI Trust Agreement to the contrary, neither this PI Trust Agreement, the PI Trust Bylaws, the TDP, nor any document annexed to the foregoing shall be modified or amended in any way that could jeopardize, impair, or modify the applicability of Section 524(g) of the Bankruptcy Code, the efficacy or enforceability of the injunction entered thereunder, or the PI Trust's qualified settlement fund status under Section 468B of the Internal Revenue Code. 7.4 MEETINGS. The Trustees, the TAC, and the Future Claimants' Representative, shall be deemed to have attended a meeting in the event such person spends a substantial portion of the day conferring, in person or by telephone conference call, on PI Trust matters with the TAC, the Future Claimants' Representative, or Trustees, as applicable. A Trustee shall also be deemed to have attended a meeting in the event he or she spends a substantial portion of the day engaging in activities related to Reorganized OC, including attendance at its Board of Directors meetings. The Trustees, the TAC and the Future Claimants' Representative shall have complete discretion to determine whether a meeting, as described herein, occurred for purposes of Sections 4.5, 5.6, and 6.5 above. 7.5 SEVERABILITY. Should any provision in this PI Trust Agreement be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any and all other provisions of this PI Trust Agreement. 7.6 NOTICES. Notices to persons asserting claims shall be given by first class mail, postage prepaid, at the address of such person, or, where applicable, such person's Future Claimants' Representative, in each case as provided on such person's claim form submitted to the PI Trust with respect to his or her PI Trust Claim. (a) Any notices or other communications required or permitted hereunder to the following parties shall be in writing and delivered at the addresses designated below, or sent by telex, telecopy or facsimile pursuant to the instructions listed below, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows, or to such other address or addresses as may hereafter be furnished in writing to each of the other parties listed below in compliance with the terms hereof. To the PI Trust through the Trustees: To Reorganized OC: To the TAC: To the Future Claimants' Representative: (b) All such notices and communications if mailed shall be effective when physically delivered at the designated addresses or, if electronically transmitted, when the communication is received at the designated addresses and confirmed by the recipient by return transmission. 7.7 SUCCESSORS AND ASSIGNS. The provisions of this PI Trust Agreement shall be binding upon and inure to the benefit of OC, Reorganized OC, the PI Trust, and the Trustees and their respective successors and assigns, except that neither OC, Reorganized OC, the PI Trust, or the Trustees may assign or otherwise transfer any of its, or their, rights or obligations under this PI Trust Agreement except, in the case of the PI Trust and the Trustees, as contemplated by Section 2.1 above. 7.8 LIMITATION ON CLAIM INTERESTS FOR SECURITIES LAWS PURPOSES. PI Trust Claims, and any interests therein (a) shall not be assigned, conveyed, hypothecated, pledged or otherwise transferred, voluntarily or involuntarily, directly or indirectly, except by will or under the laws of descent and distribution; (b) shall not be evidenced by a certificate or other instrument; (c) shall not possess any voting rights; and (d) shall not be entitled to receive any dividends or interest; provided, however, that clause (a) of this Section 7.8 shall not apply to the holder of a claim that is subrogated to a PI Trust Claim as a result of its satisfaction of such PI Trust Claim. 7.9 ENTIRE AGREEMENT; NO WAIVER. The entire agreement of the parties relating to the subject matter of this PI Trust Agreement is contained herein and in the documents referred to herein, and this PI Trust Agreement and such documents supersede any prior oral or written agreements concerning the subject matter hereof. No failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of rights under law or in equity. 7.10 HEADINGS. The headings used in this PI Trust Agreement are inserted for convenience only and do not constitute a portion of this PI Trust Agreement, nor in any manner affect the construction of the provisions of this PI Trust Agreement. 7.11 GOVERNING LAW. This PI Trust Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to Delaware conflict of law principles. 7.12 SETTLORS' REPRESENTATIONS AND COOPERATION. OC is hereby irrevocably designated as the Settlor, and is hereby authorized to take any action required of the Settlor in connection with the PI Trust Agreement. OC agrees to cooperate in implementing the goals and objectives of this PI Trust. 7.13 DISPUTE RESOLUTION. Any disputes that arise under this PI Trust Agreement or under the TDP shall be resolved by submission of the matter to an alternative dispute resolution ("ADR") process mutually agreeable to the parties involved. Should any party to the ADR process be dissatisfied with the decision of the arbitrator(s), that party may apply to the Bankruptcy Court for a judicial determination of the matter. In either case, if the dispute arose pursuant to the consent provision set forth in Section 5.7(b) (in the case of the TAC) or Section 6.6(b) (in the case of the Future Claimants' Representative), the burden of proof shall be on the party or parties who withheld consent to show that the objection was valid. Should the dispute not be resolved by ADR process within thirty (30) days after submission, the parties are relieved of the requirement to pursue ADR prior to application to the Bankruptcy Court. Notwithstanding anything else herein contained, to the extent any provision of this PI Trust Agreement is inconsistent with any provision of the Plan or the TDP, the Plan or the TDP shall control. 7.14 ENFORCEMENT AND ADMINISTRATION. The provisions of this PI Trust Agreement and the TDP attached hereto shall be enforced by the Bankruptcy Court pursuant to the Plan. The parties hereby further acknowledge and agree that the Bankruptcy Court shall have exclusive jurisdiction over the settlement of the accounts of the Trustees and over any disputes hereunder not resolved by alternative dispute resolution in accordance with Section 7.13 above. 7.15 EFFECTIVENESS. This PI Trust Agreement shall not become effective until it has been executed and delivered by all the parties hereto. 7.16 COUNTERPART SIGNATURES. This PI Trust Agreement may be executed in any number of counterparts, each of which shall constitute an original, but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties have executed this PI Trust Agreement this _____ day of ________________________, _______. SETTLOR: OWENS CORNING By: --------------------------------- --------------------------------- Name and Title TRUSTEES ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- ASBESTOS CREDITORS COMMITTEE By: --------------------------------- TRUST ADVISORY COMMITTEE ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- FUTURE CLAIMANTS' REPRESENTATIVE ----------------------------------- EXHIBIT D-1 OWENS CORNING/FIBREBOARD FORM OF ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES [THE ATTACHED ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES ARE IN DRAFT FORM AND ARE NOT COMPLETE. THEY ARE IN THE PROCESS OF BEING REVIEWED BY THE ASBESTOS CLAIMANTS COMMITTEE AND THE FUTURE CLAIMANTS' REPRESENTATIVE, AND HAVE NOT BEEN APPROVED BY EITHER OF THEM. ALL RIGHTS WITH RESPECT TO THESE DOCUMENTS AND EACH OF THE PROVISIONS THEREOF ARE FULLY RESERVED.] OWENS CORNING/Fibreboard ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES TABLE OF CONTENTS -----------------
Page ---- SECTION I-- Introduction ........................................................ 1 1.1 Purpose ........................................................... 1 1.2 Interpretation ..................................................... 1 SECTION II-- Overview ...................................................... 2 2.1 PI Trust Goals ..................................................... 2 2.2 Claims Liquidation Procedures ...................................... 3 2.3 Application of the Payment Percentage ............................ 5 2.4 Determination of the Maximum Annual Payment and Maximum Available Payment .......................................... 7 2.5 Claims Payment Ratio .............................................. 8 2.6 Indemnity and Contribution Claims ................................. 11 SECTION III-- TDP Administration ............................................... 11 3.1 PI Trust Advisory Committee and Future Claimants' Representative ................................................... 11 3.2 Consent and Consultation Procedures ................................ 12 SECTION IV-- Payment Percentage; Periodic Estimates ............................... 12 4.1 Uncertainty of OC's and Fibreboard's Total Personal Injury Asbestos Liabilities ............................................... 12 4.2 Computation of Payment Percentage .................................. 13 4.3 Applicability of the Payment Percentage ............................ 15 SECTION V-- Resolution of PI Trust Claims ......................................... 16 5.1 Ordering, Processing and Payment of Claims ......................... 16 (a) Ordering of Claims .......................................... 16 (1) Establishment of the FIFO Processing Queues........... 16 (2) Effect of Statutes of Limitations and Repose.......... 17 (b) Processing of Claims......................................... 18 (c) Payment of Claims............................................ 18 5.2 Resolution of Pre-Petition Liquidated PI Trust Claims .............. 20 (a) Processing and Payment ...................................... 20 (b) Marshalling of Security ..................................... 21 5.3 Resolution of Unliquidated PI Trust Claims ......................... 22 (a) Expedited Review Process .................................... 23 (1) In General ........................................... 23 (2) Claims Processing under Expedited Review ............. 23 (3) Disease Levels, Scheduled Values and Medical/Exposure Criteria ........................ 24 (b) Individual Review Process ................................... 28 (1) In General ........................................... 28 (A) Review of Medical/Exposure Criteria ........... 29 (B) Review of Liquidated Value..................... 29 (2) Valuation Factors to be Considered in Individual Review .................................... 30 (3) Processing and Payment Limitations for Claims Involving Disease Levels III and II .................. 31 (A) Disease Level III Claims ..................... 31 (B) Disease Level II Claims ..................... 31 (4) Scheduled, Average and Maximum Values ................ 32 5.4 Categorizing Claims as Extraordinary and/or Exigent Hardship ............................................ 33 (a) Extraordinary Claims ........................................ 33 (b) Exigent Hardship Claims ..................................... 34 5.5 Secondary Exposure Claims ......................................... 35 5.6 Indirect PI Trust Claims ........................................... 35 5.7 Evidentiary Requirements ........................................... 38 (a) Medical Evidence ............................................ 38 (1) In General ........................................... 38 (A) Disease Levels I - IV.......................... 38 (B) Disease Levels V - VIII........................ 39 (C) Treatment of Certain Pre-Petition Claims ...... 39 (2) Credibility of Medical Evidence ...................... 40 (b) Exposure Evidence............................................ 41 (1) In General ........................................... 41 (2) Significant Occupational Exposure .................... 41 (3) OC or Fibreboard Exposure ........................... 42 5.8 Claims Audit Program ............................................... 42 5.9 Second Disease (Malignancy) Claims ................................. 43 5.10 Arbitration ....................................................... 44 (a) Establishment of ADR Procedures.............................. 44 (b) Claims Eligible for Arbitration.............................. 44 (c) Limitations on and Payment of Arbitration Awards............. 45 5.11 Litigation ........................................................ 45 SECTION VI-- Claims Materials .................................................. 46 6.1 Claims Materials .................................................. 46 6.2 Content of Claims Materials ........................................ 46 6.3 Withdrawal or Deferral of Claims ................................... 47 6.4 Filing Requirements and Fees ....................................... 47 SECTION VII-- General Guidelines for Liquidating and Paying Claims ................ 48 7.1 Showing Required ................................................... 48 7.2 Costs Considered ................................................... 48 7.3 Discretion to Vary Order and Amounts of Payments in Event of Limited Liquidity ......................................... 49 7.4 Punitive Damages ............................................... 49 7.5 Interest ........................................................... 50 (a) In General................................................... 50 (b) Unliquidated PI Trust Claims................................. 50 (c) Interest on Liquidated Pre-Petition Claims................... 51 7.6 Suits in the Tort System............................................ 51 7.7 Payment of Judgments for Money Damages ............................. 51 7.8 Releases ........................................................... 52 7.9 Third-Party Services ............................................... 53 7.10 PI Trust Disclosure of Information.................................. 53 SECTION VIII-- Miscellaneous ..................................................... 53 8.1 Amendments ...................................................... 53 8.2 Severability ...................................................... 54 8.3 Governing Law ...................................................... 54
OWENS CORNING/FIBREBOARD ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES ------------------------------------------------------ The Asbestos Personal Injury Trust Distribution Procedures ("TDP") contained herein provide for resolving all Asbestos Personal Injury Claims for which Owens Corning ("OC ") and/or its wholly owned subsidiary, Fibreboard Corporation ("Fibreboard"), and their predecessors, successors, and assigns have legal responsibility (respectively, OC Asbestos Personal Injury Claims ("OC Claims") and Fibreboard Asbestos Personal Injury Claims ("Fibreboard Claims"), which terms are defined in the Amended Joint Plan of Reorganization for Owens Corning and its Affiliated Debtors and Debtors-in-Possession ("Plan") (hereinafter collectively referred to in this TDP as "PI Trust Claims")). The Plan and the Asbestos Personal Injury Trust Agreement ("PI Trust Agreement") establish the Asbestos Personal Injury Trust (the "PI Trust"). The Trustees of the PI Trust ("Trustees") shall implement and administer this TDP in accordance with the PI Trust Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Plan and the PI Trust Agreement. SECTION I Introduction ------------ 1.1 Purpose. This TDP has been adopted pursuant to the PI Trust Agreement. It is designed to provide fair, equitable, and substantially similar treatment for all PI Trust Claims that may presently exist or may arise in the future. 1.2 Interpretation. Nothing in this TDP shall be deemed to create a substantive right for any claimant. SECTION II Overview -------- 2.1 PI Trust Goals. The goal of the PI Trust is to treat all holders of PI Trust Claims equitably and in accordance with the requirements of Section 524(g) of the Bankruptcy Code. To achieve that goal, the PI Trust consists of two separate Sub-Accounts, an OC Sub-Account for payment of OC Claims and a Fibreboard Sub-Account for payment of Fibreboard Claims (together the "PI Trust Sub-Accounts"). A claimant may assert separate claims against the OC Sub-Account and the Fibreboard Sub-Account based on separate exposures to asbestos or asbestos-containing products manufactured or distributed by OC and Fibreboard, respectively ("Multiple Exposure Claims"); however, all such Multiple Exposure Claims must be filed by the claimant at the same time. To the extent that the OC Sub-Account and the Fibreboard Sub-Account each has separate liability to a claimant based on Multiple Exposure Claims, each Sub-Account shall pay the claimant the liquidated value of the separate claim for which it is liable, subject to applicable Payment Percentage, Maximum Annual Payment, Maximum Available Payment and Claims Payment Ratio limitations set forth below. This TDP sets forth procedures for processing and paying all PI Trust Claims from the two Sub-Accounts on an impartial, first-in-first-out ("FIFO") basis, with the intention of paying all claimants over time as equivalent a share as possible of the value of their claims based on historical values for substantially similar claims in the tort system.[1] This TDP also establishes a single schedule of eight asbestos-related diseases ("Disease Levels"), seven of which have presumptive medical and exposure requirements ("Medical/Exposure Criteria") that are applicable to both OC and Fibreboard Claims, as well as two separate schedules with liquidated values ("Scheduled Values"), anticipated average values ("Average Values"), and caps on liquidated values ("Maximum Values") that are applicable to OC Claims and Fibreboard Claims, respectively. __________________ [1] As used in this TDP, the phrase "in the tort system" shall include only claims asserted by way of litigation and not claims asserted against a trust established pursuant to section 524(g) and/or section 105 of the Bankruptcy Code or any other applicable law. These Disease Levels, Medical/Exposure Criteria, Scheduled Values, Average Values and Maximum Values, which are set forth in Sections 5.3 and 5.4 below, have all been selected and derived with the intention of achieving a fair allocation of the assets held by the separate OC and Fibreboard Sub-Accounts as among their respective claimants suffering from different disease processes in light of the best available information considering the settlement histories of OC and Fibreboard, and the rights that OC and Fibreboard claimants would have in the tort system absent the bankruptcy. 2.2 Claims Liquidation Procedures. PI Trust Claims shall be processed based on their place in separate FIFO Processing Queues to be established for each of the two PI Trust Sub-Accounts pursuant to Section 5.1(a) below. The PI Trust shall take all reasonable steps to resolve OC and Fibreboard Claims as efficiently and expeditiously as possible at each stage of claims processing and arbitration. To this end, the PI Trust, in its sole discretion, may conduct settlement discussions with claimants' representatives with respect to more than one claim at a time, provided that the claimants' respective positions in the FIFO Processing Queues are maintained, and each claim is individually evaluated pursuant to the valuation factors set forth in Section 5.3(b)(2) below. The PI Trust shall also make every effort to resolve each year at least that number of PI Trust Claims required to exhaust the Maximum Annual Payment and the Maximum Available Payment for Category A and Category B claims, as those terms are defined below. The PI Trust shall liquidate all OC and Fibreboard Claims that meet the presumptive Medical/Exposure Criteria of Disease Levels I - V, VII and VIII under the Expedited Review Process described in Section 5.3(a) below. PI Trust Claims involving Disease Levels I - V, VII and VIII that do not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level may undergo the PI Trust's Individual Review Process described in Section 5.3(b) below. In such a case, notwithstanding that the claim does not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level, the PI Trust can offer the claimant an amount up to the Scheduled Value of that Disease Level if the PI Trust is satisfied that the claimant has presented a claim that would be cognizable and valid in the tort system. OC and Fibreboard claimants holding PI Trust Claims involving Disease Levels II - VIII may in addition or alternatively seek to establish liquidated values for their claims that are greater than their Scheduled Values by electing the PI Trust's Individual Review Process. However, the liquidated values of PI Trust Claims that undergo the Individual Review Process for valuation purposes may be determined to be less than the Scheduled Values, and in any event shall not exceed the respective Maximum Values for the Disease Levels set forth for OC and Fibreboard Claims in Section 5.3(b)(4) below, unless the claims qualify as Extraordinary Claims as defined in Section 5.4(a) below, in which case their liquidated value cannot exceed the Maximum Values specified in that provision for such claims. OC and Fibreboard Level VI (Lung Cancer 2) Claims may be liquidated only pursuant to the PI Trust's Individual Review Process. Based upon OC 's and Fibreboard's claims settlement history in light of applicable tort law, and current projections of present and future unliquidated claims, the Scheduled Values and Maximum Values set forth in Section 5.3(b)(4) for OC and Fibreboard Claims, respectively, have been established for each of the Disease Levels that are eligible for Individual Review of their liquidated values, with the expectation that the combination of settlements at the Scheduled Values and those resulting from the Individual Review Process will result in the Average Values also set forth in that provision. All unresolved disputes over a claimant's medical condition, exposure history and/or the liquidated value of the claim shall be subject to binding or non-binding arbitration pursuant to Section 5.10 below, at the election of the claimant, under the ADR Procedures that are provided in Attachment A hereto. PI Trust Claims that are the subject of a dispute with the PI Trust that cannot be resolved by non-binding arbitration may enter the tort system as provided in Sections 5.11 and 7.6 below. However, if and when an OC or Fibreboard claimant obtains a judgment in the tort system, the judgment will be payable (subject to the Payment Percentage, Maximum Available Payment, and Claims Payment Ratio provisions set forth below) as provided in Section 7.7 below. 2.3 Application of the Payment Percentage. After the liquidated value of an OC or Fibreboard Claim other than a claim involving Other Asbestos Disease (Disease Level I - Cash Discount Payment), as defined in Section 5.3(a)(3) below, is determined pursuant to the procedures set forth herein for Expedited Review, Individual Review, arbitration, or litigation in the tort system, the claimant will ultimately receive a pro-rata share of that value based on the Payment Percentages separately set for OC and Fibreboard Claims pursuant to Section 4.2 below. These Payment Percentages shall also apply to all Pre-Petition Liquidated Claims as provided in Section 5.2 below. The Initial Payment Percentage for the OC Sub-Account has been set at ______ percent (____%), and the Initial Payment Percentage for the Fibreboard Sub-Account has been set at ______ percent (___%). These Initial Payment Percentages shall apply to all OC and Fibreboard PI Trust Voting Claims accepted as valid by the PI Trust, unless adjusted by the PI Trust pursuant to the consent of the PI Trust Advisory Committee ("TAC") and the Legal Representative for Future Asbestos Claimants ("Future Claimants' Representative") (who are described in Section 3.1 below) pursuant to Section 4.2 below. The term "PI Trust Voting Claims" includes (i) Pre-Petition Liquidated Claims as provided in Section 5.2 below; (ii) OC and Fibreboard Claims filed against OC and/or Fibreboard in the tort system or actually submitted to OC and/or Fibreboard pursuant to an administrative settlement agreement prior to the Petition Date of October 5, 2000; and (iii) all OC and Fibreboard Claims filed against another defendant in the tort system prior to the date the Plan was first filed with the Bankruptcy Court (January 17, 2003 (the "Plan Filing Date")), provided, however, that the holder of a claim described in subsection (i), (ii) or (iii) above, or his or her authorized agent, actually voted to accept or reject the Plan pursuant to the voting procedures established by the Bankruptcy Court, and provided further that the claim was subsequently filed with the PI Trust pursuant to Section 6.1 below by the Initial Claims Filing Date as defined in Section 5.1(a) below. The Initial Payment Percentages for the OC and Fibreboard Sub-Accounts set forth above have been calculated on the assumption that the Average Values set forth in Section 5.3(b)(4) below will be achieved with respect to existing present claims and projected future claims involving Disease Levels II - VIII. However, either or both of these Payment Percentages may be adjusted upwards or downwards from time to time pursuant to Section 4.2 below by the PI Trust with the consent of the TAC and the Future Claimants' Representative to reflect then-current estimates of the assets and liabilities allocable to OC and Fibreboard Claims, respectively, as well as the then-estimated value of pending and future OC and Fibreboard Claims. If the Payment Percentage for either the OC or Fibreboard Sub-Account is increased over time, claimants whose OC or Fibreboard Claims were liquidated and paid in prior periods under the TDP will not receive additional payments. Because there is uncertainty in the prediction of both the number and severity of future claims, and the amount of the PI Trust's assets, no guarantee can be made of any Payment Percentage for either OC or Fibreboard Claims. 2.4 Determination of the Maximum Annual Payment and Maximum Available Payment. For each of the OC and the Fibreboard Sub-Accounts, the PI Trust shall estimate or model the amount of cash flow anticipated to be necessary over the entire life of the Sub-Account to ensure that amounts will be available to treat all holders of OC and/or Fibreboard Claims as similarly as possible, given the assets and liabilities allocable to each of the two Sub-Accounts. In each year, for each Sub-Account, the PI Trust will be empowered to pay out all of the interest earned during the year by the Sub-Account, together with a portion of the Sub-Account's principal, calculated so that the application of the Sub-Account's assets over its life shall correspond with the needs created by the anticipated flow of claims to the Sub-Account (the "Maximum Annual Payment"), taking into account the Payment Percentage provisions set forth in Sections 2.3 above and 4.2 below. The PI Trust's distributions from each Sub-Account to all holders of claims against the Sub-Account for that year shall not exceed the Maximum Annual Payment determined for that year. In distributing the Maximum Annual Payment from each Sub-Account, the PI Trust shall first allocate the amount in question to outstanding Pre-Petition Liquidated Claims against the Sub-Account, and to liquidated claims against the Sub-Account involving Disease Level I (Cash Discount Payment), in proportion to the aggregate value of each group of claims. The remaining portion of the Maximum Annual Payment (the "Maximum Available Payment"), if any, shall then be allocated and used to satisfy all other previously liquidated PI Trust Claims against the Sub-Account, subject to the Claims Payment Ratio for the Sub-Account set forth in Section 2.5 below. In the event there are insufficient amounts in any year to pay the total number of outstanding Pre-Petition Liquidated Claims and/or previously liquidated Disease Level I Claims against the Sub-Account, the available amounts allocated to that group of claims shall be paid to the maximum extent to claimants in the particular group based on their place in their Sub-Account's FIFO Payment Queue. Claims in either group for which there are insufficient amounts in the Sub-Account shall be carried over to the next year and placed at the head of the FIFO Payment Queue for that Sub-Account. 2.5 Claims Payment Ratio. Based upon OC 's and Fibreboard's claims settlement history and analysis of present and future claims, a single Claims Payment Ratio has been determined for both Sub-Accounts, which, as of the Effective Date, has been set at 60% for Category A claims, which consist of PI Trust Claims against OC and/or Fibreboard involving severe asbestosis and malignancies (Disease Levels IV - VIII) that were unliquidated as of the Petition Date, and at 40% for Category B claims, which are PI Trust Claims against OC and/or Fibreboard involving non-malignant Asbestosis or Pleural Disease (Disease Levels II and III) that were similarly unliquidated as of the Petition Date. However, the Claims Payment Ratio shall not apply to any Pre-Petition Liquidated Claims or to any claims for Other Asbestos Disease (Disease Level I - Cash Discount Payment) payable from either OC or Fibreboard Sub-Accounts. In each year, after the determination of the Maximum Available Payment described in Section 2.4 above, 60% of that amount will be available to pay Category A claims and 40% will be available to pay Category B claims that have been liquidated since the Petition Date. In the event there are insufficient amounts in either the OC or Fibreboard Sub-Accounts in any year to pay the liquidated claims within either or both of the Categories, the available amounts allocated to the particular Category within the Sub-Account shall be paid to the maximum extent to claimants in that Category based on their place in the Sub-Account's FIFO Payment Queue described in Section 5.1(c) below, which will be based upon the date of claim liquidation. Claims for which there are insufficient amounts allocated to the relevant Category within a Sub-Account shall be carried over to the next year where they will be placed at the head of the Sub-Account's FIFO Payment Queue. If there are excess amounts in either or both Categories within a Sub-Account, because there is an insufficient amount of liquidated claims to exhaust the respective Sub-Account's Maximum Available Payment amount for that Category, then the excess amounts for either or both Categories will be rolled over and remain dedicated to the respective Category to which they were originally allocated. The 60%/40% Claims Payment Ratio and its rollover provision shall apply to all OC and Fibreboard PI Trust Voting Claims as defined in Section 2.3 above (except Pre-Petition Liquidated Claims and Other Asbestos Claims (Disease Level I - Cash Discount Payment)), and shall not be amended until the fifth anniversary of the Effective Date. Thereafter, the Sub-Account's Claims Payment Ratio and its rollover provision shall be continued absent circumstances, such as a significant change in law or medicine, necessitating amendment to avoid a manifest injustice. However, the accumulation, rollover and subsequent delay of claims against one or both Sub-Accounts resulting from the application of the Claims Payment Ratio, shall not, in and of itself, constitute such circumstances. Nor may an increase in the numbers of Category B claims against a Sub-Account beyond those predicted or expected be considered as a factor in deciding whether to reduce the percentage allocated to Category A claims. In considering whether to make any amendments to the Claims Payment Ratio and/or its rollover provisions for either Sub-Account, the Trustees should also consider the reasons for which the Claims Payment Ratio and its rollover provisions were adopted, the settlement histories of OC and Fibreboard that gave rise to its calculation, and the foreseeability or lack of the foreseeability of the reasons why there would be any need to make an amendment. In that regard, the Trustees should keep in mind the interplay between the Payment Percentage and the Claims Payment Ratio as it affects the net cash actually paid to claimants from either Sub-Account. In any event, no amendment to the Claims Payment Ratio for either Sub-Account may be made without the consent of the TAC and the Future Claimants' Representative pursuant to the consent process set forth in Sections 5.7(b) and 6.6(b) of the PI Trust Agreement. However, the Trustees, with the consent of the TAC and the Future Claimants' Representative, may offer the option of a reduced Payment Percentage to holders of claims in either Category A or Category B against either Sub-Account in return for prompter payment by the Sub-Account (the "Reduced Payment Option"). 2.6 Indemnity and Contribution Claims. As set forth in Section 5.6 below, PI Trust Claims for indemnity and contribution (defined in the Plan as OC Indirect Asbestos Personal Injury Claims and Fibreboard Indirect Asbestos Personal Injury Claims, and hereinafter referred to as "Indirect PI Trust Claims") against either the OC or the Fibreboard Sub-Accounts, if any, will be subject to the same categorization, evaluation, and payment provisions of this TDP as all other OC and Fibreboard Claims. SECTION III TDP Administration ------------------ 3.1 PI Trust Advisory Committee and Future Claimants' Representative. Pursuant to the Plan and the PI Trust Agreement, the PI Trust and this TDP shall be administered by the Trustees in consultation with the TAC, which represents the interests of holders of present PI Trust Claims against OC and Fibreboard, and the Future Claimants' Representative, who represents the interests of holders of PI Trust Claims against OC and/or Fibreboard that will be asserted in the future. The Trustees shall obtain the consent of the TAC and the Future Claimants' Representative on any amendments to these Procedures pursuant to Section 8.1 below, and on such other matters as are otherwise required below and in Section 2.2(f) of the PI Trust Agreement. The Trustees shall also consult with the TAC and the Future Claimants' Representative on such matters as are provided below and in Section 2.2(e) of the PI Trust Agreement. The initial members of the TAC and the initial Future Claimants' Representative are identified in the PI Trust Agreement. 3.2 Consent and Consultation Procedures. In those circumstances in which consultation or consent is required, the Trustees will provide written notice to the TAC and the Future Claimants' Representative of the specific amendment or other action that is proposed. The Trustees will not implement such amendment nor take such action unless and until the parties have engaged in the Consultation Process described in Sections 5.7(a) and 6.6(a), or the Consent Process described in Sections 5.7(b) and 6.6(b) of the PI Trust Agreement, respectively. SECTION IV Payment Percentage; Periodic Estimates -------------------------------------- 4.1 Uncertainty of OC 's and Fibreboard's Total Personal Injury Asbestos Liabilities. As discussed above, there is inherent uncertainty regarding OC 's and Fibreboard's total asbestos-related tort liabilities, as well as the total value of the assets available to the OC and Fibreboard Sub-Accounts to pay PI Trust Claims asserted against each Sub-Account. Consequently, there is inherent uncertainty regarding the amounts that holders of PI Trust Claims will receive. To seek to ensure substantially similar treatment of all present and future claims against either the OC or the Fibreboard Sub-Accounts, the Trustees must determine from time to time the percentage of full liquidated value that holders of claims against the Sub-Account will be likely to receive, i.e, the "Payment Percentage" described in Section 2.3 above and Section 4.2 below. 4.2 Computation of Payment Percentage. As provided in Section 2.3 above, the Initial Payment Percentage for claims against the OC Sub-Account shall be __ percent (___%), and for claims against the Fibreboard Sub-Account ___ percent (___%). These percentages shall apply to all OC and Fibreboard PI Trust Voting Claims as defined in Section 2.3 above, unless the Trustees, with the consent of the TAC and the Future Claimants' Representative, determine that the Initial Payment Percentage for one or both Sub-Accounts should be changed to assure that the PI Trust will be in a financial position to pay holders of unliquidated and/or unpaid PI Trust Voting Claims and present and future PI Trust Claims against the OC and Fibreboard Sub-Accounts, respectively, in substantially the same manner. In making any such adjustment, the Trustees, the TAC and the Future Claimants' Representative shall take into account the fact that the holders of PI Trust Voting Claims voted on the Plan relying on the findings of experts that the Initial Payment Percentage for each Sub-Account represented a reasonably reliable estimate of the PI Trust's total assets and liabilities over its life based on the best information available at the time, and shall thus give due consideration to the expectations of PI Trust Voting Claimants that the Initial Payment Percentage would be applied to their PI Trust Claims. Except with respect to PI Trust Voting Claims to which the Initial Payment Percentage applies, the Payment Percentage for either the OC or the Fibreboard Sub-Accounts shall be subject to change pursuant to the terms of this TDP and the PI Trust Agreement if the Trustees determine that an adjustment is required. No less frequently than once every three years, commencing with the first day of January occurring after the Plan is consummated, the Trustees shall reconsider the then applicable Payment Percentage for each of the OC and Fibreboard Sub-Accounts to assure that the respective percentage is based on accurate, current information and may, after such reconsideration, change the Payment Percentage for either Sub-Account if necessary with the consent of the TAC and the Future Claimants' Representative. The Trustees shall also reconsider the then applicable Payment Percentages for either or both Sub-Accounts at shorter intervals if they deem such reconsideration to be appropriate or if requested to do so by the TAC or the Future Claimants' Representative. The Trustees must base their determination of the Payment Percentage on current estimates of the number, types, and values of present and future PI Trust Claims against the respective Sub-Accounts, the value of the assets then available to the respective Sub-Accounts for their payment, all anticipated administrative and legal expenses of the respective Sub-Accounts, and any other material matters that are reasonably likely to affect the sufficiency of the respective Sub-Accounts' assets to pay a comparable percentage of full value to all holders of claims against the Sub-Accounts. When making these determinations, the Trustees shall exercise common sense and flexibly evaluate all relevant factors. The Payment Percentage applicable to Category A or Category B claims against the respective Sub-Accounts may not be reduced to alleviate delays in payments of claims in the other Category; both Categories will receive the same Payment Percentage, but the payment from either or both Sub-Accounts may be deferred as needed pursuant to Section 7.3 below, and a Reduced Payment Option may be instituted for either Sub-Account as described in Section 2.5 above. 4.3 Applicability of the Payment Percentage. No holder of a PI Trust Voting Claim other than a PI Trust Voting Claim for Other Asbestos Disease (Disease Level I - Cash Discount Payment) as defined in Section 5.3(a)(3) below shall receive a payment that exceeds the PI Trust's determination of the Initial Payment Percentage for the relevant Sub-Account of the liquidated value of the claim. Except as otherwise provided in Section 5.1(c) below for PI Trust Claims involving deceased or incompetent claimants for which court or probate approval of the PI Trust's offer is required, no holder of any other PI Trust Claim shall receive a payment that exceeds the Payment Percentage for the respective Sub-Account in effect at the time of payment. PI Trust Claims involving Other Asbestos Disease (Disease Level I - Cash Discount Payment) shall not be subject to such Sub-Account's Payment Percentage, but shall instead be paid the full amount of their Scheduled Value as set forth in Section 5.3(a)(3) below. If a redetermination of the respective Sub-Account's Payment Percentage has been proposed in writing by the Trustees to the TAC and the Future Claimants' Representative but has not yet been adopted, the claimant shall receive the lower of such Sub-Account's current Payment Percentage or the proposed Payment Percentage. However, if the proposed Payment Percentage for such Sub-Account was the lower amount but was not subsequently adopted, the claimant shall thereafter receive the difference between the lower proposed amount and the higher current amount. Conversely, if the proposed Payment Percentage for such Sub-Account was the higher amount and was subsequently adopted, the claimant shall thereafter receive the difference between the lower current amount and the higher adopted amount. SECTION V Resolution of PI Trust Claims. ------------------------------ 5.1 Ordering, Processing and Payment of Claims. 5.1(a) Ordering of Claims. 5.1(a)(1) Establishment of FIFO Processing Queues. The PI Trust will order separately all OC and Fibreboard Claims that are sufficiently complete to be reviewed for processing purposes on a FIFO basis except as otherwise provided herein (the "FIFO Processing Queues"). For all claims filed on or before the date six months after the Effective Date (the "Initial Claims Filing Date"), a claimant's position in either FIFO Processing Queue shall be determined as of the earlier of (i) the date prior to the Petition Date (if any) that the specific claim was either filed against OC or Fibreboard in the tort system or was actually submitted to OC or Fibreboard pursuant to an administrative settlement agreement; (ii) the date before the Petition Date that the claim was filed against another defendant in the tort system if at the time the claim was subject to a tolling agreement with OC or Fibreboard; (iii) the date after the Petition Date but before the Effective Date that the claim was filed against another defendant in the tort system; (iv) the date after the Petition Date the claimant filed a proof of claim form in OC's and/or Fibreboard's Chapter 11 proceeding; (v) the date after the Petition Date the claimant submitted a ballot in OC's Chapter 11 proceeding for purposes of voting on the Plan pursuant to the voting procedures approved by the Bankruptcy Court; or (vi) the date after the Effective Date but on or before the Initial Claims Filing Date that the claim was filed with the PI Trust. Following the Initial Claims Filing Date, the claimant's position in one of the two FIFO Processing Queues shall be determined by the date the claim was filed with the PI Trust. If any claims are filed on the same date, the claimant's position in the FIFO Processing Queue shall be determined by date of the claimant's diagnosis of asbestos-related disease. If any claims are filed and diagnosed on the same date, the claimant's position in the FIFO Processing Queue shall be determined by the date of the claimant's birth, with older claimants given priority over younger claimants. 5.1(a)(2) Effect of Statutes of Limitations and Repose. To be eligible for a place in either the OC or Fibreboard FIFO Processing Queues, (i) claims first filed in the tort system against OC or Fibreboard, respectively prior to the Petition Date must meet the applicable federal, state and foreign statute of limitation and repose that was in effect at the time of the filing of the claim in the tort system, and (ii) claims that were not filed against either OC or Fibreboard in the tort system prior to the Petition Date must meet the applicable federal, state or foreign statute of limitation that was in effect at the time of the filing with the PI Trust. However, the running of the relevant statute of limitation shall be tolled as of the earliest of (A) the actual filing of the claim against OC or Fibreboard prior to the Petition Date, whether in the tort system or by submission of the claim to OC or Fibreboard pursuant to an administrative settlement agreement; (B) the filing of the claim against another defendant in the tort system prior to the Petition Date if the claim was tolled against OC or Fibreboard at the time by an agreement or otherwise; (C) the filing of a claim after the Petition Date but prior to the Effective Date against another defendant in the tort system; (D) the submission by the claimant of a ballot in OC's and or Fibreboard's Chapter 11 proceeding for purposes of voting on the Plan pursuant to the voting procedures approved by the Bankruptcy Court; or (E) the filing of a proof of claim with the requisite supporting documentation with the PI Trust after the Effective Date. If a PI Trust Claim meets any of the tolling provisions described in the preceding sentence and the claim was not barred by the applicable federal, state or foreign statute of limitation at the time of the tolling event, it will be treated as timely filed if it is actually filed with the PI Trust within three (3) years after the Effective Date. In addition, any claims that were first diagnosed after the Petition Date, irrespective of the application of any relevant federal, state or foreign statute of limitation or repose, may be filed with the PI Trust within three (3) years after the date of diagnosis or within three (3) years after the Effective Date, whichever occurs later. However, the processing of any PI Trust Claim by the PI Trust may be deferred at the election of the claimant pursuant to Section 6.3 below. 5.1(b) Processing of Claims. As a general practice, the PI Trust will review its claims files on a regular basis and notify all claimants whose claims are likely to come up in either the OC or Fibreboard FIFO Processing Queue in the near future. However, claims that were not filed (i) against OC or Fibreboard in the tort system or actually submitted to OC or Fibreboard pursuant to an administrative settlement agreement prior to the Petition Date, or (ii) against another defendant in the tort system prior to the Plan Filing Date, shall not be processed until after the Initial Claims Filing Date. 5.1(c) Payment of Claims. PI Trust Claims against the OC and/or Fibreboard Sub-Accounts that have been liquidated under the provisions of this TDP by the Expedited Review Process as provided in Section 5.3(a) below, by the Individual Review Process as provided in Section 5.3(b) below, by arbitration as provided in Section 5.10 below, or by litigation in the tort system provided in Section 5.11 below, shall be paid in FIFO order from the relevant Sub-Account based on the date their liquidation became final (the "FIFO Payment Queue"), all such payments being subject to the applicable Payment Percentage, the Maximum Annual Payment, the Maximum Available Payment, and the Claims Payment Ratio, except as otherwise provided herein. Pre-Petition Liquidated Claims, as defined in Section 5.2 below, shall be subject to the Maximum Annual Payment and Payment Percentage limitations, but not to the Maximum Available Payment and Claims Payment Ratio provisions set forth above. Where the claimant is deceased or incompetent, and the settlement and payment of his or her claim must be approved by a court of competent jurisdiction or through a probate process prior to acceptance of the claim by the claimant's representative, an offer made by the PI Trust on the claim shall remain open so long as proceedings before that court or in that probate process remain pending, provided that the PI Trust has been furnished with evidence that the settlement offer has been submitted to such court or probate process for approval. If the offer is ultimately approved by the court or through the probate process and accepted by the claimant's representative, the PI Trust shall pay the claim from the relevant Sub-Account in the amount so offered, multiplied by the Payment Percentage in effect for such Sub-Account at the time the offer was first made. If any claims are liquidated on the same date, the claimant's position in a Sub-Account's FIFO Payment Queue shall be determined by the date of the diagnosis of the claimant's asbestos-related disease. If any claims are liquidated on the same date and the respective holders' asbestos-related diseases were diagnosed on the same date, those claimants' positions in the Sub-Account's FIFO Payment Queue shall be determined by the PI Trust based on the dates of the claimants' birth, with older claimants given priority over younger claimants. 5.2 Resolution of Pre-Petition Liquidated PI Trust Claims. 5.2(a) Processing and Payment. As soon as practicable after the Effective Date, the PI Trust shall pay, upon submission by the claimant of the applicable PI Trust proof of claim form (included in Attachment B) together with all documentation required thereunder, all PI Trust Claims that were liquidated by (i) a binding settlement agreement for the particular claim entered into prior to the Petition Date that is judicially enforceable by the claimant, (ii) a jury verdict in the tort system obtained prior to the Petition Date, or (iii) by a final or non-final judgment prior to the Petition Date (collectively "Pre-Petition Liquidated Claims"). The liquidated value of a Pre-Petition Liquidated Claim shall be the unpaid amount of the claim, including interest, if any, that has accrued on that amount in accordance with the terms of a binding settlement agreement, if any, or under applicable state law for settlements or judgments as of the Petition Date; however, pursuant to Section 7.4 below, the liquidated value of a Pre-Petition Liquidated Claim shall not include any punitive or exemplary damages. In addition, the amounts payable with respect to such claims shall not be subject to or taken into account in consideration of the Claims Payment Ratio and the Maximum Available Payment limitations, but shall be subject to the Maximum Annual Payment and Payment Percentage provisions. In the absence of a Final Order of the Bankruptcy Court determining whether a settlement agreement is binding and judicially enforceable, a dispute between a claimant and the PI Trust over this issue shall be resolved pursuant to the same procedures in this TDP that are provided for resolving the validity and/or liquidated value of a PI Trust Claim (i.e., arbitration and litigation in the tort system as set forth in Sections 5.10 and 5.11 below). Pre-Petition Liquidated Claims shall be processed and paid from the OC and/or Fibreboard Sub-Accounts in accordance with their order in separate FIFO queues to be established for each Sub-Account by the PI Trust based on the date the PI Trust received a completed proof of claim form with all required documentation for the particular claim. If any Pre-Petition Liquidated Claims are filed with the PI Trust on the same date, the claimant's position in the Sub-Account's FIFO queue for such claims shall be determined by the date on which the claim was liquidated. If any Pre-Petition Liquidated Claims are both filed with the PI Trust and liquidated by a Sub-Account on the same dates, those claimants' positions in the FIFO queue shall be determined by the dates of the claimants' birth, with older claimants given priority over younger claimants. 5.2(b) Marshalling of Security. Holders of Pre-Petition Liquidated Claims that are secured by letters of credit, appeal bonds, or other security or sureties shall first exhaust their rights against any applicable security or surety before making a claim against the PI Trust. Only in the event that such security or surety is insufficient to pay the Pre-Petition Liquidated Claim in full shall the deficiency be processed and paid as a Pre-Petition Liquidated Claim. 5.3 Resolution of Unliquidated PI Trust Claims. Within six months after the establishment of the PI Trust, the Trustees with the consent of the TAC and the Future Claimants' Representative shall adopt procedures for reviewing and liquidating all unliquidated PI Trust Claims, which shall include deadlines for processing such claims. Such procedures shall also require claimants seeking resolution of unliquidated PI Trust claims to first file a proof of claim form, together with the required supporting documentation, in accordance with the provisions of Sections 6.1 and 6.2 below. It is anticipated that the PI Trust shall provide an initial response to the claimant within six months of receiving the proof of claim form. The proof of claim form shall require the claimant to assert his or her OC and/or Fibreboard Claim for the highest Disease Level for which the claim qualifies at the time of filing. Irrespective of the Disease Level alleged on the proof of claim form, each OC and/or Fibreboard Claims shall be deemed to be a claim for the highest Disease Level for which the claim qualifies at the time of filing, and all lower Disease Levels for which the claim may also qualify at the time of filing or in the future shall be treated as subsumed into the higher Disease Level for both processing and payment purposes. Upon filing of a valid proof of claim form with the required supporting documentation, the claim shall be placed in the relevant OC and/or Fibreboard FIFO Processing Queue in accordance with the ordering criteria described in Section 5.1(a) above, and the claimant shall advise the PI Trust whether the claim should be liquidated either under the PI Trust's Expedited Review Process described in Section 5.3(a) below or, in certain circumstances, the PI Trust's Individual Review Process described in Section 5.3(b) below. 5.3(a) Expedited Review Process. 5.3(a)(1) In General. The PI Trust's Expedited Review Process is designed primarily to provide an expeditious, efficient and inexpensive method for liquidating all OC and Fibreboard Claims (except those involving Lung Cancer 2 - Disease Level VI) where the claim can easily be verified by the PI Trust as meeting the presumptive Medical/Exposure Criteria for the relevant Disease Level. Expedited Review thus provides claimants with a substantially less burdensome process for pursuing PI Trust Claims than does the Individual Review Process described in Section 5.3(b) below. Expedited Review is also intended to provide qualifying claimants a fixed and certain claims payment. Thus, claims that undergo Expedited Review and meet the presumptive Medical/Exposure Criteria for the relevant Disease Level shall be paid the Scheduled Value (or Values in the case of Multiple Exposure Claims) for such Disease Level set forth in Section 5.3(a)(3) below. However, except for claims involving Other Asbestos Disease (Disease Level I), all claims liquidated by Expedited Review shall be subject to the applicable Payment Percentage, the Maximum Annual Payment, the Maximum Available Payment, and the Claims Payment Ratio limitations set forth above. Claimants holding OC and/or Fibreboard Claims that cannot be liquidated by Expedited Review because they do not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level may elect the PI Trust's Individual Review Process set forth in Section 5.3(b) below. 5.3(a)(2) Claims Processing under Expedited Review. All claimants seeking liquidation of an OC and/or Fibreboard Claim pursuant to Expedited Review shall file the PI Trust's proof of claim forms provided in Attachment B hereto. As a proof of claim form is reached in the OC or Fibreboard FIFO Processing Queue, the PI Trust shall determine whether the claim described therein meets the Medical/Exposure Criteria for one of the seven Disease Levels eligible for Expedited Review, and shall advise the claimant of its determination. If a Disease Level is determined, the PI Trust shall tender to the claimant an offer of payment from the relevant OC or Fibreboard Sub-Account of the Scheduled Value for the relevant Disease Level multiplied by the applicable Payment Percentage, together with a form of release approved by the PI Trust. If the claimant accepts the Scheduled Value and returns the release properly executed, the claim shall be placed in the Sub-Account's FIFO Payment Queue, following which the PI Trust shall disburse payment subject to the limitations of the Maximum Available Payment and Claims Payment Ratio, if any. 5.3(a)(3) Disease Levels, Scheduled Values and Medical/ Exposure Criteria. The eight Disease Levels covered by this TDP, together with the Medical/Exposure Criteria for each, and the separate OC and Fibreboard Scheduled Values for the seven Disease Levels eligible for Expedited Review, are set forth below. These Disease Levels, Scheduled Values, and Medical/Exposure Criteria shall apply to all PI Trust Voting Claims (other than Pre-Petition Liquidated Claims) filed with the PI Trust on or before the Initial Claims Filing Date provided in Section 5.1 above for which the claimant elects the Expedited Review Process. Thereafter, for purposes of administering the Expedited Review Process and with the consent of the TAC and the Future Claimants' Representative, the Trustees may add to, change or eliminate Disease Levels, Scheduled Values, or Medical/Exposure Criteria; develop subcategories of Disease Levels, Scheduled Values or Medical/Exposure Criteria; or determine that a novel or exceptional asbestos personal injury claim is compensable even though it does not meet the Medical/Exposure Criteria for any of the then current Disease Levels. OC/Fibreboard Disease Level Scheduled Values Medical/Exposure Criteria - ------------- ---------------- ------------------------- Mesothelioma $215,000/$135,000 (1) Diagnosis[2] of mesothelioma; (Level VIII) and (2) credible evidence of OC or Fibreboard Exposure (as defined in Section 5.7(b)(3) below) Lung Cancer 1 $ 40,000/$19,000 (1) Diagnosis of a primary lung (Level VII) cancer plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease[3],(2) six months OC or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos,[4] and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. _____________________ [2] The requirements for a diagnosis of an asbestos-related disease that may be compensated under the provisions of this TDP are set forth in Section 5.7 below. [3] Evidence of "Bilateral Asbestos-Related Nonmalignant Disease" for purposes of meeting the criteria for establishing Disease Levels I, II, III, V, and VII, means a report submitted by a qualified physician stating that the claimant has or had either (i) a chest X-ray read by a qualified B reader of 1/0 or higher on the ILO scale or (ii)(x) an x-ray read by a qualified B reader, (y) a CT scan read by a qualified physician, or (z) pathology, in each case showing either bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening, or bilateral pleural calcification. Solely for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, if an ILO reading is not available, either (i) a chest X-ray or a CT scan read by a qualified physician, or (ii) pathology, in each case showing either bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening, or bilateral pleural calcification, consistent with or compatible with a diagnosis of asbestos-related disease, shall be evidence of a "Bilateral Asbestos-Related Nonmalignant Disease" for purposes of meeting the presumptive medical requirements of Disease Levels I, II, III, V and VII. Pathological evidence of asbestosis may be based on the pathological grading system for asbestosis described in the Special Issue of the Archives of Pathology and Laboratory Medicine, "Asbestos-associated Diseases," Vol. 106, No. 11, App. 3 (October 8, 1982). [4] "Significant Occupational Exposure" is defined in Section 5.7 below. Lung Cancer 2 None (1) Diagnosis of a primary lung (Level VI) cancer; (2) OC or Fibreboard Exposure prior to December 31, 1982, and (3) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Lung Cancer 2 (Level VI) claims are claims that do not meet the more stringent medical and/or exposure requirements of Lung Cancer (Level VII) claims. All claims in this Disease Level will be individually evaluated. The estimated likely Average Value of the individual evaluation awards for this category for OC Claims is $20,000 and for Fibreboard Claims is $12,000, with such awards capped at a Maximum Value of $50,000 for OC Claims and $30,000 for Fibreboard Claims, unless the claim qualifies for Extraordinary Claim treatment (discussed in Section 5.4 below). Level VI claims that show no evidence of either an underlying Bilateral Asbestos-Related Non-malignant Disease or Significant Occupational Exposure may be individually evaluated, although it is not expected that such claims will be treated as having any significant value, especially if the claimant is also a Smoker.[5] In any event, no presumption of validity will be available for any claims in this category. _________________ [5] There is no distinction between Non-Smokers and Smokers for either Lung Cancer (Level VII) or Lung Cancer (Level VI), although a claimant who meets the more stringent requirements of Lung Cancer (Level VII) (evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease plus Significant Occupational Exposure), and who is also a Non-Smoker, may wish to have his or her claim individually evaluated by the PI Trust. In such a case, absent circumstances that would otherwise reduce the value of the claim, it is anticipated that the liquidated value of the claim might well exceed the Scheduled Values for Lung Cancer (Level VII) claims against OC and Fibreboard, respectively, shown above. "Non-Smoker" means a claimant who either (a) never smoked or (b) has not smoked during any portion of the twelve (12) years immediately prior to the diagnosis of the lung cancer. Other Cancer $ 22,000/$12,000 (1) Diagnosis of a primary (Level V) colo-rectal, laryngeal, esophageal, pharyngeal, or stomach cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease, (2) six months OC or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the other cancer in question. Severe Asbestosis $ 42,000/$29,000 (1) Diagnosis of asbestosis with (Level IV) ILO of 2/1 or greater, or asbestosis determined by pathological evidence of asbestos, plus (a)TLC less than 65%, or (b) FVC less than 65% and FEV1/FVC ratio greater than 65%, (2) six months OC or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestosis/ Pleural Disease $ 19,000/$11,500 (1) Diagnosis of Bilateral (Level III) Asbestos-Related Nonmalignant Disease plus (a) TLC less than 80%, or (b) FVC less than 80% and FEV1/FVC ratio greater than or equal to 65%, and (2) six months OC or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestosis/ Pleural Disease $ 8,000/$4,500 (1) Diagnosis of a Bilateral (Level II) Asbestos-Related Nonmalignant Disease, and (2) six months OC or Fibreboard Exposure prior to December 31, 1982, and (3) five years cumulative occupational exposure to asbestos. Other Asbestos Disease (Level I - $ 400/$240 (1) Diagnosis of a Bilateral Cash Discount Payment) Asbestos- Related Nonmalignant Disease or an asbestos-related malignancy other than mesothelioma, and (2) OC or Fibreboard Exposure prior to December 31, 1982. 5.3(b) Individual Review Process 5.3(b)(1) In General. Subject to the provisions set forth below, an OC or Fibreboard Claimant may elect to have his or her PI Trust Claim reviewed for purposes of determining whether the claim would be compensable in the tort system even though it does not meet the presumptive Medical/Exposure Criteria for any of the Disease Levels set forth in Section 5.3(a)(3) above. In addition or alternatively, an OC or Fibreboard claimant may elect to have a claim undergo the Individual Review Process for purposes of determining whether the liquidated value of the claim exceeds the Scheduled Value for the relevant Disease Level also set forth in said provision. However, until such time as the PI Trust has made an offer on a claim pursuant to Individual Review, the claimant may change his or her Individual Review election and have the claim liquidated pursuant to the PI Trust's Expedited Review Process. In the event of such a change in the processing election, the claimant shall nevertheless retain his or her place in the FIFO Processing Queue. 5.3(b)(1)(A) Review of Medical/Exposure Criteria. The PI Trust's Individual Review Process provides an OC or Fibreboard claimant with an opportunity for individual consideration and evaluation of a PI Trust Claim that fails to meet the presumptive Medical/Exposure Criteria for Disease Levels I - V, and VII-VIII. In such a case, the PI Trust shall either deny the claim, or, if the PI Trust is satisfied that the claimant has presented a claim that would be cognizable and valid in the tort system, the PI Trust can offer the claimant a liquidated value amount up to the Scheduled Value for that Disease Level, unless the claim qualifies as an Extraordinary Claim as defined in Section 5.4(a) below, in which case its liquidated value cannot exceed the Maximum Value for such a claim. 5.3(b)(1)(B) Review of Liquidated Value. Claimants holding claims involving Disease Levels II - VIII shall also be eligible to seek Individual Review of the liquidated value of their OC and Fibreboard Claims, as well as of their medical/exposure evidence. The Individual Review Process is intended to result in payments from the OC and/or Fibreboard Sub-Accounts equal to the full liquidated value for each claim multiplied by the Payment Percentage; however, the liquidated value of any OC or Fibreboard Claim that undergoes Individual Review may be determined to be less than the Scheduled Value the claimant would have received under Expedited Review. Moreover, the liquidated value for a claim involving Disease Levels II - VIII shall not exceed the Maximum Value for the relevant Disease Level set forth in Section 5.3(b)(4) below, unless the claim meets the requirements of an Extraordinary Claim described in Section 5.4(a) below, in which case its liquidated value cannot exceed the Maximum Value set forth in that provision for such claims. Because the detailed examination and valuation process pursuant to Individual Review requires substantial time and effort, claimants electing to undergo the Individual Review Process will ordinarily be paid the liquidated value of their PI Trust Claims later than would have been the case had the claimant elected the Expedited Review Process. 5.3(b)(2) Valuation Factors to be Considered in Individual Review. The PI Trust shall liquidate the value of each OC and Fibreboard Claim that undergoes Individual Review based on the historic liquidated values of other similarly situated claims in the tort system for the same Disease Level. The PI Trust will thus take into consideration all of the factors that affect the severity of damages and values within the tort system including, but not limited to (i) the degree to which the characteristics of a claim differ from the presumptive Medical/Exposure Criteria for the Disease Level in question; (ii) factors such as the claimant's age, disability, employment status, disruption of household, family or recreational activities, dependencies, special damages, and pain and suffering; (iii) evidence that the claimant's damages were (or were not) caused by asbestos exposure to an asbestos-containing product prior to December 31, 1982 for which OC or Fibreboard has legal responsibility (for example, alternative causes, and the strength of documentation of injuries); (iv) the industry of exposure; and (v) settlements, verdicts, and the claimant's and other law firms' experience in the Claimant's Jurisdiction for similarly situated claims. For these purposes, the "Claimant's Jurisdiction" is the jurisdiction in which the claim was filed (if at all) against OC or Fibreboard in the tort system prior to the Petition Date. If the claim was not filed against OC or Fibreboard in the tort system prior to the Petition Date, the claimant may elect as the Claimant's Jurisdiction either (i) the jurisdiction in which the claimant resides at the time of diagnosis or when the claim is filed with the PI Trust; or (ii) a jurisdiction in which the claimant experienced exposure to an asbestos-containing product for which OC or Fibreboard has legal responsibility. 5.3(b)(3) Processing and Payment Limitations for Claims Involving Disease Levels III and II. The PI Trust shall administer Individual Review for Disease Levels III and II so that Individual Review does not reduce payments to claimants electing the Scheduled Value for such PI Trust Claims under Expedited Review. As one means of implementing this requirement, the following shall apply for Disease Levels III and II claims: 5.3(b)(3)(A) Disease Level III Claims. No more than 13% or 9% of Disease Level III claims paid in any year from either the OC or the Fibreboard Sub-Account, respectively, shall be PI Trust Claims allowed under Individual Review, and the total payments to such Disease Level III claims allowed under Individual Review shall be no more than 17% or 13% of payments to all Disease Level III claimants from either the OC or Fibreboard Sub-Account, respectively, during any year. 5.3(b)(3)(B) Disease Level II Claims. No more than 15% or 20% of Disease Level II claims paid in any year from either the OC or the Fibreboard Sub-Account, respectively, shall be PI Trust Claims allowed under Individual Review, and the total payments to such Disease Level II claims allowed under Individual Review shall be no more than 24% or 33% of payments to all Disease Level II claimants from either the OC or Fibreboard Sub-Account, respectively, during any year. 5.3(b)(4) Scheduled, Average and Maximum Values. The Scheduled, Average and Maximum Values for the Disease Levels compensable under this TDP from the OC and Fibreboard Sub-Accounts are the following: OC SUB-ACCOUNT -------------- Scheduled Disease Scheduled Value Average Value Maximum Value - ----------------- --------------- ------------- ------------- Mesothelioma (Level VIII) $215,000 $270,000 $650,000 Lung Cancer 1 (Level VII) $ 40,000 $ 50,000 $150,000 Lung Cancer 2 (Level VI) None $ 20,000 $ 50,000 Other Cancer (Level V) $ 22,000 $ 25,000 $ 60,000 Severe Asbestosis (Level IV) $ 42,000 $ 50,000 $150,000 Asbestosis/Pleural Disease (Level III) $ 19,000 $ 20,000 $ 35,000 Asbestosis/Pleural Disease (Level II) $ 8,000 $ 9,000 $ 20,000 Other Asbestos Disease Cash Discount Payment (Level I) $ 400 None None
FIBREBOARD SUB-ACCOUNT ----------------------
Scheduled Disease Scheduled Value Average Value Maximum Value - ----------------- --------------- ------------- ------------- Mesothelioma (Level VIII) $135,000 $180,000 $450,000 Lung Cancer1 (Level VII) $ 27,000 $ 35,000 $ 90,000 Lung Cancer 2 (Level VI) None $ 12,000 $ 30,000 Other Cancer (Level V) $ 12,000 $ 15,000 $ 36,000 Severe Asbestosis (Level IV) $ 29,000 $ 30,000 $ 90,000 Asbestosis/Pleural Disease (Level III) $ 11,500 $ 12,000 $ 21,000 Asbestosis/Pleural Disease (Level II) $ 4,500 $ 5,400 $ 12,000 Other Asbestos Disease Cash Discount Payment (Level I) $ 240 None None
These OC and Fibreboard Scheduled Values, Average Values and Maximum Values shall apply to all PI Trust Voting Claims other than Pre-Petition Liquidated Claims filed with the PI Trust on or before the Initial Claims Filing Date as provided in Section 5.1 above. Thereafter, the PI Trust, with the consent of the TAC and the Future Claimants' Representative pursuant to Sections 5.7(b) and 6.6(b) of the PI Trust Agreement, may change these valuation amounts for good cause and consistent with other restrictions on the amendment power. 5.4 Categorizing Claims as Extraordinary and/or Exigent Hardship 5.4(a) Extraordinary Claims. "Extraordinary Claim" means a PI Trust Claim that otherwise satisfies the Medical Criteria for Disease Levels II - VIII, and that is held by a claimant whose exposure to asbestos (i) occurred predominately as the result of working in a manufacturing facility of OC or Fibreboard during a period in which OC or Fibreboard was manufacturing asbestos-containing products at that facility, or (ii) was at least 75% the result of exposure to an asbestos-containing product for which OC or Fibreboard has legal responsibility, and in either case there is little likelihood of a substantial recovery elsewhere. All such Extraordinary Claims shall be presented for Individual Review and, if valid, shall be entitled to an award of up to a Maximum Value of five (5) times the Scheduled Value for claims qualifying for Disease Levels II - V, VII and VIII, and five (5) times the Average Value for claims in Disease Level VI, multiplied by the applicable Payment Percentage. Any dispute as to Extraordinary Claim status shall be submitted to a special Extraordinary Claims Panel to be established by the PI Trust with the consent of the TAC and the Future Claimants' Representative. All decisions of the Extraordinary Claims Panel shall be final and not subject to any further administrative or judicial review. An Extraordinary Claim, following its liquidation, shall be placed in the Trust's FIFO Queue ahead of all other PI Trust Claims except Exigent Hardship Claims, which shall be first in said Queue, based on its date of liquidation and shall be subject to the Maximum Available Payment and Claims Payment Ratio described above. 5.4(b) Exigent Hardship Claims. At any time the PI Trust may liquidate and pay PI Trust Claims that qualify as Exigent Hardship Claims as defined below. Such claims may be considered separately no matter what the order of processing otherwise would have been under this TDP. An Exigent Hardship Claim, following its liquidation, shall be placed first in the relevant Sub-Account's FIFO Payment Queue ahead of all other liquidated claims, and shall be subject to the Maximum Available Payment and Claims Payment Ratio described above. A PI Trust Claim qualifies for payment as an Exigent Hardship Claim if the claim meets the Medical/Exposure Criteria for Severe Asbestosis (Disease Level IV) or an asbestos-related malignancy (Disease Levels V-VIII), and the PI Trust, in its sole discretion, determines (i) that the claimant needs financial assistance on an immediate basis based on the claimant's expenses and all sources of available income, and (ii) that there is a causal connection between the claimant's dire financial condition and the claimant's asbestos-related disease. 5.5 Secondary Exposure Claims. If a claimant alleges an asbestos-related disease resulting solely from exposure to an occupationally exposed person, such as a family member, the claimant is entitled to seek Individual Review of his or her OC and/or Fibreboard Claim pursuant to Section 5.3(b) above. In such a case, the claimant must establish that the occupationally exposed person would have met the exposure requirements under this TDP that would have been applicable had that person filed a direct claim against the PI Trust. In addition, the claimant with secondary exposure must establish that he or she is suffering from one of the eight Disease Levels described in Section 5.3(a)(3) above or an asbestos-related disease otherwise valid and cognizable in the tort system, that his or her own exposure to the occupationally exposed person occurred within the same time frame as the occupationally exposed person was exposed to asbestos products produced by OC or Fibreboard, and that such secondary exposure to OC or Fibreboard products was a cause of the claimed disease. The proof of claim form included in Attachment B hereto contains an additional section for Secondary Exposure Claims. All other liquidation and payment rights and limitations under this TDP shall be applicable to such claims. 5.6 Indirect PI Trust Claims. Indirect PI Trust Claims asserted against either the OC or Fibreboard Sub-Accounts based upon theories of contribution or indemnification under applicable law, shall be treated as presumptively valid and paid by the PI Trust subject to the applicable Payment Percentage if (a) such claim satisfied the requirements of the Bar Date for such claims established by the Bankruptcy Court, if applicable, and is not otherwise disallowed by Section 502(e) of the Code or subordinated under Section 509(c) of the Code, and (b) the holder of such claim (the "Indirect Claimant") establishes to the satisfaction of the Trustees that (i) the Indirect Claimant has paid in full the liability and obligation of the Trust to the individual claimant to whom the PI Trust would otherwise have had a liability or obligation under these Procedures (the "Direct Claimant"), (ii) the Direct Claimant and the Indirect Claimant have forever and fully released the Trust from all liability to the Direct Claimant, and (iii) the claim is not otherwise barred by a statute of limitation or repose or by other applicable law. In no event shall any Indirect Claimant have any rights against the PI Trust superior to the rights of the related Direct Claimant against the PI Trust, including any rights with respect to the timing, amount or manner of payment. In addition, no Indirect Claim may be liquidated and paid in an amount that exceeds what the Indirect Claimant has actually paid the related Direct Claimant. Further, the PI Trust shall not pay any Indirect Claimant unless and until the Indirect Claimant's aggregate liability for the Direct Claimant's claim has been fixed, liquidated and paid fully by the Indirect Claimant by settlement (with an appropriate full release in favor of the PI Trust) or a Final Order (as defined in the Plan) provided that such claim is valid under the applicable state law. In any case where the Indirect Claimant has satisfied the claim of a Direct Claimant against the PI Trust under applicable law by way of a settlement, the Indirect Claimant shall obtain for the benefit of the PI Trust a release in form and substance satisfactory to the Trustees. If an Indirect Claimant cannot meet the presumptive requirements set forth above, including the requirement that the Indirect Claimant provide the PI Trust with a full release of the Direct Claimant's claim, the Indirect Claimant may request that the PI Trust review the Indirect PI Trust Claim individually to determine whether the Indirect Claimant can establish under applicable state law that the Indirect Claimant has satisfied a liability or obligation that the PI Trust would otherwise have to the Direct Claimant. If the Indirect Claimant can show that it has satisfied such a liability or obligation, the PI Trust shall reimburse the Indirect Claimant the amount of the liability or obligation so satisfied, times the then applicable Payment Percentage. However, in no event shall such reimbursement to the Indirect Claimant be greater than the amount to which the Direct Claimant would have otherwise been entitled. Further, the liquidated value of any Indirect PI Trust Claim paid by the PI Trust to an Indirect Claimant shall be treated as an offset to or reduction of the full liquidated value of any PI Trust Claim that might be subsequently asserted by the Direct Claimant against the PI Trust. Any dispute between the PI Trust and an Indirect Claimant over whether the Indirect Claimant has a right to reimbursement for any amount paid to a Direct Claimant shall be subject to the ADR procedures provided in Section 5.10 below and set forth in Attachment A hereto. If such dispute is not resolved by said ADR procedures, the Indirect Claimant may litigate the dispute in the tort system pursuant to Sections 5.11 above and 7.6 below. The Trustees may develop and approve a separate proof of claim form for Indirect PI Trust Claims. Indirect PI Trust Claims that have not been disallowed, discharged, or otherwise resolved by prior order of the Bankruptcy Court shall be processed in accordance with procedures to be developed and implemented by the Trustees consistent with the provisions of this Section 5.6, which procedures (a) shall determine the validity, allowability and enforceability of such claims; and (b) shall otherwise provide the same liquidation and payment procedures and rights to the holders of such claims as the PI Trust would have afforded the holders of the underlying valid PI Trust Claims. 5.7 Evidentiary Requirements 5.7(a) Medical Evidence. 5.7(a)(1) In General. All diagnoses of a Disease Level shall be accompanied by either (i) a statement by the physician providing the diagnosis that at least 10 years have elapsed between the date of first exposure to asbestos or asbestos-containing products and the diagnosis, or (ii) a history of the claimant's exposure sufficient to establish a 10-year latency period. A finding by a physician after the Petition Date that a claimant's disease is "consistent with" or "compatible with" asbestosis will not alone be treated by the PI Trust as a diagnosis. 5.7(a)(1)(A). Disease Levels I-IV. Except for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, all diagnoses of a non-malignant asbestos-related disease (Disease Levels I-IV) shall be based (i) in the case of a claimant who was living at the time the claim was filed, upon (A) a physical examination of the claimant by the physician providing the diagnosis of the asbestos-related disease; (B) for Disease Levels I-III, evidence of Bilateral Asbestos-Related Nonmalignant Disease (as defined in Footnote 3 above), and for Disease Level IV,[6] either an ILO reading of 2/1 or greater or pathological evidence of asbestosis, and (C) pulmonary function testing[7] if the claim involves Disease Levels III or IV; and (ii) in the case of a claimant who was deceased at the time the claim was filed, upon (A) a physical examination of the claimant by the physician providing the diagnosis of the asbestos-related disease, or (B) pathological evidence of the non-malignant asbestos-related disease, or (C) in the case of Disease Levels I-III, evidence of Bilateral Asbestos-Related Nonmalignant Disease (as defined in Footnote 3 above), and for Disease Level IV only, either an ILO reading of 2/1 or greater or pathological evidence of asbestosis. _____________________ [6] All diagnoses of Asbestos/Pleural Disease (Disease Levels II and III) not based on pathology shall be presumed to be based on findings of bilateral asbestosis or pleural disease, and all diagnoses of Mesothelioma (Disease Level VIII) shall be presumed to be based on findings that the disease involves a malignancy. However, the PI Trust may rebut such presumptions. [7] "Pulmonary Function Testing" shall mean spirometry testing that is in material compliance with the quality criteria established by the American Thoracic Society ("ATS") and is performed on equipment which is in material compliance with ATS standards for technical quality and calibration. 5.7(a)(1)(B). Disease Levels V-VIII. Except for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, all diagnoses of a malignant asbestos-related disease (Disease Levels V-VIII) shall be based upon either (i) a physical examination of the claimant by the physician providing the diagnosis of the malignant asbestos-related disease, or (ii) a diagnosis of such malignant Disease Level by a board-certified pathologist. 5.7(a)(1)(C). Treatment of Certain Pre-Petition Claims. If the holder of a claim that was filed against OC or Fibreboard or another defendant in the tort system prior to the Petition Date has available the medical evidence described in Sections 5.7(a)(1)(A) and 5.7(a)(1)(B), or if the holder has filed such medical evidence with another asbestos-related personal injury settlement trust that requires such evidence, the holder shall provide such medical evidence to the PI Trust notwithstanding the exceptions in Sections 5.7(a)(1)(A) and 5.7(a)(1)(B). 5.7(a)(2) Credibility of Medical Evidence. Before making any payment to a claimant, the PI Trust must have reasonable confidence that the medical evidence provided in support of the claim is credible and consistent with recognized medical standards. The PI Trust may require the submission of X-rays, CT scans, detailed results of pulmonary function tests, laboratory tests, tissue samples, results of medical examination or reviews of other medical evidence, and may require that medical evidence submitted comply with recognized medical standards regarding equipment, testing methods and procedure to assure that such evidence is reliable. Medical evidence (i) that is of a kind shown to have been received in evidence by a state or federal judge at trial, (ii) that is consistent with evidence submitted to OC to settle for payment similar disease cases prior to OC 's bankruptcy, or (iii) a diagnosis by a physician shown to have previously qualified as a medical expert with respect to the asbestos-related disease in question before a state or federal judge, is presumptively reliable, although the PI Trust may seek to rebut the presumption. In addition, claimants who otherwise meet the requirements of this TDP for payment of a PI Trust Claim shall be paid irrespective of the results in any litigation at anytime between the claimant and any other defendant in the tort system. However, any relevant evidence submitted in a proceeding in the tort system involving another defendant, other than any findings of fact, a verdict, or a judgment, may be introduced by either the claimant or the PI Trust in any Individual Review proceeding conducted pursuant to 5.3(b) or any Extraordinary Claim proceeding conducted pursuant to 5.4(a). 5.7(b) Exposure Evidence 5.7(b)(1) In General. As set forth in Section 5.3(a)(3) above, to qualify for any Disease Level, the claimant must demonstrate a minimum exposure to an asbestos-containing product manufactured or distributed by OC or Fibreboard. Claims based on conspiracy theories that involve no exposure to an asbestos-containing product produced by OC or Fibreboard are not compensable under this TDP. To meet the presumptive exposure requirements of Expedited Review set forth in Section 5.3(a)(3) above, the claimant must show (i) for all Disease Levels, OC or Fibreboard Exposure as defined in Section 5.7(b)(3) below prior to December 31, 1982; (ii) for Asbestos/Pleural Disease Level II, six months OC or Fibreboard Exposure prior to December 31, 1982, plus five years cumulative occupational asbestos exposure; and (iii) for Asbestosis/Pleural Disease (Disease Level III), Severe Asbestosis (Disease Level IV), Other Cancer (Disease Level V) or Lung Cancer 1 (Disease Level VII), the claimant must show six months OC or Fibreboard Exposure prior to December 31, 1982, plus Significant Occupational Exposure to asbestos as defined below. If the claimant cannot meet the relevant presumptive exposure requirements for a Disease Level eligible for Expedited Review, the claimant may seek Individual Review pursuant to Section 5.3(b) above of his or her exposure to an asbestos-containing product for which by OC or Fibreboard has legal responsibility. 5.7(b)(2) Significant Occupational Exposure. "Significant Occupational Exposure" means employment for a cumulative period of at least five years, with a minimum of two years prior to December 31, 1982 in an industry and an occupation in which the claimant (a) handled raw asbestos fibers on a regular basis; (b) fabricated asbestos-containing products so that the claimant in the fabrication process was exposed on a regular basis to raw asbestos fibers; (c) altered, repaired or otherwise worked with an asbestos-containing product such that the claimant was exposed on a regular basis to asbestos fibers; or (d) was employed in an industry and occupation such that the claimant worked on a regular basis in close proximity to workers engaged in the activities described in (a), (b) and/or (c). 5.7(b)(3) OC or Fibreboard Exposure. All PI Trust claimants must demonstrate meaningful and credible exposure, which occurred prior to December 31, 1982, to asbestos or asbestos-containing products supplied, specified, manufactured, installed, maintained , or repaired by either OC or Fibreboard, and/or any entity, including an OC or Fibreboard contracting unit, for which OC or Fibreboard has legal liability. That meaningful and credible exposure evidence may be established by an affidavit of the claimant, by an affidavit of a co-worker or the affidavit of a family member in the case of a deceased claimant (providing the PI Trust finds such evidence reasonably reliable), by invoices, employment, construction or similar records, or by other credible evidence. The specific exposure information required by the PI Trust to process a claim under either Expedited or Individual Review is set forth on the proof of claim form to be used by the PI Trust, which is attached as Attachment B hereto. The PI Trust can also require submission of other or additional evidence of exposure when it deems such to be necessary. 5.8 Claims Audit Program. The PI Trust with the consent of the TAC and the Future Claimants' Representative may develop methods for auditing the reliability of medical evidence, including additional reading of X-rays, CT scans and verification of pulmonary function tests, as well as the reliability of evidence of exposure to asbestos, including exposure to asbestos-containing products manufactured or distributed by OC or Fibreboard prior to December 31, 1982. In the event that the PI Trust reasonably determines that any individual or entity has engaged in a pattern or practice of providing unreliable medical evidence to the Trust, it may decline to accept additional evidence from such provider in the future. Further, in the event that an audit reveals that fraudulent information has been provided to the PI Trust, the PI Trust may penalize any claimant or claimant's attorney by disallowing the PI Trust Claim and/or by other means including, but not limited to, requiring the source of the fraudulent information to pay the costs associated with the audit and any future audit or audits, reordering the priority of payment of all affected claimants' PI Trust Claims, raising the level of scrutiny of additional information submitted from the same source or sources, refusing to accept additional evidence from the same source or sources, seeking the prosecution of the claimant or claimant's attorney for presenting a fraudulent claim in violation of 18 U.S.C. ss.152, and seeking sanctions from the Bankruptcy Court. 5.9 Second Disease (Malignancy) Claims. The holder of a PI Trust Claim involving a non-malignant asbestos-related disease (Disease Levels I through IV) may file a new PI Trust Claim against the PI Trust for a malignant disease (Disease Levels V - VIII) that is subsequently diagnosed. Any additional payments to which such claimant may be entitled with respect to such malignant asbestos-related disease shall not be reduced by the amount paid for the non-malignant asbestos-related disease, provided that the malignant disease had not been diagnosed at the time the claimant was paid with respect to his or her original claim involving the non-malignant disease. 5.10 Arbitration. 5.10(a) Establishment of ADR Procedures. The PI Trust, with the consent of the TAC and the Future Claimants' Representative, shall institute binding and non-binding arbitration procedures in accordance with the ADR Procedures included in Attachment A hereto for resolving disputes concerning whether a Pre-Petition settlement agreement with OC or Fibreboard is binding and judicially enforceable in the absence of a Final Order of the Bankruptcy Court determining the issue, whether the PI Trust's outright rejection or denial of a claim was proper, or whether the claimant's medical condition or exposure history meets the requirements of this TDP for purposes of categorizing a claim involving Disease Levels I - VIII. Binding and non-binding arbitration shall also be available for resolving disputes over the liquidated value of a claim involving Disease Levels II - VIII. In all arbitrations, the arbitrator shall consider the same medical and exposure evidentiary requirements that are set forth in Section 5.7 above. In the case of an arbitration involving the liquidated value of a claim involving Disease Levels II - VIII, the arbitrator shall consider the same valuation factors that are set forth in Section 5.3(b)(2) above. With respect to all claims eligible for arbitration, the claimant, but not the PI Trust, may elect either non-binding or binding arbitration. The ADR Procedures set forth in Attachment A hereto may be modified by the PI Trust with the consent of the TAC and the Future Claimants' Representative. 5.10(b) Claims Eligible for Arbitration. In order to be eligible for arbitration, the claimant must first complete the Individual Review Process set forth in Section 5.3(b) above, as well as either the Pro-Bono Evaluation or the Mediation processes set forth in the ADR Procedures included in Attachment A, with respect to the disputed issue. Individual Review will be treated as completed for these purposes when the claim has been individually reviewed by the PI Trust, the PI Trust has made an offer on the claim, the claimant has rejected the liquidated value resulting from the Individual Review, and the claimant has notified the PI Trust of the rejection in writing. Individual Review will also be treated as completed if the PI Trust has rejected the claim. 5.10(c) Limitations on and Payment of Arbitration Awards. In the case of a non-Extraordinary Claim involving Disease Levels II - VIII, the arbitrator shall not return an award in excess of the Maximum Value for the appropriate Disease Level as set forth in Section 5.3(a)(4) above, and for an Extraordinary Claim involving one of those Disease Levels, the arbitrator shall not return an award greater than the Maximum Extraordinary Value for such a claim as set forth in Section 5.4(a) above. A claimant who submits to arbitration and who accepts the arbitral award will receive payments in the same manner as one who accepts the PI Trust's original valuation of the claim. 5.11 Litigation. Claimants who elect non-binding arbitration and then reject their arbitral awards retain the right to institute a lawsuit in the tort system against the PI Trust pursuant to Section 7.6 below. However, a claimant shall be eligible for payment of a judgment for monetary damages obtained in the tort system from the PI Trust's available cash only as provided in Section 7.7 below. SECTION VI Claims Materials ---------------- 6.1 Claims Materials. The PI Trust shall prepare suitable and efficient claims materials ("Claims Materials") for all PI Trust Claims, and shall provide such Claims Materials upon a written request for such materials to the PI Trust. The proof of claim form to be submitted to the PI Trust shall require the claimant to assert the highest Disease Level for which the claim qualifies at the time of filing, and shall include a certification by the claimant or his or her attorney sufficient to meet the requirements of Rule 11(b) of the Federal Rules of Civil Procedure. In developing its claim filing procedures, the PI Trust shall make every reasonable effort to provide claimants with the opportunity to utilize currently available technology at their discretion, including filing claims and supporting documentation over the internet and electronically by disk or CD-rom. A copy of the proof of claim forms to be used by the PI Trust for OC and Fibreboard Pre-Petition Liquidated Claims and unliquidated PI Trust Claims is included in Attachment B hereto. The proof of claim forms may be changed by the PI Trust with the consent of the TAC and the Future Claimants' Representative. 6.2 Content of Claims Materials. The Claims Materials shall include a copy of this TDP, such instructions as the Trustees shall approve, and a detailed proof of claim form. If feasible, the forms used by the PI Trust to obtain claims information shall be the same or substantially similar to those used by other asbestos claims resolution organizations. Instead of collecting some or all of the claims information from a claimant or the claimant's attorney, the PI Trust may also obtain such information from electronic data bases maintained by any other asbestos claims resolution organization. However, the PI Trust shall inform the claimant that it plans to obtain information as available from such other organizations and may do so unless the claimant objects in writing or provides such information directly to the PI Trust. If requested by the claimant, the PI Trust shall accept information provided electronically. The claimant may, but will not be required to, provide the PI Trust with evidence of recovery from other asbestos defendants and claims resolution organizations. 6.3 Withdrawal or Deferral of Claims. A claimant can withdraw a PI Trust Claim at any time upon written notice to the PI Trust and file another claim subsequently without affecting the status of the claim for statute of limitations purposes, but any such claim filed after withdrawal shall be given a place in the FIFO Processing Queue based the date of such subsequent filing. A claimant can also request that the processing of his or her PI Trust Claim by the PI Trust be deferred for a period not to exceed three (3) years without affecting the status of the claim for statute of limitation purposes, in which case the claimant shall also retain his or her original place in the FIFO Processing Queue. Except for PI Trust Claims held by representatives of deceased or incompetent claimants for which court or probate approval of the PI Trust's offer is required, or a PI Trust Claim for which deferral status has been granted, a claim will be deemed to have been withdrawn if the claimant neither accepts, rejects, nor initiates arbitration within six months of the PI Trust's written offer of payment or rejection of the claim. Upon written request and good cause, the PI Trust may extend either the deferral or withdrawal period for an additional six months. 6.4 Filing Requirements and Fees. The Trustees shall have the discretion to determine, with the consent of the TAC and the Futures Representative, (a) whether a claimant must have previously filed the PI Trust Claim in the tort system to be eligible to file the claim with the PI Trust and (b) whether a filing fee should be required for any PI Trust claims. SECTION VII General Guidelines for Liquidating and Paying Claims ---------------------------------------------------- 7.1 Showing Required. To establish a valid PI Trust Claim, a claimant must meet the requirements set forth in this TDP. The PI Trust may require the submission of X-rays, CT scans, laboratory tests, medical examinations or reviews, other medical evidence, or any other evidence to support or verify the PI Trust Claim, and may further require that medical evidence submitted comply with recognized medical standards regarding equipment, testing methods, and procedures to assure that such evidence is reliable. 7.2 Costs Considered. Notwithstanding any provisions of this TDP to the contrary, the Trustees shall always give appropriate consideration to the cost of investigating and uncovering invalid PI Trust Claims so that the payment of valid PI Trust Claims is not further impaired by such processes with respect to issues related to the validity of the medical evidence supporting a PI Trust Claim. The Trustees shall also have the latitude to make judgments regarding the amount of transaction costs to be expended by the PI Trust so that valid PI Trust Claims are not unduly further impaired by the costs of additional investigation. Nothing herein shall prevent the Trustees, in appropriate circumstances, from contesting the validity of any claim against the PI Trust whatever the costs, or declining to accept medical evidence from sources that the Trustees have determined to be unreliable pursuant to the Claims Audit Program described in Section 5.7 above. 7.3 Discretion to Vary the Order and Amounts of Payments in Event of Limited Liquidity. Consistent with the provisions hereof and subject to the FIFO Processing and Liquidation Queues, the Maximum Annual Payment, the Maximum Available Payment and the Claims Payment Ratio requirements set forth above, the Trustees shall proceed as quickly as possible to liquidate valid PI Trust Claims, and shall make payments to holders of such claims in accordance with this TDP from the OC and/or Fibreboard Sub-Accounts promptly as monies become available and as claims are liquidated, while maintaining sufficient assets within each Sub-Account to pay future valid claims in substantially the same manner. Because the PI Trust's income over time remains uncertain, and decisions about payments must be based on estimates that cannot be done precisely, they may have to be revised in light of experiences over time, and there can be no guarantee of any specific level of payment for claims against either Sub-Account. However, the Trustees shall use their best efforts to treat similar claims in substantially the same manner, consistent with their duties as Trustees, the purposes of the PI Trust, the established allocation of monies to claims in Categories A and B, and the practical limitations imposed by the inability to predict the future with precision. In the event that either or both of the OC or the Fibreboard Sub-Accounts face temporary periods of limited liquidity, the Trustees may, with the consent of the TAC and the Future Claimants' Representative, suspend the normal order of payment from such Sub-Account, may temporarily limit or suspend payments from such Sub-Account altogether, and may offer a Reduced Payment Option for the Sub-Account as described in Section 2.5 above. 7.4 Punitive Damages. In determining the value of any liquidated or unliquidated PI Trust Claim, punitive or exemplary damages, i.e., damages other than compensatory damages, shall not be considered or allowed, notwithstanding their availability in the tort system. 7.5 Interest. 7.5(a) In General. Except for PI Trust Claims involving Other Asbestos Disease (Disease Level I - Cash Discount Payment) and subject to the limitations set forth below, interest shall be paid on all PI Trust Claims with respect to which the claimant has had to wait a year or more for payment, provided, however, that no claimant shall receive interest for a period in excess of seven (7) years. The applicable interest rate shall be six percent (6%) simple interest per annum for each of the first five (5) years after the Effective Date; thereafter, the PI Trust shall have the discretion to change the annual interest rate with the consent of the TAC and the Future Claimants' Representative. 7.5(b) Unliquidated PI Trust Claims. Interest shall be payable on the Scheduled Value of any unliquidated PI Trust Claim that meets the requirements of Disease Levels II - V, VII and VIII, whether the claim is liquidated under Expedited Review, Individual Review, or by arbitration. No interest shall be paid on any claim liquidated in the tort system pursuant to section 5.11 above and 7.6 below. Interest on an unliquidated PI Trust Claim that meets the requirements of Disease Level VI shall be based on the Average Value of such a claim. Interest on all such unliquidated claims shall be measured from the date of payment back to the earliest of the date that is one year after the date on which (a) the claim was filed against OC or Fibreboard prior to the Petition Date; (b) the claim was filed against another defendant in the tort system on or after the Petition Date but before the Effective Date; or (c) the claim was filed with the PI Trust after the Effective Date. 7.5(c) Interest on Liquidated Pre-Petition Claims. Interest shall also be payable on the liquidated value of all Pre-Petition Liquidated Claims described in Section 5.2(a) above. In the case of Pre-Petition Liquidated Claims liquidated by verdict or judgment, interest shall be measured from the date of payment back to the date that is one year after the date that the verdict or judgment was entered. In the case of Pre-Petition Liquidated Claims liquidated by a binding, judicially enforceable settlement, interest shall be measured from the date of payment back to the date that is one year after the Petition Date. 7.6 Suits in the Tort System. If the holder of a disputed claim disagrees with the PI Trust's determination regarding the Disease Level of the claim, the claimant's exposure history or the liquidated value of the claim, and if the holder has first submitted the claim to non-binding arbitration as provided in Section 5.10 above, the holder may file a lawsuit in the Claimant's Jurisdiction as defined in Section 5.3(b)(2) above. Any such lawsuit must be filed by the claimant in her or her own right and name and not as a member or representative of a class, and no such lawsuit may be consolidated with any other lawsuit. All defenses (including, with respect to the PI Trust, all defenses which could have been asserted by OC or Fibreboard) shall be available to both sides at trial; however, the PI Trust may waive any defense and/or concede any issue of fact or law. If the claimant was alive at the time the initial pre-petition complaint was filed or on the date the proof of claim was filed with the PI Trust, the case will be treated as a personal injury case with all personal injury damages to be considered even if the claimant has died during the pendency of the claim. 7.7 Payment of Judgments for Money Damages. If and when an OC or Fibreboard claimant obtains a judgment in the tort system, the claim shall be placed in the relevant FIFO Payment Queue based on the date on which the judgment became final. Thereafter, the claimant shall receive from the OC or Fibreboard Sub-Account an initial payment (subject to the applicable Payment Percentage, the Maximum Available Payment, and the Claims Payment Ratio provisions set forth above) of an amount equal to one-hundred percent (100%) of the greater of (i) the PI Trust's last offer to the claimant or (ii) the award that the claimant declined in non-binding arbitration. The claimant shall receive the balance of the judgment, if any, in five equal installments in years six (6) through ten (10) following the year of the initial payment (also subject to the applicable Payment Percentage, the Maximum Available Payment and the Claims Payment Ratio provisions set forth above). In the case of non-Extraordinary claims involving Disease Levels II - VIII, the total amounts paid with respect to such claims shall not exceed the Maximum Values for such Disease Levels set forth in Section 5.3(b)(4). In the case of Extraordinary Claims, the total amounts paid with respect to such claims shall not exceed the Maximum Value for such claims set forth in Section 5.4(a) above. Under no circumstances shall interest be paid pursuant to Section 7.5 or under any statute on any judgments obtained in the tort system pursuant to Sections 5.11 and 7.6 above. 7.8 Releases. The Trustees shall have the discretion to determine the form and substance of the releases to be provided to the PI Trust in order to maximize recovery for claimants against other tortfeasors without increasing the risk or amount of claims for indemnification or contribution from the PI Trust. As a condition to making any payment to a claimant, the PI Trust shall obtain a general, partial, or limited release as appropriate in accordance with the applicable state or other law. If allowed by state law, the endorsing of a check or draft for payment by or on behalf of a claimant shall constitute such a release. 7.9 Third-Party Services. Nothing in this TDP shall preclude the PI Trust from contracting with another asbestos claims resolution organization to provide services to the PI Trust so long as decisions about the categorization and liquidated value of PI Trust Claims are based on the relevant provisions of this TDP, including the Disease Levels, Scheduled Values, Average Values, Maximum Values, and Medical/Exposure Criteria set forth above. 7.10 PI Trust Disclosure of Information. Periodically, but not less often than once a year, the PI Trust shall make available to claimants and other interested parties, the number of claims by disease levels that have been resolved both by the Individual Review Process and by arbitration as well as by litigation in the tort system, indicating the amounts of the awards and the averages of the awards by jurisdiction. SECTION VIII Miscellaneous ------------- 8.1 Amendments. Except as otherwise provided herein, the Trustees may amend, modify, delete, or add to any provisions of this TDP (including, without limitation, amendments to conform this TDP to advances in scientific or medical knowledge or other changes in circumstances), provided they first obtain the consent of the TAC and the Future Claimants' Representative pursuant to the Consent Process set forth in Sections 5.7(b) and 6.6(b) of the PI Trust Agreement, except that the right to amend the Claims Payment Ratio is governed by the restrictions in Section 2.5 above, and the right to adjust the Payment Percentage is governed by Section 4.2 above. 8.2 Severability. Should any provision contained in this TDP be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any and all other provisions of this TDP. Should any provision contained in this TDP be determined to be inconsistent with or contrary to OC's or Fibreboard's obligations to any insurance company providing insurance coverage to OC and/or Fibreboard in respect of claims for personal injury based on exposure to asbestos-containing products manufactured or produced by OC or Fibreboard, the PI Trust with the consent of the TAC and the Future Claimants' Representative may amend this TDP and/or the PI Trust Agreement to make the provision of either or both documents consistent with the duties and obligations of OC or Fibreboard to said insurance company. 8.3 Governing Law. Except for purposes of determining the liquidated value of any PI Trust Claim, administration of this TDP shall be governed by, and construed in accordance with, the laws of the State of Delaware. The law governing the liquidation of PI Trust Claims in the case of Individual Review, arbitration or litigation in the tort system shall be the law of the Claimant's Jurisdiction as described in Section 5.3(b)(2) above. ATTACHMENT A OWENS CORNING/FIBREBOARD ASBESTOS PERSONAL INJURY TRUST ALTERNATIVE DISPUTE RESOLUTION PROCEDURES OWENS CORNING/FIBREBOARD PI TRUST ALTERNATIVE DISPUTE RESOLUTION PROCEDURES Pursuant to Section 5.10 of the Owens Corning/Fibreboard PI Trust Distribution Procedures (the "TDP"), the Owens Corning/Fibreboard Asbestos Personal Injury Trust ("PI Trust") hereby establishes the following alternative dispute resolution ("ADR") procedures. All capitalized terms herein shall be as defined and/or referenced within the TDP. I. OVERVIEW The PI Trust shall appoint a Private Adjudication Center, at the cost of the PI Trust, to administer the ADR proceedings. If the claimant chooses not to submit supplemental information or rejects the PI Trust's final claim evaluation based upon its analysis of such supplemental information, then the claimant may request ADR. To initiate these procedures, the claimant must make a written request to the PI Trust. Within twenty (20) days of a claimant's request for ADR, the PI Trust will send the claimant an ADR packet containing the documents necessary to pursue the ADR process. The ADR procedures shall not be construed as imparting to any claimant any substantive or procedural rights beyond those conferred by the TDP. The ADR process available to the claimant includes both non-binding and binding elements. In addition, there are mandatory as well as voluntary options that can/will be utilized by the claimant and the PI Trust in proceeding toward settlement. The ADR procedures must be pursued by claimants on an individual basis. Claims of different claimants cannot be grouped together even if the claimants are represented by the same counsel, unless the PI Trust, in its sole discretion, decides it would be expeditious to conduct ADR proceedings with respect to more than one claim involving differently exposed claimants with those claimants' representative. In such a case, however, the arbitrator, mediator or other neutral must individually value each such claim using the valuation factors set forth in Section 5.3(b)(2) of the TDP, and the claimants' positions in the PI Trust's FIFO Processing and Payment Queues must be separately maintained.. The requisite steps in the process are as follows, in order: Mandatory ADR Proceedings (Two Stages) Stage One (Claimant Must Select One): 1. Pro Bono Evaluation 2. Mediation Stage Two: Arbitration (Binding or Non-Binding) Initiation of ADR Within twenty (20) days of a claimant's request for ADR, the PI Trust will send the claimant an ADR packet containing a copy of these procedures and the following: 1. A Summary Outline of the ADR procedures with the time limits identified; 2. Form Affidavit of Completeness; 3. Election Form for Pro Bono Evaluation; 4. Request for Mediation Form; 5. Election Form and Agreement to submit to Binding Arbitration; and 6. Election Form and Agreement to submit to Non-binding Arbitration. A claimant who wishes to proceed through the ADR process must engage in one of the two ADR options (pro bono evaluation or mediation) before any form of arbitration. Only after either party rejects a non-binding arbitration award, may a claimant proceed to then commence a lawsuit in the tort system. It is the claimant's responsibility to comply with the ADR time deadlines. Although the deadlines may be extended by agreement or for cause shown, failure to comply with a deadline without obtaining an extension may result in withdrawal of the claim. Promptly after a claimant fails to comply with a specified deadline without obtaining an extension, the PI Trust shall send the claimant written notice of the failure to comply. If the claimant does not take any action on the claim, then thirty (30) days thereafter the claim will be deemed withdrawn under Section 6.4 of the TDP. If the claimant requests arbitration, either binding or non-binding, then the PI Trust shall execute the appropriate election form and agreement. If both parties agree to binding arbitration, then the claimant and the PI Trust waive their respective rights to seek a jury trial as set forth in the TDP. If either party rejects a non-binding arbitration award, and the claimant has otherwise complied with the requirements of these ADR/Arbitration procedures and the Plan, then the claimant may commence a lawsuit against the PI Trust in an appropriate jurisdiction. II. ADR PROCEEDINGS SUMMARY A. Showing Required As set forth in the TDP, in order to establish a valid Asbestos Personal Injury Claim, a claimant must among other things make a demonstration of exposure to OC and/or Fibreboard asbestos-containing products. B. Pro Bono Evaluation This ADR alternative consists of an evaluation of the claim by an evaluator selected from a pro bono panel. The panel shall be comprised of asbestos litigation attorneys as mutually agreed upon between the PI Trust Advisory Committee (the "TAC") and the PI Trustees. The TAC will be provided, on a quarterly basis, with a list of the pro bono panelists. Each evaluation will have a pro bono evaluator randomly selected by the Private Adjudication Center from the list of pro bono panelists. Within fifteen (15) days of the claimant's request for the pro bono evaluation, the individual pro bono evaluator shall be randomly chosen from the approved panel. A pro bono evaluation will be done by document submission. The identity of the pro bono evaluator will not be disclosed to the claimant and the claimant's attorney. The PI Trust encourages identification of and not anonymity as to the alleged injured party so that medical records can be transmitted in their original form. The Private Adjudication Center will communicate to the parties the pro bono evaluator's written evaluation. The parties will communicate their respective rejection or acceptance of settlement upon the terms of the written evaluation. If either or both parties reject settlement upon those terms, then the claimant may submit an Election Form and Agreement for Binding or Non-binding Arbitration. C. Mediation The claimant may request telephone mediation as an ADR alternative. This process will require detailed written submissions to familiarize the mediator with the respective positions. The PI Trust shall establish and maintain a list of qualified regional mediators compensated by the PI Trust. The Private Adjudication Center shall select a qualified mediator from the list based upon location of claimant within fifteen (15) days after receipt of the Request for Mediation Form signed by the claimant and the PI Trust. Claims shall be handled by each mediator in the order received by him or her, to the extent practicable. Any party may be represented by legal counsel. The mediator shall review the claim and the positions of the parties, such information as the parties may wish to submit as to a fair and equitable settlement, and all documents and medical reports relevant to the claim as submitted by the parties. At least five (5) days prior to the mediation conference, claimant and the PI Trust shall each submit to the mediator a detailed written submission consisting of a confidential statement outlining the claimant's medical condition, exposure to OC and/or Fibreboard products and each party's detailed position on overall claim value. The mediator shall confer with the parties and/or their legal representatives, individually and jointly. Such conference shall be conducted by telephone unless both parties agree otherwise. A representative of the PI Trust with settlement authority must participate in the conference. The mediator may request, but not require, that the claimant personally participate in the conference. Such conference shall be in the nature of a settlement conference. The mediator shall work with both sides toward reaching an acceptable, reasonable settlement. The mediator does not have the authority to impose a settlement on the parties. Ten (10) days after the conclusion of the mediation, if the parties have not settled the matter, the claimant may submit to the PI Trust an Election Form and Agreement for Binding or Non-binding Arbitration. D. Binding and Non-binding Arbitration Procedures Upon completion of either pro bono evaluation or mediation, the claimant may request non-binding and/or binding arbitration. Binding arbitration will be conducted in the "final offer" format also known as "baseball style" arbitration. If the claim is arbitrated in either the binding or non-binding format, then the arbitrator shall return an award no greater than the Maximum Value for the category in which the claim properly falls in the Tables set forth in the TDP, unless the Extraordinary Claims Review Panel has previously determined that the claim should receive extraordinary claim treatment. If the claimant requests arbitration, either binding or non-binding, then the PI Trust shall execute the appropriate Election Form and Agreement. The PI Trust may not decline the claimant's election of either binding or non-binding arbitration, but reserves all rights to reject any award in a non-binding arbitration proceeding. If the parties agree to engage in binding arbitration, then the claimant and the PI Trust waive their respective rights to seek a jury trial as set forth in the TDP. III. RULES GOVERNING PRO BONO EVALUATION AND MEDIATION Within ninety (90) days of a claimant's receipt of the ADR packet from the PI Trust, the claimant must elect one of the two ADR procedures and return the appropriate form to the PI Trust along with an executed Affidavit of Completeness. A. Rules Governing Pro Bono Evaluation 1. Election and Time Limits a. If the claimant chooses pro bono evaluation, then within ninety (90) days of claimant's receipt of the ADR packet, the claimant must send the PI Trust the Election Form for Pro Bono Evaluation. (See Attachment A). The claimant or his/her attorney shall personally sign the Election Form for Pro Bono Evaluation. b. The claimant must also sign an Affidavit of Completeness (See Attachment B) and return it to the PI Trust with a copy to the Private Adjudication Center within ninety (90) days of receipt of the ADR packet. The claim will not proceed until the PI Trust has received a completed election form and Affidavit of Completeness from the claimant. The Affidavit of Completeness shall verify that all information to be considered in the ADR process has been provided to the PI Trust while the claim was under review by the PI Trust. c. After receiving the signed election form and Affidavit of Completeness, the PI Trust shall review and sign the election form within five (5) days of receipt. d. Within fifteen (15) days from the date the PI Trust notifies the claimant's counsel of the PI Trust's consent to the election form, the PI Trust shall send a copy of the signed election form, the Affidavit of Completeness together with complete copies of all materials submitted to the PI Trust by the claimant and factual information in the PI Trust file, if any, gathered by the PI Trust from other sources, and a completed Affidavit of Accuracy to the claimant's counsel and the Private Adjudication Center who will forward the materials to the selected pro bono evaluator at the time the evaluator is selected. The PI Trust may not send the Private Adjudication Center any materials in the PI Trust file that have not previously been provided to the claimant. 2. Selection of the Pro Bono Evaluator Within fifteen (15) days of the date the Private Adjudication Center received the claimant's election agreement, the Private Adjudication Center shall randomly select the pro bono evaluator from the list of pro bono panelists and notify the parties that the evaluator has been designated without disclosing the identity of the evaluator. The pro bono evaluator shall be selected from a panel of asbestos litigation plaintiff attorneys who have volunteered to serve the PI Trust at the request of the TAC. Pro bono assignments will be made on a rotating basis. The identity of the pro bono evaluator shall not be disclosed to the claimant and the claimant's attorney. The injured party should not be anonymous so that medical records can be transmitted in their original form. 3. Submission of Written Arguments Fifteen (15) days after the PI Trust sends the complete file materials to the Private Adjudication Center, the claimant and the PI Trust shall simultaneously exchange and submit written arguments to the Private Adjudication Center. The Private Adjudication Center will immediately forward the written arguments to the pro bono evaluator. The written arguments shall comply with the following rules: a. The argument shall not exceed ten (10) double spaced typewritten pages. In order to preserve anonymity in a pro bono evaluation, the name of counsel should not be mentioned. The argument may not introduce factual matter not contained in the documents in the PI Trust's file. The evaluator shall disregard any argument that does not comply with this rule. b. When a party fails to submit the written argument within the fifteen (15) days, the party waives written argument and the pro bono evaluator shall disregard any argument received after that time. 4. Evaluation of Documents The pro bono evaluation is only a document review with complete anonymity preserved between claimant's counsel and the pro bono evaluator. The documents that the pro bono evaluator may consider shall be limited to the following: a. The documents in PI Trust's file forwarded to the pro bono evaluator. b. The claimant's Affidavit of Completeness and the PI Trust's Affidavit of Accuracy. c. The written arguments of the claimant and the PI Trust that comply with the rules for written arguments set forth above. d. Before the Private Adjudication Center forwards any documents to the pro bono evaluator it will redact all references to claimant's counsel. 5. Written Evaluation and Procedure for Acceptance/Rejection Within fifteen (15) days after the submission of written arguments, the pro bono evaluator shall submit a written evaluation of the claim to the Private Adjudication Center who will promptly mail it to the parties. Within fifteen (15) days after receipt of the pro bono evaluator's written evaluation, the claimant and the PI Trust will each communicate in writing to the Private Adjudication Center whether they will accept the amount of the pro bono evaluator's written evaluation to settle the claim. If both parties accept, then the Private Adjudication Center will immediately inform both parties that they have achieved a settlement and the PI Trust shall pay the claim pursuant to the TDP. If either or both parties reject the pro bono evaluator's written evaluation, then within five (5) days of receipt of both parties' written communication, the Private Adjudication Center shall send each party a notice of rejection of pro bono evaluator's written evaluation that will not indicate whether the opposing party has accepted or rejected the pro bono evaluator's written evaluation amount. 6. Arbitration May Proceed After Rejection of Pro Bono Evaluator's Written Evaluation Within sixty (60) days after receipt of the notice of rejection of pro bono evaluator's written evaluation, the claimant may request arbitration by returning to the PI Trust a signed Election Form and Agreement for either Binding or Non-binding Arbitration. B. Rules Governing Mediation 1. Election If the claimant chooses mediation, then the claimant shall submit to the PI Trust a signed Request for Mediation Form (Attachment C) along with an executed Affidavit of Completeness within ninety (90) days of claimant's receipt of the ADR packet. Within five (5) days of the PI Trust's receipt of the signed Request for Mediation Form, the PI Trust shall review and sign the form and forward a signed copy along with an executed Affidavit of Accuracy to the claimant and the Private Adjudication Center. 2. Selection of Mediator Within fifteen (15) days of the signed Request for Mediation Form, the Private Adjudication Center shall retain a mediator from the approved list of mediators. The Private Adjudication Center shall select the mediator based upon the region in which the claimant is located. The mediator shall be compensated by the PI Trust. The Private Adjudication Center shall schedule a mediation conference within sixty (60) days after receipt of the signed request for mediation form. The mediation will be conducted by telephone conference unless the parties agree otherwise. Scheduling of the conference shall be coordinated with the mediator and the conferences shall take place in the order received by the mediator, to the extent practicable. 3. Submission of Materials to Mediator At least five (5) days prior to the mediation conference, the claimant and the PI Trust shall each submit to the mediator a confidential statement outlining the claimant's medical condition, exposure to OC and/or Fibreboard products, and each party's position on overall claim value. The parties may also submit to the mediator documents and medical reports that they believe are relevant to the claim. The mediator shall review the claim and the positions of the parties and the other information that the parties submit prior to the mediation conference. The mediation briefs shall comply with the following rules: a. The confidential statement should not exceed ten (10) double spaced typewritten pages exclusive of attachments. b. The submission may not introduce factual matter not contained in the documents in the PI Trust's file as certified by the Affidavit of Completeness. 4. Mediation Conference Any party may be represented by legal counsel at the mediation conference. The mediator shall confer with the parties' legal representatives and, if the claimant is present and consents, with the claimant. A representative of the PI Trust with settlement authority must participate in the conference. The mediator may request, but not require, that the claimant personally participate in the conference. 5. Negotiations at the Mediation Conference The mediator may facilitate settlement in any manner the mediator believes is appropriate. The mediator will help the parties focus on their underlying interests, explore resolution alternatives and develop settlement options. The mediator will decide when to hold joint conferences, and when to confer separately with each party. The parties are expected to initiate and convey to the mediator proposals for settlement. Each party shall provide a rationale for any settlement terms proposed. Finally, if the parties fail to develop mutually acceptable settlement terms, before terminating the procedure, and only with the consent of the parties, (a) the mediator may submit to the parties a final settlement proposal; and (b) if the mediator believes he/she is qualified to do so, the mediator may give the parties an evaluation (which if all parties choose, and the mediator agrees, may be in writing) of the likely outcome of the case if it were tried to final judgment, subject to any limitations under the Plan, the TDP and ethical codes. 6. Confidentiality of Mediation The entire mediation process is confidential. Unless agreed among all the parties or required to do so by law, the parties and the mediator shall not disclose to any person who is not associated with participants in the process, including any judicial officer, any information regarding the process (including pre-process exchanges and agreements), contents (including written and oral information), settlement terms or outcome of the proceeding. Under this procedure, the entire process is a compromise negotiation subject to Federal Rule of Evidence 408 and all state counterparts, together with any applicable statute protecting the confidentiality of mediation. All offers, promises, conduct and statements, whether oral or written, made in the course of the proceeding by any of the parties, their agents, employees, experts and attorneys, and by the mediator are confidential. Such offers, promises, conduct and statements are privileged under any applicable mediation privilege and are inadmissible and not discoverable for any purpose, including impeachment, in litigation between the parties. However, any written or oral information or other materials submitted to the mediator by either the PI Trust or the claimant may be submitted by either party to the arbitrator in an arbitration that takes place under these ADR procedures. In addition, evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable solely as a result of its presentation or use during the mediation. The exchange of any tangible material shall be without prejudice to any claim that such material is privileged or protected as work-product within the meaning of Federal Rule of Civil Procedure 26 and all state and local counterparts. The mediator and any documents and information in the mediator's possession will not be subpoenaed in any such investigation, action or proceeding, and all parties will oppose any effort to have the mediator or documents subpoenaed. The mediator will promptly advise the parties of any attempt to compel him/her to divulge information received in mediation. 7. Submission of Written Offers After Mediation At the conclusion of the mediation, the mediator shall require the parties to exchange written settlement offers that shall remain open for ten (10) days. If after the expiration of that ten (10) day period neither party accepts the other's written offer or the parties do not otherwise settle the matter, then the claimant may request binding or non-binding arbitration by sending to the PI Trust the appropriate signed Election Form and Agreement for either Binding or Non-binding Arbitration. IV. RULES GOVERNING NON-BINDING AND BINDING Arbitration A. Election by the PI Trust The PI Trust shall review the Election Form and Agreement for Binding or Non-binding Arbitration (Attachments D and E) and within five (5) days of receipt the PI Trust shall sign the Agreement and shall immediately send a fully signed Arbitration Agreement to the Private Adjudication Center. B. Selection of the Arbitrator 1. As soon as reasonably possible after the receipt of the signed Arbitration Agreement, but no more than fifteen (15) days after the receipt of the signed arbitration agreement, the Private Adjudication Center shall select three potential arbitrators from a rotating list kept by the Private Adjudication Center. Assignments of arbitrators will be made on a rotating basis nationally, by the Private Adjudication Center. The Private Adjudication Center shall promptly notify the arbitrator and the parties of the potential arbitrators' selection. If a potential arbitrator is unable or unwilling to serve, then a replacement selection will be made prior to notifying the PI Trust and the claimant of the potential arbitrators selected. 2. Within seven (7) days of receipt of the list of potential arbitrators, the PI Trust may select, and identify to the Private Adjudication Center, one potential arbitrator to be stricken from the list. The Private Adjudication Center shall then promptly notify the claimant of the PI Trust's selection, whereupon, within seven (7) days of the receipt of such notification, the claimant may select, and identify to the Private Adjudication Center, a second potential arbitrator to be stricken from the list. The Private Adjudication Center shall then notify all parties which potential arbitrator remains and will conduct the arbitration. If either the PI Trust or the claimant, or both, fails to exercise the right to strike an arbitrator from the list of potential arbitrators, the Private Adjudication Center shall appoint from those potential arbitrators remaining the arbitrator next in rotation on the PI Trust's rotating list. 3. Any appointed arbitrator shall disclose to the Private Adjudication Center any circumstances likely to affect impartiality, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or representatives. Upon receipt of such information from the arbitrator or another source, the Private Adjudication Center shall communicate the information to the parties and, if the administrator deems necessary, to the arbitrator and others. Upon objection of a party to the continued service, the Private Adjudication Center shall determine whether the arbitrator should be disqualified and shall inform the parties of the decision, which shall be final. C. Extraordinary Claims and Those Reviewed by the Extraordinary Claims Review Panel In the event that the Extraordinary Claims Review Panel has deemed the claim worthy of extraordinary treatment, the Private Adjudication Center shall forward to the arbitrator the written decision of the Extraordinary Claims Review Panel, and the parties may submit a final request that exceeds the values ascribed to the type of injury in the TDP. In such circumstances, the arbitrator may issue an award in accordance with such a final offer/request. In the event that the Extraordinary Claims Review Panel declined to give extraordinary treatment to the claim, the arbitrator shall not be informed of the extraordinary claims review panel's decision, and the claimant must confine his/her award to the values ascribed to the type of injury in the TDP because the arbitrator may not award an amount in excess of the Maximum Value assigned to the appropriate category for the injury in the TDP. The PI Trust will not engage in non-binding or binding arbitration, and reserves the unilateral right to withdraw from a signed non-binding or binding arbitration agreement at any time, where the claimant's final offer and award demand exceeds the Maximum Value assigned to the type of injury in the TDP and the Extraordinary Claims Review Panel has declined to give extraordinary treatment to the claim. D. Final Offer or "Baseball Style" Binding Arbitration All binding arbitration shall be conducted in the "final offer" format also known as "baseball style" arbitration. In the course of submitting the arbitration materials, as explained in these rules, the parties shall submit their final offer of settlement which shall also serve as the party's demand for arbitration award. The arbitrator must choose from one of these two demands in determining the amount of the arbitration award. E. Submission of Pre-Hearing Statements Within twenty (20) days of the appointment of an arbitrator each party shall submit to the opposing party and to the arbitrator a written statement (not to exceed ten (10) double spaced pages) containing that party's positions and arguments. Each party may then submit a supplement to its written statement (not to exceed five (5) double-spaced pages) following the initial pre-hearing conference to respond to the opposing party's positions and arguments and addressing issues raised at the initial pre-hearing conference. Supplements must be sent to the opposing party and to the arbitrator within ten (10) days after the date of the pre-hearing conference. The Private Adjudication Center will provide the arbitrator with a complete schedule of categories of injuries and Scheduled and Maximum Values therefor in the TDP. F. Initial Pre-Hearing Conference, Scheduling Hearing Date, Optional Video Conference for Arbitration Hearing 1. Within fifteen (15) calendar days of the receipt of both party's briefs, the Private Adjudication Center shall contact the claimant, the arbitrator, and the PI Trust to schedule the initial pre-hearing conference. The pre-hearing conference shall be presided over by the arbitrator and held by telephone conference call. 2. During the initial pre-hearing conference, the arbitrator shall schedule the date and select the location of the arbitration hearing either at the location of the arbitrator or a location mutually agreeable by the parties. The arbitration hearing should be scheduled not less than forty-five (45) days, and not more than sixty (60) days, from the date of the initial pre-hearing conference. The Private Adjudication Center will mail a confirmation notice of this date to the claimant and the PI Trust. 3. At the election of the claimant, the arbitration hearing may be conducted by video conference. If the claimant so elects, then the claimant must state that election in writing prior to the initial pre-hearing conference. The Private Adjudication Center will make appropriate arrangements for the PI Trust and the arbitrator to participate by video conference. The PI Trust shall pay for its and the arbitrator's cost for use of video conference equipment and facilities. The claimant shall only be responsible for his/her costs (including participation by claimant's counsel). 4. During the initial pre-trial conference, the arbitrator shall seek to achieve agreement between the parties on: a. narrowing the issues (through methods including but not limited to stipulation of facts); b. whether the claimant will appear at the hearing (at the claimant's sole discretion); c. any legal issues; d. and any other matters that will expedite the arbitration proceedings. If appropriate or if the parties do not agree on these issues, then the arbitrator must issue orders governing the process. G. No Discovery With Limited Exceptions There shall be no discovery except as specifically provided below. The purpose of the arbitration is to resolve differences between the PI Trust and the claimant based only on the documents that have been previously submitted to the PI Trust by the claimant and any other documents relied upon by the PI Trust to make a settlement offer to the claimant or to disallow the claim. However, if the PI Trust commissions an independent medical examination or a third-party medical review upon which the PI Trust relies in evaluating the claimant's claim, then the claimant may depose the medical professional conducting the review or examination after having a reasonable opportunity to study any report or written opinion generated by the medical professional. H. No Record of Proceedings Unless Requested by Arbitrator There will be no record or transcript of the proceedings unless and except the arbitrator requests a transcript to assist him/her in reviewing the evidence or otherwise to aid in the decision making process. In the event an arbitrator requests a transcript prior to the arbitration, then the PI Trust shall arrange for a court reporter and shall pay all expenses associated with the preparation of the transcript. In no event, however, will the transcript be made available to the parties, nor shall any time required for preparation of the transcript affect the time for the arbitrator to render a decision. I. Postponement of Hearing The arbitrator for good cause may postpone any hearing upon the request of a party or upon the arbitrator's own initiative, and shall also grant such postponement when all of the parties agree. J. Duration of Hearings The arbitrator shall complete the hearing in one day except for good cause shown. The arbitrator shall set time limits on the respective presentations, and shall enforce those set limits. The parties shall request no more than three hours apiece for presentation of their cases. K. Procedure at Arbitration Hearing 1. Testimony Under Oath or Affirmation If the claimant or any other witness testifies, such testimony shall be under oath or affirmation administered by the arbitrator. 2. Conduct of Hearing At the opening of the arbitration hearing, the arbitrator shall make a written record of the time, place, and date of the hearing, and the presence of the parties and counsel. 3. Evidence a. Rules of Evidence: The arbitrator is not required to apply the rules of evidence used in judicial proceedings, provided, however that the arbitrator shall apply the attorney-client privilege and the work product privilege. The arbitrator shall determine the applicability of any privilege or immunity and the admissibility, relevance, materiality and weight of the evidence offered. b. Admission of Evidence: The evidence that the arbitrator may consider shall be limited to the following: (i) The documents supplied to the PI Trust prior to the execution of the Affidavit of Completeness; (ii) Non-binding or binding arbitration election agreement; (iii) Testimony of the claimant. The claimant may offer evidence regarding the nature and extent of compensable damages, including physical injuries, and/or the market share of OC and/or Fibreboard products, if there is a claim of greater than average market share. The PI Trust may cross-examine on these issues. At the claimant's option, a claimant's deposition, including videotaped testimony, shall be admissible into evidence in lieu of live testimony. (iv) Any additional deposition testimony taken by the PI Trust or the claimant, and provided to both sides, prior to the initiation of ADR. (v) Any evidence submitted in mediation. (vi) Closing arguments of the claimant and the PI Trust. The arguments shall be limited to the evidence contained and the issues raised in the documents or testimony referred to above and shall be limited to 1/2 hour for each party. The arbitrator shall disregard any effort to introduce further evidence or issues in argument. L. Arbitration in the Absence of a Party or Representative The claimant may choose whether or not to attend the arbitration in person in his/her sole discretion. The arbitration may proceed in the absence of any party or representative who, after due notice, chooses not to be present, fails to be present or falls to obtain a postponement if he/she desires to be present but cannot. An award shall not be made against a party solely for the failure to appear. The arbitrator shall require the party who is present to submit such evidence as the arbitrator may require for the making of an award. M. Conclusion of Hearing and Submission of Post-Hearing Briefs When the parties state that they have no further evidence or witnesses to offer, and after the parties have made their closing arguments, if any, the arbitrator shall declare the hearing closed. Post-hearing briefs will be permitted only upon order of the arbitrator and shall be served upon the arbitrator no later than ten (10) ten days after the hearing is closed. Such briefs shall be no longer than five (5) double spaced pages. The time limit within which the arbitrator is required to make the award shall commence to run upon the closing of the hearing or the submission of post-hearing briefs, whichever is later. N. Option to Waive Oral Hearings The parties may request a waiver of oral hearings. Oral hearings will only be waived if all parties consent. O. Arbitration Decision 1. The arbitrator shall issue a decision no later than fifteen (15) calendar days after the date of the close of the hearing or submission of post-hearing briefs, whichever is later. 2. The decision shall state the amount of the award, if any, only. The decision shall not state reasons for the award. An arbitrator shall not be permitted to award punitive, exemplary, trebled or other like damages or attorneys' fees, and prejudgment and post-judgment interest and costs shall not be sought or allowed. The award shall dispose of all monetary claims presented to the arbitrator and shall determine fully the only issue to be decided pursuant to the arbitration agreement: the amount, if any, at which the claim value should be fixed. To assist the arbitrator, the Private Adjudication Center will provide the arbitrator with a schedule setting forth the Disease Levels and the Scheduled, Average and Maximum Values associated with each category. Unless the Extraordinary Claims Review Panel has determined that a claim is entitled to extraordinary treatment during the claims review process, the arbitrator's award shall not exceed the Maximum Value amount for the appropriate Category in the TDP. P. Payment of Award Pursuant to the terms of the arbitration agreement, the PI Trust will promptly send to the claimant the appropriate IRC or DCP Release. The PI Trust will then pay the claim based upon the binding or, if accepted by both parties, the non-binding award, in accordance with the TDP in effect at that time. Q. Rejection of Non-binding Award 1. A party in a non-binding arbitration proceeding that wishes to reject the award must notify the other party within thirty (30) days from the date a non-binding award is issued. If no rejection is received or sent by the PI Trust, then the decision will stand and the award will be deemed accepted by both parties and the PI Trust will promptly send to the claimant the appropriate IRC or DCP Release. The PI Trust will then pay the claim in accordance with the Claim Resolution Procedures in effect at that time. 2. Procedure for Rejected Award a. Rejection by Claimant If claimant has sent the PI Trust timely notification of rejection of a non-binding award and wishes to pursue the claim, then the claimant must notify the PI Trust through correspondence postmarked no later than sixty (60) days from the date of the non-binding award. If notification is received within the sixty (60) day deadline and claimant wishes to pursue the claim, then the PI Trust will within fifteen (15) days of receipt of this notification send the claimant an authorization to commence litigation. b. Rejection by PI Trust If the PI Trust rejects the non-binding award, then claimant may elect binding arbitration or request that the PI Trust forward the authorization to commence litigation. V. GENERAL ADR PROCEDURES GOVERNING PRO BONO EVALUATION, MEDIATION, NON-BINDING ARBITRATION, AND BINDING ARBITRATION A. ADR Submissions The claimant's submissions (with the exception of the binding arbitration's written argument) will be reviewed by the ADR administrator before they are submitted to the pro bono evaluator, mediator or arbitrator. If they contain materials not previously submitted in support of the claim, then the PI Trust claims department will review the additional information and determine the effect, if any, it would have on the PI Trust's evaluation of the claim. In appropriate situations, a new offer may be made to the claimant. If an attorney or other agent represents the claimant, both the attorney and the claimant must also sign the Election and Agreement for Binding Arbitration. The attorney or agent may not sign in place of, or for, the claimant unless the claimant is incapacitated, incompetent or deceased and the attorney or agent has been designated legally to act on the claimant's behalf. Documentation of this legal designation will be required. B. No Grouping or Bundling of Claims There shall be no grouping or bundling of claims by separate claimants at any stage of the ADR or arbitrations even if the claims are related and/or the claimants have the same counsel. Each claimant must proceed individually through the ADR and arbitration processes with all claims that claimant may have or represent. This provision is intended to separate claims of different exposed persons and has no effect upon multiple claims brought by a claimant's representative, such as heirs of a deceased worker. However, the PI Trust, in its sole discretion, may decide that it would be expeditious to allow the conduct of arbitration proceeding with respect to more than one claim of different exposed persons, provided that the arbitrator individually values each such claim in accordance with the valuation factors set forth in Section 5.3(b)(2) of the TDP, and the respective claimants' separate positions in the PI Trust's FIFO Processing and Payment Queues are maintained. C. No Ex Parte Communication There shall be no ex parte communication between the arbitrator or pro bono evaluator and any counsel or party in any matter. All correspondence between the arbitrator or pro bono evaluator and the parties will be facilitated by the Private Adjudication Center. D. Claims and Defenses All available claims and defenses which exist under the law subject to the claimant's election under the TDP shall be available to both sides. E. Costs of ADR 1. ADR expenses The PI Trust will pay the arbitrator's fee for non-binding or binding arbitration up to two thousand dollars ($2000.00) per claim depending on the length of the hearing. The pro bono evaluator is a volunteer and thus no fee will be incurred. The PI Trust will assume costs of meeting and hearing facilities for arbitration. Claimants will pay their costs and attorney fees, including any expenses incurred should the claimant testify. 2. Filing Fee No filing fee is required of the claimant for any ADR selection, unless the PI Trust with the consent of the TAC and the Future Claimants' Representative decide that it would be in the best interests of the PI Trust and its beneficiaries to adopt such a fee. F. Waiver of Objection to Rules Infraction Either party who continues with the pro bono evaluation, mediation, non-binding arbitration, or binding arbitration proceeding after knowing that any provision or requirement of the applicable rules has not been complied with, and who fails to state a timely objection in writing to the arbitrator, mediator or pro bono evaluator, shall be deemed to have waived the right to object. A timely objection by a claimant must be stated in writing and mailed to the PI Trust with instructions to forward the objection to the Private Adjudication Center and to the arbitrator, mediator or pro bono evaluator. A timely objection by the PI Trust will be mailed to the claimant and to the Private Adjudication Center with instructions to forward to the arbitrator, mediator or pro bono evaluator. G. Serving of Notices and Other Papers Each party to the ADR and arbitration agreements shall be deemed to have consented that any papers, notices, or processes necessary or proper for the initiation or continuation of ADR and Arbitration proceedings under these rules may be served upon such party as follows: 1. By regular U.S. mail or overnight courier addressed to such party or their attorneys at their last known address; 2. By facsimile, transmission, if a copy of the transmitted papers is mailed addressed to the party or their attorney at their last known address within twenty-four (24) hours of the facsimile transmission; or, 3. By personal service, within or without the state where the pro bono evaluation, mediation or arbitration is to be held, whether the party is within or without the United States of America. H. Time Limits Triggered Upon Receipt 1. Documents sent by U.S. mail under these rules shall be deemed received three (3) business days after the date of postmark. Documents sent via overnight mail shall be deemed received on the next business day after mailing. 2. Documents sent via facsimile transmission shall be deemed received on the business day that the transmission is received. I. Exclusion of Liability Neither the Private Adjudication Center nor the mediator, nor the arbitrator nor pro bono evaluator shall be liable to any party for any act or omission in connection with any evaluation conducted under these rules. J. Relationship of Rules to Election Form for Pro Bono Evaluation, Request for Mediation, Non-binding Arbitration Agreement or Binding Arbitration Agreement These Rules shall be deemed a part of, and incorporated by reference in, every duly executed ADR agreement or arbitration agreement and shall be binding on all parties. K. Arbitrator/Pro Bono Evaluator Immunity Arbitrators or pro bono evaluators who serve pursuant to these rules shall have the same immunity as judges for their official acts. L. Jurisdiction Any dispute under these rules shall be subject to the jurisdiction of the United States Bankruptcy Court for the District of Delaware. M. Statement of Confidentiality 1. All ADR and arbitration proceedings and information relating to the proceeding will be confidential. Neither party shall disclose the information obtained during the proceedings, nor the valuation placed on the case by an arbitrator or pro bono evaluator, to anyone or use such information or valuation in any further proceeding except as necessary to maintain the PI Trust's obligation to report to the Bankruptcy Court and to provide ongoing evaluation by the PI Trust and TAC. Except for documents prepared by a non-party which are introduced as evidence before an arbitrator or pro bono evaluator, any document prepared by another party, attorney or other participant in anticipation of the ADR is privileged and shall not be disclosed to any court or arbitrator/pro bono evaluator or construed for any purpose as an admission against interest. 2. All ADR and arbitration proceedings shall be deemed a settlement conference pursuant to Rule 408 of the Federal Rules of Evidence. Except by agreement of the parties, the parties will not introduce into evidence in any other proceedings the fact that there was an arbitration, the nature or amount of the award, and written submissions may not be used for purposes of showing accord and satisfaction or res judicata. In binding arbitration, the decision of the arbitrator may be admissible in the event the claimant improperly seeks to litigate the claim. The binding arbitration award shall be admissible in support of a motion to enjoin such litigation. No arbitrator or pro bono evaluator will ever be subpoenaed or otherwise required by any party or any third party, to testify or produce records, notes or work product in any future proceedings. N. Amendments Except as otherwise ruled by the Bankruptcy Court, these rules, as they may from time to time be amended by the PI Trustees, will be binding on all parties in the form in which they are in force on the date the claimant signs the election agreement. O. Time Limits The time limits included in these procedures are to be strictly enforced. Any time limit set forth herein may be extended by agreement of the parties or for cause shown to the neutral party presiding over the particular ADR or arbitration proceeding. Any request for extension, however, shall first be made to the opposing party and then if the parties cannot agree, shall be submitted to the Private Adjudication Center who will request a ruling from the pro bono evaluator, mediator, or arbitrator as the case may be. Although the deadlines may be extended by agreement or for cause shown, failure to comply with a deadline without obtaining an extension may result in withdrawal of the claim. Promptly after a claimant fails to comply with a specified deadline without obtaining an extension, the PI Trust shall send the claimant written notice of the failure to comply. If the claimant does not take any action on the claim, then thirty (30) days thereafter the claim will be deemed withdrawn under Section 7.13 of the TDP. OC/FIBREBOARD PI TRUST ELECTION FORM FOR PRO BONO EVALUATION I, ___________________________________ ("Claimant"), Claim No. _____________, hereby elect and agree to: Non-Binding document evaluation of my claim by an individual selected from a Panel of Pro Bono Evaluators who volunteered to serve at the request of the PI Trust Advisory Committee pursuant to Section 5.10 of the OC/Fibreboard TDP. Unless the box below is initialed, the undersigned waives anonymity of the claimant in the Pro Bono Evaluation of this claim. The PI Trust encourages leaving this box blank and waiving anonymity so that medical records may be transmitted in their original form. ____ | | | | |___| Dated: _____________________________, ______. ____________________________________ Claimant or Claimant's Attorney Accepted and Consented to: OC/FIBREBOARD PI TRUST By:_________________________________ ________________________________Title Dated:_______________________________ STATE OF ______________________ ) ) SS: COUNTY OF ____________________ ) AFFIDAVIT OF COMPLETENESS I, ______________________________________, as the person [or legal representative of the person] who has filed a claim against the OC/Fibreboard PI Trust, being duly sworn, depose and say: I have furnished all information which I wish to be considered in the valuation of claim number ______________________. I certify (or declare) under penalty of perjury, that the foregoing is true and correct. By____________________________________________ Claimant or Legal Representative of Claimant Date_________________________ Sworn to before me this _______ day of __________________________, _______. __________________________________________ OC/FIBREBOARD PI TRUST REQUEST FOR MEDIATION FORM I, ___________________________________ ("Claimant"), Claim No. _____________, hereby elect and agree to: Attempt in good faith to resolve the dispute with the PI Trust relating to my claim promptly by confidential Mediation under the terms set forth for Mediation procedure established by the PI Trust under Sections 5.10 of the OC/Fibreboard TDP. I have been provided with a copy of the rules relating to Mediation established by the PI Trust. I understand and agree to those rules in the course of the Mediation. Dated: __________________, ______. ____________________________________ Claimant or Claimant's Attorney Accepted and Consented to: OC/FIBREBOARD PI TRUST By:_________________________________ ________________________________Title Dated:_______________________________ OC/FIBREBOARD PI TRUST ELECTION FORM AND AGREEMENT FOR BINDING ARBITRATION I, ___________________________________ ("Claimant"), Claim No. _____________, hereby elect and agree to: Submit all disputes with the PI Trust relating to my claim to Binding Arbitration under the terms set forth for Binding Arbitration procedure established by the PI Trust under Section 5.10 of the OC/Fibreboard TDP. I have been provided with a copy of the rules relating to Binding Arbitration established by the PI Trust. I understand and agree to those rules in the course of the Binding Arbitration. I understand that as a result of this agreement if accepted by the PI Trust, I will waive my rights to litigate my claim in Court including the right to trial by jury and I will be bound by the arbitration award. Dated: _____________________________, _______. ____________________________________ Claimant ____________________________________ Claimant's Attorney Claimant and attorney must both sign Accepted and Consented to: By accepting this agreement the PI Trust waives its rights to litigate the claimant's claim in Court including the right to trial by jury and agrees to be bound by the arbitration award. OC/FIBREBOARD PI TRUST By:_________________________________ ________________________________Title Dated:_______________________________ OC/FIBREBOARD PI TRUST ELECTION FORM AND AGREEMENT FOR NON-BINDING ARBITRATION I, ___________________________________ ("Claimant"), Claim No. _____________, hereby elect and agree to: Submit all disputes with the PI Trust relating to my claim to Non-Binding Arbitration under the terms set forth for Non-Binding Arbitration procedure established by the PI Trust under Section 5.10 of the OC/Fibreboard TDP. I have been provided with a copy of the rules relating to Non-Binding Arbitration established by the PI Trust. I understand and agree to those rules in the course of the Non-Binding Arbitration. Dated: _____________________________, _______. ____________________________________ Claimant or Claimant's Attorney Accepted and Consented to: OC/FIBREBOARD PI TRUST By:_________________________________ ________________________________Title Dated:_______________________________ ATTACHMENT B OWENS CORNING/FIBREBOARD ASBESTOS PERSONAL INJURY SETTLEMENT TRUST PROOF OF CLAIM FORMS OC/FIBREBOARD PI TRUST PROOF OF CLAIM FORM UNLIQUIDATED PI TRUST CLAIMS - ------------------------------------------------------------------------------- Submit completed claims - ------------------------------------------------------------------------------- Instructions for the Claim Form Complete this claim form as thoroughly and accurately as possible. Please type or print neatly. Should there be insufficient space to list all relevant information, please attach additional sheets. In addition to filing the forms that follow, please ensure the following are enclosed, if applicable: - Death Certificate (if applicable) - Certificate of Official Capacity (if personal representative is filing form) - Medical records as requested in instructions - Proof of OC and/or Fibreboard product exposure as set out in the instructions - Copy of cover sheet of complaint (if applicable - see Part 8 below) - Copy of W-2 and first page of IRS Form 1040 (if applicable - see Part 9 below) Representation If counsel represents claimant, please print or type the following information: Attorney Name: ______________________________________________________ Paralegal or Contact Name: _____________________________________________ Name of Law Firm: ___________________________________________________ Firm Address: ________________________________________________________ ________________________________________________________ Attorney Phone: __________________________ Fax: ______________________ Contact Phone: ___________________________ Fax: ______________________ Attorney's or Law Firm's Tax ID Number: _________________________________ OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 1: Choice of Claim Process Please choose the applicable claim process (choose only one): |_| 1. Expedited review (not available for Disease Level VI) |_| 2. Individual Review |_| 3. Extraordinary Claim (must also undergo Individual Review) |_| 4. Cash Discount Payment ($400 for OC, $240 for Fibreboard) (available for Disease Level I - Other Asbestos Disease) OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 2: Injured Party Information - ------------------------------------------------------------------------------- Name: _____________________________ Social Security #: ______-______-______ Gender: Male ______ Female ______ Date of Birth: _____/_____/_____ - ------------------------------------------------------------------------------- I. Is injured party living? Yes _____ No _____ II. If injured party is living and not represented by counsel, please complete the following: Mailing address: _____________________________________________ _____________________________________________ Daytime Phone: ( ) ______-________ III. If injured party is deceased: (Death certificate must be enclosed) Date of death: _____/_____/_____ Was death asbestos related? Yes _____ No _____ IV. If injured party has personal representative other than, or in addition to his/her attorney, please indicate the following information for the representative (Certificate of Official Capacity must be enclosed) Name: ____________________________ Social Security#: _____/_____/____ Mailing Address: ___________________________________________________ ___________________________________________________ Daytime Phone: ( ) _____-_______ Relationship to injured party. I am party's _________________________ (spouse, child, other) OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 3: Diagnosed Asbestos-Related Injuries Place an X next to the highest level (most serious) asbestos-related Disease Level that has been diagnosed for the injured party and for which medical documentation is attached to this claim form. See instructions for listing of the specific medical criteria and records that must be enclosed for each Disease Level. (Check only the most serious.) - ------------------------------------------------------------------------------- |_| Level I. Other Asbestos Disease Date of Diagnosis ___/___/___ |_| Level II Asbestosis/Pleural Disease Date of Diagnosis ___/___/___ |_| Level III. Asbestosis/Pleural Disease Date of Diagnosis ___/___/___ |_| Level IV. Severe Asbestosis Date of Diagnosis ___/___/___ |_| Level V. Other Cancer: Colo-rectal Date of Diagnosis ___/___/___ Laryngeal Date of Diagnosis ___/___/___ Esophageal Date of Diagnosis ___/___/___ Pharyngeal Date of Diagnosis ___/___/___ Stomach Date of Diagnosis ___/___/___ |_| Level VI. Lung Cancer 2 Date of Diagnosis ___/___/___ |_| Level VII. Lung Cancer 1 Date of Diagnosis ___/___/___ |_| Level VIII. Malignant Mesothelioma Date of Diagnosis ___/___/___ - ------------------------------------------------------------------------------- The claims must meet the relevant medical criteria and be supported by appropriate medical documentation as delineated in the Trust Distribution Plan (TDP). The presumptive medical criteria for the eight Disease Levels set forth above are attached to this Claim Form. OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 4: Dependents and Beneficiaries List any other persons represented by claimant's counsel who may have rights associated with this claim. Be sure to include the injured party's spouse, any dependents who derive (or who did derive at the time of the injured person's death) at least one-half of their financial support from the injured party. Also list beneficiaries represented by claimant's counsel who are entitled to pursue an action for wrongful death under applicable state law. If more than four, please photocopy this page, and insert after current page. - ------------------------------------------------------------------------------- Name: _______________________________ Date of Birth: ____/____/____ Relationship: |_| Spouse Financially Dependent? Yes / No |_| Child --------- |_| Other: _____ (Circle One) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Name: _______________________________ Date of Birth: ____/____/____ Relationship: |_| Spouse Financially Dependent? Yes / No |_| Child -------- |_| Other: _____ (Circle One) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Name: _______________________________ Date of Birth: ____/____/____ Relationship: |_| Spouse Financially Dependent? Yes / No |_| Child -------- |_| Other: _____ (Circle One) Name: _______________________________ Date of Birth: ____/____/____ Relationship: |_| Spouse Financially Dependent? Yes / No |_| Child -------- |_| Other: _____ (Circle One) - ------------------------------------------------------------------------------- OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 5: OC and/or Fibreboard Exposure, Significant Occupational Exposure and/or 5-Year Cumulative Occupational Exposure Proof of OC and/or Fibreboard product exposure must be enclosed as required by TDP Section 5.7(b). (See instructions) Please photocopy this page and list separately each site, industry or occupation upon which claimant relies to establish: A. OC and/or Fibreboard Exposure; B. Significant and/or 5-Year Cumulative Occupational Exposure. A. OC and/or Fibreboard Exposure: 1. Name of Plant/Site of Exposure: _____________________________________ City: _______________ State ________________ 2. Month/Year Exposure Began: ____/____ Month/Year Exposure Ended: ____/____ 3. Is above job site on an OC and/or Fibreboard job site list? _____ Yes _____ No (If No, Affidavit of claimant, co-worker, family member in case of a deceased claimant if evidence reasonably reliable, invoices, employment, construction or similar records or other credible evidence required to establish OC and/or Fibreboard exposure pursuant to TDP Section 5.7(b)(3) must be enclosed). 4. Occupation at time of Exposure (e.g. Laborer, etc.) ___________________ 5. Industry in which exposure occurred: ____ (Industry codes listed below.) If code is 37 (other), specify the other industry: _________________________ Industry Codes 10. Asbestos mining 24. Petrochemical 11. Aerospace/aviation 25. Insulation 12. Asbestos abatement 27. Railroad 13. Automobile/mechanical friction 30. Shipyard-construction/repair 16. Chemical 31. Textile 17. Construction trades 32. Tire/rubber 18. Iron/steel 33. Utilities 19. Longshore 34. Asbestos products manufacturing 20. Maritime 36. Building occupant/bystander 21. Military 37. Other 23. Non-asbestos products manufacturing 6. Nature of Exposure: a. Worked directly on OC and/or Fibreboard products _______ b. Worked in proximity of OC and/or Fibreboard products _______ c. Worked in proximity of the performance of services by an OC and/or Fibreboard entity _______ d. Other description of job duties _______________________________ ___________________________________________________________________ B. SIGNIFICANT AND/OR 5-YEAR CUMULATIVE OCCUPATIONAL EXPOSURE: Does the OC and/or Fibreboard exposure described above satisfy the Significant Occupational Exposure and/or the 5-year cumulative occupational exposure requirements contained in TDP Section 5.7(b)? ________ Yes _________ No If Yes, there is no need to complete this section unless claimant wishes to submit such evidence for Individual Evaluation. If No, give the following information for each job site claimant is relying upon to establish the Significant Occupational Exposure or 5-year cumulative occupational exposure requirements in the TDP (Please photocopy and use separate page for each job site): 1. Job Site City/State Years of Exposure _________________________________________________________________ 2. Occupation at time of exposure: _______________________________________ 3. Industry _______ (Industry Codes listed above). If code is 37 (other), specific the other industry _____________________________________________ 4. Indicate circumstances of exposure: a. Claimant handled raw asbestos fibers on a regular basis _________; or b. Claimant fabricated asbestos-containing products such that the claimant in the fabrication process was exposed on a regular basis to raw asbestos fibers ________; or c. Claimant altered, repaired or otherwise worked with an asbestos-containing product such that the claimant was exposed on a regular basis to raw asbestos fibers_________; or d. Claimant was employed in an industry or occupation such that the claimant worked on a regular basis in close proximity to workers who did one or more of the above three activities. ___________ OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 6: Exposure to an Occupationally Exposed Person Is the claimant alleging an asbestos-related disease resulting in whole or in part from another person's occupational exposure, such as a family member (spouse, father, sister, etc.)? Yes ______ No ______ If yes, Part 5 must also be completed for each occupationally exposed person. Date Exposure to other person began: Month ________ Year _______ Date Exposure to other person Ended: Month ________ Year _______ Relationship to occupationally exposed individual: I am his/her ________________________________________ (brother, son, spouse, etc.) Describe how injured party was exposed to OC and/or Fibreboard product: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Reminder: Part 5 must be completed for the occupationally exposed person. Part 7: Smoking History NOTE: This information is relevant only to claims involving Disease Level VII, Lung Cancer 1, for which the claimant elects Individual Review, or to claims involving Disease Level VI, Lung Cancer 2, for which Individual Review is required. Thus, this section does not need to be completed if your claim is for Disease Levels I through V, Disease Level VII (Expedited Review), or Disease Level VIII. For each item, indicate whether injured party has smoked or used the given product. If cigarettes were smoked, indicate the dates they were used, and the amount per day. Indicate fractional packs as appropriate, e.g. three and one-half packs would be entered as 3.5. - ------------------------------------------------------------------------------- Has the injured party ever: Smoked Cigarettes? Yes _____ No _____ From _____/_____ To: _____/_____ Packs per day: _____._____ From _____/_____ To: _____/_____ Packs per day: _____._____ From _____/_____ To: _____/_____ Packs per day: _____._____ From _____/_____ To: _____/_____ Packs per day: _____._____ - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Has the injured party ever: Smoked Cigars? Yes _____ No _____ From _____/_____ To: _____/_____ From _____/_____ To: _____/_____ From _____/_____ To: _____/_____ From _____/_____ To: _____/_____ - ------------------------------------------------------------------------------- OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 8: Asbestos Litigation Has a lawsuit ever been filed on behalf of the injured party? Yes ___ No___ Two-letter abbreviation of the state in which the suit was originally filed: Name of court in which suit was originally filed:_____________________________ Date on which the suit was originally filed: _________________________________ Has injured party received settlement money from OC and/or Fibreboard? Yes__No___ What is the current status of this suit? |_| Pending |_| Judgment |_| Dismissed |_| Settled Please attach a photocopy of the endorsed cover sheet of the filed complaint. OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 9: Employment Information Note: This section is optional and only needs to be completed if you wish this information considered in connection with a claim to be processed by Individual Review. Current Employment Status: |_| Full-time, outside the home |_| Full-time, within the home |_| Part-time, outside the home |_| Part-time, within the home |_| Retired |_| Disabled Amount of last annual wages: $__________,__________.______ Date of last wage received:________/________ (Month) (Year) (Enter current month and year if currently earning work-related compensation) W-2 and first page of Form 1040 for last year of full employment must be enclosed if lost wages are being claimed. OC/FIBREBOARD UNLIQUIDATED CLAIM FORM Part 10. Signature Page All claims must be signed by the claimant, or the person filing on his/her behalf (such as the personal representative or attorney) I have reviewed the information submitted on this claim form and all documents submitted in support of this claim. To the best of my knowledge under penalty of perjury, the information submitted is accurate and complete. - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Signature of claimant or Representative - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Please print the name and relationship to the claimant of the signatory above. Please review your submission to ensure it is complete. |_| Death Certificate (if applicable) |_| Certificate of Official Capacity (if personal representative is filing form) |_| Medical Records as required by the TDP and as requested in the instructions. |_| Proof of OC and/or Fibreboard product exposure as required in the TDP and requested in the instructions. |_| Cover sheet of filed complaint (if Part 8 is applicable). |_| W-2 and first page of IRS form 1040 (if Part ( is applicable). ATTACHMENT B OC/FIBREBOARD TDP PRESUMPTIVE MEDICAL/EXPOSURE CRITERIA Mesothelioma (Level VIII) (1) Diagnosis(1) of mesothelioma; and (2) credible evidence of OC or Fibreboard Exposure as defined in Section 5.7(b)(3). Lung Cancer 1 (Level VII) (1) Diagnosis of a primary lung cancer plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease(2), (2) six months OC and/or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure(3) to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Lung Cancer 2 (Level VI) (1) Diagnosis of a primary lung cancer; (2) OC and/or Fibreboard Exposure prior to December 31, 1982, and (3) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. - ---------- 1 The requirements for a diagnosis of an asbestos-related disease that may be compensated under the provisions of this TDP are set forth in Section 5.7. 2 Evidence of "Bilateral Asbestos-Related Nonmalignant Disease" for purposes of meeting the criteria for establishing Disease Levels I, II, III, V, and VII, means a report submitted by a qualified physician stating that the claimant has or had either (i) a chest X-ray read by a qualified B reader of 1/0 or higher on the ILO scale or (ii)(x) a chest X-ray read by a qualified B reader, (y) a CT scan read by a qualified physician, or (z) pathology, in each case showing either bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening, or bilateral pleural calcification. Solely for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, if an ILO reading is not available, either (i) a chest X-ray or a CT scan read by a qualified physician, or (ii) pathology, in each case showing bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening, or bilateral pleural calcification consistent with or compatible with a diagnosis of asbestos-related disease, shall be evidence of a Bilateral Asbestos-Related Nonmalignant Disease for purposes of meeting the presumptive medical requirements of Disease Levels I, II, III, V and VII. Pathological evidence of asbestosis may be based on the pathological grading system for asbestosis described in the Special Issue of the Archives of Pathology and Laboratory Medicine, "Asbestos-associated Diseases," Vol. 106, No. 11, App. 3 (October 8, 1982). 3 The term "Significant Occupational Exposure" is defined in Section 5.7(b) of the TDP. Lung Cancer 2 (Level VI) claims are claims that do not meet the more stringent medical and/or exposure requirements of Lung Cancer (Level VII) claims. All claims in this Disease Level will be individually evaluated. The estimated likely average of the individual evaluation awards for this category is $20,000 for OC and $12,000 for Fibreboard, with such awards capped at $50,000 for OC and $30,000 for Fibreboard, unless the claim qualifies for Extraordinary Claim treatment (as defined in Section 5.4(a) of the TDP. Level VI claims that show no evidence of either an underlying Bilateral Asbestos-Related Nonmalignant Disease or Significant Occupational Exposure may be individually evaluated, although it is not expected that such claims will be treated as having any significant value, especially if the claimant is also a Smoker.(4) In any event, no presumption of validity will be available for any claims in this category. Other Cancer (Level V) (1) Diagnosis of a primary colo-rectal, laryngeal, esophageal, pharyngeal, or stomach cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease, (2) six months OC and/or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the other cancer in question. - ----------------- 4 There is no distinction between Non-Smokers and Smokers for either Lung Cancer (Level VII) or Lung Cancer (Level VI), although a claimant who meets the more stringent requirements of Lung Cancer (Level VII) (evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease plus Significant Occupational Exposure), and who is also a Non-Smoker, may wish to have his or her claim individually evaluated by the PI Trust. In such a case, absent circumstances that would otherwise reduce the value of the claim, it is anticipated that the liquidated value of the claim might well exceed the Scheduled Value for Lung Cancer (Level VII). "Non-Smoker" means a claimant who either (a) never smoked or (b) has not smoked during any portion of the twelve (12) years immediately prior to the diagnosis of the lung cancer. Severe Asbestosis (Level IV) (1) Diagnosis of asbestosis with ILO of 2/1 or greater, or asbestosis determined by pathological evidence, plus (a) TLC less than 65%, or (b) FVC less than 65% and FEV1/FVC ratio greater than 65%, (2) six months OC and/or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestosis/ Pleural Disease (Level III) Diagnosis of Bilateral Asbestos-Related Nonmalignant Disease, plus (a) TLC less than 80%, or (b) FVC less than 80% and FEV1/FVC ratio greater than or equal to 65%, and (2) six months OC and/or Fibreboard Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestosis/ Pleural Disease (Level II) (1) Diagnosis of a Bilateral Asbestos-Related Nonmalignant Disease, and (2) six months OC and/or Fibreboard Exposure prior to December 31, 1982, and (3) five years cumulative occupational exposure to asbestos. Other Asbestos Disease (Level I -Cash Discount Payment) (1) Diagnosis of a Bilateral Asbestos- Related Nonmalignant Disease or an asbestos-related malignancy other than mesothelioma, and (2) OC and/or Fibreboard Exposure prior to December 31, 1982. ATTACHMENT B OC/FIBREBOARD PI SETTLEMENT TRUST PROOF OF CLAIM FORM PRE-PETITION LIQUIDATED CLAIMS - ------------------------------------------------------------------------------- Submit completed claims form - ------------------------------------------------------------------------------- Instructions for the Claim Form Complete this claim form as thoroughly and accurately as possible. Please type or print neatly. Should there be insufficient space to list all relevant information, please attach additional sheets. In addition to filing the forms that follow, please ensure the following are enclosed, if applicable: - Death Certificate (if applicable) - Certificate of Official Capacity (if personal representative is filing form) - Documentary evidence of the Pre-Petition Liquidated Claim Representation If counsel represents claimant, please print or type the following information: Attorney Name: ______________________________________________________ Paralegal or Contact Name: ___________________________________________ Name of Law Firm: ____________________________________________________ Firm Address: ________________________________________________________ ________________________________________________________ Attorney Phone: __________________________ Fax: ______________________ Contact Phone: ___________________________ Fax: ______________________ Attorney or Law Firm's Tax ID number ____________________________________ OC/FIBREBOARD PRE-PETITION LIQUIDATED CLAIM FORM Part 1: Injured Party Information - ------------------------------------------------------------------------------- Name: _____________________________ Social Security #: ______-______-______ Gender: Male ______ Female ______ Date of Birth: _____/_____/_____ - ------------------------------------------------------------------------------- I. Is injured party living? Yes _____ No _____ II. If injured party is living and not represented by counsel, please complete the following: Mailing address: _____________________________________________ _____________________________________________ Daytime Phone: ( ) ______-____________ III. If injured party is deceased: (Death certificate must be enclosed) Date of death: _____/_____/_____ Was death asbestos related? Yes _____ No _____ IV. If injured party has personal representative other than, or in addition to his/her attorney, please indicate the following information for the representative (Certificate of Official Capacity must be enclosed) Name: ____________________________ Social Security#: _____/_____/_____ Mailing Address: ___________________________________________________ ___________________________________________________ Daytime Phone: ( ) _____-_______ Relationship to injured Party: I am party's (spouse, child, other): ______________ OC/FIBREBOARD PRE-PETITION LIQUIDATED CLAIM FORM Part 2: Claim Information 1. What was the Pre-Petition Liquidated Value $____________ 2. What was the date of the verdict, settlement or judgment resulting in the Pre-Petition Liquidated Claim ___/___/___ 3. What proof is being submitted that documents your Pre-Petition Liquidated Claim? Mark an X where appropriate |_| Binding agreement entered into prior to the October 5, 2000 Petition Date for the particular claim that is judicially enforceable by the claimant |_| Jury verdict or non-final judgment in the tort system obtained prior to the October 5, 2000 Petition Date |_| Judgment that became final and non-appealable prior to the October 5, 2000 Petition Date |_| If you believe you have other evidence of a pre-petition liquidated settlement, please describe the type of document being submitted: ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ OC/FIBREBOARD PRE-PETITION LIQUIDATED CLAIM FORM Part 3: Signature Page The claimant or the person filing on his/her behalf (such as the personal representative or attorney) must sign all claims. I have reviewed the information submitted on this claim form and all documents submitted in support of this claim. To the best of my knowledge under penalty of perjury, the information submitted is accurate and complete. - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Signature of claimant or Representative - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Please print the name and relationship to the claimant of the signatory above. Please review your submission to ensure it is complete. |_| Death Certificate (if applicable) |_| Certificate of Official Capacity (if personal representative is filing form) |_| Documentary evidence of the Pre-Petition Liquidated Claim EXHIBIT E FIBREBOARD ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST AGREEMENT This Trust Agreement is among Fibreboard Corporation, a Delaware corporation and debtor-in-possession ("FB"), and [insert name of Trustee], as Trustee ("Trustee"), pursuant to the Joint Plan of Reorganization for Owens Corning and its Affiliated Debtors and Debtors-In-Possession, dated January 17, 2003 (the "Plan"). WHEREAS, at the time of the entry of the order for relief in the Chapter 11 Cases, FB was named as a defendant in property damage actions seeking recovery for damages allegedly caused by the presence of asbestos or asbestos-containing products in buildings and other property, and WHEREAS, FB has reorganized under the provisions of Chapter 11 of the Bankruptcy Code in a case pending in the United States Bankruptcy Court for the District of Delaware and administratively consolidated with In re Owens Corning, et al., Case No. 00-3837 (JKF) ("Chapter 11 Cases"), and WHEREAS, the Plan, filed by the Debtors, the Official Committee for Asbestos Claimants ("Asbestos Claimants' Committee"), and the Legal Representative for Future Claimants appointed by the Bankruptcy Court pursuant to its order of September 28, 2001 ("Future Representative"), has been confirmed by the Bankruptcy Court, and WHEREAS, the Plan provides, inter alia, for the creation of the Fibreboard Asbestos Property Damage Settlement Trust (the "FB Property Damage Trust"), and WHEREAS, pursuant to the Plan, the FB Property Damage Trust is to be funded in whole by the FB Asbestos Property Damage Insurance Assets, and WHEREAS, pursuant to the Plan, the FB Property Damage Trust is to use its assets or income to pay FB Asbestos Property Damage Claims, and WHEREAS, the Plan provides, among other things, for the complete settlement and satisfaction of all liabilities and obligations of FB with respect to FB Asbestos Property Damage Claims; and WHEREAS, pursuant to the Plan, the FB Property Damage Trust is intended to qualify as a "Qualified Settlement Fund" within the meaning of Section 1 468B-1 of the Treasury Regulations promulgated under Section 468B of the Internal Revenue Code, and WHEREAS, pursuant to the Plan, all Fibreboard Asbestos Property Damage Claims will be channeled to the FB Property Damage Trust and all Persons shall otherwise be permanently and forever stayed, restrained, and enjoined from taking any Enjoined Actions for the purposes of, directly or indirectly, collecting, recovering, or receiving payment of, on, or with respect to any FB Asbestos Property Damage Claims, NOW, THEREFORE, it is hereby agreed as follows: ARTICLE 1 DEFINITIONS ----------- As used herein, the following terms shall have the meanings specified below: 1.1 "Affiliate" of, or a Person "Affiliated" with, a specified Person, is a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified; provided, that with respect to an "Affiliate" of a Debtor or a Person "Affiliated" with a Debtor, such term shall include, without limiting the foregoing definition, the meaning ascribed thereto in Section 101(2) of the Bankruptcy Code. 1.2 "Assets" means the FB Asbestos Property Damage Insurance Assets, as that term is defined in Section 1.92 of the Plan. 1.3 "Bankruptcy Court" means the United States Bankruptcy Court for the District of Delaware, having jurisdiction over the Chapter 11 Case to the extent of any reference made to it by the District Court pursuant to 28 U.S.C. ss.157 as a unit of such District Court pursuant to 28 U.S.C. ss.151. 1.4 "Business Day" means any day, excluding Saturdays, Sundays or "legal holidays" (as defined in Federal Rule of Bankruptcy Procedure 9006(a)), on which commercial banks are open for business in New York, New York. 1.5 "Claim" means a claim as defined in Section 101(5) of the Bankruptcy Code against the Debtors, or any of them, whether or not asserted. 1.6 "Class" means a category of holders of Claims or Interests, as described in Articles II and III of the Plan. 1.7 "Confirmation Order" means the order entered by the Bankruptcy Court confirming the Plan. 1.8 "Disallowed Claim" means a FB Asbestos Property Damage Claim that is disallowed in its entirety pursuant to the FB Asbestos Property Damage Trust Distribution Procedures. 1.9 "Effective Date" means the Business Day on which all conditions to the consummation of the Plan have been satisfied or waived as provided in Article XII of the Plan, and is the effective date of the Plan. 1.10 "Encumbrance" means, with respect to any property, tangible or intangible, any mortgage, lien, pledge, charge, security interest, assignment, or encumbrance of any nature in respect of such property (including, without express or implied limitation, any conditional sale or other title retention agreement, any security agreement, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction). 1.11 "Enjoined Action" means (i) the commencement, conduct, or continuation in any manner, directly or indirectly (including an action directly against a provider of insurance), of any suit, action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) in any forum; (ii) the enforcement, attachment (including, without limitation, any prejudgment attachment), collection or seeking to recover any judgment, award, decree, or other order; (iii) the creation, perfection or enforcement in any manner, directly or indirectly, of any Encumbrance; (iv) the setting off, seeking reimbursement of, contribution from, or subrogation against, or other recoupment in any manner, directly or indirectly, of any amount against any liability owed to any Protected Parties, and (v) the commencement or continuation, in any manner, in any place, of any action which, in any such case, does not comply with or is inconsistent with the provisions of the Plan. 1.12 "Entity" means an individual, corporation, partnership, association, joint stock company, joint venture, estate, trust, unincorporated organization, or government or any political subdivision thereof, or other person or entity. 1.13 "FB Asbestos Property Damage Claim" means any present or future right to payment, claim, remedy, or liability against, or debt or obligation of, any FB Person, whether or not the facts or legal basis for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise for, relating to, or arising by reason of, directly or indirectly, damage to property, including, without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person prior to the Petition Date, or for which any FB Person is liable due to the acts or omissions of any FB Person, including, without express or implied limitation, any right, claim, remedy, liability against, or debt or obligation for compensatory damages (such as proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Property Damage Claims include FB Indirect Asbestos Property Damage Claims. 1.14 "FB Asbestos Property Damage Claims Procedures" means the FB Asbestos Property Damage Trust Distribution Procedures to be implemented by the FB Property Damage Trustee pursuant to the terms and conditions of the Plan and the FB Asbestos Property Damage Trust Agreement to process, liquidate, and pay FB Asbestos Property Damage Claims, and attached hereto as Annex A. 1.15 "FB Asbestos Property Damage Trustee" means the Person confirmed by the Bankruptcy Court to serve as the trustee of the FB Property Damage Trust, pursuant to the terms of the FB Asbestos Property Damage Trust Agreement, or as subsequently may be appointed pursuant to the provisions of the FB Asbestos Property Damage Trust Agreement. 1.16 "FB Indirect Asbestos Property Damage Claim" means any present or future right to payment, claim, remedy or liability against, or debt or obligation of, any FB Person, whether or not the facts of or legal basis for such right, claim, remedy or liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise that is (i) asserted by (A) any Person (other than (I) an FB Person or (II) a Related Person of the Debtors or Reorganized Debtors entitled to indemnification pursuant to Section 7.5 of the Plan) who has been, is, or may be a defendant in an action seeking damages for, relating to, or arising by reason of, directly or indirectly, damage to property, including without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person, prior to the Petition Date, or for which any FB Person is otherwise liable due to the acts or omissions of any FB Person or (B) any assignee or transferee of such Person, and (ii) on account of alleged liability of any FB Person for reimbursement, contribution, subrogation or indemnification of any portion of any damages such Person has paid or may pay to the plaintiff in such action. 1.17 "Final Order" means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction, as entered on the docket in the Chapter 11 Cases, the operation or effect of which has not been stayed, reversed, or amended and as to which order or judgment (or any revision, modification, or amendment thereof) the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for review or rehearing was filed or, if filed, remains pending. 1.18 "Petition Date" means October 5, 2000, the date of the Filing. 1.19 "Proof of Claim" means the proof of claim that must be filed by a holder of a Claim by the date(s), if any, designated by the Bankruptcy Court as the last date(s) for filing proofs of claims or interests against the Debtors. 1.20 "Related Parties" means (a) any past or present affiliate of any of the Debtors or the Reorganized Debtors, (b) any predecessor in interest of any of the Debtors or the Reorganized Debtors, or (c) any Entity that owned a financial interest in any of the Debtors or the Reorganized Debtors, any past or present affiliate of any of the Debtors or the Reorganized Debtors, or any predecessor in interest of any of the Debtors or the Reorganized Debtors. All capitalized terms used herein and not defined in this Article I or in another provision of this Trust Agreement shall have the meanings assigned to them in the Plan and/or the Bankruptcy Code, which definitions are incorporated by reference herein. ARTICLE 2 AGREEMENT OF TRUST ------------------ 2.1 Creation and Name. The Settlors hereby create a trust known as the "Fibreboard Asbestos Property Damage Settlement Trust," which is the FB Property Damage Trust provided for and referred to in the Plan. The Trustee of the FB Property Damage Trust may transact the business and affairs of the FB Property Damage Trust in the name, "Fibreboard Asbestos Property Damage Settlement Trust." 2.2 Purpose. The purpose of the FB Property Damage Trust is to assume any and all liabilities of Fibreboard or its Affiliates, with respect to any and all FB Asbestos Property Damage Claims, and to use the FB Property Damage Trust's assets and income to promptly pay holders of valid FB Asbestos Property Damage Claims. This purpose shall be fulfilled through the provisions of this Trust Agreement and the FB Asbestos Property Damage Claims Procedures attached hereto as Annex A. 2.3 Transfer of Assets. The Settlors hereby transfer and assign to the FB Property Damage Trust the property set forth in Section 11.3 of the Plan (herein the "Assets"). 2.4 Acceptance of Assets and Assumption of Liabilities. (a) In furtherance of the purposes of the FB Property Damage Trust, the Trustee, on behalf of the FB Property Damage Trust, hereby expressly accepts the transfer and assignment to the FB Property Damage Trust of the Assets. (b) In furtherance of the purposes of the FB Property Damage Trust, and subject to Article 5.4 hereof, the Trustee, on behalf of the FB Property Damage Trust, expressly assumes all liability for all FB Asbestos Property Damage Claims as provided for in Section 11.4 of the Plan. Except as otherwise provided in the FB Asbestos Property Damage Claims Procedures, the FB Property Damage Trust shall have all defenses, cross-claims, offsets, and recoupments regarding FB Asbestos Property Damage Claims that FB has or would have had under applicable law. (c) Nothing in this section or any other section of this Trust Agreement shall be construed in any way to limit the scope, enforceability, or effectiveness of the general injunction issued in connection with the Plan or the FB Property Damage Trust's assumption of all liability with respect to FB Asbestos Property Damage Claims. ARTICLE 3 POWERS AND TRUST ADMINISTRATION ------------------------------- 3.1 Powers. (a) Subject to the limitations set forth in this Trust Agreement, the Trustee shall have the power to take any and all actions that, in the judgment of the Trustee, are necessary or proper to fulfill the purposes of the FB Property Damage Trust, including, without limitation, each power expressly granted in this Article 3.1, any power reasonably incidental thereto, and any trust power now or hereafter permitted under the laws of the State of Delaware. (b) Except as otherwise specified herein, the Trustee needs not obtain the order or approval of any court in the exercise of any power or discretion conferred hereunder. (c) Without limiting the generality of Article 3.1(a) above, the Trustee shall have the power to (i) receive and hold the Assets, (ii) invest the monies held from time to time by the FB Property Damage Trust, (iii) sell, transfer or exchange any or all of the Assets at such prices and upon such terms as they may consider proper, consistent with the other terms of this Trust Agreement, (iv) pay liabilities and expenses of the FB Property Damage Trust, (v) change the state of domicile of the FB Property Damage Trust, (vi) establish such funds, reserves and accounts within the FB Property Damage Trust estate, as deemed by the Trustee to be useful in carrying out the purposes of the FB Property Damage Trust, (vii) sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitral or other proceeding, (viii) amend the Bylaws, a copy of which is annexed hereto as Annex B (the "Bylaws"), (ix) appoint such officers and hire such employees and engage such legal, financial, accounting, investment and other advisors, alternative dispute resolution panelists, and agents as the business of the FB Property Damage Trust requires, and to delegate to such persons such powers and authorities as the fiduciary duties of the Trustee permit and as the Trustee, in his or her discretion, deem advisable or necessary in order to carry out the terms of this FB Property Damage Trust, (x) pay employees, legal, financial, accounting, investment and other advisors and agents reasonable compensation, including without limitation, compensation at rates approved by the Trustee for services rendered prior to the execution hereof, (xi) reimburse the Trustee, subject to Article 5.5, and reimburse such officers, employees, legal, financial, accounting, investment and other advisors and agents all reasonable out-of-pocket costs and expenses incurred by such persons in connection with the performance of their duties hereunder, including without limitation, costs and expenses incurred prior to the execution hereof, (xii) execute and deliver such deeds, leases and other instruments as the Trustee considers proper in administering the FB Property Damage Trust, (xiii) enter into such other arrangements with third parties as are deemed by the Trustee to be useful in carrying out the purposes of the FB Property Damage Trust, provided such arrangements do not conflict with any other provision of this Trust Agreement, (xiv) in accordance with Article 5.6, indemnify (and purchase insurance indemnifying) the Trustee and PD Advisory Committee members (as hereinafter defined), and officers, employees, agents, advisers and representatives of the FB Property Damage Trust or the PD Advisory Committee to the fullest extent that a corporation or trust organized under the law of the FB Property Damage Trust's domicile is from time to time entitled to indemnify and/or insure its directors, trustees, officers, employees, agents, advisers and representatives, (xv) indemnify (and purchase insurance indemnifying) the Additional Indemnitees as defined in Article 5.6 hereof, (xvi) delegate any or all of the authority therein conferred with respect to the investment of all or any portion of the Assets to any one or more reputable individuals or recognized institutional investment advisers or investment managers without liability for any action taken or omission made because of any such delegation, except as provided in Article 5.4, (xvii) consult with FB or its Affiliates at such times and with respect to such issues relating to the conduct of the FB Property Damage Trust as the Trustee considers desirable, (xviii) make, pursue (by litigation or otherwise), collect, compromise or settle any claim, right, action or cause of action included in the Assets, and (xix) merge or contract with other claims resolution facilities that are not specifically created by this Agreement or the FB Asbestos Property Damage Claims Procedures, subject to Article 3.2(e) of this Agreement, provided that such merger or contract shall not (a) alter the FB Asbestos Property Damage Claims Procedures; (b) subject the FB Property Damage Trust to any additional liabilities for FB Asbestos Property Damage Claims, (c) subject the Reorganized Debtors or any successor in interest to any risk of having any Asbestos Property Damage Claim asserted against it or them; or (c) otherwise jeopardize the validity or enforceability of the General Injunction. (d) The Trustee shall not have the power to guaranty any debt of other persons. 3.2 General Administration. (a) The Trustee shall act in accordance with the Bylaws. To the extent not inconsistent with the terms of this Trust Agreement, the Bylaws govern the affairs of the FB Property Damage Trust. (b) The Trustee shall timely file such income tax and other returns and statements and comply with all withholding obligations, as required under the applicable provisions of the Internal Revenue Code and of any state law and the regulations promulgated thereunder. (c) (i) The Trustee shall cause to be prepared and filed with the Bankruptcy Court as soon as available, and in any event within ninety (90) days following the end of each fiscal year an annual report containing financial statements of the FB Property Damage Trust (including, without limitation, a balance sheet of the FB Property Damage Trust as of the end of such fiscal year and a statement of operations for such fiscal year) audited by a firm of independent certified public accountants selected by the Trustee and accompanied by an opinion of such firm as to the fairness of the financial statements' presentation of the cash and investments available for the payment of claims and as to the conformity of the financial statements with generally accepted accounting principles. The Trustee shall provide a copy of such report to the PD Advisory Committee and to Reorganized FB. (ii) Simultaneously with delivery of each set of financial statements referred to in Article 3.2(c)(i) above, the Trustee shall cause to be prepared and filed with the Bankruptcy Court a report containing a summary regarding the number and type of Claims disposed of during the period covered by the financial statements. (iii) All materials requested to be filed with the Bankruptcy Court by this Article 3.2 shall be available for inspection by the public in accordance with procedures established by the Bankruptcy Court. (d) The Trustee shall cause to be prepared and submitted to the PD Advisory Committee as soon as practicable prior to the commencement of each fiscal year a budget and cash flow projections covering such fiscal year and the succeeding four fiscal years. (e) The Trustee shall consult with the PD Advisory Committee (as hereinafter defined) on the appointment of a successor Trustee and the implementation and administration of the FB Asbestos Property Damage Claims Procedures. The Trustee shall be required to obtain the consent of a majority of the members of the PD Advisory Committee in order: (i) to amend materially the FB Asbestos Property Damage Claims Procedures, unless such amendment relates to the specific amounts or percentages to be paid to holders of Asbestos Property Damage Claims who have not elected discounted payment, in which case, PD Advisory Committee consent is not required, or (ii) to merge or participate with any claims resolution facility that was not specifically created under this Trust Agreement or the FB Asbestos Property Damage Claims Procedures, or (iii) to amend any provision of Article 6 herein; or (iv) to terminate the FB Property Damage Trust pursuant to Article 7.2(a)(iii) herein. The PD Advisory Committee shall not unreasonably withhold any consent required hereunder, and if ever the PD Advisory Committee shall withhold any consent required hereunder, at the election of the Trustee, the dispute between the Trustee and the PD Advisory Committee shall be resolved through the implementation of binding alternative dispute resolution procedures mutually agreed to by the Trustee and the PD Advisory Committee. 3.3 Claims Administration. (a) General Principles. The Trustee shall proceed quickly to implement the FB Asbestos Property Damage Claims Procedures. The FB Property Damage Trust shall pay holders of valid Asbestos Property Damage Claims in accordance with the provisions hereof as promptly as funds become available. In his or her administration of the FB Asbestos Property Damage Claims Procedures, the Trustee shall favor settlement over arbitration, and fair and efficient resolution of Claims in all cases, while endeavoring to preserve and enhance the FB Property Damage Trust estate. (b) FB Asbestos Property Damage Claims. (i) The Trustee shall administer the processing and payment of FB Asbestos Property Damage Claims in accordance with the FB Asbestos Property Damage Claims Procedures, a copy of which is annexed hereto as Annex A, as the same may be amended from time to time, in accordance with the provisions hereof and thereof. (c) Bankruptcy Court Claims Bar Date Orders (i) As provided herein, the Trustee shall enforce the Bankruptcy Court's claims bar date orders that are applicable to Asbestos Property Damage Claims. (ii) The Trustee shall disallow any Asbestos Property Damage Claim if they determine the claimant inexcusably failed to comply with an applicable claims bar date order entered by the Bankruptcy Court, and any such decision shall be final and non-appealable. (iii) The Trustee shall have complete discretion to determine whether a claimant inexcusably failed to comply with an applicable claims bar date order. In making this determination, the Trustee may be guided by the "excusable neglect" standard developed under federal bankruptcy law in connection with the adjudication of late filed proofs of claim in bankruptcy cases. ARTICLE 4 ACCOUNTS, INVESTMENTS, AND PAYMENTS ----------------------------------- 4.1 Accounts. The Trustee may, from time to time, create such accounts and reserves within the FB Property Damage Trust estate as they may deem necessary, prudent or useful in order to provide for the payment of expenses and valid Asbestos Property Damage Claims and may, with respect to any such account or reserve, restrict the use of monies therein. 4.2 Investments. Investment of monies held in the FB Property Damage Trust shall be administered in the manner in which individuals of ordinary prudence, discretion and judgment would act in the management of their own affairs, subject to the following limitations and provisions: (a) Except with respect to entities owned and controlled by the FB Property Damage Trust for purposes of carrying out provisions of this Trust Agreement, the FB Property Damage Trust shall not acquire or hold any equity in any Person or business enterprise unless such equity is in the form of securities that are traded on a national securities exchange or major international securities exchange or over the National Association of Securities Dealers Automated Quotation System. (b) The FB Property Damage Trust shall not acquire or hold any repurchase obligations unless, in the opinion of the Trustee, they are adequately collateralized. 4.3 Source of Payments. All FB Property Damage Trust expenses, payments and all liabilities with respect to FB Asbestos Property Damage Claims shall be payable solely out of the FB Property Damage Trust estate. Neither FB, its Affiliates, its subsidiaries, any successor in interest or the present or former directors, officers, employees or agents of FB, its Affiliates, or its subsidiaries, nor the Trustee, the PD Advisory Committee, or any of their officers, agents, advisers or employees shall be liable for the payment of any FB Property Damage Trust expenses or any Asbestos Property Damage Claim or any other liability of the FB Property Damage Trust. ARTICLE 5 THE TRUSTEE ----------- 5.1 Number. There shall be one (1) Trustee. The Trustee shall be the person named on the signature page hereof. 5.2 Term of Service. (a) The Trustee shall serve until the earlier of (i) the termination of the FB Property Damage Trust pursuant to Article 7.2 below, (ii) his or her death, (iii) his or her resignation pursuant to Article 5.2(c) below, or (iv) his or her removal pursuant to Article 5.2(c) below, at which time his or her term shall terminate automatically. (b) The Trustee may resign at any time by written notice to the PD Advisory Committee. Such notice shall specify a date when such resignation shall take effect, which shall not be less than 90 days after the date such notice is given, where practicable. (c) The Trustee may be removed in the event that the Trustee becomes unable to discharge his or her duties hereunder due to accident or physical or mental deterioration, or for other good cause. Good cause shall be deemed to include, without limitation, any failure to comply with Article 5.9, a consistent pattern of neglect and failure to perform or participate in performing the duties of the Trustee hereunder, or repeated nonattendance at scheduled meetings. Such removal shall require the unanimous decision of the PD Advisory Committee. Such removal shall take effect at such time as the PD Advisory Committee shall determine. 5.3 Appointment of Successor Trustee. (a) In the event of a vacancy in the position of Trustee, the vacancy shall be filled by majority vote of the PD Advisory Committee who shall refrain from making an appointment that may result in the appearance of impropriety. (b) Immediately upon the appointment of a successor Trustee, all rights, titles, duties, powers and authority of the predecessor Trustee hereunder shall be vested in, and undertaken by, the successor Trustee without any further act. No successor Trustee shall be liable personally for any act or omission of his or her predecessor Trustee. 5.4 Liability of the Trustee. No Trustee, officer, or employee of the FB Property Damage Trust shall be liable to the FB Property Damage Trust, to any person holding an Asbestos Property Damage Claim, or to any other Person except for such Trustee's, officer's or employee's own breach of trust committed in bad faith or for willful misappropriation. No Trustee, officer, or employee of the FB Property Damage Trust shall be liable for any act or omission of any other officer, agent, or employee of the FB Property Damage Trust, unless the FB Trustee acted with bad faith or willful misconduct in the selection or retention of such officer, agent, or employee. 5.5 Compensation and Expenses of the Trustee. (a) The Trustee shall receive compensation from the FB Property Damage Trust for his or her services as Trustee in the amount of $_________ per annum, plus a per diem allowance for meetings attended in the amount of $1,000. The Trustee shall determine the scope and duration of activities that constitute a meeting and may provide for partial payment of per diem amounts for activities of less than a full day's duration. The per annum compensation payable to the Trustee hereunder may only be increased annually by the PD Advisory Committee proportionately with any increase in the Consumer Price Index -- All Cities (or any successor index) for the corresponding annual period. Any increase in excess of that amount may be made only with the approval of the Bankruptcy Court. (b) The FB Property Damage Trust will promptly reimburse the Trustee for all reasonable out-of-pocket costs and expenses incurred by the Trustee in connection with the performance of his or her duties hereunder. 5.6 Indemnification of the Trustee and Others. (a) The FB Property Damage Trust shall indemnify and defend the Trustee, the FB Property Damage Trust's officers, agents, advisers or employees, to the fullest extent that a corporation or trust organized under the laws of the FB Property Damage Trust's domicile is from time to time entitled to indemnify and defend its directors, trustees, officers, employees, agents or advisers against any and all liabilities, expenses, claims, damages or losses incurred by them in the performance of their duties hereunder. Notwithstanding the foregoing, the Trustee shall not be indemnified or defended in any way for any liability, expense, claim, damage or loss for which he or she is liable under Article 5.4. Additionally, each member of the PD Advisory Committee (collectively "Additional Indemnitees") who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding of any kind, whether civil, administrative or arbitral, by reason of any act or omission of such Additional Indemnitees with respect to (i) the Chapter 11 Cases, (ii) the liquidation of any Asbestos Property Damage Claims, or (iii) the administration of the FB Property Damage Trust and the implementation of the FB Asbestos Property Damage Claims Procedures, shall be indemnified and defended by the FB Property Damage Trust against expenses, costs and fees (including attorneys' fees), judgments, awards, costs, amounts paid in settlement, and liabilities of all kinds incurred by each Additional Indemnitee in connection with or resulting from such action, suit, or proceeding, except for bad faith or willful misconduct. (b) Reasonable expenses, costs and fees (including attorney's fees) incurred by or on behalf of the Trustee or any Additional Indemnitee in connection with any action, suit, or proceeding, whether civil, administrative or arbitral from which they are indemnified by the FB Property Damage Trust pursuant to this Article 5.6, may be paid by the FB Property Damage Trust in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Trustee or Additional Indemnitee to repay such amount unless it shall be determined ultimately that such Trustee or Additional Indemnitee is entitled to be indemnified by the FB Property Damage Trust. (c) The Trustee may purchase and maintain reasonable amounts and types of insurance on behalf of an individual who is or was a Trustee, officer, employee, agent or representative of the FB Property Damage Trust or Additional Indemnitee against liability asserted against or incurred by such individual in that capacity or arising from his or her status as a Trustee, officer, employee, agent or representative. 5.7 The Trustee's and Additional Indemnitees' Lien. The Trustee and any Additional Indemnitee shall have a prior lien upon the FB Property Damage Trust corpus to secure the payment of any amounts payable to them pursuant to Articles 5.5 and 5.6. 5.8 The Trustee's Employment of Experts. The Trustee may, but shall not be required to, consult with counsel, accountants, appraisers and other parties deemed by the Trustee to be qualified as experts on the matters submitted to them (regardless of whether any such party is affiliated with the Trustee in any manner, except as otherwise expressly provided in this Trust Agreement), and the opinion of any such parties on any matters submitted to them by the Trustee shall be full and complete authorization and protection in respect of any action taken or not taken by the Trustee hereunder in good faith and in accordance with the written opinion of any such party. 5.9 The Trustee's Independence. The Trustee shall not, during the term of his or her service, hold a position with or financial interest in an insurance company identified in Schedule XVI to the Plan, or act as attorney or advisor for any person who holds an Asbestos Property Damage Claim. 5.10 The Trustee's Service as Officer or Consultant to the FB Property Damage Trust. The Trustee may, but is not required to, serve as an officer or manager of the FB Property Damage Trust or as a consultant to the FB Property Damage Trust. In the event the Trustee serves the FB Property Damage Trust in such a capacity, the FB Property Damage Trust shall compensate the Trustee in an amount determined by the PD Advisory Committee. Compensation for the Trustee's service as an officer or manager of the FB Property Damage Trust or as a consultant to the FB Property Damage Trust shall be in addition to compensation paid pursuant to Article 5.5. 5.11 Bond. The Trustee shall not be required to post any bond or other form of surety or security unless otherwise ordered by the Bankruptcy Court. ARTICLE 6 PROPERTY DAMAGE ADVISORY COMMITTEE ---------------------------------- 6.1 Formation; Duties. A Property Damage Advisory Committee (the "PD Advisory Committee") shall be formed. The Trustee shall consult with the PD Advisory Committee on the appointment of a successor Trustee and the implementation and administration of the FB Asbestos Property Damage Claims Procedures. The Trustee may consult with the PD Advisory Committee on any matter affecting the FB Property Damage Trust, and certain actions by the Trustee are subject to the prior consent of the PD Advisory Committee as provided in Article 3.2(e) hereof. The PD Advisory Committee shall endeavor to act in the best interests of the holders of all Asbestos Property Damage Claims. 6.2 Number; Chairperson. (a) There shall be three members of the PD Advisory Committee. The initial PD Advisory Committee members shall be , ______________ and _____________. The PD Advisory Committee shall act in all cases by majority vote. (b) There shall be a Chairperson of the PD Advisory Committee. The Chairperson of the PD Advisory Committee shall be ____________. The Chairperson shall act as the PD Advisory Committee's liaison, he or she shall coordinate and schedule meetings of the PD Advisory Committee, and he or she shall handle all administrative matters that come before the PD Advisory Committee. 6.3 Term of Office. (a) Each member of the PD Advisory Committee shall serve for the duration of the FB Property Damage Trust, subject to the earlier of his or her death, resignation, or removal. (b) Subject to Article 6.4(b) hereof, any member of the PD Advisory Committee may resign at any time by written notice to each of the remaining members specifying the date when such resignation shall take place. (c) Any member of the PD Advisory Committee may be removed in the event such member becomes unable to discharge his or her duties hereunder due to accident, physical deterioration, mental incompetence, or a consistent pattern of neglect and failure to perform or to participate in performing the duties of such member hereunder, such as repeated nonattendance at scheduled meetings. Such removal shall be made by the unanimous decision of the other members of the PD Advisory Committee, and it shall be effective at such time as all other members of the PD Advisory Committee determine. 6.4 Appointment of Successor. (a) A vacancy in the PD Advisory Committee caused by the resignation of a PD Advisory Committee member shall be filled with an individual nominated by the resigning PD Advisory Committee member and approved by the unanimous vote of all PD Advisory Committee members. The resigning PD Advisory Committee member's resignation shall not be effective until such approval is obtained and the successor PD Advisory Committee member has accepted the appointment. (b) In the event of a vacancy in the membership of the PD Advisory Committee other than one caused by resignation, the vacancy shall be filled by the unanimous vote of the remaining member(s) of the PD Advisory Committee. 6.5 Compensation and Expenses of PD Advisory Committee Members. (a) Each member of the PD Advisory Committee shall receive compensation from the FB Property Damage Trust for his or her services in the amount of $3,000 per diem for meetings attended by such member, payable as determined by the Trustee, but not less frequently than quarterly. Such per diem amount shall be increased or decreased annually pro rata with the amount that the per diem for meetings paid to the Trustee is increased or decreased pursuant to Article 5.5(a). For purposes of determining the per diem amount hereunder, the same definition of "meeting" shall apply to the PD Advisory Committee as is adopted by the Trustee for meetings of the Trustee. (b) All reasonable out-of-pocket costs and expenses incurred by PD Advisory Committee members in connection with the performance of their duties hereunder will be promptly reimbursed to such members by the FB Property Damage Trust. 6.6 Procedure for Obtaining Consent of PD Advisory Committee. In the event a matter is subject to the consent of the PD Advisory Committee pursuant to the terms hereof, the Trustee shall provide the PD Advisory Committee with the appropriate information regarding the matter in question. Upon receipt of such information, the PD Advisory Committee shall be given a period of twenty (20) days to respond to the Trustee's request for consent. This twenty (20) day period may be extended with the consent of the Trustee. In the event that the PD Advisory Committee does not respond to the Trustee within such twenty (20) day period, or any extension thereof, as to their approval or non-approval to such matter, then approval by the PD Advisory Committee shall be deemed to have been granted. The members of the PD Advisory Committee must consider in good faith any request by the Trustee prior to any non-approval thereof, and no member of the PD Advisory Committee may withhold his consent unreasonably. ARTICLE 7 GENERAL PROVISIONS ------------------ 7.1 Irrevocability. The FB Property Damage Trust is irrevocable during the term of the trust, but is subject to amendment as provided in Article 7.3. 7.2 Termination. (a) The FB Property Damage Trust shall automatically terminate on the date (the "Termination Date") 90 days after the first occurrence of any of the following events: (i) the Trustee in his or her sole discretion decides to terminate the FB Property Damage Trust because (A) he or she deems it unlikely that new Asbestos Property Damage Claims will be filed against the FB Property Damage Trust and (B) all Asbestos Property Damage Claims duly filed with the FB Property Damage Trust have been liquidated and satisfied and two years have elapsed since the Effective Date; or (ii) if the Trustee has procured and has in place irrevocable insurance policies or coverage in place agreements and has established claims handling agreements and other necessary arrangements adequate to discharge all expected remaining obligations and expenses of the FB Property Damage Trust in a manner consistent with this Trust Agreement and the FB Asbestos Property Damage Claims Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes final; or (iii) if in the judgment of the Trustee, with the consent of the PD Advisory Committee (which consent shall not be unreasonably withheld), the continued administration of the FB Property Damage Trust is uneconomic or inimical to the best interests of the persons holding Asbestos Property Damage Claims and the termination of the FB Property Damage Trust will not expose or subject FB, its Affiliates, or any other Reorganized Debtor or any successor in interest to any increased or undue risk of having any Asbestos Property Damage Claims asserted against it or them or in any way jeopardize the validity or enforceability of the General Injunction; or (iv) 21 years less 91 days pass after the death of the last survivor of all the descendants of George Herbert Walker Bush of Texas living on the date hereof. (b) On the Termination Date, after payment of all the FB Property Damage Trust's liabilities have been provided for, the remaining FB Asbestos Property Damage Insurance Assets shall be transferred and assigned to Reorganized OC; all monies, if any, remaining in the FB Property Damage Trust estate shall be transferred to charitable organization(s) exempt from federal income tax under Section 501 (c)(3) of the Internal Revenue Code, which tax-exempt organization(s) shall be selected by the Trustee using his or her reasonable discretion; provided, however, that (i) if practicable, the tax-exempt organization(s) shall be related to the treatment of, research, or the relief of suffering of individuals suffering from asbestos-related disorders, and (ii) the tax-exempt organization(s) shall not bear any relationship to FB or its Affiliates within the meaning of Section 468(d)(3) of the Internal Revenue Code. 7.3 Amendments. The Trustee, after consultation with the PD Advisory Committee, and subject to the PD Advisory Committee's consent when so provided herein, may modify or amend this Trust Agreement or any document annexed to it, including, without limitation, the By Laws, or the FB Asbestos Property Damage Claims Procedures, except that Articles 2.2 (Purpose), 2.4 (Acceptance of Assets and Assumption of Liabilities), 3.1(d) (Precluding Guaranty of Certain Debt), 3.2(e) (Trustee's consultation with PD Advisory Committee), 3.3(a)-(c) (Claims Administration), 5.1 (Number of Trustees), 5.2 (Term of Service), 5.3 (Appointment of a Successor Trustee), 5.5 (Compensation and Expenses of FB Property Damage Trust ), 5.6 (Indemnification of the Trustee and Others), 5.9 (Trustee's Disinterestedness), 6.1 (PD Advisory Committee Formation and Duties), 6.2 (PD Advisory Committee Number and Chairperson), 6.4 (Appointment of Successor (PD Advisory Committee)), 7.1 (Irrevocability), 7.2 (Termination) and 7.3 (Amendments) herein shall not be modified or amended in any respect. No consent from the Settlors shall be required to modify or amend this Trust Agreement or any document annexed to it. Any modification or amendment made pursuant to this section must be done in writing. Notwithstanding anything contained herein to the contrary, neither this Trust Agreement nor the FB Asbestos Property Damage Claims Procedures shall be modified or amended in any way that would jeopardize the efficacy or enforceability of the General Injunction. 7.4 Meetings. For purposes of Articles 5.5 and 6.5 of this Trust Agreement, a PD Advisory Committee member or the Trustee shall be deemed to have attended a meeting in the event such person spends a substantial portion of the day conferring, by phone or in person, on FB Property Damage Trust matters with PD Advisory Committee members, the Trustee, or advisors hired by the FB Property Damage Trust. The Trustee shall have complete discretion to determine whether a meeting, as described herein, occurred for purposes of Articles 5.5 and 6.5. 7.5 Severability. Should any provision in this Trust Agreement be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any and all other provisions of this Trust Agreement. 7.6 Notices. Notices to persons asserting claims shall be given at the address of such person, or, where applicable, such person's legal representative, in each case as provided on such person's claim form submitted to the FB Property Damage Trust with respect to his or her Asbestos Property Damage Claim. Any notices or other communications required or permitted hereunder shall be in writing and delivered at the addresses designated below, or sent by telecopy pursuant to the instructions listed below, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows, or to such other address or addresses as may hereafter be furnished by any of Reorganized FB, the Trustee or the PD Advisory Committee to the others in compliance with the terms hereof: To the FB Property Damage Trust or the Trustee: _____________________ _____________________ _____________________ and _____________________ _____________________ _____________________ To the PD Advisory Committee _____________________ _____________________ _____________________ and _____________________ _____________________ _____________________ and _____________________ _____________________ _____________________ To [________] _____________________ _____________________ _____________________ _____________________ and _____________________ _____________________ _____________________ _____________________ _____________________ All such notices and communications shall be effective when delivered at the designated addresses or when the telecopy communication is received at the designated addresses and confirmed by the recipient by return telecopy in conformity with the provisions hereof. 7.7 Counterparts. This Trust Agreement may be executed in any number of counterparts, each of which shall constitute an original, but such counterparts shall together constitute but one and the same instrument. 7.8 Successors and Assigns. The provisions of this Trust Agreement shall be binding upon and inure to the benefit of the Settlors, the FB Property Damage Trust, and the Trustee and their respective successors and assigns, except that neither the Settlors nor the FB Property Damage Trust nor the Trustee may assign or otherwise transfer any of its, or his or her rights or obligations under this Trust Agreement except, in the case of the FB Property Damage Trust and the Trustee, as contemplated by Articles 3.1 or 7.2(b). 7.9 Entire Agreement; No Waiver. The entire agreement of the parties relating to the subject matter of this Trust Agreement is contained herein and in the documents referred to herein, and this Trust Agreement and such documents supersede any prior oral or written agreements concerning the subject matter hereof. No failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of other rights under law or in equity. 7.10 Headings. The headings used in this Trust Agreement are inserted for convenience only and neither constitute a portion of this Trust Agreement nor in any manner affect the construction of the provisions of this Trust Agreement. 7.11 Governing Law. This Trust Agreement shall be governed by, and construed in accordance with. the laws of the State of Delaware. 7.12 Settlors' Representative. FB is hereby irrevocably designated as the representative of the Settlors, and it is hereby authorized to take any action required of the Settlors in connection with the Trust Agreement. 7.13 Dispute Resolution. Any disputes that arise under this Agreement or under the Annexes hereto shall be resolved by the Bankruptcy Court pursuant to Article XIII of the Plan, except as otherwise provided herein or in the Annexes hereto. Notwithstanding anything else herein contained, to the extent any provision of this Trust Agreement is inconsistent with any provision of the Plan, the Plan shall control. 7.14 Enforcement and Administration. The parties hereby acknowledge the Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce the terms of this Trust Agreement and the Annexes hereto, pursuant to Article XIII of the Plan. 7.15 Effectiveness. This Trust Agreement shall not become effective until it has been executed and delivered by all the parties hereto and until the Effective Date. IN WITNESS WHEREOF, the parties have executed this Trust Agreement this ___ day of ________, 2003. SETTLORS _______________________ By: ___________________________________ Name_______________________________ Title______________________________ By: ___________________________________ Name_______________________________ Title______________________________ By: ___________________________________ Name_______________________________ Title______________________________ TRUSTEE _______________________ Name FIBREBOARD ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST BYLAWS ------ ARTICLE 1 OFFICES ------- 1.1 . Principal Office. The initial principal office of the Fibreboard Asbestos Property Damage Settlement Trust (the "FB Property Damage Trust") shall be in Wilmington, Delaware or at such other place as the Trustee shall from time to time select. 1.2 . Other Offices. The FB Property Damage Trust may have such other offices at such other places as the Trustee may from time to time determine to be necessary for the efficient and cost effective administration of the FB Property Damage Trust. ARTICLE 2 THE TRUSTEE ----------- 2.1 . Control of Property, Business and Affairs. The property, business and affairs of the FB Property Damage Trust shall be managed by or under the discretion of the Trustee, provided that certain decisions of the Trustee shall be subject to the consent of the PD Advisory Committee as provided in the Trust Agreement to which these Bylaws are attached as Annex B. 2.2 . Number, Resignation and Removal. The number of Trustee[s] and the provisions governing the' resignation and removal of the Trustee and the appointment of a successor Trustee shall be governed by the provisions of Article 5 of the Trust Agreement. 2.3 . Quorum and Manner of Acting. All of the Trustees shall be required for the transaction of business. In the absence of all Trustees, the Trustee[s] present may adjourn the meeting from time to time until all shall be present. The unanimous vote, at a meeting at which all Trustees are present, shall be an act of the Trustees. 2.4 . Regular Meetings. Regular meetings of the Trustee may be held at such time and place as shall from time to time be determined by the Trustee provided that the Trustee shall meet at least once per calendar quarter. After there has been such determination, and a notice thereof has been once given to the PD Advisory Committee, regular meetings may be held without further notice being given. The PD Advisory Committee members shall be entitled to attend every regular meeting of the Trustee unless the Trustee reasonably determines that their attendance at all or part of a regular meeting would compromise a privileged communication or that a confidential discussion among the Trustee and his or her advisors is required. 2.5 . Special Meetings. Special meetings of the Trustee shall be held whenever called by the Trustee. Notice of each such meeting, unless impracticable, shall be sent to each member of the PD Advisory Committee at his or her residence or usual place of business by personal delivery or by telephone or telecopy not later than two (2) days before the day on which such meeting is to be held. Such notice shall state the place, date and hour of the meeting and the purposes for which it is called. In lieu of the notice to be given as set forth above, a waiver thereof in writing, signed by the member of the PD Advisory Committee entitled to receive such notice, whether before or after the meeting shall be deemed equivalent thereto for purposes of this Section 5. The PD Advisory Committee shall be entitled to attend every special meeting of the Trustee, unless the Trustee reasonably determines that their attendance at all or part of a special meeting would compromise a privileged communication or that a confidential discussion among the Trustee and his or her advisors is required. No notice or waiver by the Trustee, or any PD Advisory Committee member with respect to any special meeting shall be required if such person shall be present at said meeting. In the event a special meeting of the Trustee is held without notice to or the presence of the PD Advisory Committee, the PD Advisory Committee shall be given prompt notice after the fact of any resolution adopted by the Trustee at such special meeting. 2.6 . Action Without a Meeting: Meeting by Conference Call. Any action required or permitted to be taken at any meeting of the Trustee may be taken without a meeting if the Trustee consents thereto in writing, and the writing is filed with the minutes of proceedings of the Trustee. The Trustee also may take any action required or permitted to be taken at any meeting by means of conference telephone or similar communication equipment, provided that all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this paragraph shall constitute presence in person at such meeting. In the event the Trustee takes any action pursuant to this Section 6, the PD Advisory Committee shall be given prompt notice after the fact of any resolution adopted by the Trustee in writing. 2.7 . Minutes of Proceedings of Trustees. Minutes of the meetings of the Trustee shall be maintained by the FB Property Damage Trust. The PD Advisory Committee shall receive copies of the minutes promptly after they have been approved by the Trustee. 2.8 . Notice Recipient. The PD Advisory Committee members shall designate a representative to receive the notices and minutes required to be provided by this Article II. The Trustee's delivery of the notices and minutes to such designated notice recipient shall suffice for all purposes of this Article II. ARTICLE 3 OFFICERS -------- 3.1 . Principal Officers. The principal officer of the FB Property Damage Trust shall be an Executive Director. The FB Property Damage Trust may also have such other officers as the Trustee may appoint after determining, that such appointment will promote the efficient and cost-effective administration of the FB Property Damage Trust. 3.2 . Election and Term of Office. The principal officer(s) of the FB Property Damage Trust shall be chosen by the Trustee. Each such officer shall hold office until his successor shall have been duly chosen and qualified or until his earlier death, resignation or removal. 3.3 . Subordinate Officers. In addition to the principal officer enumerated in 3.1 of this Article 3, the FB Property Damage Trust may have such other subordinate officers, agents and employees as the Trustee may deem necessary for the efficient and cost-effective administration of the FB Property Damage Trust, each of whom shall hold office for such period, have such authority, and perform such duties as the Trustee may from time to time determine. The Trustee may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees. 3.4 . Removal. The Executive Director or any other officer may be removed with or without cause, at any time, by resolution adopted by the Trustee at any regular meeting of the Trustee or at any special meeting of the Trustee called for that purpose. 3.5 . Resignations. Any officer may resign at any time by giving written notice to the Trustee. The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 3.6 . Powers and Duties. The officers of the FB Property Damage Trust shall have such powers and perform such duties as may be conferred upon or assigned to them by the Trustee. ARTICLE 4 PD ADVISORY COMMITTEE --------------------- 4.1 . Regular Meetings. Regular meetings of the PD Advisory Committee may be held at such time and place as shall from time to time be determined by the PD Advisory Committee, provided it shall meet as often as is necessary to respond promptly to matters referred to it for consultation or consent by the Trustee. After a schedule for regular meetings has been determined, and a notice thereof has been once given to each PD Advisory Committee member, regular meetings may be held without further notice being given. 4.2 . Special Meeting; Notice. Special meetings of the PD Advisory Committee shall be held whenever called by one or more of the PD Advisory Committee members. Notice of each such meeting shall be delivered by overnight courier to each PD Advisory Committee member, addressed to him or her at his or her residence or usual place of business, at least three (3) days before the date on which the meeting is to be held, or shall be sent to him or her at such place by personal delivery or by telephone or telecopy, not later than two (2) days before the date on which such meeting is to be held. Such notice shall state the place, date and hour of the meeting and the purposes for which it is called. In lieu of the notice to be given as set forth above, a waiver thereof in writing, signed by the PD Advisory Committee members entitled to receive such notice, whether before or after the meeting, shall be deemed equivalent thereto for purposes of this 4.2. No notice to or waiver by any PD Advisory Committee member with respect to any special meeting shall be required if such PD Advisory Committee member shall be present at such meeting. 4.3 . Action Without a Meeting; Meeting by Conference Call. Any action required or permitted to be taken at any meeting of the PD Advisory Committee may be taken without a meeting if all members of the PD Advisory Committee consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the PD Advisory Committee. The PD Advisory Committee may take any action required or permitted to be taken at any meeting by means of conference telephone or similar communication equipment provided that all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this paragraph shall constitute presence in person at such meeting. 4.4 . Reimbursement of Expenses. All reasonable out-of-pocket expenses incurred by each member of the PD Advisory Committee in connection with the performance of his or her duties hereunder will be paid directly or reimbursed promptly to such member by the FB Property Damage Trust upon presentation of appropriate documentation. ARTICLE 5 AMENDMENTS ---------- The Bylaws of the FB Property Damage Trust, other than Article II, Article IV and Article V, may be amended by the Trustee at any meeting of the Trustee, provided that notice of the proposed amendment is contained in the notice of such meeting. The remaining Bylaws may be amended by the Trustee only after receipt of the consent of the PD Advisory Committee to the proposed amendment. ANNEX A to the FB Property Damage Trust Agreement EXHIBIT E-1 FIBREBOARD ASBESTOS PROPERTY DAMAGE CLAIMS RESOLUTION PROCEDURES These Fibreboard Asbestos Property Damage Claims Resolution Procedures ("FB Property Damage Claims Procedures") have been prepared in connection with the Joint Plan of Reorganization for Owens Corning and Its Affiliated Debtors and Debtors-in-possession, dated as of January 17, 2003 (the "Plan"), and in connection with the Fibreboard Asbestos Property Damage Settlement Trust Agreement (the "Trust Agreement") filed in connection with the Plan. These Property Damage Claims Procedures provide for the exclusive means of processing, liquidating, paying and satisfying all Fibreboard Asbestos Property Damage Claims as provided in and required by the Plan and the Trust Agreement. The trustee (the "Trustee") of the Fibreboard Asbestos Property Damage Trust (the "FB Property Damage Trust") shall implement and administer these Property Damage Claims Procedures in accordance with the Trust Agreement. ARTICLE 1 Definitions ----------- Capitalized terms used herein not otherwise defined shall have the meanings set forth in the Trust Agreement and if not defined herein nor defined in the Trust Agreement, but defined in the Plan shall have the meanings ascribed to them in the Plan. 1.1 Abatement. "Abatement" shall mean and refer to the removal, enclosure, encapsulation or repair of asbestos containing products. 1.2 Abatement Costs. "Abatement Costs" shall mean and refer to the reasonable and customary costs of Abatement, including, by way of example, costs for the Abatement itself, design, consultant and laboratory fees and costs in connection with the Abatement, and, except for Abatement upon Demolition, the reasonable costs of replacement, as allowed in these Property Damage Claims Procedures, of the asbestos containing products with a non-asbestos containing product. 1.3 Allowed Claim. "Allowed Claim" shall mean and refer to any Claim allowed for payment under the terms of these FB Property Damage Claims Procedures. An Allowed Claim shall be, and be deemed to be, a judgment against the FB Property Damage Trust (as successor for all purposes to the liabilities of Fibreboard in respect of FB Asbestos Property Damage Claims), in the Allowed Amount of such Claim. 1.4 Allowed Costs. "Allowed Costs" are those costs actually incurred that are reasonably and customary in the circumstances and which are allowed under these FB Property Damage Claims Procedures. 1.5 Approved Laboratory. "Approved Laboratory" shall mean and refer to a laboratory competent to perform constituent analysis of bulk samples of asbestos containing products approved by the Trustee with the concurrence of the PD Advisory Committee. 1.6 Asbestos Coordinator. "Asbestos Coordinator" shall mean and refer to Claimant's employee or agent who has primary responsibility for the Claimant's asbestos abatement, management and control activities. 1.7 Claim. "Claim" shall mean a Fibreboard Asbestos Property Damage Claim. 1.8 Claimant. "Claimant" shall mean an Entity holding a Fibreboard Asbestos Property Damage Claim. 1.9 Convincing Evidence. "Convincing Evidence" shall mean and refer to sufficient evidence to be a preponderance of the evidence. 1.10 Cost Model. "Cost Model" shall mean and refer to an appropriate model or formula developed by the Trustee with the advice and concurrence of the PD Advisory Committee for the purpose of estimating Past and Future Abatement Costs. 1.11 Demolition. "Demolition" shall mean and refer to the deliberate removal or destruction of a building or a part thereof, or a building system or component thereof, for any purpose by its owner or operator, by those acting for or on behalf of the owner or operator, or by a government agency, undertaken at least in principal part for reasons not related to asbestos management or control. 1.12 Disallowed Claim. "Disallowed Claim" shall mean and refer to any Claim that has been determined by the Trustee to not qualify for payment under these FB Property Damage Claims Procedures. 1.13 Discounted Payable Costs. "Discounted Payable Costs" shall mean and refer to the Abatement Costs payable to a Category 2 Claimant calculated in accordance with Exhibit 1. 1.14 Effective Date. "Effective Date" shall mean the Business Day on which all conditions to the consummation of the Plan have been satisfied or waived as provided in Article XII of the Plan, and is the effective date of the Plan. 1.15 Future Abatement Costs. "Future Abatement Costs" shall mean and refer to estimated Abatement Costs to be incurred by the Claimant based upon the Cost Model. Future Abatement Costs shall include the Abatement Costs for removal of previously encapsulated or enclosed asbestos containing products. 1.16 Homogeneous Area. "Homogeneous Area" shall mean and refer to a section of asbestos-containing product within a building that appears uniform in color and texture. 1.17 Past Abatement Costs. "Past Abatement Costs" shall mean and refer to Abatement Costs actually incurred by the Claimant prior to the date of submission of its Claim to the Property Damage Facility, or, at the Claimant's option, costs for such Abatement as calculated by application of the Cost Model. 1.18 Payment Percentage. "Payment Percentage" shall mean and refer to the percentage of the Allowed Amount of all Asbestos Property Damage Claims that the Trustee, from time to time, determine pursuant to the requirements set forth in Section 7.1(c) of the FB Property Damage Claims Procedures. 1.19 Pre-Existing Claims. "Pre-Existing Claims" shall mean and refer to those claims on behalf of a Claimant who prior to the Bar Date filed or intervened in a lawsuit in a court of general jurisdiction against Fibreboard ("Fibreboard Pre-Existing Claimant). 1.20 Product Identification. "Product Identification" shall mean and refer to Convincing Evidence that the asbestos-containing product which is the subject of a Claim is a Fibreboard asbestos-containing product. 1.21 Property Damage Claim Form. "PD Claim Form" or "Claim Form" shall mean and refer to the form(s) and supporting instructions approved by the Trustee to be used by Claimants in the proper submission of Claims to the Property Damage Facility. 1.22 Property Damage Facility. "Property Damage Facility" shall mean and refer to the mechanism or system established by the Trustee for the disposition and payment of Claims pursuant to these FB Property Damage Claims Procedures. 1.23 Qualified Person. "Qualified Person" shall mean and refer to a trained industrial hygienist, engineer, contractor, consultant and/or asbestos coordinator who is certified, licensed and/or specially trained and experienced to identify and assess asbestos-containing products and to select appropriate Abatement. ARTICLE 2 Purpose and Interpretation -------------------------- 2.1 Purpose. These FB Property Damage Claims Procedures are adopted pursuant to the Trust Agreement. They are designed to provide fair, prompt payment to holders of valid FB Property Damage Claims and to provide a low transaction cost method of effectuating the resolution of such Claims. 2.2 Interpretation. Nothing in these FB Property Damage Claims Procedures shall be deemed to create a substantive right for any Claimant. Without limiting the foregoing, these FB Property Damage Claims Procedures specifically shall not create any substantive right for any claimant to be afforded now, or in the future, a discounted cash payment election, as described in Section 4.3(b) herein, in any amount. These FB Property Damage Claims Procedures are procedural, and they may be amended, deleted, or added to pursuant to the terms of the Trust Agreement and the terms of these FB Property Damage Claims Procedures. ARTICLE 3 Property Damage Advisory Committee ---------------------------------- There shall be a Property Damage Advisory Committee (the "PD Advisory Committee") composed of three persons selected by the Trustee. The Trustee shall participate and consult with the PD Advisory Committee on all major policy and administrative decisions affecting, and the interpretation and implementation of, the FB Property Damage Claims Procedures. Where consultation is required under the Trust Agreement or these FB Property Damage Claims Procedures, the Trustee need only seek advice and counsel from the PD Advisory Committee and are independent and free to accept or reject any recommendation of the PD Advisory Committee. In addition to any provisions in the Trust Agreement that may require the consent of the PD Advisory Committee, the Trustee shall obtain the consent of the PD Advisory Committee regarding (i) participation or merger with another claim resolution organization or contracting the operation of the FB Property Damage Trust (as defined herein) to another claim resolution organization; (ii) material changes other than any changes related to specific amounts to be paid or percentages to be paid in these FB Property Damage Claims Procedures in respect of Allowed Asbestos Property Damage Claims; (iii) the designation of approved laboratories; and (iv) the approval of a Cost Model for Past and Future Abatement Costs (as defined herein) under these FB Property Damage Claims Procedures. ARTICLE 4 Claims Categories ----------------- 4.1 Categories of Asbestos Property Damage Claims. All FB Asbestos Property Damage Claims shall be divided into two categories: (a) Category 1 Claims. Category 1 Claims shall include those Claims for Individual Review which are filed within twelve months of the Effective Date. (b) Category 2 Claims. Category 2 Claims shall include those Claims for Discounted Payable Costs which are filed within twelve months of the Effective Date. (c) No Claimant may file a Claim in more than one category. 4.2 Allowed Asbestos Property Damage Claims. For a Category 1 Claim or a Category 2 Claim to be Allowed, the Claimant must provide Convincing Evidence of each of the following: (a) The asbestos containing product for which the Claim is submitted is a Fibreboard asbestos-containing product; and (b) A legally viable cause of action; and (c) A Category 1 Claim, only, must also provide Convincing Evidence of compensable injury and damages. 4.3 Allowed Amounts. (a) Category 1 Claims shall be Allowed in the amount of the Allowed Costs, as adjusted to take into account the historical difficulty of proving such claims in the tort system and in no event shall the Allowed amount be greater than 50% of the Allowed Costs. (b) Category 2 Claims shall be Allowed in the amount of their Discounted Payable Costs as provided in Exhibit 1. 4.4 Disallowed Asbestos Property Damage Claims. The Property Damage Facility will disallow any Asbestos Property Damage Claim: (a) for which the Claimant did not file a timely Proof of Claim within the meaning of the Bankruptcy Code and Bankruptcy Rules, such determination shall be made consistent with Section 3.3(c) of the Trust Agreement requiring the Trustee to enforce the Bankruptcy Court's bar date orders; (b) for which the Claimant did not file a Property Damage Claim Form within twelve months of the Effective Date; (c) where there has been a prior judicial determination or stipulation that the asbestos containing product for which the Asbestos Property Damage Claim was filed is not a Fibreboard asbestos-containing product; (d) by any Claimant where there is Convincing Evidence that Fibreboard would have been able to obtain summary judgment on the ground that the claim would have been barred as a matter of law or factually time-barred under the laws of the applicable jurisdiction if considered on the Petition Date, unless such claim has been revived or reinstated by reason of legislative enactment in the applicable jurisdiction; provided, however, there is a presumption that Pre-Existing Claims are not factually time-barred; or (e) where there has been a prior adjudication by Final Order (as defined in the Plan) that an Asbestos Property Damage Claim has been time-barred and may not be brought in any other jurisdiction or otherwise revived by the holder of such Claim. 4.5 Fibreboard Indirect Asbestos Property Damage Claim. Fibreboard Indirect Asbestos Property Damage Claims asserted against the FB Property Damage Trust that fall within the Plan's definition of Fibreboard Indirect Asbestos Property Damage Claims, and which have not been disallowed, discharged, or otherwise resolved, shall be processed, allowed or disallowed, liquidated, paid, and satisfied in accordance with procedures to be developed and implemented by the Trustee, which procedures (a) shall determine the validity and allowance of such claims consistent with Section 502(e) of the Bankruptcy Code, (b) shall require binding arbitration for the resolution of all disputes and thereby foreclose resort to the tort system for dispute resolution, and (c) shall otherwise provide the same processing and payment to the holders of such claims that are allowed as the FB Property Damage Trust would have afforded the holders of any underlying valid Fibreboard Asbestos Property Damage Claims under this Section IV. ARTICLE 5 Processing and Review of Asbestos Property Damage Claims. --------------------------------------------------------- 5.1 Submission of Asbestos Property Damage Claims. All Asbestos Property Damage Claims shall be submitted on the Property Damage Claim Form within twelve (12) months of the Effective Date, and shall include all of the documentation (as set forth in Section VI below) required to substantiate the Claim. The Property Damage Facility may establish procedures designed to reduce administrative costs, which do not prejudice the Claimants' substantive rights. The Property Damage Facility also may establish guidelines to prevent abuse of the Property Damage Facility's objective of providing for cost-effective and reasonable methods of Abatement which do not prejudice the Claimants' substantive rights and which are not inconsistent with these FB Property Damage Claims Procedures. The Property Damage Facility may negotiate and compromise Claims in the best interests of the Category 1 and Category 2 Claims pursuant to these FB Property Damage Claims Procedures. 5.2 Review of Asbestos Property Damage Claims. Upon receipt of a Property Damage Claim Form, the Property Damage Facility shall review the Property Damage Claim Form to determine whether the necessary documentation (as set forth in Section VI) has been submitted. If additional documentation is required in order to evaluate the Claim, the Property Damage Facility shall notify the Claimant in writing within 90 days of receipt of such Property Damage Claim Form by the Facility. Any Claim requiring additional documentation as to which no such further documentation is provided within 60 days from the date of such notification, or such reasonable extension as may be granted by the Trustee (but which, in no event, shall exceed an additional 30 days), shall be a Disallowed Claim, provided that the Claimant shall have the right to request reconsideration and binding dispute resolution pursuant to the procedures set forth in Sections 5.3 and 5.4 below. Once all of the necessary documentation pertinent to a Claim is received, the Property Damage Facility will determine whether the Claim will be Allowed. The Property Damage Facility shall notify the Claimant in writing by mail of its determination within 120 days of receipt of all necessary documentation. Where Product Identification evidence under Section 6.2(c) is submitted, the Property Damage Facility shall have the right, upon reasonable notice to the Claimant, to inspect Claimant's building(s) or structure(s) and conduct non-invasive or non-destructive tests reasonably necessary for the evaluation of the Claim. Such inspection and/or testing shall be limited to visual inspection, photography, bulk sample collection and constituent analysis by an approved laboratory under these FB Property Damage Claims Procedures, and other such reasonable tests, and shall be done at times reasonably convenient to the Claimant and in accordance with all applicable federal, state and local rules or regulations regarding safe practices and the Claimant's operations and maintenance program, if any. Unless otherwise agreed, inspection or testing shall not extend the time for making a determination with respect to a Claim. For the purposes of this Section, the requirement that any testing by the Property Damage Facility be non-invasive or non-destructive shall not preclude securing bulk samples, provided, however, that the sampling shall be conducted in accordance with all applicable federal, state and local rules or regulations regarding safe practices and the Claimant's operations and maintenance program, if any, and further that the Property Damage Facility shall repair, including cosmetically, the material from which the sample is taken. The Property Damage Facility's official determination of a Claim shall include the dollar amount of Abatement Costs. If the Property Damage Facility determines that the claim amount for Abatement Costs of a Claim, as filed, is greater than the reasonable and customary costs of the allowable action undertaken under the circumstances, it shall allow only such reasonable and customary costs. If the dollar amount allowed is less than the total amount of the Claim filed by the Claimant for any reason, the Property Damage Facility's notification shall include the reason for its determination, a response to any contention previously raised by the Claimant in support of its Claim, copies of all reports of any inspection and/or testing, and a full disclosure of the Claimant's rights to request reconsideration and binding dispute resolution. If the Claimant accepts the determination of the Property Damage Facility as to the amount of such Claimant's Allowed Claim, that decision will be final and binding on both parties and may not be reopened. 5.3 Reconsideration of Asbestos Property Damage Claim. A Claimant shall have 60 days from the date of receipt of the Property Damage Facility's notice of its official determination to file with the Property Damage Facility a written request for reconsideration of that determination. The Claimant must state in writing the reason(s) for seeking reconsideration and include any additional materials not theretofore submitted which the Claimant wishes to be considered in connection with the reconsideration. Once the Property Damage Facility has received a request for reconsideration, it shall review the Asbestos Property Damage Claim, the supporting documentation, Claimant's reason for seeking reconsideration and arguments in support thereof, any newly submitted material, the notice of determination and reasons therefor, and any other relevant material. The review shall be conducted de novo by a panel consisting of two Property Damage Facility claims analysts and one otherwise disinterested member of the PD Advisory Committee. The claims analyst who made the original determination shall not sit on the reconsideration panel. Neither the Property Damage Facility nor the panel members may raise or rely on any reasons not stated in the Notice of Determination as a basis for denying the request for reconsideration. The panel shall have 90 days from the date of receipt of Claimant's request for reconsideration to issue a final determination. If no final determination is issued within said 90-day time period, the Asbestos Property Damage Claim shall be Allowed as originally submitted. The reconsideration panel shall issue its final determination in writing to the Claimant. The Allowed Amount shall include the amount of the Abatement Costs, if any. If the amount allowed is less that the Claim as filed by the Claimant for any reason or the Claim is disallowed in whole or in part, the final determination shall include a detailed, written statement supporting the panel's finding, including a response to any contention previously raised by the Claimant in support of its Claim, as well as a full disclosure of Claimant's right to request binding dispute resolution. 5.4 Binding Dispute Resolution. A final determination upon reconsideration by the panel which denies either in full or in part a Claim may be submitted to an arbitrator for binding dispute resolution. A Claimant shall have 60 days from the date of receipt of the Property Damage Facility's final determination upon reconsideration to file with the Property Damage Facility a written request for binding dispute resolution. The Property Damage Facility shall maintain a list of a minimum of 15 independent arbitrators who are available to hear disputes between the Property Damage Facility and Claimants. Once a request for Binding Dispute Resolution is received by the Property Damage Facility, the Property Damage Facility shall, within 10 days of receipt of such request, send to the Claimant the names and addresses of 10 independent arbitrators which shall have been selected by a random process. Claimant shall have 30 days from the date the list is received to strike five arbitrators, and to return that information to the Property Damage Facility. The Property Damage Facility, once it has received Claimant's choices, shall select one of the five potential arbitrators not stricken by the Claimant and then arrange a mutually acceptable date and location for the binding dispute resolution to take place. The binding dispute resolution shall be commenced within 90 days of receipt by the Property Damage Facility of Claimant's choices of arbitrators. Upon confirmation of the date that binding dispute resolution is to commence, the Property Damage Facility shall notify the Claimant in writing of the identity of the arbitrator and the date and location of commencement of the binding dispute resolution. Telephone arbitrations may be conducted by the Property Damage Facility, where requested by the Claimant. The arbitrator shall review the Claim de novo pursuant to the standards set forth in these FB Property Damage Claims Procedures. In no event shall the arbitrator's determination be an amount lower than the amount of the final determination by the Property Damage Facility upon reconsideration, unless the arbitrator determines that the Claim is a Disallowed Claim. The Property Damage Facility shall pay the arbitrators' fees, provided, however, that, in the event a Claimant fails to obtain an award in an amount equal to or greater than 125% of the Property Damage Facility's final determination of its Claim, such fees shall be borne by the Claimant. ARTICLE 6 Required Documentation ---------------------- 6.1 Requirements. Except as otherwise may be provided for herein, no Asbestos Property Damage Claim shall be Allowed unless the following documentation is submitted to the Property Damage Facility in support of the Asbestos Property Damage Claim. All documentation provided by a Claimant must be sufficient to constitute Convincing Evidence as required by these FB Property Damage Claims Procedures. The absence of one or more of the categories of documents set forth below shall not prejudice the allowance of, or constitute the basis for the disallowance of, a Claim if the Claimant certifies that, despite reasonable efforts, the required material could not be located. In such case, alternative documents or testimony that provides Convincing Evidence of the necessary facts to support the Claim shall be accepted. Claimants may also use evidence submitted and determinations made by the claims processing facilities in other asbestos bankruptcies to constitute Convincing Evidence, as appropriate, of the quantity of asbestos-containing product in their buildings or structures and/or their costs of Abatement. 6.2 Category 1 Claims. The following documentation must be supplied: (a) A completed PD Claim Form, describing the location, type and quantity of asbestos-containing product and the installation date thereof, including a certification of the information contained therein; and (b) Copies of all bulk sample analysis results and/or records thereof (existing as of the Effective Date) showing that abated material contained asbestos. The bulk sample analysis technique must be polarized light microscopy or another generally acceptable method, including those acceptable to the United States Environmental Protection Agency. A minimum of one sample from each Homogeneous Area for which Abatement Costs are claimed must have been analyzed; and (c) Convincing Evidence that the asbestos-containing product that is the subject of the Claim is a Fibreboard asbestos-containing product, which the Trustee may confirm by any method and which confirmation shall be at the expense of the Claimant. Identification of Fibreboard asbestos-containing product may be established by any of the following, among others: (i) constituent analysis of representative bulk sample(s) showing that the asbestos-containing product that is the subject of the Claim is a Fibreboard asbestos-containing product; or (ii) a sworn affidavit of an individual with personal knowledge that Fibreboard asbestos-containing product was used in the building or structure for which the Claim is made, setting forth the individual's conclusion that Fibreboard is the designer, manufacturer, supplier, distributer or seller of the asbestos-containing product and the factual basis for that conclusion; or (iii) documentation evidencing that Fibreboard asbestos-containing product was used in the building or structure for which the Claim is made including, without limitation, sales invoices; purchase orders; architectural specifications and records; bid documents; contracts and subcontracts; change orders; material approvals; maintenance, repair and renovation records; complaints to contractors; installation records; advertisements; insurance claims; supplier records; documents from discovery in lawsuits; and Fibreboard records. For this purpose, a specification without some additional substantiating proof that Fibreboard asbestos-containing product was used shall not sustain a Claim; or (iv) A prior judicial determination or stipulation entered into by Fibreboard that the asbestos-containing product that is the subject of the Claim is Fibreboard asbestos-containing product; and (d) Convincing Evidence supporting a Claim for Abatement Costs including one or more of the following: (i) a copy of a report from a Qualified Person or Asbestos Coordinator describing the type, location, and quantity of asbestos-containing product, and type and scope of Abatement which was performed; or (ii) copies of receipted bills, or vouchers or other proof of all Abatement Costs; or (iii) copies of bid specifications and contracts for all Abatement work performed by persons other than the Claimant's employees; or (iv) copies of all special insurance policies purchased directly by Claimant to cover risks resulting from Abatement or copies of receipted bills, vouchers, or other proof of special insurance; or (v) with respect to costs attributable to Abatement performed by Claimant's employees, copies of personnel contracts or other proof of the salary of Claimant's employees and the number of hours spent by them on Abatement, including a breakdown of those activities. Such proof shall include a sworn statement by Claimant setting forth the basis for attributing such employee costs to and/or Abatement and the job description and qualifications of each such employee; and (e) Claimants submitting a Claim for Future Abatement Costs must supply a copy of the report of a Qualified Person or an Asbestos Coordinator detailing information sufficient for the Trustee to apply the Cost Model based on the type, location and quantity of Fibreboard or asbestos-containing product and type and scope of Abatement to be performed. 6.3 Category 2 Claims. The following documentation must be provided: (a) A completed Property Damage Claim Form, describing the location, type and quantity of asbestos-containing product and the installation date thereof, including a certification of the information contained therein; and (b) Convincing Evidence that the asbestos-containing product that is the subject of the Claim is a Fibreboard asbestos-containing product, which the Trustee may confirm by any method and which confirmation shall be at the expense of the Claimant. ARTICLE 7 Payment of Asbestos Property Damage Claims ------------------------------------------ 7.1 Payment Procedures. (a) To the extent that Claims, as a part of a voluntary procedure, have not already been liquidated during the these Reorganization Cases, or are not in the process of being liquidated, the Trustee shall use these procedures to process all Claims as quickly as practicable after the Effective Date. Claims shall be processed on a first-in-first-out ("FIFO") order. (b) As soon as all Claims submitted to the FB Property Damage Trust according to these FB Property Damage Claims Procedures have been finally determined to be Allowed Claims or Disallowed Claims, the Trustee, in consultation with the PD Advisory Committee, shall calculate the total Allowed Amount of all Allowed Category 1 Claims and the total Allowed Amount of all Allowed Category 2 Claims. (c) The FB Asbestos Property Damage Trust is funded with Assets primarily consisting of rights to insurance recoveries (the "Recoveries") under liability insurance policies issued to Fibreboard for FB Asbestos Property Damage Claims and identified in Schedule XVI to the Plan. The Trust shall use the Recoveries to pay holders of Allowed Claims pursuant to these FB Property Damage Claims Procedures. (d) Upon receiving all of the Recoveries from the Assets, or 5 years from the Effective Date, whichever occurs first, the Trustee shall determine the amounts to be paid to holders of Allowed Claims based on the total amount of Recoveries available at that time ("Available Recoveries"). (i) Allowed Category 1 Claims shall be paid based on the following calculations: The Trustee shall subtract the total Allowed Amount of all Allowed Category 2 Claims from the Available Recoveries to determine the Available Recoveries remaining to compensate holders of Allowed Category 1 Claims ("Remaining Available Recoveries"). The Trustee, in consultation with the PD Advisory Committee, shall then determine the Payment Percentage to be used to pay holders of Allowed Category 1 Claims based on the Remaining Available Recoveries. Holders of Allowed Category 1 Claims shall then receive payment calculated on the basis of the Payment Percentage multiplied by the Allowed Amount of their Claim. (ii) Allowed Category 2 Claims shall be paid their Discounted Payable Costs calculated in accordance with Exhibit 1; except that, if the Remaining Available Recoveries are insufficient to pay holders of Allowed Category 1 Claims at least as much as they would have received had they submitted their Claim as a Category 2 Claim, then all of the holders of Allowed Claims, regardless of claim category, shall receive their pro rata share of all Available Recoveries. (iii) Should additional recoveries ("Additional Recoveries") from the Assets become available after payment has been made to holders of Allowed Claims pursuant to Sub-sections 7.1(d)(i) - (ii), as soon as practicable after they become available, the Additional Recoveries shall be distributed to holders of Allowed Claims pursuant to Sub-sections 7.1(d)(i)-(ii); provided that holders of Allowed Category 2 Claims shall not be entitled to receive more than their Discounted Payable Costs, such that any Additional Recoveries that become available after all holders of Allowed Category 2 Claims have received their total Allowed Amounts shall be paid only to holders of Allowed Category 1 Claims based on the Payment Percentage; provided further that holders of Allowed Category 1 Claims shall not be entitled to receive more than their Allowed Amount. (e) Notwithstanding any other provision above, if the Claimant has previously received payment through any other lawsuit or bankruptcy case for damages that would qualify as Allowed Costs under these procedures for the same asbestos-containing product for which it is now seeking payment from the Trust, the amount actually received from the Trust attributable to that asbestos-containing product shall be adjusted. The payment that would otherwise have been received from the Trust shall be reduced to the extent necessary to ensure that the amount received herein, when combined with the payment received in the prior lawsuit or bankruptcy, will not allow the Claimant to receive more than 100% of its Allowed Costs for said asbestos-containing product. 7.2 Timing of Payments. Payments to holders of Allowed Claims shall be made as soon as practicable after Available Recoveries or Additional Recoveries become available. EXHIBIT 1 - --------- 1. Except as otherwise may be the case pursuant to sections 2 and 3, below, Claimants who elect Category 2 treatment for their claims shall receive Discounted Payable Costs based upon the quantity of asbestos-containing product identified in the building(s) or structure(s) specified in their respective Property Damage Claim Forms. Any such Claim must be supported by the documentation required in Section 6.3 and shall be reviewed and approved by the Property Damage Facility using the procedures set forth in Section V. One-hundred percent (100%) of the quantity of asbestos-containing product approved by the Property Damage Facility shall be used in computing a Claimant's Allowed Claim where Past Abatement Costs have been incurred for the relevant asbestos-containing product; sixty-five percent (65%) of the quantity of approved asbestos-containing product shall be used in computing a Claimant's Allowed Claim where such Past Abatement Costs have not been incurred. 2. After determining the aggregate allowed amounts of the quantity of asbestos-containing product as provided in paragraph 1, hereof, and subject to the provisions of paragraph 3, below, the Trustee shall Allow each Category 2 Claimant Discounted Payable Costs in the amount of $1.00 times each linear and/or square foot of asbestos-containing product. If there are not sufficient funds to pay all Discounted Payable Costs in full, the available funds will be distributed, pro rata, among the holders of the Category 2 Claims. 3. To further encourage the efficient and consensual resolution of Claims, a Claimant may propose to the Trustee, within six months of the Effective Date, that, in lieu of the provisions of paragraph 1, that its Discounted Payable Cost be determined on the basis of a lump-sum settlement, based on either evidence of a relevant settlement history, an extrapolation of the quantity of asbestos-containing product for the type or types of asbestos-containing product for which it seeks payment, or a combination of the two methods. The following procedures then shall apply: (a) The Claimant's proposal must be accompanied by supporting information, including, at a minimum: (i) the relevant history of prior settlements in the tort system (whether or not this is the basis for Claimant's proposal); and (ii) amounts the Claimant has received in connection with other asbestos bankruptcies and the basis upon which those payments were made. The Claimant may, but need not, include a specific amount it proposes for settlement. (b) Upon receiving a proposal to settle for a lump-sum, the Trustee may either accept the initial specific amount proposed by the Claimant or enter into good-faith negotiations with the Claimant to determine such a lump-sum settlement amount. The Trustee's initial response to the proposal must be made to the Claimant within two months after receiving the Claimant's proposal. (c) If within two months after the Trustee's initial response they have not agreed with the Claimant upon a lump-sum settlement, the Trustee may, but need not, declare an impasse, in which case, the parties may continue to negotiate until such time as the Trustee declares an impasse. Thereafter, the Claimant will be given a minimum of an additional four months to file a Category 2 Claim, pursuant to the provisions of paragraph 1, above. (d) In their negotiations with the Claimant, the Trustee shall take into account all matters they deem relevant including, but not limited to, prior settlements reached by the Claimant in the tort system; amounts the Claimant has received in connection with other asbestos bankruptcies and the basis upon which those payments were made; the amount of Past Abatement Costs incurred by the Claimant versus the Future Abatement Costs to be incurred by the priority accorded to Past Abatement Costs herein; the total quantity of asbestos-containing product present in the Claimant's buildings or structures as determined by extrapolation or other means as compared with the aggregate quantity submitted by all other Category 2 Claimants; the limitation of total payments per square or linear foot of asbestos-containing product set forth in paragraph 2 above; and the Discounted Payable Costs being sought by the other Category 2 Claimants. (e) The Trustee's offer to the Claimant of a lump sum settlement may be expressed in terms of an allowed amount of Discounted Payable Costs and/or an actual cash payment the Claimant may expect to receive. (f) If the Trustee and the Claimant agree upon an Allowed Amount based upon Discounted Payable Costs, that amount will be included in the aggregate amount of Discounted Payable Costs described in paragraph 2, above, and the Claimant will receive its appropriate pro rata share from the funds available. (g) Notwithstanding any other provision herein, the Trustee has the discretion to defer making any settlement offer for an actual cash payment until he or she has processed and determined the aggregate quantity of asbestos-containing product used in computing all other Claims submitted by the Category 2 Claimants. SCHEDULE I SCHEDULE OF SUBSIDIARY DEBTORS CDC Corporation Engineered Yarns America, Inc. Exterior Systems, Inc. Falcon Foam Corporation Fibreboard Corporation HOMExperts LLC Integrex Integrex Professional Services LLC Integrex Testing Systems LLC Integrex Supply Chain Solutions LLC Integrex Ventures LLC Jefferson Holdings, Inc. Owens-Corning Fiberglas Technology Inc. Owens Corning HT, Inc. Owens-Corning Overseas Holdings, Inc. Owens Corning Remodeling Systems, LLC Soltech, Inc. SCHEDULE II LIST OF NON-DEBTOR SUBSIDIARIES Commercial Owens Corning Chile Limitada Crown Manufacturing Inc. Engineered Pipe Systems, Inc. EPS Holding AS Eric Company European Owens-Corning Fiberglas, S.A. Flowtite Offshore Services Ltd. Goodman Ventures, Inc. IPM, Inc. LMP Impianti Srl Norske EPS Botswana AS OC (Belgium) Holdings, Inc. OC Celfortec Inc. O.C. Funding B.V. OCW Acquisition Corporation Owens-Corning Britinvest Limited Owens-Corning Capital Holdings I, Inc. Owens-Corning Capital Holdings II, Inc. Owens-Corning Capital L.L.C. Owens-Corning Cayman Limited Owens-Corning Fiberglas Deutschland GmbH Owens-Corning Fiberglas (G.B.) Ltd. Owens-Corning Fiberglas Espana, S.A. Owens-Corning Fiberglas France S.A. Owens-Corning Fiberglas Norway A/S Owens-Corning Fiberglas S.A. Owens-Corning Fiberglas Sweden Inc. Owens-Corning Fiberglas (U.K.) Pension Plan Ltd. Owens-Corning FSC, Inc. Owens-Corning Funding Corporation Owens-Corning (Guangzhou) Fiberglas Co., Ltd. Owens-Corning Holdings Limited Owens-Corning Real Estate Corporation Owens-Corning (Sweden) AB Owens-Corning Veil Netherlands B.V. Owens-Corning Veil U.K. Ltd. Owens Corning (Anshan) Fiberglass Co., Ltd. Owens Corning Argentina Sociedad de Responsabilidad Limitada Owens Corning Australia Pty. Limited Owens Corning Building Materials Espana, S.A. Owens Corning Canada Inc. Owens Corning Cayman (China) Holdings Owens Corning (China) Investment Company, Ltd. Owens Corning Commercial Insulation Systems, LLC Owens Corning Composites Italia S.r.l. Owens Corning Composites SPRL Owens Corning Espana SA Owens Corning Fiberglas A.S. Limitada Owens Corning (India) Limited Owens Corning (Japan) Ltd. Owens Corning Integrated Acoustic Systems, LLC Owens Corning Korea Owens Corning Mexico, S.A. de C.V. Owens Corning (Nanjing) Foamular Board Co. Ltd. Owens Corning NRO Inc. Owens Corning NRO II Inc. Owens Corning (Shanghai) Fiberglas Co., Ltd. Owens Corning (Singapore) Pte Ltd. Owens Corning VF Holdings, Inc. Palmetto Products, Inc. Quest Industries, LLC Scanglas Ltd. Trumbull Asphalt Co. of Delaware Vytec Corporation Wall Technology, Inc. Willcorp,Inc. Wrexham A.R. Glass Ltd. SCHEDULE V SCHEDULE OF AVOIDANCE ACTIONS COMMENCED BY THE DEBTORS Owens Corning, et al. v. A.C. Leadbetter & Son, Inc. (Case No. A-02-5810). Owens Corning, et al. v. AT Plastics Corporation (Case No. A-02-5811). Owens Corning, et al. v. Nextiraone, LLC, f/k/a Williams Communications Solutions, LLC and Williams Communications, LLC f/k/a Williams Communications Solutions, LLC (Case No. A-02-5817). Owens Corning and Fibreboard Corporation v. John D. Roach, et al. (Case No. A-02-5826). Owens Corning v. Bank of America Corp. (Case No. A-02-5819). Owens Corning v. Sanford C. Bernstein & Co. LLC, et al. (Case No. A-02-5820). Owens Corning v. The Northern Trust Company (Case No. A-02-5818). Owens Corning, et al. v. Credit Suisse First Boston, et al. (Case No. A-02-5829). Owens Corning, Fibreboard Corporation and Integrex v. The Estate of David T. Cobb and Official Committee of Unsecured Creditors (Case No. A-02-5832). Owens Corning, Fibreboard Corporation and Integrex v. Duke Law Firm, P.C. and Official Committee of Unsecured Creditors (Case No. A-02-5875). Owens Corning, Fibreboard Corporation and Integrex v. Ness Motley Loadholt Richardson & Poole, Ness Motley LLC and Official Committee of Unsecured Creditors (Case No. A-02-5830). Owens Corning, Fibreboard Corporation and Integrex v. Lewis & Lewis, P.A., Michael T. Lewis and Official Committee of Unsecured Creditors (Case No. A-02-5876). Owens Corning, Fibreboard Corporation and Integrex v. Terrence M. Johnson, Esquire and Official Committee of Unsecured Creditors (Case No. A-02-5872). Owens Corning, Fibreboard Corporation and Integrex v. Law Office of Peter T. Nicholl and Official Committee of Unsecured Creditors (Case No. A-02-5879). Owens Corning, Fibreboard Corporation and Integrex v. Peyton Parenti & Whittington, Peyton Law Firm and Official Committee of Unsecured Creditors (Case No. A-02-5831). Owens Corning, Fibreboard Corporation and Integrex v. Provost Umphrey Law Firm LLP and Official Committee of Unsecured Creditors (Case No. A-02-5873). Owens Corning, Fibreboard Corporation and Integrex v. Reaud, Morgan & Quinn, Inc., The Reaud Law Firm and Official Committee of Unsecured Creditors (Case No. A-02-5874). Owens Corning, Fibreboard Corporation and Integrex v. Roxie Huffman Viator and Official Committee of Unsecured Creditors (Case No. A-02-5871). Owens Corning, Fibreboard Corporation and Integrex v. Vonachen, Lawless, Trager & Slevin and Official Committee of Unsecured Creditors (Case No. A-02-5878). SCHEDULE VI SCHEDULE OF PURCHASERS AND TRANSFEREES TREATED AS PROTECTED PARTIES (1) THE FOLLOWING PARTIES ARE PROTECTED PARTIES FOR PURPOSES OF THE ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION ONLY TO THE EXTENT THE ALLEGED LIABILITY OF THE PROTECTED PARTY WITH RESPECT TO AN ASBESTOS PERSONAL INJURY CLAIM DERIVES FROM THE PURCHASE OF ASSETS OR BUSINESSES OR STOCK FROM ONE OR MORE OF THE DEBTORS OR ONE OR MORE RELATED PERSONS OF THE DEBTORS. 493989 B.C. Ltd. 901065 Ontario Limited A.J. Gerrard & Co. Advanced Glassfiber Yarns LLC Advanced Glassfiber Yarns LLC AG Yarns Canada Inc. AGY Holdings, Inc. Alcoa Home Exteriors, Inc. Alcopor Holding AC Alpha Corporation of Tennessee ALSCO Metals Corporation f/k/a ALSCO Acquisition Corp. American Builders & Contractors Supply Apache Building Products Company Archway Manufacturing and Warehousing, Inc. Armstrong World Industries Canada Ltd. Armstrong World Industries, Inc. Asahi Glass Company Limited Ashland Chemical Canada, Ltd. Asphalt Roofing & Supplies Asphalt Roofing & Supplies, Inc. Atco Rubber Products, inc. Atlantic Air Products Atlas Roofing Corporation Atlas Roofing Corporation Australian Fiber Glass, ACI Fiberglass & New Zealand Fiber Glass Blue Ridge Investments, LLC Booth Creek Ski Holdings, Inc. Bristol Composite Materials Inc. Bundy Corporation Caliste-Ruston, Inc. (an affiliate of Calsilite Manufacturing Corp., Inc.) Cambridge Industrial do Brazil, Ltda Central Industrial Center Chan Hwa Trading Corporation City of Millersburg, Oregon C-K Communications, Inc. Companice Colombiana de Assesorices e Inversiones Derbit-Belgium, S.A. Erom Second Corporation Fastening Systems Acquisition Corporation Fiberglas South Africa Fiber-Lite Corporation Florida Metal Products, Inc. Flowtite as, Norway Fluid Containment, Inc. (f/k/a Octens, Inc.) Foam Fabricators, Inc. Gaylord Container Corp. Gewestelijke-Steuben Partners Glasfiber AS Great Lakes Terminal & Transport Corporation H.H.M. Van Gilse, Trustee IIG Minwool, LLC Industry Factory Rentals J. Aron & Co. Jeffrey Wilson Koch Fuels, Inc. (through Koch Materials Company Division) Koch Materials Company Kroy Building Products, Inc. LA County Transportation Commission Lance, Inc. (assigned to Vista Bakery, Inc.) Leeway & Co. Manufacturing Hanover Mellon Bank, N.A. Mesa Insulation, Inc. (a Division of Johns Manville Corporation) Metro Boston Contracting Co., Inc. Mogens Hogsted Molded Fiber Glass Body Company Montedison S.P.A. and Granmont, Inc. National Filtration Corporation Newport Mineral Ventures, Inc. (Borate Distribution Company) Newport Mineral Ventures/James H. Sparks NGF Canada Ltd NHP, Inc. North River Partners Oregon Metallurgical Corporation (ESOP) Outboard Marine Company Owens Corning (Anshan) Fiberglass Co., Ltd Package Deal Inc. Parker Hannifin Corporation Performance Contracting Group, Inc. Performance Contracting, Inc. Performance Materials Supply Inc. Platres Fafarge PST Corporation (wholly owned by Industiras Perdura) Roan Selection Trust International Limited Rockefeller Foundation - Transaction Two Rockfibras do Brasil Industria e Comercio Ltda. S&D Realty, LLC Sampco, Inc. Saudi Arabian Amiantit Co. Schuller International, Inc. Schuller International, Inc. Sheffield Insulations Limited Shell Oil Siam Cement Sierra Pacific Industries Simonton Building Products, Inc. Simonton Building Products, Inc. Southern Silica Inc. Spieker-French-Foster Partnership Sterling Faucet Company Sunnybrook Conference Center, Inc. Taiyo Kogyo Corporation The Aviation Works (Newark Airport) The Detroit Salt Company, L.C. The Image Source, Inc. Therm-All Insulation Inc. Tibbet TKV Containers, Inc. Trade & Development Offshore Properties VCFA Inv. I-MBW Veroc Technology W.M. Cameron W.M. Cameron Company Wiley Organics, Inc. Wohlstadter-Hyperion WPI Acquisition Company Yapi Merkezi A PROTECTED PARTY IDENTIFIED OR DESCRIBED IN THIS SCHEDULE IS A PROTECTED PARTY ONLY TO THE EXTENT ITS ALLEGED LIABILITY FOR AN ASBESTOS PERSONAL INJURY CLAIM IS DERIVED FROM ITS RELATIONSHIP WITH OCD, FIBREBOARD, AN OC PERSON, AN FB PERSON OR A RELATED PERSON OF THE FOREGOING. NO SUCH PERSON SHALL BE A PROTECTED PARTY BY VIRTUE OF THIS PLAN TO THE EXTENT ITS ASBESTOS LIABILITY IS INDEPENDENT OF AND NOT DERIVED FROM THE FOREGOING RELATIONSHIPS. - -------- (1) The within Schedule is subject to further review by the Official Committee of Asbestos Claimants and the Legal Representative for Future Claimants and may be revised any time prior to ten (10) Business days prior to the Objection Deadline. SCHEDULE VIII(1) SCHEDULE OF FB PERSONS AND OC PERSONS THE PLAN IDENTIFIES CATEGORIES OF PERSONS THAT ARE FB PERSONS AND OC PERSONS. FB PERSONS ARE LIMITED TO THE FOLLOWING: (i) Fibreboard and its direct or indirect Subsidiaries, (ii) Fibreboard's and its direct or indirect Subsidiaries' respective predecessors in interest, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (iii) Fibreboard's and its direct or indirect Subsidiaries' respective successors in interest, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (iv) Fibreboard's and its direct or indirect Subsidiaries' respective controlled Affiliates, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (v) the respective former and present employees, directors or officers of the Persons identified in clauses (i), (ii), (iii) and (iv), acting in such capacity. ALTHOUGH THE DEBTORS INTEND TO ATTEMPT TO SPECIFICALLY IDENTIFY AND NAME AS MANY FB PERSONS AS POSSIBLE UNDER CATEGORY (V), IT MAY BE IMPRACTICABLE TO IDENTIFY ALL SUCH INDIVIDUALS AND IT IS THE INTENT OF INCLUDING SUCH INDIVIDUALS BY IDENTIFICATION OF THE CATEGORY EVEN IF NOT NAMED. OC PERSONS ARE LIMITED TO THE FOLLOWING: (i) OCD and its direct or indirect Subsidiaries, (ii) OCD's and its direct or indirect Subsidiaries' respective predecessors in interest, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (iii) OCD's and its direct or indirect Subsidiaries' respective successors in interest, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (iv) OCD's and its direct or indirect Subsidiaries' respective controlled Affiliates, but solely to the extent they appear on the following list: [THIS LIST IS BEING PREPARED BY THE DEBTORS AND MAY BE AMENDED UP TO TEN (10) BUSINESS DAYS PRIOR TO THE OBJECTION DEADLINE] (v) the respective former and present employees, directors or officers of the Persons identified in clauses (i), (ii), (iii) and (iv), acting in such capacity. ALTHOUGH THE DEBTORS INTEND TO ATTEMPT TO SPECIFICALLY IDENTIFY AND NAME AS MANY OC PERSONS AS POSSIBLE UNDER CATEGORY (V), IT MAY BE IMPRACTICABLE TO IDENTIFY ALL SUCH INDIVIDUALS AND IT IS THE INTENT OF INCLUDING SUCH INDIVIDUALS BY IDENTIFICATION OF THE CATEGORY EVEN IF NOT NAMED. - -------- (1) The within Schedule is subject to further review by the Official Committee of Asbestos Claimants and the Legal Representative for Future Claimants and may be revised any time prior to ten (10) Business days prior to the Objection Deadline. SCHEDULE X(1) SCHEDULE OF PROTECTED PARTIES The following are Protected Parties to the extent identified on this Schedule, but only to the extent its alleged liability for an Asbestos Personal Injury Claim is derived from its relationship with OC, Fibreboard, and OC Person, FB Person or a Related Person: (a) any Debtor and its Related Persons; (b) any Reorganized Debtor and its Related Persons, (c) any Person to the extent such Person is alleged to be directly or indirectly liable for the conduct of, Claims against, or Demands on any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust on account of Asbestos Personal Injury Claims by reason of one or more of the following: (a) such Person's ownership of a financial interest in any of the Debtors or Reorganized Debtors, a past or present Affiliate of any of the Debtors or the Reorganized Debtors, or predecessor in interest of any of the Debtors or the Reorganized Debtors, (b) such Person's involvement in the management of any of the Debtors or the Reorganized Debtors or any predecessor in interest of any of the Debtors or the Reorganized Debtors, or (c) such Person's service as an officer, director, or employee of any of the Debtors, the Reorganized Debtors or any Interested Party. The Debtors intend to attempt to investigate and identify as many Protected Parties as possible under the above categories , and will begin filing such list no later than ten (10) Business Days prior to the approval of the Disclosure Statement, but this Schedule may be amended up to ten (10) Business Days prior to the Objection Deadline. Nonetheless the Debtors intend that all Related Persons who are individuals that are alleged to be liable for Asbestos Personal Injury Claims by virtue of service as officers or directors or involvement in management of the Debtors, their Affiliates or other Related Person be Protected Parties as defined in this Plan. A PROTECTED PARTY IDENTIFIED OR DESCRIBED IN THIS SCHEDULE IS A PROTECTED PARTY ONLY TO THE EXTENT ITS ALLEGED LIABILITY FOR AN ASBESTOS PERSONAL INJURY CLAIM IS DERIVED FROM ITS RELATIONSHIP WITH OCD, FIBREBOARD, AN OC PERSON, AN FB PERSON OR A RELATED PERSON OF THE FOREGOING. NO SUCH PERSON SHALL BE A PROTECTED PARTY BY VIRTUE OF THIS PLAN TO THE EXTENT ITS ASBESTOS LIABILITY IS INDEPENDENT OF AND NOT DERIVED FROM THE FOREGOING RELATIONSHIPS. ___________________ (1) The within Schedule is subject to further review by the Official Committee of Asbestos Claimants and the Legal Representative for Future Claimants and may be revised any time prior to ten (10) Business days prior to the Objection Deadline. SCHEDULE XII COMBINED DISTRIBUTION PACKAGE The Combined Distribution Package consists of: 1. Available Cash, less $7 million in Cash as the Cash component of the FB Sub-Account Settlement Payment; 2. Senior Notes in the aggregate principal amount of $1,400 million, less the sum of (a) the amount of any deferred portion of the Allowed Priority Tax Claims and (b) Senior Notes in the aggregate principal amount of $63 million as the Senior Notes component of the FB Sub-Account Settlement Payment; 3. 77.2 million shares of New OCD Common Stock, with an estimated value of $1,900 million, less 2.8 million shares, with an estimated value of $70 million, as the New OCD Common Stock component of the FB Sub-Account Settlement Payment; and 4. The Litigation Trust Recoveries SCHEDULE XIII SCHEDULE OF EXCLUSIONS FROM INTERCOMPANY CLAIMS The Wilmington Trust/O.C. Funding B.V. Guarantee Claim is not an Intercompany Claim and is classified and treated as a Class 5 Claim. All Claims of O.C. Funding B.V. against any of the Debtors shall be treated as Class 10 Intercompany Claims, shall be cancelled and extinguished, and no holder of such Claims shall be entitled to, or shall receive or retain any property or interest in property on account of, such Claims. SCHEDULE XV
Insurer Policy Period Policy Number Lloyd's of London Sept. 15, 1950 to Sept. 15, 1953 564/155055 Lloyd's of London Sept. 15, 1953 to Sept. 15, 1956 564/477688 Lloyd's of London Sept. 15, 1953 to Sept. 15, 1954 53/8540D Lloyd's of London Sept. 15, 1954 to Sept. 15, 1955 54/83850 Lloyd's of London Sept. 15, 1955 to Sept. 15, 1956 55/7871D Employers Reinsurance Corp. Sept. 15, 1956 to Sept. 15, 1959 C-2033 Lloyd's of London Sept. 15, 1956 to Sept. 15, 1959 564/500671 Lloyd's of London Sept. 15, 1956 to Sept. 15, 1958 56/8706D Lloyd's of London Sept. 15, 1958 to Sept. 15, 1959 58/10666D Employers Surplus Lines Ins. Co. Sept. 15, 1959 to Sept. 15, 1962 E50072 Lloyd's of London Sept. 15, 1959 to Sept. 15, 1962 564/510503 Lloyd's of London Sept. 15, 1959 to Sept. 15, 1962 59/9335D Truck Ins. Exchange April 1, 1977 to Oct. 1, 1978 350 41 55 Ins. Co. Of The State Of Pa June 1, 1977 to July 1, 1977 4177 8005 Central National Insurance Co. July 1, 1977 to June 1, 1978 CNU 12 65 73 Mission Insurance July 1, 1977 to June 1, 1978 M 835766 Pine Top June 1, 1978 to Aug. 1, 1978 MLP 101015 Lexington June 1, 1978 to Aug. 3, 1978 5513494 Puritan Insurance Co. April 1, 1979 to April 1, 1980 ML 650521 Granite State Jan. 1, 1980 to April 1, 1980 6579 5818 Granite State Jan. 1, 1980 to April 1, 1980 6579 0962 Granite State April 1, 1980 to April 1, 1981 6580 7157 Granite State April 1, 1980 to April 1, 1981 6580 2060 New England Reinsurance Corp. April 1, 1980 to April 1, 1981 791297 California Union Ins. Company April 1, 1980 to April 1, 1981 ZCX 004028 Allianz Underwriters Inc. April 1, 1980 to April 1, 1981 AUX 5200051 Granite State April 1, 1981 to April 1, 1982 6581 8194 Granite State April 1, 1981 to April 1, 1982 6581 2956 New England Reinsurance Corp. April 1, 1981 to April 1, 1982 791604 California Union Ins. Company April 1, 1981 to April 1, 1982 ZCX 004437 Allianz Underwriters Inc. April 1, 1981 to April 1, 1982 AUX 5201138 Granite State April 1, 1982 to April 1, 1983 6582 9385 New England Reinsurance Corp. April 1, 1982 to April 1, 1984 791794 California Union Ins. Company April 1, 1982 to April 1, 1983 ZCX 006186 Allianz Underwriters Inc. April 1, 1982 to April 1, 1983 AUX 5201505 Century Indemnity Co. April 1, 1982 to April 1, 1984 CIZ 425553 Central National Insurance Co. April 1, 1982 to April 1, 1985 CNZ 006802 Granite State April 1, 1983 to April 1, 1984 6583 0372 California Union Ins. Company April 1, 1983 to April 1, 1984 ZCX 006526 Allianz Underwriters Inc. April 1, 1983 to April 1, 1984 AUX 5201071 Granite State April 1, 1984 to April 1, 1985 6584 1255 Aetna Insurance Co. April 1, 1984 to April 1, 1985 EX 09 1011 Constitution State April 1, 1984 to April 1, 1985 CE 874 F6883
SCHEDULE XVI
Insurer Policy Period Policy Number Midland June 18, 1974 to Oct. 22, 1976 XL 1110170544 National Union Fire June 18, 1974 to Oct. 22, 1976 CE 1011835 Affiliated FM July 9, 1974 to Oct. 22, 1976 XL 72515 INA July 9, 1974 to Oct. 22, 1976 XCP 6638 Lexington Oct. 22, 1975 to Oct. 22, 1976 GC 5502955 Midland Oct. 22, 1976 to Oct. 22, 1977 XL 151996 National Union Fire Oct. 22, 1976 to Oct. 22, 1977 1189233 Allianz March 9, 1979 to Sept. 1, 1979 UMB 599515 Midland Sept. 1, 1979 to Sept. 1, 1980 XL 153013 XL 153014 Transit Casualty Sept. 1, 1979 to Sept. 1, 1980 SCU 955271 SCU 955258 Gibraltar Sept. 1, 1979 to Sept. 1, 1980 GMX 00232 GMX 00236 Granite State Sept. 1, 1979 to Sept. 1, 1980 6179-1549 6179-1662 Integrity Sept. 1, 1979 to Sept. 1, 1980 XL 201337 National Union Fire Sept. 1, 1979 to Sept. 1, 1980 1224753 1224754 Allianz Sept. 1, 1979 to Sept. 1, 1980 AU 5003102 Birmingham Fire Sept. 1, 1979 to Sept. 1, 1980 SE 6073551 Landmark Sept. 1, 1979 to Sept. 1, 1980 FE 4000221 Royale Belge Sept. 1, 1979 to Sept. 1, 1980 1250965/79 Southern American Sept. 1, 1979 to Sept. 1, 1980 XX 800201 Zurich International Sept. 1, 1979 to Sept. 1, 1980 ZI 7162 Midland Sept. 1, 1980 to Sept. 1, 1981 XL 706744 XL 706745 Transit Casualty Sept. 1, 1980 to Sept. 1, 1981 MUX 967039 MUX 967040 Allianz Sept. 1, 1980 to Sept. 1, 1981 AUX 5200169 AUX 5200178 Gibraltar Sept. 1, 1980 to Sept. 1, 1981 GMX 00719 GMX 00720 Granite State Sept. 1, 1980 to Sept. 1, 1981 6180-2514 6180-2515 Integrity Sept. 1, 1980 to Sept. 1, 1981 XL 201765 National Union Fire Sept. 1, 1980 to Sept. 1, 1981 122 60 49 122 60 50 Birmingham Fire Sept. 1, 1980 to Sept. 1, 1981 SE 6073686 Royale Belge Sept. 1, 1980 to Sept. 1, 1981 1250965/80 Southern American Sept. 1, 1980 to Sept. 1, 1981 XX 800360 Zurich International Sept. 1, 1980 to Sept. 1, 1981 ZIB 7458/2 Midland Sept. 1, 1981 to Sept. 1, 1982 XL 724521 XL 724522 Transit Casualty Sept. 1, 1981 to Sept. 1, 1982 MUX 967065 MUL 967066 Allianz Sept. 1, 1981 to Sept. 1, 1982 AUX 5201229 AUX 5201230 Gibraltar Sept. 1, 1981 to Sept. 1, 1982 GMX 01308 GMX 01309 Integrity Sept. 1, 1981 to Sept. 1 1982 XL 203363 XL 203364 National Union Fire Sept. 1, 1981 to Sept. 1, 1982 118 64 21 118 64 22 Birmingham Fire Sept. 1, 1981 to Sept. 1, 1982 SE 6073042 Central Nat'l of Omaha Sept. 1, 1981 to Sept. 1, 1982 CNZ 0066019 Continental Sept. 1, 1981 to Dec. 17, 1981 SRX 3196793 Royale Belge Sept. 1, 1981 to Sept. 1, 1982 1250965-81 Southern American Sept. 1, 1981 to Sept. 1, 1982 XX 800472 Transit Casualty Sept. 1, 1982 to Sept. 1, 1983 UMB 950250 Midland Sept. 1, 1982 to Sept. 1, 1983 XL 739665 XL 739666 XL 739667 Birmingham Fire Sept. 1, 1982 to Sept. 1, 1983 SE 607 3986 SE 607 3985 Gibraltar Sept. 1, 1982 to Sept. 1, 1983 GMX 01828 GMX 01829 Integrity Sept. 1, 1982 to Sept. 1, 1983 XL 206444 XL 206445 National Union Fire Sept. 1, 1982 to Sept. 1, 1983 118 64 37 118 64 38 Central Nat'l of Omaha Sept. 1, 1982 to Sept. 1, 1983 CNZ 008086 Granite State Sept. 1, 1982 to Sept. 1, 1983 6682-3495 Harbor Insurance Co. Sept. 1, 1982 to Sept. 1, 1983 HI 163017 London Guarantee & Accd. Sept. 1, 1982 to Sept. 1, 1983 LX 18988076 Pacific Employers Sept. 1, 1982 to Sept. 1, 1983 XCC 003198 Royal Indemnity Dec. 10, 1982 to Sept. 1, 1983 ED 101856 Royale Belge Sept. 1, 1982 to Sept. 1, 1983 1250965/82 Central Nat'l of Omaha Sept. 1, 1983 to Sept. 1, 1984 CNZ 008414 Gibraltar Sept. 1, 1983 to Sept. 1, 1984 GMX 02346 GMX 02347 Midland Sept. 1, 1983 to Sept. 1, 1984 XL 749124 XL 749125 XL 749143 Royal Indemnity Sept. 1, 1983 to Sept. 1, 1984 ED 102134 Birmingham Fire Sept. 1, 1983 to Sept. 1, 1984 SE 6074148 SE 6074149 Granite State Sept. 1, 1983 to Sept. 1, 1984 6683-4149 6683-4150 INA Underwriters Sept. 1, 1983 to Sept. 1, 1984 XCP 145412 XCP 145413 Integrity Sept. 1, 1983 to Sept. 1, 1984 XL 207790 National Union Fire Sept. 1, 1983 to Sept. 1, 1984 9605001 9605002 Royal Indemnity Sept. 1, 1983 to Sept. 1, 1984 ED 102135 Harbor Insurance Co. Sept. 1, 1983 to Feb. 10, 1984 HI 176858 London Guarantee & Accd. Sept. 1, 1983 to Sept. 1, 1984 LX 2107865 Royale Belge Sept. 1, 1983 to Sept. 1, 1984 1250965/83
SCHEDULE XVII SCHEDULE OF FB SUB-ACCOUNT SETTLEMENT PAYMENT The FB Sub-Account Settlement Payment shall be $140 million consisting of the following: 1. $7 million in Cash; 2. Senior Notes in the principal amount of $63 million; and 3. 2.8 million shares of New OCD Common Stock, with an estimated value of $70 million. EX-99 4 s770855.txt EXHIBIT 99 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ___________________________ IN RE: ) ) Chapter 11 OWENS CORNING, et al., ) ) Case No. 00-03837 (JKF) Debtors. ) ) Jointly Administered ___________________________) Related to Docket Nos. 7438, 7999, 8460, and 8461 Hearing Date: August 27, 2003 at 9:00 a.m. Objection Deadline: August 22, 2003 at 4:00 p.m. DISCLOSURE STATEMENT WITH RESPECT TO THIRD AMENDED JOINT PLAN OF REORGANIZATION FOR OWENS CORNING AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION SAUL EWING LLP SKADDEN, ARPS, SLATE, MEAGHER Norman L. Pernick (I.D. # 2290) & FLOM LLP J. Kate Stickles (I.D. # 2917) Ralph Arditi 222 Delaware Avenue D.J. Baker P.O. Box 1266 Four Times Square Wilmington, DE 19899-1266 New York, NY 10036-6522 (302) 421-6800 (212) 735-3000 Charles O. Monk, II Special Counsel to Debtors Jay A. Shulman and Debtors-in-Possession Edith K. Altice 100 South Charles Street COVINGTON & BURLING Baltimore, MD 21201-2773 1201 Pennsylvania Avenue, N.W. (410) 332-8600 Mitchell F. Dolin Anna P. Engh Adam H. Isenberg Washington, D.C. 20004-2401 MaryJo Bellew (202) 662-6000 Centre Square West 1500 Market Street, 38th Floor Special Insurance Counsel to Debtors Philadelphia, PA 19102-2186 and Debtors-in-Possession (215) 972-7777 Attorneys for the Debtors and Debtors-in-Possession KAYE SCHOLER LLP CAPLIN & DRYSDALE, CHARTERED Michael J. Crames Elihu Inselbuch Jane W. Parver 399 Park Avenue Andrew A. Kress New York, NY 10022 Edmund M. Emrich (212) 319-7125 425 Park Avenue New York, NY 10022 Peter Van N. Lockwood (212) 836-8000 Julie W. Davis One Thomas Circle, N.W. YOUNG, CONAWAY, Washington, D.C. 20005 STARGATT & TAYLOR LLP (202) 862-5000 James L. Patton, Jr. (I.D. # 2202) Edwin J. Harron (I.D. # 3396) CAMPBELL & LEVINE, LLC The Brandywine Building Marla Eskin (I.D. # 2989) 1000 West Street, 17th Floor Mark T. Hurford (I.D. # 3299) P.O. Box 391 800 King Street Wilmington, DE 19899-0391 Wilmington, DE 19801 (302) 571-6600 (302) 426-1900 Attorneys for James J. McMonagle, Attorneys for the Official Legal Representative for Future Claimants Committee of Asbestos Claimants Dated as of August 8, 2003 TABLE OF CONTENTS
Page PREFATORY SECTIONS NOTICE WITH RESPECT TO INJUNCTIONS................................................................................i DISCLAIMER.......................................................................................................ii NOTE ON DEFINED TERMS............................................................................................iv SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS......................................................................v I. INTRODUCTION.............................................................................................1 II. PLAN VOTING INSTRUCTIONS AND PROCEDURES..................................................................2 A. Definitions.....................................................................................2 B. Notice to Holders of Claims and Interests.......................................................2 C. Solicitation Package............................................................................4 D. Voting Procedures, Ballots and Voting Deadline..................................................4 E. Confirmation Hearing and Deadline for Objections to Confirmation................................5 III. GENERAL INFORMATION CONCERNING THE DEBTORS...............................................................5 A. History and Description of Business.............................................................5 B. Financial Structure of the Company at the Petition Date........................................11 IV. BACKGROUND OF ASBESTOS-RELATED LITIGATION...............................................................17 A. Pre-Petition Claims Against OCD................................................................17 B. Pre-Petition Claims Against Fibreboard.........................................................17 C. National Settlement Program....................................................................18 D. Establishment of Financial Reserves for Asbestos Liability; Estimation of Asbestos Liability...............................................................23 V. CHAPTER 11 CASES........................................................................................26 A. Events Leading to the Chapter 11 Filings.......................................................26 B. The Chapter 11 Filings.........................................................................27 C. Continuation of Business; Stay of Litigation...................................................28 D. Professionals Retained in the Chapter 11 Cases.................................................28 E. "First Day" and Other Orders...................................................................38 F. Significant Events During the Chapter 11 Cases.................................................39 G. Avoidance Actions In the Chapter 11 Cases......................................................83 VI. FUTURE BUSINESS OF THE REORGANIZED DEBTORS..............................................................91 A. Structure and Business of the Reorganized Debtors..............................................91 B. Board of Directors and Management of Reorganized Debtors.......................................92 C. Terms of Certificate of Incorporation of Reorganized OCD......................................102 D. Projected Financial Information...............................................................103 VII. SUMMARY OF THE PLAN OF REORGANIZATION..................................................................104 A. Structure of the Plan.........................................................................105 B. Substantive Consolidation under the Plan......................................................106 C. Classification and Treatment of Claims and Interests..........................................108 D. Summary of Debt to be Incurred, Securities to be Issued and Other Consideration Under the Plan; Execution of Related Documents............................127 E. Distributions under the Plan..................................................................130 F. Treatment of Executory Contracts and Unexpired Leases.........................................135 G. Resolution and Treatment of Disputed, Contingent, and Unliquidated Claims........................................................................................140 H. Exit Facility.................................................................................141 I. Conditions Precedent to Confirmation and Effectiveness of the Plan............................141 J. Certain Releases and Injunctions Under the Plan...............................................148 K. Summary of Other Provisions of the Plan.......................................................154 L. Effects of Confirmation.......................................................................156 M. Retention of Jurisdiction.....................................................................161 N. Revesting of Assets...........................................................................163 O. Rights of Action..............................................................................163 P. Payment of Statutory Fees.....................................................................164 Q. Post-Consummation Operations of the Debtors...................................................164 VIII. THE ASBESTOS PERSONAL INJURY TRUST.....................................................................164 A. General Description of the Asbestos Personal Injury Trust.....................................165 B. Asbestos Personal Injury Trust Distribution Procedures........................................170 C. The Asbestos Personal Injury Permanent Channeling Injunction..................................187 IX. THE FB ASBESTOS PROPERTY DAMAGE TRUST..................................................................188 A. General Description of the FB Asbestos Property Damage Trust..................................189 B. FB Asbestos Property Damage Claims Procedures.................................................192 C. Injunction Channeling FB Asbestos Property Damage Claims......................................195 X. THE LITIGATION TRUST...................................................................................195 A. General Description of the Litigation Trust...................................................195 B. Distributions of Litigation Trust Recoveries..................................................197 XI. REGISTRATION RIGHTS/RESTRICTIONS ON TRANSFERS OF CORPORATE SECURITIES AND CERTAIN CLAIMS................................................................198 XII. APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS.....................................................199 A. Offer and Sale of New OCD Securities Pursuant to the Plan: Bankruptcy Code Exemption from Registration Requirements......................................199 B. Subsequent Transfers of New OCD Securities....................................................200 XIII. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN............................................................................................202 A. Federal Income Tax Consequences to the Debtors................................................203 B. Federal Income Tax Consequences to Claim Holders..............................................206 C. Importance of Obtaining Professional Tax Assistance...........................................213 XIV. FEASIBILITY OF THE PLAN AND BEST INTERESTS OF CREDITORS................................................213 A. Feasibility of the Plan.......................................................................213 B. Acceptance of the Plan........................................................................215 C. Best Interests Test...........................................................................216 D. Liquidation Analysis..........................................................................217 E. Valuation of the Reorganized Debtors..........................................................217 F. Application of the "Best Interests" of Creditors Test to the Liquidation Analysis and the Valuation....................................................................224 G. Confirmation Without Acceptance of All Impaired Classes: "Cramdown"....................................................................................224 XV. CERTAIN RISK FACTORS TO BE CONSIDERED..................................................................225 A. Certain Factors Relating to the Chapter 11 Proceedings........................................225 B. Certain Factors Relating to Securities to be Issued Pursuant to the Plan......................226 C. Certain Factors Relating to the Reorganized Debtors...........................................227 XVI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN...............................................................................................230 A. Alternative Plan(s) of Reorganization or Liquidation..........................................230 B. Liquidation Under Chapter 7 or Chapter 11.....................................................230 XVII. THE SOLICITATION; VOTING PROCEDURE.....................................................................232 A. Parties in Interest Entitled to Vote..........................................................232 B. Classes Impaired under the Plan...............................................................233 C. Waivers of Defects, Irregularities, etc.......................................................233 D. Withdrawal of Ballots; Revocation.............................................................233 E. Further Information; Additional Copies........................................................234 XVIII. RECOMMENDATION AND CONCLUSION..........................................................................235
NOTICE WITH RESPECT TO INJUNCTIONS THE THIRD AMENDED JOINT PLAN OF REORGANIZATION FOR OWENS CORNING AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION (THE "PLAN"), WHICH IS ATTACHED AS APPENDIX A TO THIS DISCLOSURE STATEMENT, CONTAINS AN ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION UNDER 11 U.S.C. ss. 524(g). THE PLAN ALSO CONTAINS AN INJUNCTION UNDER 11 U.S.C. ss. 105, WHICH CHANNELS ALL ASBESTOS PROPERTY DAMAGE CLAIMS AGAINST FIBREBOARD CORPORATION, AN INJUNCTION UNDER 11 U.S.C. ss. 105 WITH RESPECT TO CLAIMS AGAINST THE HARTFORD ENTITIES AND AN INJUNCTION WITH RESPECT TO CLAIMS AGAINST RELATED PERSONS OF THE DEBTORS BY HOLDERS OF CLAIMS WHO VOTE IN FAVOR OF THE PLAN, WHICH ARE INJUNCTIONS AGAINST CONDUCT NOT OTHERWISE ENJOINED UNDER THE BANKRUPTCY CODE. FOR A DESCRIPTION OF THE ACTS TO BE ENJOINED AND THE IDENTITY OF THE ENTITIES THAT WOULD BE SUBJECT TO EACH OF THESE INJUNCTIONS, SEE THE FOLLOWING SECTIONS OF THIS DISCLOSURE STATEMENT: (1) THE ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION: SECTION VIII.C OF THIS DISCLOSURE STATEMENT ENTITLED "THE ASBESTOS PERSONAL INJURY TRUST--THE ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION" AND SECTION 5.14(b) OF THE PLAN; (2) THE INJUNCTION CHANNELING FB ASBESTOS PROPERTY DAMAGE CLAIMS: SECTION IX.C OF THIS DISCLOSURE STATEMENT ENTITLED "THE FB ASBESTOS PROPERTY DAMAGE TRUST-- INJUNCTION CHANNELING FB ASBESTOS PROPERTY DAMAGE CLAIMS " AND SECTION 3.3(g) OF THE PLAN; (3) THE INJUNCTION WITH RESPECT TO CLAIMS AGAINST THE HARTFORD ENTITIES: SECTION VII.J.6 OF THIS DISCLOSURE STATEMENT ENTITLED "INJUNCTION WITH RESPECT TO CLAIMS AGAINST THE HARTFORD ENTITIES" AND SECTION 5.13(d) OF THE PLAN; AND (4)THE INJUNCTION WITH RESPECT TO CLAIMS AGAINST RELATED PERSONS OF THE DEBTORS BY HOLDERS OF CLAIMS WHO VOTE IN FAVOR OF THE PLAN: SECTION VII. J.2 OF THIS DISCLOSURE STATEMENT ENTITLED "CERTAIN RELEASES AND INJUNCTIONS UNDER THE PLAN -- RELEASES BY HOLDERS OF CLAIMS AND INTERESTS" AND SECTION VII. J.3 ENTITLED "INJUNCTIONS RELATED TO RELEASES" AND SECTIONS 5.13(b) AND (c) OF THE PLAN. DISCLAIMER THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS INCLUDED HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE THIRD AMENDED JOINT PLAN OF REORGANIZATION FOR OWENS CORNING AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION (THE "PLAN"), FILED BY OWENS CORNING ("OCD") AND THOSE ENTITIES LISTED ON SCHEDULE I OF THE PLAN (COLLECTIVELY, THE "SUBSIDIARY DEBTORS" AND, TOGETHER WITH OCD, THE "DEBTORS"), JAMES J. MCMONAGLE, THE LEGAL REPRESENTATIVE FOR FUTURE CLAIMANTS ("FUTURE CLAIMANTS' REPRESENTATIVE"), AND THE OFFICIAL COMMITTEE OF ASBESTOS CLAIMANTS ("ASBESTOS CLAIMANTS' COMMITTEE") (THE DEBTORS, THE FUTURE CLAIMANTS' REPRESENTATIVE, AND THE ASBESTOS CLAIMANTS' COMMITTEE, COLLECTIVELY, THE "PLAN PROPONENTS"). THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN. NO PERSON MAY GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DISCLOSURE STATEMENT, REGARDING THE PLAN OR THE SOLICITATION OF ACCEPTANCES OF THE PLAN. ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. PLAN SUMMARIES AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS AND SCHEDULES ANNEXED TO THE PLAN AND THIS DISCLOSURE STATEMENT. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME BEFORE OR AFTER THE DATE HEREOF. THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE UNITED STATES BANKRUPTCY CODE, 11 U.S.C. ss.ss. 101-1330 (AS AMENDED, THE "BANKRUPTCY CODE") AND RULE 3016 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE (THE "BANKRUPTCY RULES") AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAWS. EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTING FIRM AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THIS DISCLOSURE STATEMENT HAS NEITHER BEEN APPROVED NOR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR THE SECURITIES REGULATORS OF ANY STATE, AND NEITHER THE SEC NOR ANY STATE REGULATORS HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. PERSONS OR ENTITIES TRADING IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES OF OR CLAIMS AGAINST OCD OR ANY OF THE SUBSIDIARY DEBTORS AND DEBTORS-IN-POSSESSION IN THESE CASES SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY WERE PREPARED. AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER ACTIONS OR THREATENED ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS DISCLOSURE STATEMENT SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES OR OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN, OCD OR ANY OF THE SUBSIDIARY DEBTORS AND DEBTORS-IN-POSSESSION IN THESE CASES. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT AT THIS TIME. A HEARING TO CONSIDER THE ADEQUACY OF THIS DISCLOSURE STATEMENT UNDER SECTION 1125 OF THE BANKRUPTCY CODE HAS BEEN SET BY THE BANKRUPTCY COURT FOR AUGUST 27, 2003 AT 9:00 A.M. AS MAY BE CONTINUED FROM TIME TO TIME BY THE BANKRUPTCY COURT. THE PLAN PROPONENTS RESERVE THE RIGHT TO MODIFY OR SUPPLEMENT THIS DISCLOSURE STATEMENT PRIOR TO AND UP TO THE TIME OF THE CONCLUSION OF SUCH HEARING. NOTE ON DEFINED TERMS For purposes of this Disclosure Statement, all capitalized terms not otherwise defined shall have the meanings ascribed to them in Article I of the Plan, attached to the Disclosure Statement as Appendix A, except as expressly provided or unless the context clearly requires otherwise. A Glossary of Additional Terms is attached to this Disclosure Statement as Appendix A-1. Whenever the context requires, such meanings shall be equally applicable to both the singular and plural form of such terms, and the masculine gender shall include the feminine and the feminine gender shall include the masculine. Any term used in initially capitalized form in this Disclosure Statement that is not defined herein but that is used in the Bankruptcy Code shall have the meaning ascribed to such term in the Bankruptcy Code.
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS The treatment of each of the Classes is summarized as follows: - --------------------- ---------------------------- ------------- -------------------- -------------------------------- CLASS DESCRIPTION TREAT- ESTIMATED ESTIMATED RECOVERY MENT ALLOWED CLAIMS (in millions) - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Unclassified DIP Facility Claims N/A $0 100% Claims - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Unclassified Administrative Claims N/A $46 100% Claims - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Unclassified Priority Tax Claims N/A Up to $135 100% Claims - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 1 Claims Other Priority Claims Unimpaired $0 100% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 2A Claims Other Secured Tax Claims Unimpaired $5 100% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 2B Claims Other Secured Claims Unimpaired $6 100% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 3 Claims Convenience Claims Impaired $18 100% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 4 Claims Bank Holders Claims Impaired $1,472 to $1,577 See attachment to this Chart - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 5 Claims Bondholders Claims Impaired $1,389 See attachment to this Chart - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 6 Claims General Unsecured Claims Impaired $323 to $687 See attachment to this Chart - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 7 Claims OC Asbestos Personal Impaired See attachment to See attachment to this Chart Injury Claims this Chart - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 8 Claims FB Asbestos Personal Impaired See attachment to See attachment to this Chart Injury Claims this Chart - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 9 Claims FB Asbestos Property Impaired $2 to $7 100% Damage Claims - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 10 Claims Intercompany Claims Impaired N/A 0% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 11 Claims Subordinated Claims Impaired N/A 0% - --------------------- ---------------------------- ------------- -------------------- -------------------------------- Class 12 Interests OCD Interests Impaired N/A 0% - --------------------- ---------------------------- ------------- -------------------- --------------------------------
- ---------------------------------------------- ----------------------------------------------------------------------- Class Description Treatment Under Plan - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Unclassified Claims - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- DIP Facility Claims The Plan provides for DIP Facility Claims to be paid in full. On, or as soon as reasonably practicable after, the latest of (i) the Estimated Allowed Claims: $0 Initial Distribution Date, (ii) the date on which a DIP Facility Claim becomes an Allowed DIP Facility Claim or (iii) the date on Estimated Recovery: 100% which a DIP Facility Claim becomes payable pursuant to any agreement between a Debtor and the holder of such DIP Facility Claim, each holder of an Allowed DIP Facility Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed DIP Facility Claim (a) Cash equal to the unpaid portion of such Allowed DIP Facility Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. - ---------------------------------------------- ----------------------------------------------------------------------- Administrative Claims The Plan generally provides for Administrative Claims to be paid in full. Except as otherwise provided in the Plan and subject to the Estimated Allowed Claims: requirements of the Plan, on, or as soon as reasonably practicable $46 million after, the latest of (i) the Initial Distribution Date, (ii) the date on which an Administrative Claim becomes an Allowed Administrative Estimated Recovery: 100% Claim or (iii) the date on which an Administrative Claim becomes payable pursuant to any agreement between a Debtor and the holder of such Administrative Claim, each holder of an Allowed Administrative Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Administrative Claim (a) Cash equal to the unpaid portion of such Allowed Administrative Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing; provided, however, that Allowed Administrative Claims with respect to liabilities incurred by a Debtor in the ordinary course of business during the Chapter 11 Cases shall be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto. - ---------------------------------------------- ----------------------------------------------------------------------- Priority Tax Claims Except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Initial Distribution Date Estimated Allowed Claims: or has agreed in writing to a different treatment, each holder of an Up to $135 million Allowed Priority Tax Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Estimated Recovery: 100% Priority Tax Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Priority Tax Claim, including any interest on such Allowed Class 2A Claims required to be paid pursuant to Section 506(b) of the Bankruptcy Code, on the later of the Initial Distribution Date and the date such Priority Tax Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Priority Tax Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. - ---------------------------------------------- ----------------------------------------------------------------------- Unimpaired Classes of Claims - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class 1 -Other Priority Claims Class 1 consists of all Allowed Claims entitled to priority pursuant to Section 507(a) of the Bankruptcy Code other than Estimated Allowed Claims: $0 DIP Facility Claims, Administrative Claims or Priority Tax Claims. Estimated Recovery: 100% On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 1 Claim becomes an Allowed Class 1 Claim, or (iii) the date on which such Class 1 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 1 Claim, each holder of an Allowed Class 1 Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 1 Claim (a) Cash equal to the unpaid portion of such Allowed Class 1 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. All Allowed Class 1 Claims which are not by their terms due and payable on or before the Effective Date will be paid in the ordinary course of business in accordance with the terms thereof. Class 1 Claims are Unimpaired. Holders of Claims in Class 1 will be deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Unimpaired Classes of Claims - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class 2A - Other Secured Tax Class 2A consists of all Claims which otherwise would be tax claims Claims entitled to priority under Section 507(a)(8) of the Bankruptcy Code, but which are secured by a valid and unavoidable Encumbrance in Estimated Allowed Claims: or on any of the Debtors' property (to the extent of the value of the $5 million Claim holder's interest in the Debtors' property, as determined pursuant to Section 506 of the Bankruptcy Code). Estimated Recovery: 100% Except to the extent that a holder of an Allowed Other Secured Tax Claim has been paid by the Debtors prior to the Initial Distribution Date or has agreed in writing to a different treatment, each holder of an Allowed Other Secured Tax Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Other Secured Tax Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Other Secured Tax Claim on the later of the Initial Distribution Date and the date such Other Secured Tax Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Other Secured Tax Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Each holder of an Allowed Class 2A Claim shall retain the Encumbrances (or replacement Encumbrances as may be contemplated under nonbankruptcy law) securing its Allowed Class 2A Claim as of the Effective Date until full and final payment of such Allowed Class 2A Claim is made as provided in the Plan, and upon such full and final payment, such Encumbrances shall be deemed null and void and shall be unenforceable for all purposes. Although for Unsecured Claims, a Claim becomes Allowed unless objected to by the Claims Objection Deadline, the Debtors' failure to object to any Class 2A Claim in the Chapter 11 Cases will be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Nothing in the Plan or elsewhere will preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or the value of any collateral notwithstanding a failure to file an objection by the Claims Objection Deadline. Class 2A Claims are Unimpaired. Holders of Claims in Class 2A will be deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class Description Treatment Under Plan - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class 2B -Other Secured Claims Class 2B consists of Claims secured by a valid Encumbrance in or on any of the Debtors' property, which is not void or voidable under the Estimated Allowed Claims: Bankruptcy Code or any other applicable law, to the extent of the $6 million value of the Claim holder's interest in the Debtors' property, but excluding the Other Secured Tax Claims. Estimated Recovery: 100% On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 2B Claim becomes an Allowed Class 2B Claim or (iii) the date on which such Class 2B Claim becomes due and payable pursuant to any agreement between a Debtor and the holder of an Allowed Class 2B Claim, each holder of an Allowed Class 2B Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 2B Claim, at the sole discretion of the Debtors, (a) Cash equal to the unpaid portion of such Allowed Class 2B Claim, (b) Reinstatement of the legal equitable and contractual rights of the holder of such Allowed Class 2B Claim, subject to the provisions of Article VII of the Plan, or (c) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Although for Unsecured Claims, a Claim becomes Allowed unless objected to by the Claims Objection Deadline, the Debtors' failure to object to any Class 2B Claim in the Chapter 11 Cases will be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Nothing in the Plan or elsewhere will preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or the value of any collateral notwithstanding a failure to file an objection by the Claims Objection Deadline. Class 2B Claims are Unimpaired. Holders of the Claims in Class 2B are deemed to have accepted the Plan, and accordingly are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Impaired Classes of Claims - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class 3 -Convenience Claims Class 3 consists of all Claims against any of the Debtors that would otherwise be classified as a Class 6 Claim, which (i) is in an amount Estimated Allowed Claims (after that is equal to or less than $5,000 or (ii) on the Ballot has been adjustment to account for Holders reduced to $5,000 by the holder of such Claim. of Convenience Claims in amounts greater than $5,000 who elect to On, or as soon as reasonably practicable after, the latest of (i) the opt Initial Distribution Date, (ii) the date on which such Class 3 Claim becomes into Class 3): an Allowed Class 3 Claim, or (iii) the date on which such Class 3 Claim $18 million becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 3 Claim, each holder of an Allowed Class 3 Claim shall receive in full satisfaction, settlement, release and discharge of and in Estimated Recovery: 100% exchange for such Allowed Class 3 Claim (a) Cash equal to the amount of such Allowed Class 3 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Any holder of a Claim in Class 6 that desires treatment of such Claim as a Convenience Claim shall make such election on the Ballot to be provided to holders of Impaired Claims entitled to vote to accept or reject the Plan and return such Ballot to the address specified therein on or before the Voting Deadline. Any election made after the Voting Deadline shall not be binding on the Debtors unless the Voting Deadline is expressly waived in writing by the Debtors with respect to any such Claim. Class 3 Claims are Impaired. Holders of the Claims in Class 3 are entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Impaired Classes of Claims - ---------------------------------------------- ----------------------------------------------------------------------- - ---------------------------------------------- ----------------------------------------------------------------------- Class 4 -Bank Holders Claims Class 4 consists of Claims held by the Bank Holders arising under or as a result of the Debtors' obligations under the 1997 Credit Estimated Allowed Claims: Agreement (the "Bank Holders Claims" or "Class 4 Claims"). $1,472 million to $1,577 million On, or soon as reasonably practicable after, the latest of (i) the Estimated Recovery: Initial Distribution Date, (ii) the date on which such Class 4 Claim See Attached Chart becomes an Allowed Class 4 Claim, or (iii) the date on which such Class 4 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 4 Claim, each holder of an Allowed Class 4 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 4 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 4 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 4 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 4 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 4 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 4 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 4 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Class 4 Claims are Impaired. To the extent and in the man-ner provided in the Voting Procedures Order, holders of the Claims in Class 4 are entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 5 -Bondholders Claims Class 5 consists of Claims held by the Bondholders arising under or as a result of the Debtors' obligations under the Pre-petition Bonds Estimated Allowed Claims: (the "Bondholders Claims" or "Class 5 Claims"). $1,389 million On, or as soon as reasonably practicable after, the later of (i) the Estimated Recovery: Initial Distribution Date, (ii) the date on which such Class 5 Claim See Attached Chart becomes an Allowed Class 5 Claim, or (iii) the date on which such Class 5 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 5 Claim, each holder of an Allowed Class 5 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 5 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 5 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 5 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 5 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 5 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 5 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 5 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Holders of Class 5 Bond Holder Claims may have their distributions under the Plan reduced to the extent Pre-petition Indenture Trustees exercise any applicable rights under the Pre-petition Bond Indentures to recover their costs and/or expenses from the distributions to be paid to Holders of Class 5 Bond Holder Claims under the Plan. Any payment of such costs or expenses will commensurately reduce the recovery realized under the Plan by holders of Class 5 Bond Holder Claims. Class 5 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 5 are entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 6 - General Unsecured Class 6 consists of those Claims against the Debtors that are General Claims Unsecured Claims, which are Claims against any of the Debtors that Estimated Allowed Claims: are not a DIP Facility Claim, an Administrative Claim, a Priority Tax $323 million to $687 million Claim, an Other Priority Claim, an Other Secured Tax Claim, an Other Secured Claim, a Convenience Claim, a Bank Holders Claim, a Estimated Recovery: Bondholders Claim, an OC Asbestos Personal Injury Claim, an FB See Attached Chart Asbestos Personal Injury Claim, an FB Asbestos Property Damage Claim, an Intercompany Claim or an OCD Interest. General Unsecured Claims include, without limitation, all Environmental Claims and OC Asbestos Property Damage Claims ("General Unsecured Claims" or "Class 6 Claims"). On, or as soon as reasonably practicable after, the later of (i) the Initial Distribution Date, (ii) the date on which such Class 6 Claim becomes an Allowed Class 6 Claim, or (iii) the date on which such Class 6 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 6 Claim, each holder of an Allowed Class 6 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 6 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 6 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 6 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 6 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount to the Class 6 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 6 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 6 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Class 6 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 6 are entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 7 -OC Asbestos Personal Class 7 consists of OC Asbestos Personal Injury Claims ("Class 7 Claims"). Injury Claim Estimated Allowed Claims: An "OC Asbestos Personal Injury Claim" means any present or future See Attached Chart right to payment, claim, remedy, liability or Demand against any OC Person for death, bodily injury, or other personal damages (whether Estimated Recovery: physical, emotional or otherwise), whether or not such right, claim, See Attached Chart remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any OC Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any OC Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. OC Asbestos Personal Injury Claims (i) include OC Indirect Asbestos PI Trust Claims and Unpaid OC Resolved Asbestos Personal Injury Claims, but (ii) exclude OC Resolved Asbestos Personal Injury Claims, OC Asbestos Property Damage Claims, OC Indirect Asbestos Property Damage Claims, workers' compensation claims, FB Asbestos Personal Injury Claims, FB Indirect Asbestos PI Trust Claims, FB Asbestos Property Damage Claims, and FB Indirect Asbestos Property Damage Claims. All Class 7 Claims will be channeled to the Asbestos Personal Injury Trust, and shall be processed, liquidated and paid pursuant to the terms and provisions of the Asbestos Personal Injury Trust Distribution Procedures and the Asbestos Personal Injury Trust Agreement. The sole recourse of the holder of a Class 7 Claim shall be the Asbestos Personal Injury Trust, and such holder shall have no right whatsoever at any time to assert its Claim or Demand against any Protected Party. Without limiting the foregoing, on the Effective Date, all persons shall be permanently and forever stayed, restrained, and enjoined from taking any Enjoined Actions for the purpose of, directly or indirectly, collecting, recovering, or receiving payment of, on, or with respect to any Class 7 Claim (other than actions brought to enforce any right or obligation under the Plan, any Exhibits to the Plan, or any other agreement or instrument between the Debtors or Reorganized Debtors and the Asbestos Personal Injury Trust, which actions shall be in conformity and compliance with the provisions of the Plan.) The Asbestos Personal Injury Trust will be funded as follows: On the Effective Date, or as soon as practicable after, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) the portion of the Combined Distribution Package equal to the Class 7 Initial Distribution Percentage, (ii) the OC Asbestos Personal Injury Liability Insurance Assets and (iii) the OCD Insurance Escrow. On or as soon as reasonably practicable after the Final Distribution Date, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) Cash in an amount equal to the Class 7 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 7 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 7 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 7 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Class 7 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 7 are entitled to vote accept or reject the Plan. Among such conditions to confirmation is the requirement that at least 75% of the Holders of Class 7 Claims that vote on the Plan vote in favor of the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 8 - FB Asbestos Class 8 consists of FB Asbestos Personal Injury Claims ("Class 8 Personal Injury Claims Claims"). Estimated Allowed Claims: An "FB Asbestos Personal Injury Claim" means any present or future See Attached Chart right to payment, claim, remedy, liability or Demand against any FB Person for death, bodily injury, or other personal damages (whether Estimated Recovery: physical, emotional or otherwise), whether or not such right, claim, See Attached Chart remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, by the presence of, or exposure to asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any FB Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Personal Injury Claims (i) include FB Indirect Asbestos PI Trust Claims and Unpaid FB Resolved Asbestos Personal Injury Claims, but (ii) exclude FB Resolved Asbestos Personal Injury Claims, FB Asbestos Property Damage Claims, FB Indirect Asbestos Property Damage Claims, workers' compensation claims, OC Asbestos Personal Injury Claims, OC Indirect Asbestos PI Trust Claims, OC Asbestos Property Damage Claims, and OC Indirect Asbestos Property Damage Claims. All Class 8 Claims will be channeled to the Asbestos Personal Injury Trust, and shall be processed, liquidated and paid pursuant to the terms and provisions of the Asbestos Personal Injury Trust Distribution Procedures and the Asbestos Personal Injury Trust Agreement. The sole recourse of the holder of a Class 8 Claim shall be the Asbestos Personal Injury Trust, and such holder shall have no right whatsoever at any time to assert its Claim or Demand against any Protected Party. Without limiting the foregoing, on the Effective Date, all Persons shall be permanently and forever stayed, restrained, and enjoined from taking any Enjoined Actions for the purpose of, directly or indirectly, collecting, recovering, or receiving payment of, on, or with respect to any Class 8 Claim (other than actions brought to enforce any right or obligation under the Plan, any Exhibits to the Plan, or any other agreement or instrument between the Debtors or Reorganized Debtors and the Asbestos Personal Injury Trust, which actions shall be in conformity and compliance with the provisions of the Plan.) The Asbestos Personal Injury Trust will be funded as follows: On the Effective Date, or as soon as practicable thereafter, the Reorganized Debtors will irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the FB Sub-Account the following: (i) the FB Reversions, (ii) the Committed Claims Account, and (iii) the FB Sub-Account Settlement Payment. The Reorganized Debtors will, or will use all commercially reasonable efforts to, cause the trustees of the Fibreboard Insurance Settlement Trust to irrevocably transfer and assign (i) the Existing Fibreboard Insurance Settlement Trust Assets, and (ii) any and all of the Fibreboard Insurance Settlement Trust's rights in the FB Reversions, to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, on the Effective Date or as soon as practicable thereafter. The Reorganized Debtors will, or will use all commercially reasonable efforts to, cause the trustees of the Fibreboard Insurance Settlement Trust to irrevocably transfer and assign (i) the Existing Fibreboard Insurance Settlement Trust Assets, and (ii) any and all of the Fibreboard Insurance Settlement Trust's rights in the FB Reversions, to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, on the Effective Date or as soon as practicable thereafter. The Reorganized Debtors will also execute and deliver, or will use all commercially reasonable efforts to cause the trustees of the Fibreboard Insurance Settlement Trust to execute and deliver, to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request in connection with the transfer and assignment of the Existing Fibreboard Insurance Settlement Trust Assets and the FB Reversions. Class 8 Claims are impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 8 are entitled to vote to accept or reject the Plan. Among such conditions to confirmation is the requirement that at least 75% of the Holders of Class 8 Claims that vote on the Plan vote in favor of the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 9 -FB Asbestos Property Class 9 consists of FB Asbestos Property Damage Claims ("Class 9 Claims"). Damage Claims Estimated Allowed Claims: An "FB Asbestos Property Damage Claim" means any present or future $2 million to $7 million right to payment, claim, remedy, or liability against, or debt or obligation of, any FB Person, whether or not the facts or legal basis Estimated Recovery: 100% for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise for, relating to, or arising by reason of, directly or indirectly, damage to property, including, without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person prior to the Petition Date, or for which any FB Person is liable due to the acts or omissions of any FB Person, including, without express or implied limitation, any right, claim, remedy, liability against, or debt or obligation for compensatory damages (such as proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Property Damage Claims include FB Indirect Asbestos Property Damage Claims. All Class 9 Claims will be channeled to the FB Asbestos Property Damage Trust, and will be processed, liquidated and paid pursuant to the terms and provisions of the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. The sole recourse of the holder of an Allowed Class 9 Claim will be the FB Asbestos Property Damage Trust, and such holder will have no right whatsoever at any time to assert its Class 9 Claim against any FB Person. Without limiting the foregoing, on the Effective Date, all Persons shall be permanently and forever stayed, restrained, and enjoined from taking any Enjoined Actions for the purpose of, directly or indirectly, collecting, recovering, or receiving payment of, on, or with respect to any FB Asbestos Property Damage Claims (other than actions brought to enforce any right or obligation under the Plan, any Exhibits to the Plan, or any other agreement or instrument between the Debtors or Reorganized Debtors and the FB Asbestos Property Damage Trust, which actions shall be in conformity and compliance with the provisions of the Plan.) The FB Asbestos Property Damage Trust will be funded as follows: On the later of the Effective Date and the date by which the FB Asbestos Property Damage Trustee has executed the FB Asbestos Property Damage Trust Agreement, the Reorganized Debtors shall transfer and assign, or cause to be transferred and assigned, to the FB Asbestos Property Damage Trust the FB Asbestos Property Damage Insurance Assets. The FB Asbestos Property Damage Insurance Assets means rights to coverage for FB Asbestos Property Damage Claims under liability insurance policies issued to Fibreboard and identified in Schedule XV to the Plan, to be filed at least ten (10) Business Days prior to the Objection Deadline. The foregoing includes, without limitation, (i) rights under such insurance policies, rights under settlement agreements made with respect to such insurance policies, Insolvent Insurer PD Rights, and Insurance Guarantee Fund PD Rights; and (ii) the right, on behalf of the Debtors, to give a full release of the insurance rights of the Debtors for FB Asbestos Property Damage Claims under any such policies or related agreements, provided that a reciprocal release of the Debtors in connection with said policies or agreements is given in exchange by the insurer or other released insurance entity and further provided that any such release shall not encompass rights with respect to coverage for workers' compensation claims or with respect to coverage other than for FB Asbestos Property Damage Claims. Class 9 Claims are Impaired. To the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 9 are entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 10 - Intercompany Claims Class 10 consists of Intercompany Claims ("Class 10 Claims"). Estimated Allowed Claims: N/A An "Intercompany Claim" is any Claim, including, without limitation, any Administrative Claim, by a Debtor against another Debtor or a Estimated Recovery: 0% non-Debtor Subsidiary against a Debtor, but excluding the Claims set forth on Schedule XIII to the Plan, as it may be filed or amended at least ten (10) Business Days prior to the Objection Deadline. Under the Plan, on the Effective Date, all Intercompany Claims other than such Claims set forth in Schedule XIII, to be filed or amended at least ten (10) Business Days prior to the Objection Deadline, shall be deemed cancelled and extinguished in accordance with Section 5.2 of the Plan. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such Intercompany Claim. Schedule XIII shall indicate the classification and/or treatment of the Claims set forth therein. Class 10 Claims are Impaired. Holders of Claims in Class 10 will be deemed to have rejected the Plan, and accordingly are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 11 - Subordinated Claims Class 11 consists of all Subordinated Claims ("Class 11 Claims"). Estimated Allowed Claims: N/A "Subordinated Claims" consist of the Claims or Interests (in the event that a Claim might be characterized as an Interest) of any Estimated Recovery: 0% Person who has entered in a subordination agreement that is enforceable under applicable non-bankruptcy law and which subordinates such Claims or Interests to any holders of Claims who will not be paid in full on account of such holder's Allowed Claims under the Plan. Subordinated Claims shall include, without limitation, the MIPS Claims and Interests. On the Effective Date, all of the Subordinated Claims shall be deemed cancelled and extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such Subordinated Claims. Class 11 Claims are Impaired. The holders of the Claims in Class 11 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- Class 12 - OCD Interests Class 12 consists of all OCD Interests ("Class 12 Interests"). Estimated Allowed Interests: N/A "OCD Interests" consist of, (i) collectively, all Existing OCD Common Stock, Existing OCD Preferred Stock and Existing OCD Options, Estimated Recovery: 0% together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, to acquire or receive any Existing OCD Common Stock, Existing OCD Preferred Stock, Existing OCD Options or other capital stock in OCD, or any contract subscription, commitment or agreement pursuant to which any Person was or could have been entitled to receive any share of the capital stock of OCD, or any such option, warrant, conversion right, right of first refusal or other right (including, without limitation, any rights of any 401(k) plan or the interest of any participant therein), in each case issued or entered into by, or otherwise the obligation of, OCD or another Debtor; and (ii) all shares of Preferred Stock and Class A Common Stock of Integrex, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, relating to such stock, held by Blue Ridge Investments, L.L.C. or its successors and assigns. On the Effective Date, all of the OCD Interests outstanding at the Effective Date will be deemed cancelled and extinguished. No holder thereof will be entitled to, or will receive or retain any property or interest in property on account of, such OCD Interests. Class 12 Interests are Impaired. The holders of the Interests in Class 12 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. - ---------------------------------------------- ----------------------------------------------------------------------- THE PLAN PROPONENTS BELIEVE THAT THE PLAN PROVIDES THE BEST RECOVERIES POSSIBLE FOR HOLDERS OF CLAIMS AGAINST THE DEBTORS AND THUS STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.
SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS The calculation of estimated recoveries for Classes 4, 5, 6, 7 and 8 are dependent upon the determination of the Allowed Claim amounts for Class 7 - OC Asbestos Personal Injury Claims and Class 8 - FB Asbestos Personal Injury Claims. Classes 4, 5, 6 and 7 share in the Combined Distribution Package, which consists of Cash, Senior Notes, and New OCD Common Stock. The following chart details five scenarios assuming varying asbestos claim amounts, ranging from the Company's current asbestos reserve of $5.8 billion to $24 billion.
- --------------------------------------------------------- ------------------------------------------------------------ ESTIMATED AGGREGATE CLAIM AMOUNT - ------------------ -------------------------------------- ----------- ------------ ----------- ----------- ----------- CLASS DESCRIPTION A B C D E - ------------------ -------------------------------------- ----------- ------------ ----------- ----------- ----------- Class 7 OC Asbestos Personal Injury 6,688 10,700 13,375 16,050 Claims 3,564 - ------------------ -------------------------------------- ----------- ------------ ----------- ----------- ----------- Class 8 FB Asbestos Personal Injury 2,310 3,312 5,300 6,625 7,950 Claims - --------------------------------------------------------- ----------- ------------ ----------- ----------- ----------- TOTAL $5,874 $10,000 $16,000 $20,000 $24,000 - --------------------------------------------------------- ----------- ------------ ----------- ----------- -----------
The estimated recovery of each of the Classes for each of the various asbestos claim assumptions, is as follows:
- -------------------------------------------------------------- ------------------------------------------------------- ESTIMATED RECOVERY - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- CLASS DESCRIPTION CLAIM* A B C D E - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 4 Bank Holder Claims $1,472 51.0% 34.6% 24.4% 20.5% 17.6% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 5 Bond Holder Claims $1,389 51.0% 34.6% 24.4% 20.5% 17.6% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 6 General Unsecured Claims $323 51.0% 34.6% 24.4% 20.5% 17.6% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 7 OC Asbestos Personal Injury See Above 53.3% 36.2% 25.6% 21.5% 18.5% Claims - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 8 FB Asbestos Personal Injury See Above 66.6% 46.5% 29.0% 23.2% 19.4% Claims - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 9 FB Asbestos Property Damage $2 100.0% 100.0% 100.0% 100.0% 100.0% Claims - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 10 Intercompany Claims $0 0.0% 0.0% 0.0% 0.0% 0.0% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 11 Subordinated Claims N/A 0.0% 0.0% 0.0% 0.0% 0.0% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- Class 12 OCD Interests N/A 0.0% 0.0% 0.0% 0.0% 0.0% - ---------------- ------------------------------- ------------- ----------- ---------- ---------- ---------- ---------- * Recovery calculations based upon low-end claim estimate for Classes 4, 5, 6 and 9
I. INTRODUCTION Owens Corning, a Delaware corporation ("OCD"), certain of its direct and indirect Subsidiaries that are also debtors and debtors-in-possession (the "Subsidiary Debtors" and, together with OCD, the "Debtors") in the reorganization cases (the "Chapter 11 Cases") under Chapter 11 of the Bankruptcy Code ("Chapter 11"), James J. McMonagle, the Legal Representative for Future Claimants (the "Future Claimants' Representative"), and the Official Committee of Asbestos Claimants (the "Asbestos Claimants' Committee") (the Debtors, the Future Claimants' Representative, and the Asbestos Claimants' Committee, collectively, the "Plan Proponents") submit this disclosure statement (the "Disclosure Statement") pursuant to Section 1125 of Title 11 of the United States Code (the "Bankruptcy Code") for use in the solicitation of votes on the Amended Joint Plan of Reorganization for Owens Corning and its Affiliated Debtors and Debtors-in-Possession, dated as of March 28, 2003 (the "Plan"), as it may be further amended from time to time in accordance with its terms and in accordance with Section 1127 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3019, proposed by the Plan Proponents and filed with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). A copy of the Plan is attached as Appendix A to this Disclosure Statement. This Disclosure Statement sets forth certain information regarding the Debtors' operating and financial history prior to October 5, 2000, the Petition Date, the reasons for seeking protection and reorganization under Chapter 11, significant events that have occurred since the Chapter 11 Cases were commenced, and the anticipated organization, operations and financing of the Debtors upon emergence from Chapter 11 (the "Reorganized Debtors"). This Disclosure Statement also describes certain terms and provisions of the Plan, including certain alternatives to the Plan, certain effects of confirmation of the Plan, certain risk factors associated with securities to be issued under the Plan, and the manner in which distributions will be made under the Plan. In addition, this Disclosure Statement discusses the confirmation process and the voting procedures that holders of Claims entitled to vote under the Plan must follow for their votes to be counted. Unless otherwise noted herein, all dollar amounts provided in this Disclosure Statement and in the Plan are given in United States dollars. FOR A DESCRIPTION OF THE PLAN AND VARIOUS RISKS AND OTHER FACTORS PERTAINING TO THE PLAN, PLEASE SEE SECTION VII OF THIS DISCLOSURE STATEMENT, ENTITLED "SUMMARY OF THE PLAN OF REORGANIZATION," AND SECTION XV OF THIS DISCLOSURE STATEMENT, ENTITLED "CERTAIN RISK FACTORS TO BE CONSIDERED." ALTHOUGH THE PLAN PROPONENTS BELIEVE THAT THE SUMMARIES OF THE PLAN AND RELATED DOCUMENT SUMMARIES ARE FAIR AND ACCURATE, SUCH SUMMARIES ARE QUALIFIED TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS' MANAGEMENT, EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE PLAN PROPONENTS DO NOT WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN, INCLUDING THE FINANCIAL INFORMATION, IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION. THE PLAN PROPONENTS BELIEVE THAT THE PLAN WILL ENABLE THE DEBTORS TO SUCCESSFULLY REORGANIZE AND ACCOMPLISH THE OBJECTIVES OF CHAPTER 11 AND THAT ACCEPTANCE OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTORS AND THE HOLDERS OF CLAIMS AND INTERESTS. THE PLAN PROPONENTS URGE ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING SOLICITED TO VOTE TO ACCEPT THE PLAN. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE ADVICE ON THE TAX OR OTHER LEGAL EFFECTS OF THE REORGANIZATION AS TO HOLDERS OF ALLOWED CLAIMS OR INTERESTS. YOU SHOULD CONSULT YOUR PERSONAL COUNSEL OR TAX ADVISOR ON ANY QUESTIONS OR CONCERNS RESPECTING TAX, SECURITIES, OR OTHER LEGAL CONSEQUENCES OF THE PLAN. II. PLAN VOTING INSTRUCTIONS AND PROCEDURES A. Definitions All capitalized terms used herein and not otherwise defined herein have the meanings given to them in the Article I of the Plan, which is attached hereto as Appendix A, if defined in the Plan, or in the Glossary of Additional Terms, attached hereto as Appendix A-1, except as expressly provided or unless the context clearly requires otherwise. Whenever the context requires, such meanings shall be equally applicable to both the singular and plural form of such terms, and the masculine gender shall include the feminine and the feminine gender shall include the masculine. Any term used in initially capitalized form in this Disclosure Statement that is not defined herein but that is used in the Bankruptcy Code shall have the meaning ascribed to such term in the Bankruptcy Code. Additionally, the rules of construction contained in Section 102 of the Bankruptcy Code apply to the construction of this Disclosure Statement. B. Notice to Holders of Claims and Interests This Disclosure Statement is being transmitted to holders of Impaired Claims that are entitled under the Bankruptcy Code to vote on the Plan, as well as other parties. See Section XVII of this Disclosure Statement entitled "The Solicitation; Voting Procedure" for a description of the Classes of Claims that are entitled to vote on the Plan. Holders of Interests that do not receive any distributions under the Plan on account of their Interests are deemed to have rejected the Plan and are not entitled to vote on the Plan. The primary purpose of this Disclosure Statement is to provide adequate information to enable holders of Claims against the Debtors to make a reasonably informed decision whether to vote to accept or reject the Plan. Approval by the Bankruptcy Court of this Disclosure Statement means the Bankruptcy Court has found that this Disclosure Statement contains information of a kind and in sufficient and adequate detail to enable such Claim holders to make an informed judgment whether to accept or reject the Plan. THE BANKRUPTCY COURT'S APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE EITHER A GUARANTEE OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN OR AN ENDORSEMENT OF THE PLAN BY THE BANKRUPTCY COURT. IF THE PLAN IS APPROVED BY THE REQUISITE VOTE OF HOLDERS OF CLAIMS ENTITLED TO VOTE AND IS SUBSEQUENTLY CONFIRMED BY THE BANKRUPTCY COURT, THE PLAN WILL BIND ALL HOLDERS OF CLAIMS AGAINST, AND INTERESTS IN, THE DEBTORS, WHETHER OR NOT THEY WERE ENTITLED TO VOTE OR DID VOTE ON THE PLAN AND WHETHER OR NOT THEY RECEIVE OR RETAIN ANY DISTRIBUTIONS OR PROPERTY UNDER THE PLAN. THUS ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND ITS APPENDICES AND SCHEDULES CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO VOTE EITHER TO ACCEPT OR REJECT THE PLAN. THIS DISCLOSURE STATEMENT IS THE ONLY DOCUMENT AUTHORIZED BY THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES TO ACCEPT OR REJECT THE PLAN. No solicitation of votes may be made except after distribution of this Disclosure Statement, and no person has been authorized to distribute any information concerning the Debtors other than the information contained herein. No such information shall be relied upon in making a determination to vote to accept or reject the Plan. CERTAIN OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS BY ITS NATURE FORWARD LOOKING AND CONTAINS ESTIMATES, ASSUMPTIONS AND PROJECTIONS THAT MAY BE MATERIALLY DIFFERENT FROM ACTUAL FUTURE RESULTS. Except with respect to the Pro Forma Financial Projections and Reorganization Balance Sheet set forth in Appendix B attached hereto and except as otherwise specifically and expressly stated herein, this Disclosure Statement does not purport to reflect any events that may occur subsequent to the date hereof and that may have a material impact on the information contained in this Disclosure Statement. The Debtors do not undertake any obligation to, and do not intend to, update the Financial Projections; thus, the Financial Projections will not reflect the impact of any subsequent events not already accounted for in the assumptions underlying the Financial Projections. Further, the Debtors do not anticipate that any amendments or supplements to this Disclosure Statement will be distributed to reflect such occurrences. Accordingly, the delivery of this Disclosure Statement shall not under any circumstance imply that the information herein is correct or complete as of any time subsequent to the date hereof. EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTING FIRM AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. C. Solicitation Package Each person entitled to vote to accept or reject this Plan is being transmitted (1) this Disclosure Statement; (2) the Plan (attached as Appendix A to this Disclosure Statement); (3) notification of (a) the time by which Ballots or Master Ballots, as applicable, to accept or reject the Plan must be submitted, (b) the date, time and place of the hearing to consider confirmation of the Plan and related matters, and (c) the time for filing objections to confirmation of the Plan; and (4) a Ballot or Master Ballot, as applicable (and return envelopes), to be used in voting to accept or reject the Plan. Any person who receives this Disclosure Statement but does not receive a Ballot or Master Ballot and who believes that he is entitled to vote to accept or reject the Plan should contact the Voting Agent at the address or telephone number set forth in Section XVII of this Disclosure Statement. D. Voting Procedures, Ballots and Voting Deadline After carefully reviewing the Plan, this Disclosure Statement and all related material including, without limitation, the Voting Procedures attached hereto as Appendix H (the "Voting Procedures"), creditors should indicate acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed Ballot or Master Ballot and return it in the envelope provided. Only original Ballots and Master Ballots will be accepted. Each Ballot and Master Ballot has been coded to reflect the Class of Claims it represents. Accordingly, in voting to accept or reject the Plan, only the coded Ballots or Master Ballots accompanying this Disclosure Statement may be used. IN ORDER FOR VOTES TO BE COUNTED, BALLOTS AND MASTER BALLOTS MUST BE PROPERLY COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING PROCEDURES AND RECEIVED NO LATER THAN [DATE], AT [TIME] (-_- TIME) (THE "VOTING DEADLINE") BY ROBERT L. BERGER & ASSOCIATES, L.L.C. (THE "VOTING AGENT") OR BY INNISFREE M&A INCORPORATED (THE "SPECIAL VOTING AGENT"). NO STOCK CERTIFICATES OR DEBT INSTRUMENTS OR OTHER INSTRUMENTS OR DOCUMENTS REPRESENTING CLAIMS OR INTERESTS SHOULD BE RETURNED WITH THE BALLOT OR MASTER BALLOT. Questions about (1) the Voting Procedures, (2) the packet of materials that has been transmitted, (3) the amount of a Claim or (4) requests for an additional copy of the Plan, this Disclosure Statement or any appendices or exhibits to such documents (for which a charge may be imposed unless otherwise specifically provided by Federal Rule of Bankruptcy Procedure 3017(d)) should be directed to: OWENS CORNING c/o Robert L. Berger & Associates, L.L.C. 16501 Ventura Blvd., Suite 440 Encino, CA 91436 818-906-8300 (phone) 818-783-2737 (fax) FOR FURTHER INFORMATION AND INSTRUCTION ON VOTING TO ACCEPT OR REJECT THE PLAN, SEE SECTION XVII OF THIS DISCLOSURE STATEMENT ENTITLED "THE SOLICITATION; VOTING PROCEDURE." E. Confirmation Hearing and Deadline for Objections to Confirmation Pursuant to Section 1128 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3017(c), a hearing has been scheduled on confirmation of the Plan (the "Confirmation Hearing") for__________ __, 2003, at ____ _.m. The Confirmation Hearing may be adjourned from time to time without further notice except for the announcement of the adjournment date made at the Confirmation Hearing or at any subsequent adjourned Confirmation Hearing. Objections to confirmation of the Plan must be made in writing and must specify in detail the name and address of the objector, all grounds for the objection, and the amount and class of the Claim. Any such objection must be filed with the Bankruptcy Court on or before __________ __, 2003 at ____ _.m. Objections to confirmation of the Plan are governed by Federal Rule of Bankruptcy Procedure 9014. Additional information regarding the filing of any objections to confirmation of the Plan is contained in the Notice accompanying this Disclosure Statement. III. GENERAL INFORMATION CONCERNING THE DEBTORS The following information is only a summary and is qualified in its entirety by reference to OC's Annual Report on Form 10-K for the year ended December 31, 2002, OC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, OC's Annual Report on Form 10-K for the year ended December 31, 2001, and OC's Annual Report on Form 10-K for the year ended December 31, 2000, copies of which may be obtained, free of charge, through OC's website at www.owenscorning.com. Readers of this Disclosure Statement are directed to the full text of those reports for additional information concerning the historical business and operations of OC. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D. A. History and Description of Business 1. Introduction OCD began as a glass fiber joint venture in the 1930's between Owens-Illinois and Corning Glass. At the end of 1938, the year in which it was incorporated, OCD reported sales of $2,555,000 and had 632 employees. Today, OCD, along with its approximately 85 direct and indirect subsidiaries in the United States and throughout the world (collectively, OCD and its subsidiaries are referred to as "OC" or the "Company") is a global leading producer of glass fiber materials used in composites and a leading home building products company. For the year ended December 31, 2002, OC had over $4.8 billion in sales, approximately 17,500 employees around the world, and manufacturing, sales and research facilities, including joint venture and licensee relationships, in more than 30 countries. See Appendix F for a chart depicting OC's corporate structure as of March, 2003, and Appendix G for a description of the anticipated corporate structure of the Reorganized Debtors after the Effective Date. 2. General Description of OC's Business OC operates in two business segments: Building Materials Systems and Composite Solutions. In 2002, the Building Materials Systems segment accounted for approximately 73% of OC's total sales, while Composite Solutions accounted for the remainder. The products and systems provided by OC's Building Materials Systems segment are used in residential remodeling and repair, commercial improvement, new residential and commercial construction, and other related markets. The products and systems offered by OC's Composite Solutions segment are used in end-use markets such as building construction, automotive, telecommunications, marine, aerospace, energy, appliance, packaging and electronics. Many of OC's products are marketed under registered trademarks, including Propink(R), Advantex(R) and/or the color PINK. Approximately 65% of OC's sales are related to home improvement, non-residential markets, sales of composite materials and sales outside U.S. markets. Approximately 35% of OC's 2002 sales are related to new U.S. residential construction. OC also has affiliate companies in a number of countries. Generally, affiliated companies' sales, earnings and assets are not included in either operating segment unless OC owns more than 50% of the affiliate and the ownership is not considered temporary. As part of OC's strategy to divest non-strategic business, OC sold the majority of its Engineered Pipe Business during the first quarter of 2001 and sold its 40% interest in Alcopor Owens Corning, its European building materials joint venture, during the fourth quarter of 2001. Revenue from external customers, income from operations and total assets attributable to each of OC's operating segments and geographic regions, as well as information concerning the dependence of its operating segments on foreign operations, for each of the years 2002, 2001, and 2000, are contained in Note 2 to OC's Consolidated Financial Statements, entitled "Segment Data." See OC's Annual Report on Form 10-K for the year ended December 31, 2002, OC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, OC's Annual Report on Form 10-K for the year ended December 31, 2001, and OC's Annual Report on Form 10-K for the year ended December 31, 2000, copies of which may be obtained, free of charge, through OC's website at www.owenscorning.com. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D. (a) Building Materials Systems Principal Products and Methods of Distribution. Building Materials Systems operates primarily in North America. It also has a presence in Latin America and Asia Pacific. Building Materials Systems sells a variety of products and systems in two major categories: (i) insulating systems, including thermal and acoustical insulation and air ducts formed from glass wool fibers and foam insulation, and (ii) exterior systems for the home, including roofing shingles, vinyl and metal siding and accessories, windows and doors, cast stone building products and branded housewrap. These products are used primarily in the home improvement, new residential construction, manufactured housing and commercial construction markets. Sales of building insulation systems, roofing shingles and accessories, housewrap, and vinyl siding are made through home centers, lumberyards, retailers and distributors. Other channels of distribution for insulation systems in North America include insulation contractors, wholesalers, specialty distributors, metal building insulation laminators, mechanical insulation distributors and fabricators, manufactured housing producers and appliance, office products and automotive manufacturers. Foam insulation and related products are sold to distributors and retailers who resell to residential builders, remodelers and do-it-yourself customers; commercial and industrial markets through specialty distributors; and, in some cases, large contractors, particularly in the agricultural and cold storage markets. Outside North America, OC has a foam technology facility in Italy and a majority-owned joint venture foam plant in China and has licensed others for the manufacture of foam products at locations in Europe, the Middle East and Asia. OC sells foam products through traditional agents and distributors. In Latin America, OC produces and sells building and mechanical insulation primarily through an affiliate joint venture in Mexico, as well as exports from U.S. plants. In Asia Pacific, OC sells primarily mechanical insulation through joint venture businesses, including two majority owned insulation plants and an insulation fabrication center in China, a minority owned joint venture in Saudi Arabia, and licensees. Seasonality. Sales of the Building Materials Systems segment tend to follow seasonal patterns in the home improvement, remodeling and renovation, and new construction industries. Sales levels for the segment, therefore, are typically lower in the winter months. Major Customers. No customer of the Building Materials Systems segment accounted for more than 6% of the segment's sales in 2002. (b) Composite Solutions Segment Principal Products and Methods of Distribution. Composite Solutions operates in North America, Europe, Latin America and Asia Pacific, with affiliates and licensees around the world. OC is a leading producer of glass fiber materials used in composites. Composites are made up of two or more components (e.g., plastic resin and a fiber, traditionally a glass fiber) used in various applications to replace traditional materials, such as aluminum, wood and steel. OC is increasingly providing systems that are designed for a specific end-use application and entail a material, a proprietary process and a fully assembled part or system. The global composites industry has thousands of end-use applications. OC has selected strategic markets and end-users in which OC provides integral solutions, such as the building construction, transportation, and telecommunications/electronics markets. A large portion of the business also serves thousands of applications within the consumer, industrial and infrastructure markets, which include sporting goods and marine applications. OC sells composite materials to original equipment manufacturers and boat builders, both directly and through distributors. Within the building construction market, glass fiber mat is used to provide fire and mildew resistance in 95% of all asphalt roofing shingles. OC sells glass fiber and/or mat directly to a small number of major shingle manufacturers, including its own roofing business. Tubs, showers and other related internal building components used for both remodeling and new construction are also major applications of composite materials in the construction market. These end-use products are some of the first successful material substitution conversions normally encountered in developing countries. Glass fiber reinforcements and composite material solutions for these markets are sold to direct accounts, and also to distributors around the world, who in turn service thousands of customers. A significant portion of transportation-related composite solutions are used in automotive applications. Non-automotive transportation applications include heavy trucks, rail cars, shipping containers, refrigerated containers, trailers and commercial ships. Growth continues in automotive applications, as composite systems create new applications or displace other materials in existing applications. There are hundreds of composites applications, including body panels, door modules, integrated front-end systems, instrument panels, chassis and underbody components and systems, pick-up truck beds and heat and noise shields. These composite parts are either produced by original equipment manufacturers or are purchased by original equipment manufacturers from first-tier suppliers. Within the telecommunications and electronics markets, glass fiber composites are used to protect and reinforce fiber optic and copper cables. OC also produces central strength members for fiber optic cables. Other end-uses include connectors, circuit breaker boxes, computer housings, electricians' safety ladders and hundreds of various electro/mechanical components. OC sells asphalt products, primarily for industrial and specialty applications, under the Trumbull brand name. There are three principal kinds of industrial asphalt: built-up roofing asphalt, used in commercial flat roof systems to provide waterproofing and adhesion; saturants or coating asphalt, used to manufacture roofing mats, felts and residential shingles; and industrial specialty asphalt, used by manufacturers in a variety of products such as waterproofing systems, adhesives, coatings, dyes and product extenders, as well as in various automotive applications. There are several channels of distribution for these products. They are used internally in the manufacture of residential roofing products and are also sold to other shingle manufacturers. In addition, asphalt is sold to roofing contractors and distributors for built-up roofing asphalt systems and to manufacturers in a variety of other industries, including automotive, chemical, rubber and construction. Major Customers. No customer of the Composite Solutions segment accounted for more than 7% of the segment's sales in 2002. (c) Business Realignment Preceding Commencement of Chapter 11 Cases Prior to the commencement of the Chapter 11 Cases, OC consummated several significant acquisitions and divestitures of non-strategic businesses and realigned existing businesses. During the period 1994 through 1996, OC made a number of acquisitions for its Building Materials Systems segment in the United States and Europe. The combined purchase price for the acquisitions totaled approximately $370 million. The largest of these acquisitions was the $110 million acquisition in 1994 of Pilkington Insulation Limited and Kitsons Insulation Products Limited, the United Kingdom-based insulation manufacturing and industrial supply businesses of Pilkington PLC. On June 27, 1997, OC acquired Fibreboard Corporation ("Fibreboard"), a North American manufacturer of vinyl siding and accessories, as well as manufactured stone. At the time of the acquisition, Fibreboard was a leading producer of vinyl siding and accessories, with plants in Georgia, Missouri and North Carolina in the United States, and British Columbia and Ontario in Canada. Marketing products under the brand names Norandex and Vytec, Fibreboard also operated more than 130 company-owned distribution centers in 32 states. The purchase price of the acquisition totaled approximately $660 million, including assumed debt of $138 million. On July 28, 1997, OC acquired Amerimark Building Products, Inc. ("Amerimark") (including its wholly-owned subsidiaries, Wolverine Coil Coating, Inc. and RBP, Inc.) for a purchase price of approximately $317 million. Amerimark was a specialty building products company serving the exterior residential housing industry. Major product lines included vinyl siding, vinyl windows and aluminum accessories for the exterior of the home. In April 1998, OC completed the sale of its 50% interest in the Alpha/Owens Corning, L.L.C. joint venture, a manufacturer and marketer of unsaturated polyester and vinylester resins. OC sold its interest to the joint venture and Alpha Corporation of Tennessee. OC and Alpha Corporation of Tennessee had created the joint venture in 1994, combining their existing resin businesses to form the largest manufacturer of polyester resins in North America. In September 1998, OC completed the formation of a joint venture with a U.S. subsidiary of Groupe Porcher Industries. The joint venture manufactured and sold yarns and specialty materials. OC contributed two manufacturing plants and certain proprietary technology to the joint venture, in return for a 49% interest in the joint venture. The remaining 51% interest in the joint venture was sold to the Groupe Porcher subsidiary for approximately $550 million. In late 1999, certain OC entities, including Fibreboard, underwent an internal reorganization. On December 15, 1999, OCD approved the transfer of the assets and liabilities of Cultured Stone Corporation ("Cultured Stone"), a Fibreboard subsidiary, to OCD in exchange for the transfer by OCD of stock of Amerimark to Fibreboard. Effective December 31, 1999, Cultured Stone and Vytec Sales Corporation, also a Fibreboard subsidiary, merged with and into Fibreboard. On that same date, Fibreboard exchanged the Cultured Stone assets and liabilities for the Amerimark stock. Also on the same date, Fabwel, Inc. ("Fabwel"), a Fibreboard subsidiary, and the newly acquired Amerimark were merged with and into Norandex, Inc. ("Norandex"), a Fibreboard subsidiary, which then changed its name to Exterior Systems, Inc. ("Exterior Systems"). During 2000, OC implemented the first phase of a strategic restructuring program, which continued throughout 2001. On February 2, 2000, OC completed the sale of the assets of Falcon Foam, a producer of expanded polystyrene foam insulation in Michigan and California, to Atlas Roofing Corp. for net proceeds of approximately $50 million. On June 5, 2000, OC completed the sale of its European building materials business to Alcopor Owens Corning Holding AG ("Alcopor Owens Corning"), an unconsolidated joint venture between OC and Alcopor Holding AG, in which OC retained a 40% interest. Proceeds from the sale, net of OC's $34 million cash infusion into the joint venture, were $177 million. 3. Acquisitions, Divestitures and Business Realignments During the Pendency of the Chapter 11 Cases (a) Business Realignments Beginning in 2000, and continuing after the filing with the Bankruptcy Court of voluntary petitions for relief under Chapter 11 made by OCD and the Subsidiary Debtors (the "Filing"), OC reviewed its cost structures as a response to the overall slowed economy in both the building materials and composites industries. As a result of that review, various restructuring programs were put into place as OC assessed cost structures of certain businesses and facilities as well as overhead expenditures for the entire company. One result of such assessments was the determination to exit certain businesses and consolidate in others, leading to significant restructuring charges as assets were written down to realizable value or other exit costs were recognized. In addition, a strategic review of OC's businesses resulted in additional restructuring charges in 2002. By Order dated December 9, 2002, OC received Bankruptcy Court approval for the restructuring of two of OC's joint ventures in China, namely OC Shanghai and OC Guangzhou. The restructuring involved the extension of certain debt maturities and the reduction of principal by the China Lenders (as defined below), who were owed approximately $22 million, which debt was originally guaranteed by OCD. The restructuring, pursuant to the terms of the China Standstill Agreement, extended the debt maturities through December 31, 2005, and reduced the principal. In consideration for the proposed maturity extensions and reduction in principal, OC agreed that the China Lenders have an Allowed unsecured guaranty Claim against the Estate in the aggregate amount of $22 million. (b) Acquisitions In June 2002, OC received Bankruptcy Court approval to consummate the restructuring of OC's Indian joint venture, Owens-Corning (India) Limited ("OCIL"), a producer of composite material. As part of the restructuring, OC, through its wholly-owned subsidiary, IPM Inc.("IPM"), contributed approximately $3 million of cash into OCIL and agreed to allow a guaranty claim in the amount of approximately $19 million in its Chapter 11 proceedings in respect of OCIL's junior debt. In addition, OCIL's senior debt maturities were extended, and its junior debt was converted to approximately $7 million of redeemable convertible debentures. Through these restructuring efforts, OC's ownership interest in OCIL increased from approximately 50% to approximately 60%. OC began consolidating OCIL on July 1, 2002, when the restructuring was consummated by all of the parties to the restructuring and approved by the Indian Government. (c) Divestitures During the first quarter of 2001, OC completed the sale of the majority of its interest in Engineered Pipe Systems, Inc. ("EPS"), a producer of glass-reinforced plastic pipe with operations mostly in Europe. EPS and Saudi Arabian Amiantit Co. ("Amiantit") had entered into a Stock Purchase Agreement, dated February 28, 2001, pursuant to which EPS sold to Amiantit all of the capital stock of its wholly-owned subsidiaries, Flowtite A/S and Flowtite Technology A/S. Also pursuant to the Stock Purchase Agreement, Amiantit purchased from Norske EPS BOT A/S, its interest in Flowtite Botswana Ltd. The purchase price was $2 million. By letter dated May 29, 2001, the Unsecured Creditors' Committee represented to the Debtors that it had no objection to the Stock Purchase Agreement, or the implementation of the transactions related to these agreements. Net proceeds from the sale were $22 million. OC completed its divestiture of the pipe business with a sale of certain other operations to Amiantit pursuant to a Stock Purchase Agreement, dated November 21, 2001. The purchase price for the sale of these interests was $2.6 million. By letter dated November 29, 2001, the Unsecured Creditors' Committee represented to the Debtors that it had no objection to the Stock Purchase Agreement or the implementation of the transactions provided for under the agreement. During the fourth quarter of 2001, OC sold its remaining 40% interest in Alcopor Owens Corning, an unconsolidated joint venture for net proceeds of $23 million. On October 29, 2001, OC received approval from the Bankruptcy Court to finalize the transaction, as modified. B. Financial Structure of the Company at the Petition Date 1. Capitalization The following table sets forth the consolidated current liabilities and capitalization of OC as at the dates indicated. The table does not reflect OC's pre-petition asbestos liability. This information is qualified in its entirety by, and should be read in connection with, the Consolidated Financial Statements of OC (including the notes thereto) that are included in OC's Annual Report on Form 10-K for the year ended December 31, 2002, as well as the Consolidated Financial statements of OC included in OC's other reports filed with the SEC, which may be obtained, free of charge, through OC's website at www.owenscorning.com. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D.
- ----------------------------------------------------------------------------------------------- (in millions of dollars) As of - ------------------------------------------- -------------------------- ------------------------ October 4, 2000 December 31, 2002 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Current Liabilities - ------------------------------------------- -------------------------- ------------------------ Accounts Payable and $ 281 $ 756 Accrued Liabilities - ------------------------------------------- -------------------------- ------------------------ Short-term Debt 50 40 - ------------------------------------------- -------------------------- ------------------------ Long-term Debt - current portion 10 65 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Long-term Debt 66 71 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Other - ------------------------------------------- -------------------------- ------------------------ Other employee benefits liability 322 368 - ------------------------------------------- -------------------------- ------------------------ Pension Plan liability 41 500 - ------------------------------------------- -------------------------- ------------------------ Other 133 103 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Liabilities Subject to Compromise 3,503 3,362 (excluding Asbestos) - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Company-obligated Securities of Entities 195 200 Holding Solely Parent Debentures-subject to compromise - ------------------------------------------- -------------------------- ------------------------ Minority Interest 47 49 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Total Liabilities and Minority Interest $ 4,648 $ 5,514 - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Stockholders' Equity - ------------------------------------------- -------------------------- ------------------------ Common Stock 6 6 - ------------------------------------------- -------------------------- ------------------------ Additional Paid-In Capital 694 690 - ------------------------------------------- -------------------------- ------------------------ Deficit (1,876) (4,766) - ------------------------------------------- -------------------------- ------------------------ Accumulated other (103) (395) comprehensive loss - ------------------------------------------- -------------------------- ------------------------ Other (9) (3) - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Total Stockholders' Equity (1,288) (4,468) - ------------------------------------------- -------------------------- ------------------------ - ------------------------------------------- -------------------------- ------------------------ Total Liabilities and Stockholders' $ 3,360 $ 1,046 Equity (excluding Asbestos) - ------------------------------------------- -------------------------- ------------------------
2. Pre-petition Indebtedness As of the Petition Date, OCD, the Subsidiary Debtors and certain Non-Debtor Subsidiaries were parties to a Credit Agreement, dated as of June 26, 1997 (the "Credit Agreement"), with certain banks listed in Annex A thereto and with Credit Suisse First Boston, as agent for the lenders signatory thereto. The Credit Agreement initially provided a revolving credit line of up to $2 billion available in the form of revolving loans. The initial borrowers under the Credit Agreement were: OCD, European Owens-Corning Fiberglas S.A., N.V., Owens-Corning S.A., Owens-Corning Canada Inc., Owens-Corning UK Holdings Ltd. and Sierra Corp. (and Fibreboard as successor to Sierra Corp. after the merger of Sierra Corp. with Fibreboard). The Credit Agreement was amended by Amendment No. 1, dated as of February 20, 1998 ("Amendment No. 1"), pursuant to which Owens-Corning Fiberglas (U.K.) Ltd., Owens Corning Building Products (U.K.) Ltd., Owens Corning Polyfoam UK Ltd. and Owens-Corning Isolation France S.A. were added as borrowers under the credit facility. In addition, Amendment No. 1, among other things, reduced the maximum amount of the commitment under the credit facility to $1.8 billion. The Credit Agreement was again amended by Amendment No. 2, dated as of November 30, 1998, pursuant to which, among other things, certain financial covenants were modified to accommodate the NSP ("Amendment No. 2", and the Credit Agreement as amended by Amendment No. 1 and Amendment No. 2, the "1997 Credit Agreement"). The obligations under the 1997 Credit Agreement were guaranteed by certain Subsidiaries of OCD (collectively, the "Subsidiary Guarantors"). OCD was a guarantor, in addition to a borrower, under the 1997 Credit Agreement. At the Petition Date, IPM, Vytec Corporation, Owens-Corning Fiberglas Sweden Inc., Falcon Foam Corporation, Integrex, Fibreboard, Exterior Systems, Inc., Owens-Corning Fiberglas Technology Inc., and Soltech, Inc. were Subsidiary Guarantors of the obligations under the 1997 Credit Agreement. As of the Petition Date, the principal amount outstanding under the 1997 Credit Agreement was $1,565,919,519 (including contingent liabilities for undrawn letters of credit in the amount of $250,919.519). See Section VII.C.3.b(iii) of this Disclosure Statement for a description of the treatment of the Bank Holders Claims under the Plan and Section V.F.11 of this Disclosure Statement entitled "Implementation of Process for Resolution of Inter-Creditor Issues" and Section V.G. entitled "Avoidance Actions in the Chapter 11 Cases" of this Disclosure Statement, for a description of certain pending litigation relating to the Subsidiary Guarantees. OC's other principal loan indebtedness as of the Petition Date (excluding intercompany indebtedness) included:
---------------------------------------- ------------------------- ------------------------------- Amount Outstanding (principal Notes Aggregate Original and accrued interest) as of Principal Amount October 1, 2000 ---------------------------------------- ------------------------- ------------------------------- $400 Million Debentures due 2018 (7.5%) $400,000,000 $405,333,333 ($400,000,000 / $5,333,333) ---------------------------------------- ------------------------- ------------------------------- $550 Million Term Notes (First Series) $300,000,000 $309,625,000 due 2005 (7.500%) ($300,000,000 / $9,625,000) ---------------------------------------- ------------------------- ------------------------------- $550 Million Term Notes (Second $250,000,000 $258,234,722 Series) due 2008 (7.700%) ($250,000,000 / $8,234,722) ---------------------------------------- ------------------------- ------------------------------- $250 Million Notes due 2009 (7.000%) $250,000,000 $250,923,611 ($250,000,000 / $923,611) ---------------------------------------- ------------------------- ------------------------------- $150 million 8.875% Debentures of the $150,000,000 $41,269,153 $300 Million High Coupon Debentures ($40,045,000 / $1,224,153) due 2002 ---------------------------------------- ------------------------- ------------------------------- $150 million 9.375% Debentures of the $150,000,000 $7,213,654 $300 Million High Coupon Debentures ($6,988,000 / $225,654) due 2012 ---------------------------------------- ------------------------- ------------------------------- 130 Million DEM Bearer Bonds 130,000,000 DEM $62,776,357 due 2000 (7.250%) ($60,572,174 / $2,204,183) ---------------------------------------- ------------------------- ------------------------------- Industrial Revenue Bonds $9,950,000 ---------------------------------------- ------------------------- ------------------------------- TOTAL $1,345,325,830 ($1,317,555,174 / $27,770,656)
Collectively, the debt securities listed above are referred to as the "Pre-petition Bonds". See Section VII.C.3.b(iv) of this Disclosure Statement for a description of the treatment of Bondholders Claims under the Plan. In May 1995, Owens-Corning Capital L.L.C., a special purpose Delaware limited liability company, issued and sold four million shares of 6 1/2 % Convertible Monthly Income Preferred Securities (the "MIPS") for aggregate gross proceeds of approximately $200 million. Owens-Corning Capital L.L.C. then lent the proceeds from the MIPS issuance, together with the proceeds from the issuance of common limited liability company interests, to OCD, which loan was evidenced by the issuance by OCD to Owens-Corning Capital L.L.C. of approximately $253 million in aggregate principal amount of OC's 6.5% Convertible Subordinated Debentures due 2002. As of December 31, 2002, $253,104,600 of these convertible subordinated debentures remained outstanding. Under the Plan, the term "MIPS Claims and Interests" is defined to mean all Claims asserted directly or indirectly against OCD (or Interests to the extent any such Claims may be characterized as Interests) by the holders of the 6 1/2 % Convertible Monthly Income Preferred Securities issued by Owens-Corning Capital L.L.C. or any Person (including any trustee) asserting such Claims derivatively or otherwise on behalf of such holders, including, without limitation, (i) the Claims of Owens-Corning Capital L.L.C. for approximately $253 million original aggregate principal amount arising from OCD's 6.5% Convertible Subordinated Debentures due 2002, issued pursuant to an indenture dated as of May 10, 1995, between OCD, Owens-Corning Capital L.L.C. and Harris Trust and Savings Bank, as trustee, (ii) Claims arising under the guarantee agreement, dated as of May 10, 1995, in respect of such Convertible Subordinated Debentures, executed by OCD as guarantor, (iii) the Claim of The Bank of New York ("BONY"), as Special Trustee on behalf of the holders of the MIPS, and (iv) any Interests of the foregoing to the extent any rights of such holders may be characterized as Interests. Because the rights against OCD under the Convertible Subordinated Debentures are contractually subordinated to substantially all indebtedness, and since the MIPS are themselves equity securities, the MIPS Claims and Interests are treated as Subordinated Claims under Class 11 of the Plan. As a result, the MIPS Claims and Interests shall be deemed extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account the MIPS Claims and Interests. For a discussion of the treatment of Subordinated Claims generally, see Section VII.C.3.b(x) of this Disclosure Statement entitled "Class 11--Subordinated Claims." BONY, as successor Trustee under the Indenture dated as of May 10, 1995, for the 6.5% Convertible Subordinated Debentures due 2002 (the "MIPS Indenture"), has alleged several defects in the Plan with respect to its asserted claims and the rights of the holders of the MIPS. BONY has asserted: (a) that the Plan improperly places the MIPS Claims and Interests in the same class, because the MIPS Claims and Interests constitute both claims and interests; (b) that, to the extent the Plan's definition of "MIPS Claims and Interests" includes claims of BONY for fees and expenses, the Plan improperly classifies claims that are not subordinated with subordinated claims; and (c) that the Plan improperly discriminates between The Bank of New York's claim for fees and expenses and the claims of Pre-petition Indenture Trustees, by excluding the MIPS Indenture from the Plan's definition of Pre-Petition Bond Indentures. The Debtors disagree with each of these assertions. The Debtors believe that whether or not the parties holding or asserting rights under the MIPS Indenture hold "claims" or "interests," such rights are subject to contractual subordination such that they are not entitled to receive any recovery under the Plan. The Debtors similarly believe that there are no circumstances that would support the payment of fees and expenses to BONY. Although the Plan gives BONY, as trustee, different treatment, regarding fees and expenses, than it provides to Pre-petition Indenture Trustees (e.g., by not providing for BONY to retain its liens, if any, on any payments or distribution made to the holders of the MIPS Claims and Interests), the Debtors believe such disparate treatment is justified. The holders of the MIPS Claims and Interests receive no distributions under the Plan and, as a consequence, BONY will not be disbursing any funds to such holders and there will be no property to which its lien could attach. In 1991, OCD formed O. C. Funding B.V. ("O.C. Funding"), a closed company with limited liability organized under the laws of The Netherlands, as a wholly-owned subsidiary of OCD for the purposes of obtaining financing for OCD and its subsidiaries. O.C. Funding subsequently issued $150,000,000 aggregate principal amount of its 10% Guaranteed Debentures due 2001 (the "O.C. Funding B.V. Debentures"), which were guaranteed as to payment of principal and interest, on an unsubordinated basis, by OCD. The O.C. Funding B.V. Debentures were issued pursuant to an indenture dated as of May 15, 1991, between O.C. Funding, OCD and The Bank of New York, as trustee. The guarantee by OCD was issued pursuant to that indenture. Substantially all of the net proceeds of the issuance of the O.C. Funding B.V. Debentures were lent by O.C. Funding to OCD pursuant to a loan agreement dated June 11, 1991. The intercompany loan was evidenced by a promissory note in the principal amount of $148,000,000 (the "Debentures Intercompany Note"). In accordance with terms required by OCD's then current bank credit agreement, payment on the intercompany loan was subordinated in accordance with the terms of an attached schedule. As of the Petition Date, $42,395,000 aggregate principal amount of the O.C. Funding B.V. Debentures remained outstanding. Wilmington Trust Company, as successor trustee, filed a proof of claim against OCD in the amount of $43,855,272 on account of the foregoing guaranty plus accrued interest. This Claim is defined in the Plan as the "Wilmington Trust/O.C. Funding B.V. Claim." See Section 1.211 of the Plan, defining the "Wilmington Trust/O.C. Funding B.V. Claim". KBC Bank Nederland N.V. ("KBC Bank") loaned $20 million to O.C. Funding under a Credit Agreement dated August 10, 1999, between O.C. Funding and KBC Bank (the "KBC Agreement"). The loan to O.C. Funding was guaranteed on an unsubordinated basis by OCD. O.C. Funding subsequently lent the proceeds of its borrowing under the KBC Agreement to OCD, which intercompany borrowing was represented by a promissory note in the principal amount of $20,000,000. Westdeutsche Landesbank Girozentrale ("West LB") loaned $10 million to O.C. Funding under a Credit Facility dated February 24, 2000, between O.C. Funding and West LB (the "West LB Facility"). The loan to O.C. Funding was guaranteed on an unsubordinated basis by OCD. O.C. Funding subsequently lent the proceeds of its borrowing under the KBC Agreement to OCD, which intercompany borrowing was represented by a promissory note in the principal amount of $11,800,000. As of the Petition Date, $20,379,264 (including accrued interest) was outstanding under the KBC Agreement, and $10,135,236 (including accrued interest) was outstanding under the West LB Facility. KBC Bank filed a proof of claim based on its guaranty from OCD in the amount of $20,379,264 and West LB filed a proof of claim based on its guaranty from OCD in the amount of $10,135,236, exclusive of postpetition interest. In July 2003, Goldman Sachs & Co. Inc. ("Goldman Sachs") advised OCD that it was the beneficial holder of more than 50% of the outstanding O.C. Funding B.V. Debentures and that it was cooperating with KBC Bank and West LB concerning the assertion of claims relating to the O.C Funding B.V. Debentures, the KBC Agreement and the West LB Facility. Goldman Sachs made a number of claims relating to the indebtedness under the O.C. Funding B.V. Debentures. Among other claims, Goldman Sachs alleged that the subordination provisions governing certain of the intercompany indebtedness were not enforceable, and Goldman Sachs began court proceedings in The Netherlands seeking, among other relief, to compel O.C. Funding to assert its claim under such intercompany indebtedness on an unsubordinated basis. Although OCD believes that it has meritorious positions with respect to the assertions made by Goldman Sachs, OCD believed it was in the best interests of its creditors and the maintenance of undisrupted business operations to settle Goldman Sachs' claims by reaching an agreement as to the amount and priority of claims that OCD would support as allowed claims in the bankruptcy proceedings. Accordingly, OCD has reached an agreement in principle with Goldman Sachs pursuant to which OCD would support (a) Allowed Claims in Class 5 aggregating $74,377,708 in respect of the claims of the holders of the O.C. Funding B.V. Debentures, the KBC Agreement and the West LB Facility against OCD arising under the direct guarantees by OCD, (ii) Allowed Claims in Class 6 aggregating $32,371,570 in respect of the claims of O.C. Funding against OCD under the intercompany notes entered into in respect of the related financings, (iii) an Allowed Claim in Class 6 of $15,628,430 in respect of a negotiated portion of the claims of the holders of the O.C. Funding B.V. Debentures against OCD under the Debentures Intercompany Note, and (iv) An allowed Claim in Class 11 of $26,205,260 in respect of the remaining claims of the holders of the O.C. Funding B.V. Debentures against OCD under the Debentures Intercompany Note. The amounts of such claims specified above may be adjusted subject to verification of the exact amounts and dates of intercompany borrowings and other related matters. The agreement in principle with respect to such claims has not yet been set forth in definitive documentation, and is subject to approval of the Bankruptcy Court, and may be challenged by other creditors. In addition, while the agreement in principle described above has been reached with Goldman Sachs, it has not been approved by the other holders of the O.C. Funding B.V. Debentures, KBC Bank, West LB or Wilmington Trust Company, the successor trustee under the O.C. Funding B.V. Debentures. If such other parties to do not agree to the terms of this agreement in principle, or if the agreement in principle is not set forth in definitive documentation, the amounts of the claims asserted by the parties described above, and the relative seniority thereof, would likely be different than as described above. The amounts of such claims actually allowed by the Bankruptcy Court may be more or less than the amounts indicated above. OC's other indebtedness subject to compromise at the Petition Date and as of December 31, 2002, consisted of other long-term debt through 2012 at rates from 6.25% to 13.8% in an aggregate amount of $62 million and $92 million, respectively. For a description of other indebtedness, see OC's Annual Report on Form 10-K for the year ended December 31, 2002, OC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, OC's Annual Report on Form 10-K for the year ended December 31, 2001, OC's Annual Report on Form 10-K for the year ended December 31, 2000, and OC's Quarterly Report on Form 10-Q for the quarter ended March 31,2003, copies of which may be obtained, free of charge, through OC's website at www.owenscorning.com. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D. 3. Pre-petition Equity Prior to the Petition Date, OCD's common stock, par value $0.10 per share (the "Existing OCD Common Stock") was listed on the New York Stock Exchange ("NYSE") under the ticker symbol "OWC". As of the Petition Date, OCD had 100 million shares of authorized common stock, of which 55,423,132 shares were outstanding. Effective January 30, 2003, OCD's common stock was removed from listing and registration on the NYSE for failing to meet certain continued listing standards of the NYSE. Effective December 19, 2002, OCD's common stock has been traded on the Over-The-Counter Bulletin Board under the ticker symbol "OWENQ". OCD declared and paid regular dividends of $0.75 per share of Existing OCD Common Stock for each of the first two quarters of 2000. As a result of the Filing, on October 5, 2000, OCD declared but did not pay the regular dividend for the third quarter of 2000. See Sections V.G.3.a of this Disclosure Statement entitled "Dividend Action" for a discussion of certain actions that have been filed in the Chapter 11 Cases to avoid certain dividends paid to certain of the Debtors' shareholders and to recover such dividends for the Debtors' Estates as a fraudulent conveyance. As of February 28, 2003, there were 6,929 stockholders of record of the Existing OCD Common Stock. See Section VII.C.3.b(xi) of this Disclosure Statement for a description of the treatment of the Existing OCD Common Stock under the Plan. IV. BACKGROUND OF ASBESTOS-RELATED LITIGATION A. Pre-Petition Claims Against OCD Prior to the Petition Date, numerous claims had been asserted against OCD alleging personal injuries arising from inhalation of asbestos fibers. Virtually all of these claims arose out of OCD's manufacture, distribution, sale or installation of an asbestos-containing calcium silicate, high temperature insulation product, the manufacture and distribution of which was discontinued in 1972. OCD received approximately 18,000 asbestos personal injury claims during 2000, approximately 32,000 such claims during 1999 and approximately 69,000 such claims during 1998. B. Pre-Petition Claims Against Fibreboard Prior to 1972, Fibreboard manufactured asbestos-containing products, including insulation products. Fibreboard has since been named as a defendant in many thousands of personal injury claims for injuries allegedly caused by asbestos exposure. Fibreboard received approximately 22,000 asbestos personal injury claims during 2000. 1. The Fibreboard Insurance Settlement Trust In an effort to deal with the financial impact of its existing and future asbestos-related personal liability in the early 1990's, Fibreboard entered into a settlement agreement with two of its insurers, ultimately resulting in the creation of a trust (the "Fibreboard Insurance Settlement Trust"). See Section IV.C.3(c) of this Disclosure Statement entitled "Insurance Settlement" for a discussion of the Insurance Settlement entered into by Fibreboard with respect to its asbestos-related liability. During the fourth quarter of 1999, the Fibreboard Insurance Settlement Trust was funded with $1.873 billion in proceeds from the settlement referred to above. The terms of the Fibreboard Insurance Settlement Trust provided for the funds in the trust to be applied solely to the costs of resolving pending and future Fibreboard asbestos-related liabilities, whether incurred as a result of a judgment in litigation or a settlement, or otherwise. During 2000 prior to the Petition Date, payments made out of the Fibreboard Insurance Settlement Trust for asbestos-related claims against Fibreboard totaled $820 million, including $45 million in defense, claims processing and administrative expenses. As a result of the Filing, no payments for such claims have been made from the Fibreboard Insurance Settlement Trust since the Petition Date. The assets of the Fibreboard Insurance Settlement Trust are comprised of marketable securities. The Fibreboard Insurance Settlement Trust has received a ruling from the United States Internal Revenue Service ("IRS") that it is a "qualified settlement fund" for federal income tax purposes. At December 31, 2002, the fair value of assets in the Fibreboard Insurance Settlement Trust was $1.238 billion. In addition, there are $127 million in Administrative Deposits held in settlement accounts to pay applicable Fibreboard asbestos claim settlements. See Section IV.C.4 of this Disclosure Statement entitled "NSP Administrative Deposits" for a discussion of these Administrative Deposits. 2. The Committed Claims Account Fibreboard also has an interest of approximately $30 million in the balance of the account (the "Committed Claims Account") established by Fibreboard and Continental Casualty Company ("Continental") pursuant to the Agreement Between Fibreboard and Continental On Remaining Issues, dated December 13, 1999, which was the subject of a Stipulation and Agreed Order Between Debtors and Continental Casualty Company Regarding Status and Disposition of Funds in Committed Claims Account and Related Matters Under Buckets Agreement, entered by the Bankruptcy Court on June 27, 2001. Under the Plan, the Committed Claims Account is being transferred to the FB Sub-Account of the Asbestos Personal Injury Trust for the benefit of the holders of Allowed Claims in Class 8, FB Asbestos Personal Injury Claims. See Section VII.C.3.b(vii) of this Disclosure Statement entitled "Impaired Classes of Claims--Class 8 - FB Asbestos Personal Injury Claims." C. National Settlement Program 1. General Beginning in late 1998, OCD implemented the National Settlement Program ("NSP") to resolve personal injury asbestos claims through settlement agreements with individual plaintiffs' law firms (the "NSP Agreements"). The NSP was intended to better manage the asbestos liabilities of OCD and to help OCD better predict the timing and amount of indemnity payments for both pending and future asbestos claims. The number of law firms participating in the NSP expanded from approximately 50 when the NSP was established to approximately 120 as of the Petition Date. The NSP Agreements extended through at least 2008 and provided for the resolution of existing asbestos claims, including unfiled claims pending with the participating law firm at the time it entered into an NSP Agreement ("Initial Claims"). The NSP Agreements also established procedures and fixed payments for resolving, without litigation, claims against either OCD or Fibreboard, or both, arising after a participating firm entered into an NSP Agreement ("Future Claims"). Settlement amounts for both Initial Claims and Future Claims were negotiated with each firm participating in the NSP, and each firm was to communicate with its respective clients to obtain authority to settle individual claims. Payments to individual claimants were to vary based on a number of factors, including the type and severity of disease, age and occupation. All such payments were subject to delivery of satisfactory evidence of a qualifying medical condition and exposure to OCD's and/or Fibreboard's products, delivery of customary releases by each claimant, and other conditions. Certain claimants settling non-malignancy claims with OCD and/or Fibreboard were entitled to an agreed pre-determined amount of additional compensation if they later developed a more severe asbestos-related medical condition. As to Future Claims, each participating NSP firm agreed (consistent with applicable legal requirements) to recommend to its future clients, based on appropriately exercised professional judgment, to resolve their asbestos personal injury claims against OCD and/or Fibreboard through an administrative processing arrangement, rather than litigation. In the case of Future Claims involving non-malignancy, claimants were required to present medical evidence of functional impairment, as well as the product exposure criteria and other requirements set forth above, to be entitled to compensation. 2. OCD's Experience with the NSP (a) NSP Claims Against OCD As of the Petition Date, the NSP covered approximately 239,000 Initial Claims against OCD, approximately 150,000 of which had satisfied all conditions to final settlement, including receipt of executed releases, or other resolution (the "Final NSP Settlements") at an average cost per claim of approximately $9,300. As of the Petition Date, approximately 89,000 of such Final NSP Settlements had been paid in full or otherwise resolved, and approximately 61,000 were unpaid in whole or in part. As of such date, the remaining balance payable under NSP Agreements in connection with these unpaid Final NSP Settlements was approximately $510 million. Through the Petition Date, OCD had received approximately 6,000 Future Claims under the NSP. (b) Non-NSP Claims Against OCD As of the Petition Date, approximately 29,000 asbestos personal injury claims were pending against OCD outside the NSP. This compares to approximately 25,000 such claims pending on December 31, 1999. The information needed for a critical evaluation of pending claims, including the nature and severity of disease and definitive identifying information concerning claimants, typically becomes available only through the discovery process or as a result of settlement negotiations, which often occur years after particular claims are filed. As a result, OCD has limited information about many of such claims. OCD resolved (by settlement or otherwise) approximately 10,000 asbestos personal injury claims outside the NSP during 1998, 5,000 such claims during 1999 and 3,000 such claims during 2000 prior to the Petition Date. The average cost of resolution was approximately $35,900 per claim for claims resolved during 1998, $34,600 per claim for claims resolved during 1999, and $44,800 per claim for claims resolved during 2000 prior to the Petition Date. Generally, these claims were settled as they were scheduled for trial, and they typically involved more serious injuries and diseases. Accordingly, OCD does not believe that such average costs of resolution are representative of the value of the non-NSP claims then pending against OCD. (c) Asbestos-Related Payments by OCD As a result of the Filing, OCD has not made any asbestos-related payments since the Petition Date except for approximately $20 million paid on its behalf by third parties pursuant to appeal bonds issued prior to the Petition Date. During 1999 and 2000 (prior to the Petition Date), OCD made asbestos-related payments falling within four major categories: (1) settlements in respect of verdicts incurred or claims resolved prior to the implementation of the NSP; (2) NSP settlements; (3) non-NSP settlements covering cases not resolved by the NSP; and (4) defense, claims processing and administrative expenses, as follows:
- --------------------------------------------- --------------------------------- -------------------------------------- 1999 2000 (through October 4)1 (In millions of dollars) (In millions of dollars) - --------------------------------------------- --------------------------------- -------------------------------------- Pre-NSP Settlements $170 $ 51 - --------------------------------------------- --------------------------------- -------------------------------------- NSP Settlements 570 538 - --------------------------------------------- --------------------------------- -------------------------------------- Non-NSP Settlements 30 42 - --------------------------------------------- --------------------------------- -------------------------------------- Defense, Claims Processing and 90 54 Administrative Expenses - --------------------------------------------- --------------------------------- -------------------------------------- Total2 $860 $685 - --------------------------------------------- --------------------------------- --------------------------------------
- ------------------- 1 Since the Petition date, all pre-petition asbestos claims and pending litigation against the Debtors, including, without limitation, claims under the NSP, have been automatically stayed. 2 Amounts shown are before tax and application of insurance recoveries. Prior to the Petition Date, OCD deposited certain amounts in settlement accounts to facilitate claims processing under the NSP ("Administrative Deposits"). See Section IV.C.4 of this Disclosure Statement entitled "NSP Administrative Deposits" for a further discussion of the settlement accounts. 3. Fibreboard's Experience with the NSP (a) NSP Claims Against Fibreboard As described above, OCD acquired Fibreboard in 1997. Fibreboard executed the NSP Agreements and became a participant in the NSP effective in the fourth quarter of 1999. The NSP Agreements settled asbestos personal injury claims that had been filed against Fibreboard by participating plaintiffs' law firms and claims that could have been filed against Fibreboard by such firms following the lifting, in the third quarter of 1999, of an injunction which had barred the filing of asbestos personal injury claims against Fibreboard. As of the Petition Date, the NSP covered approximately 206,000 Initial Claims against Fibreboard, approximately 118,000 of which had satisfied all conditions to final settlement, including receipt of executed releases, or other resolution as Final NSP Settlements at an average cost per claim of approximately $7,400. As of the Petition Date, approximately 62,000 of such Final NSP Settlements had been paid in full or otherwise resolved, and approximately 56,000 were unpaid in whole or in part. As of such date, the remaining balance payable under NSP Agreements in connection with these unpaid Final NSP Settlements was approximately $330 million. The NSP Agreements also provided for the resolution of Future Claims under the NSP against Fibreboard through the administrative processing arrangement described above. Through the Petition Date, Fibreboard had received approximately 6,000 Future Claims under the NSP. (b) Non-NSP Claims Against Fibreboard As of the Petition Date, approximately 9,000 asbestos personal injury claims were pending against Fibreboard outside the NSP. This compares to approximately 1,000 such claims pending on December 31, 1999. Fibreboard resolved (by settlement or otherwise) approximately 2,000 asbestos personal injury claims outside the NSP during 2000 prior to the Petition Date at an average cost of resolution of approximately $45,000 per claim. Generally, these claims were settled as they were scheduled for trial, and they typically involved more serious injuries and diseases. Accordingly, OC does not believe that such average costs of resolution are representative of the value of the non-NSP claims then pending against Fibreboard. (c) Insurance Settlement In 1993, Fibreboard entered into certain settlement arrangements in an attempt to address the financial impact of its existing and future asbestos-related personal injury liabilities. One such arrangement was an insurance settlement (the "Insurance Settlement") between Fibreboard and two of its insurers, Continental and Pacific Indemnity Company ("Pacific"). Under the terms of the Insurance Settlement, Continental and Pacific were, among other things, to provide up to $2 billion minus interim settlements, plus accrued interest, to resolve asbestos personal injury claims pending against Fibreboard as of August 27, 1993 and all future asbestos personal injury claims asserted against Fibreboard after such date, including defense costs. These funds were to be put into the Fibreboard Insurance Settlement Trust. See Section V.F.6 of this Disclosure Statement entitled "Insurance Settlement" and OC's Annual Report on Form 10-K for the year ended December 31, 2002, (which is available free of charge from OC's website, www.owenscorning.com), for a further description of the Insurance Settlement. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D. The Insurance Settlement became effective in 1999 and, during the fourth quarter of 1999, Continental and Pacific funded the Fibreboard Insurance Settlement Trust with $1.873 billion. (d) Asbestos-Related Payments by Fibreboard As a result of the Filing, Fibreboard has not made any asbestos-related payments since the Petition Date. During 2000 (prior to the Petition Date), gross payments for asbestos-related claims against Fibreboard, all of which were paid/reimbursed by the Fibreboard Insurance Settlement Trust, fell within four major categories, as follows:
------------------------------------------ --------------------------------------- 2000 (through October 4, 2000)3 (In millions of dollars) ------------------------------------------ --------------------------------------- Pre-NSP Settlements $29 ------------------------------------------ --------------------------------------- NSP Settlements 705 ------------------------------------------ --------------------------------------- Non-NSP Settlements 41 ------------------------------------------ --------------------------------------- Defense, Claims Processing and 45 Administrative Expenses ------------------------------------------ --------------------------------------- Total $820 ------------------------------------------ ---------------------------------------
- ------------------- 3 Only payments through October 4, 2000, are reflected. Since the Petition date, all pre-petition asbestos claims and pending litigation against the Debtors, including, without limitation, claims under the NSP, have been automatically stayed. The payments for settlements under the NSP include certain administrative deposits during the reporting period in respect of Fibreboard claims. Of this, approximately $127 million remains in settlement accounts and is or will be the subject of litigation to determine if any of these funds are recoverable by Fibreboard's estate. See Section IV.C.4 of this Disclosure Statement entitled "NSP Administrative Deposits" for a further discussion of the settlement accounts. 4. NSP Administrative Deposits As referred to above, prior to the Petition Date, OCD and Fibreboard entered into settlement agreements with four law firms including Baron & Budd, P.C. ("B&B"), whereby OCD and Fibreboard would make certain Administrative Deposits to facilitate claims processing under the NSP Agreements. These Administrative Deposits were made to settlement accounts maintained by such law firms for the benefit of their clients under the NSP Agreements. Each of the NSP Agreements contemplated that clients of the four firms, who received written approval from OCD and/or Fibreboard that they qualified for settlement payments pursuant to the terms of the particular NSP Agreement, would receive their settlement distribution from the Administrative Deposits maintained by their law firm. After the Petition Date, the Debtors did not authorize any further distributions from the Administrative Deposits. Nonetheless, at least one law firm, Waters & Kraus LLP, made distributions after the Petition date in the amount of approximately $11.6 million. At December 31, 2002, approximately $106 million of Administrative Deposits previously made by OCD, and $127 million of Administrative Deposits previously made by Fibreboard had not been finally distributed to claimants and are reflected in OCD's consolidated balance sheet as restricted assets ("Restricted Cash") and have not been subtracted from OCD's or Fibreboard's reserve for asbestos personal injury claims. The Administrative Deposits held by B&B have been the subject of litigation during the Chapter 11 Cases. See Section V.F.7 of this Disclosure Statement entitled "Baron & Budd Administrative Deposits." The Debtors are negotiating with the three other law firms holding Administrative Deposits to resolve disputes relating to the Debtors' rights to the return of some portion of the Administrative Deposits. If no settlement is reached, the Debtors will pursue the return of an appropriate portion of the Administrative Deposits. D. Establishment of Financial Reserves for Asbestos Liability; Estimation of Asbestos Liability 1. Financial Statement Reserves for Asbestos Liability For financial reporting purposes, OC estimates a reserve in accordance with generally accepted accounting principles to reflect asbestos-related liabilities that have been asserted or are probable of assertion, in which liabilities are probable and reasonably estimable. This reserve in respect of OCD's asbestos-related liabilities was established initially through a charge to income in 1991 with additional charges to income of $1.1 billion in 1996, $1.4 billion in 1998, $1.0 billion in 2000 and $1.4 billion in the third quarter of 2002 and as of December 31, 2002, the reserve in respect of OCD asbestos-related liabilities was approximately $3.6 billion. Similarly, OC estimates a reserve in respect of Fibreboard's asbestos-related liabilities and, as of December 31, 2002, the aggregate reserve in respect of Fibreboard asbestos-related liabilities was approximately $2.3 billion. Thus, OC's aggregate reserve for potential asbestos-related liability was approximately $5.9 billion as of December 31, 2002. For additional information with respect to the establishment and amount of reserves for asbestos-related liability, see Note 19 of the Notes to Consolidated Financial Statements set forth in OC's Annual Report on Form 10-K for the year ended December 31, 2002, and Note 8 of the Notes to Consolidated Financial Statements set forth in OC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, copies of which may be obtained, free of charge, through OC's website at www.owenscorning.com. Copies of OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request in accordance with the directions set forth in Appendix D. As OC has discussed in its public filings, any estimate for financial reporting purposes of its liabilities for pending and expected future asbestos claims is subject to considerable uncertainty because such liabilities are influenced by numerous variables that are inherently difficult to predict. As discussed further below, such uncertainties significantly increased as a result of the Filing. Prior to the Petition Date, such variables included, among others, the cost of resolving pending non-NSP claims; the disease mix and severity of disease of pending NSP claims; the number, severity of disease, and jurisdiction of claims filed in the future (especially the number of mesothelioma claims); how many future claimants were covered by an NSP Agreement; the extent, if any, to which individual claimants exercised a right to opt out of an NSP Agreement and/or engage counsel not participating in the NSP; the extent, if any, to which counsel not bound by an NSP Agreement undertook the representation of asbestos personal injury plaintiffs against OCD and Fibreboard; the extent, if any, to which OC exercised its right to terminate one or more of the NSP Agreements due to excessive opt-outs or for other reasons; and the success in controlling the costs of resolving future non-NSP claims. As a result of the Filing, the inherent difficulties and uncertainties involved in estimating the number and cost of resolution of present and future asbestos-related claims against OCD and Fibreboard have significantly increased and will likely have the effect of increasing the number and ultimate cost of resolution of such claims substantially. This could result from the following factors: o The settlement values for specified categories of disease set forth in the NSP Agreements were established by arms-length negotiations with the participating law firms in circumstances very different from those prevailing in the Chapter 11 Cases. The settlement values available to individual claimants under the arrangements to be included in any plan or plans of reorganization may vary substantially from those contemplated by the NSP Agreements. Because OC's estimate of liabilities in respect of non-NSP claims assumed payment of settlement values similar to those contained in the NSP Agreements, such estimate is subject to similar uncertainty. o OC anticipates that the number and estimated aggregate value of allowed future claims will ultimately be determined either as a result of negotiations involving the Future Claimants' Representative and the other interested constituencies or, if necessary, by the Bankruptcy Court. It is not possible to predict the outcome of such negotiations, or Bankruptcy Court determination, at this time. As a result of the foregoing, the asbestos liability reserve estimates set forth in OC's consolidated financial statements are subject to change. In addition, for the reasons stated below, the estimation of the asbestos liability reserve for financial statement purposes may differ from the competing estimations of asbestos liability for Plan purposes. 2. Estimation of Asbestos Liability for Plan Purposes Unlike the estimation of asbestos-related liability for the purposes of establishing financial statement reserves, which are based upon a range of probable and reasonably estimable liabilities, the estimation of asbestos-related liability for the purposes of determining the relative allocation of plan consideration is based upon an estimation of the number of Allowed Claims and their value, including future claims. The proposed Plan provides that such estimated liabilities would be determined by the District Court or Bankruptcy Court as part of the confirmation hearing on the Plan. It is therefore anticipated that the number and estimated aggregate value of Asbestos Personal Injury Claims will ultimately be resolved through negotiations involving the Asbestos Claimants' Committee and the Future Claimants' Representative and the other interested constituencies or, if necessary, determined by the District Court or Bankruptcy Court through litigation. It is not possible to predict the outcome of such negotiations or litigation at this time. In connection with establishing the number and estimated aggregate value of Asbestos Personal Injury Claims, and as a basis for establishing the alternative scenarios for creditor recoveries, the Debtors, the Unsecured Creditors' Committee, the Asbestos Claimants' Committee and the Future Claimants' Representative retained experts to assist them in estimating the number and value of OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims. Such estimates are necessary under Section 524(g) of the Bankruptcy Code, which requires an estimate of the number of claims that will be filed against the Debtors in the future. These estimates, particularly in light of the extended length of the forecast period, necessarily result in more uncertainty than generally holds for estimates of other types of contingent liability. In addition, to make these estimates, each of the experts must make certain assumptions, including the propensity of asbestos claimants to file a claim against the Debtors, the timing and disease severity of those claims, and the appropriate average settlement value of claims, all of which add to the uncertainty and can result in significant variations in the final estimates. Based on facts currently known to it, including positions that have been articulated by various interested constituencies since the Petition Date, the Company believes that the estimates included in most or all such analyses are likely to vary substantially from the amounts of OCD's and Fibreboard's respective asbestos reserves in prior periods, and are likely to also vary substantially from one another, for a number of reasons. First, such analyses will not involve the same type of estimation process required in connection with the preparation of financial statements under generally accepted accounting principles. In general, such accounting principles require accruals with respect to contingent liabilities (including asbestos liabilities) only to the extent that such liabilities are both probable and reasonably estimable. With respect to such liabilities that are probable as to which a reasonable estimate can be made only in terms of a range (with no point within the range determined to be more probable than any other point in such range), such accounting principles require only the accrual of the amount representing the low point in such range. Moreover, because such analyses are prepared solely for use in the negotiation of a plan of reorganization, they will naturally reflect the respective interests of the different constituencies putting them forward. Certain constituencies, for example, may have an interest in presenting an analysis that estimates such liability at the highest level that can arguably be justified; others may have an interest in estimating such liability at the lowest possible level; while others may have an interest in estimating such liability at a point between the two extremes, in an effort to achieve consensus in the negotiation of the plan of reorganization. In addition, interested constituencies in the Debtors' bankruptcy proceedings may also take into account the implications of any such analyses prepared for use in the Debtors' bankruptcy proceedings on their position in one or more of the other asbestos-related bankruptcy cases pending in the District of Delaware or elsewhere. Ultimately, OCD's (and Fibreboard's) total liability for asbestos claims will be finally determined after a lengthy period of negotiations and, if necessary, by the Bankruptcy Court, taking into account numerous factors not present in OCD's (and Fibreboard's) pre-petition environment. Such factors include the claims of competing creditor groups as to the appropriate treatment of their Allowed Claims, the size of the total estimated asbestos liability, the total number of present Asbestos Personal Injury Claims Allowed, the total amount of future Asbestos Personal Injury Claims, and the impact of the procedural consolidation before Judge Wolin of the Chapter 11 Cases of the Debtors with the cases of Armstrong World Industries, Inc., W.R. Grace & Co., Federal-Mogul Global, Inc., and USG Corporation on the timing, outcome or other aspects of the Chapter 11 Cases, including estimates of the number and cost of resolution of asbestos-related claims. V. CHAPTER 11 CASES A. Events Leading to the Chapter 11 Filings Since the adoption of its NSP in the fourth quarter of 1998, OC's strategy had been to use that program to avoid the costly and unpredictable traditional tort system and to quantify the amount of payments to asbestos claimants and control the timing of those payments to match the Company's ability to make such payments. The NSP achieved these goals in many respects and also facilitated the negotiation of the deferral of payments to NSP participants during 2000 prior to the Filing. As discussed in more detail below, however, OC's inability to obtain ongoing financing on acceptable terms, the lack of support for additional payment deferrals, the higher than anticipated number of asbestos-related claims (which adversely affected the Company's estimated liquidity needs through 2004), and the deterioration of OC's operations during 2000, resulted in the decision by OC to seek protection for the Debtors under Chapter 11 of the Bankruptcy Code. During the third quarter of 2000, OC met on a number of occasions with CSFB, as the agent for the lenders under the 1997 Credit Agreement, to discuss a refinancing of its $1.8 billion credit facility under the 1997 Credit Agreement, which was scheduled to expire in June 2002. OC requested that the refinancing extend into 2005 and be increased to an amount sufficient to meet its expected liquidity needs, including the repayment on maturity of $300 million of debentures in 2005. Following extended negotiations, OC concluded at the end of the third quarter of 2000 that its lenders would not be willing to agree to a refinancing that would meet OC's needs. Moreover, OC concluded that the lenders would require, as a part of any refinancing, that OC pledge its assets to secure the loans and agree to limits on payments for asbestos liabilities that would be inconsistent with its anticipated asbestos payment obligations. During the course of the third quarter of 2000, support for asbestos payment deferrals was adversely impacted by several factors. First, as a result of the downturn in the Company's operations in the third quarter of 2000 (discussed below), OC approached certain NSP firms to request additional payment deferrals. Based on those discussions, OC determined that it would not be feasible to obtain additional payment deferrals and that the likely terms of the refinancing would be unacceptable to the NSP participants. Second, the executive committee under the NSP and other participants in the NSP declined to agree to any deferral in payments due from Fibreboard. Finally, several NSP firms declined to grant the deferrals previously agreed upon in principle and initiated legal proceedings to enforce the terms of their respective NSP Agreements. Prior to the Filing, OC noted several trends which indicated that it would likely be required to defer asbestos-related payments in excess of deferrals previously negotiated with law firms participating in the NSP. First, OC began to see evidence that a higher than anticipated number of new asbestos-related claims, particularly higher value claims, was being filed by non-NSP firms, including new firms (where the timing of resolution is uncertain and the amount and timing of payments may be determined by the traditional tort system). Second, OC noted a substantial increase in the rate of claims filed, particularly during September 2000. Approximately 7,800 asbestos-related claims were received by OC (excluding Fibreboard) during the third quarter of 2000, compared to approximately 3,400 and 4,200 claims received during the first and second quarters, respectively. While OC believed that this increase in claims filings represented an acceleration of claims from future periods as a result of the downgrading of OC's credit rating in mid-2000, rather than an increase in the total number of asbestos-related claims to be expected, this trend would have had the effect of accelerating the related settlement payments and increasing liquidity needs through 2004 and/or the need to negotiate further deferrals of asbestos payments. OC's results of operations deteriorated significantly in the third quarter of 2000, with expectations for the quarter declining particularly during the last half of the period. As a result of, among other factors, the fall in demand for building materials, elevated energy and raw materials costs and the inability of OC to fully recapture these costs in price adjustments, OC's margins and income from operations were significantly reduced. As a result, OC's ability to service its ongoing asbestos payments and continue to comply with its pre-petition loan covenants was adversely affected. OC concluded at the end of the third quarter of 2000 that, unless it used a substantial portion of its cash to repay a portion of its debt under the 1997 Credit Agreement, OC would be in violation of the leverage ratio covenant under that agreement. Moreover, in view of reduced expectations concerning operating results in the fourth quarter of 2000 and beyond, OC concluded that its long-term liquidity needs (driven in large measure by asbestos payment obligations) could not likely be met by its cash and available credit under the 1997 Credit Agreement (which was limited by leverage ratio and other loan covenants). As a result of the above factors, OC's management determined late in the third quarter that it was unlikely that OC would be able to meet its long-term liquidity needs, including agreed and other required asbestos payments and repayment of debt on maturity. While OC held $378 million of Cash and cash equivalents at the end of the third quarter of 2000, and OC's operations (excluding the effects of asbestos) were traditionally profitable and generated strong positive cash flow, management determined that a Chapter 11 filing in October would be in the best interest of all OC stakeholders. B. The Chapter 11 Filings On October 5, 2000, OCD and the Subsidiary Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court. The cases are being jointly administered as In re Owens Corning, et al., Case No. 00-03837 (JKF) (the "Chapter 11 Cases"). The Subsidiary Debtors that also filed for protection under Chapter 11 of the Bankruptcy Code on the Petition Date are:
CDC Corporation Integrex Testing Systems LLC Engineered Yarns America, Inc. HOMExperts LLC Falcon Foam Corporation Jefferson Holdings, Inc. Integrex Owens-Corning Fiberglas Technology Inc. Fibreboard Corporation Owens Corning HT, Inc. Exterior Systems, Inc. Owens-Corning Overseas Holdings, Inc. Integrex Ventures LLC Owens Corning Remodeling Systems, LLC Integrex Professional Services LLC Soltech, Inc. Integrex Supply Chain Solutions LLC
The Subsidiary Debtors include only the Subsidiaries listed above and do not include any other United States Subsidiaries of OCD or any of OCD's foreign Subsidiaries (collectively, the "Non-Debtor Subsidiaries"). A list of the Non-Debtor Subsidiaries may be found in Schedule II to the Plan, attached to this Disclosure Statement as Appendix A. C. Continuation of Business; Stay of Litigation Since the Petition Date, the Debtors have continued to operate their businesses as debtors-in-possession under the Bankruptcy Code. Pursuant to the Bankruptcy Code, the Debtors are required to comply with certain statutory reporting requirements, including the filing of monthly operating reports. As of the date hereof, the Debtors have complied with such requirements, and intend to continue to comply with such requirements. The Debtors are authorized to operate their businesses in the ordinary course of business, with transactions out of the ordinary course of business requiring Bankruptcy Court approval. In accordance with the Bankruptcy Code, the Debtors are not permitted to pay any claims or obligations that arose prior to the Petition Date unless specifically authorized by the Bankruptcy Court. Similarly, claimants may not enforce any Claims against the Debtors that arose prior to the Petition Date unless specifically authorized by the Bankruptcy Court. As debtors-in-possession, the Debtors have the right, under Section 365 of the Bankruptcy Code, subject to the Bankruptcy Court's approval, to assume or reject pre-petition executory contracts and unexpired leases in existence at the Petition Date. Parties to contracts or leases that are rejected may assert rejection damages claims as permitted by the Bankruptcy Code. See Section VII.F of this Disclosure Statement entitled "Treatment of Executory Contracts and Unexpired Leases". As a consequence of the Filing, all pending litigation against the Debtors was stayed automatically by Section 362 of the Bankruptcy Code and, absent further order of the Bankruptcy Court, no party may take any action to recover on pre-petition claims against the Debtors. D. Professionals Retained in the Chapter 11 Cases 1. The Debtors' Professionals The attorneys and advisors that have been retained by the Debtors to assist them in the conduct of their Chapter 11 Cases are set forth below: Principal Reorganization Counsel to the Debtors: SAUL EWING LLP 222 Delaware Avenue Wilmington, DE 19899-1266 Special Counsel to the Debtors: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, NY 10036-6522 Special Reorganization Counsel to the Debtors: ARNOLD & CARUSO, LTD.* 1822 Cherry Street Toledo, OH 43608 * On August 26, 2002, the Bankruptcy Court entered an order vacating the employment and retention of Arnold & Caruso, Ltd.; however, Arnold & Caruso, Ltd. was retained as an ordinary course professional. Special Reorganization Counsel to the Debtors: SHUMAKER, LOOP & KENDRICK, LLP North Courthouse Square 1000 Jackson Toledo, OH 43624 Special Reorganization Counsel to the Debtors: BROBECK, PHLEGER & HARRISON, LLP* Spear Street Tower One Market San Francisco, CA 94105 * Brobeck, Phleger & Harrison, LLP has ceased performing services for the Debtors. Special Counsel to the Debtors: DEBEVOISE & PLIMPTON 919 Third Avenue New York, NY 10022 Special Counsel to the Debtors: FORMAN PERRY WATKINS KRUTZ & TARDY, PLLC 1200 One Jackson Place 188 East Capitol Street Jackson, MS 39225-2608 Special International Counsel to the Debtors: BINGHAM MCCUTCHEN LLP One State Street Hartford, CT 06103 Special Insurance Counsel to the Debtors: COVINGTON & BURLING 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2401 Special Claims Conflict Counsel for the Debtors Adelman Lavine Gold and Levin 1100 North Market Street, 11th Floor Wilmington, DE 19801-1292 Auditor, Tax Advisor, Accounting Advisor & Financial Advisor to the Debtors: ARTHUR ANDERSEN LLP* 33 West Monroe Chicago, IL 60603 * Arthur Andersen LLP has ceased performing services for the Debtors. Special Financial Advisor to the Debtors: PRICEWATERHOUSECOOPERS LLP 203 North LaSalle Street Chicago, IL 60601 Information Technology Advisor to the Debtors: CAP GEMINI ERNST & YOUNG US LLC 1200 Skylight Office Tower 1660 West 2nd Street Cleveland, OH 44113 Financial and Consulting Services to the Debtors: CRAWFORD FINANCIAL CONSULTING LLC (d/b/a CRAWFORD & WINIARSKI) Suite 1500 535 Griswold Detroit, MI 48226 Audit, Accounting, Actuarial and Tax Advisory Services to the Debtors: ERNST & YOUNG LLP 555 California Street San Francisco, CA 94104 Investment Banker and Financial Advisor to the Debtors: LAZARD FRERES & CO. LLC 30 Rockefeller Plaza , 61st Floor New York, NY 10020 Investment Banker to the Debtors: GOLDSMITH AGIO HELMS SECURITIES, INC. 601 Second Avenue South, 46th Floor Minneapolis, MN 55402 Asbestos Personal Injury Claims Valuation Consultants to the Debtors: Thomas E. Vasquez, Ph.D. ARPC 420 Lexington Ave. Suite 1840 New York, NY 10170 2. The Debtors' Ordinary Course Professionals Separately, throughout the Chapter 11 Cases, the Debtors have employed certain other professionals to render post-petition services to the Debtors in the ordinary course of their businesses, pursuant to an order of the Bankruptcy Court dated November 30, 2000 (the "OCP Order"). The OCP Order establishes certain standards, guidelines and procedures for the Debtors' retention and payment of ordinary course professionals during the Chapter 11 Cases. The OCP Order authorizes the Debtors to employ and compensate ordinary course professionals without additional approval from the Bankruptcy Court subject to certain limitations. Among other limitations, the OCP Order requires the Debtors to obtain approval under Sections 330 and 331 of the Bankruptcy Code if payments to the ordinary course professionals exceed an average of $35,000 per month for the professionals (with certain exceptions), and/or if the payments to all ordinary course professionals exceed a total of $3 million in any given month. In accordance with the terms of the OCP Order, every two months throughout the Chapter 11 Cases, the Debtors have submitted (and continue to submit) a statement with the Bankruptcy Court which reports the name of the ordinary course professionals, the amounts paid as compensation for services rendered and reimbursement of expenses incurred by each ordinary course professional during the previous two-month period, and a general description of the services rendered by each ordinary course professional. 3. The Appointment of Official Committees On October 23, 2000, the United States Trustee for the District of Delaware appointed two creditors' committees, pursuant to Section 1102(a) of the Bankruptcy Code, one representing general unsecured creditors (as thereafter amended or reconstituted, the "Unsecured Creditors' Committee") and the other representing asbestos claimants (as thereafter amended or reconstituted, the "Asbestos Claimants' Committee" and, together with the Unsecured Creditors' Committee, the "Committees"). (a) Unsecured Creditors' Committee The Unsecured Creditors' Committee represents general unsecured creditors of the Debtors, including the Bank Holders, the Bondholders, trade creditors and holders of Environmental Claims. The current four members of, and professionals retained by, the Unsecured Creditors' Committee are set forth below: Members of the Unsecured Creditors' Committee: Credit Suisse First Boston Eleven Madison Avenue New York, NY 10010-3629 JP Morgan Chase Manhattan Bank 380 Madison Avenue New York, NY 10017-2513 John Hancock Life Insurance Company 200 Clarendon Street Boston, MA 02117 Jackson National Life Insurance Company 225 West Wacker Suite 1200 Chicago, IL 60606 Counsel to the Unsecured Creditors' Committee: DAVIS, POLK & WARDWELL 450 Lexington Avenue New York, NY 10017 MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899-1347 Financial Advisors to the Unsecured Creditors' Committee: HOULIHAN, LOKEY, HOWARD & ZUKIN, INC. 685 Third Avenue 15th Floor New York, NY 10017 Asbestos Personal Injury Claims Valuation Consultants Unsecured Creditors' Committee: CHAMBERS ASSOCIATES, INC. 805 15th Street, N.W. - Suite 500 Washington, D.C. 20005 The Unsecured Creditors' Committee has establishedtwo unofficial sub-committees (the Bank Holders' sub-committee and the Bondholders' and trade creditors' sub-committee), each of which is represented by separate counsel and financial advisors. The Bank Holders' unofficial sub-committee is represented by the following attorneys and financial advisors: Counsel to the Bank Holders' Sub-Committee: KRAMER LEVIN, NAFTALIS & FRANKEL LLP 919 Third Avenue New York, NY 10022 RICHARDS LAYTON & FINGER, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Financial Advisors to the Bank Holders' Sub-Committee: FTI POLICANO & MANZO 622 Third Avenue New York, NY 10017 On July 16, 2001, the Bankruptcy Court entered an order authorizing and approving the employment of special counsel for the Bondholders' and trade creditors' unofficial sub-committee (also referred to herein as the "Designated Members"). The Bondholders' and trade creditors' unofficial sub-committee is represented by the following attorneys and financial advisors: Counsel to the Bondholders' and Trade Creditors' Unofficial Sub-Committee: ANDERSON KILL & OLICK, P.C. 1251 Avenue of the Americas New York, NY 10020 MONZACK AND MONACO, P.A. (f/k/a WALSH MONZACK AND MONACO, PA) 400 Commerce Ctr. 1201 Orange Street P.O. Box 2031 Wilmington, DE 19899 Financial Advisors to the Bondholders' and Trade Creditors' Unofficial Sub-Committee: BDO SEIDMAN 330 Madison Avenue New York, NY 10017 (b) Asbestos Claimants' Committee The Asbestos Claimants' Committee represents persons alleging asbestos-related personal injuries due to exposure to products manufactured by the Debtors. The current thirteen members of, and professionals retained by, the Asbestos Claimants' Committee are set forth below: Members of the Asbestos Claimants' Committee: David Fitts c/o Brayton & Purcell 222 Rush Landing Road P.O. Box 2109 Novato, CA 94948 Delores Ramsey c/o Baron & Budd Attn: Fred Baron, Esquire The Centrum 3102 Oak Lawn Avenue Suite 1100 Dallas, TX 75219-4281 Charles Barrett c/o Weitz & Luxenberg Attn: Perry Weitz, Esquire 180 Maiden Lane New York, NY 10038 John Edward Keane c/o Kelley & Ferraro, LLP 1901 Bond Court Building 1300 E. 9th Street Cleveland, OH 44114 Mary F. Stone c/o Hartley & O'Brien Attn: R. Dean Hartley, Esquire 827 Main Street Wheeling, WV 26003 Glenn L. Arnott c/o Goldberg, Perskey, Jennings & White, P.C. Attn: Mark C. Meyer, Esquire 1030 Fifth Avenue Pittsburgh, PA 15219 Elmer Richardson c/o Cumbest, Cumbest, Hunter & McCormick P.A. Attn: David O. McCormick, Esquire 729 Watts Avenue P.O. Drawer 1176 Pascagoula, MS 39568 Barbara Casey c/o Cooney & Conway Attn: John D. Cooney, Esquire 701 6th Avenue LaGrange, IL 60425 James Nelson Allen c/o Glasser & Glasser Attn: Richard S. Glasser, Esquire Crown Center Building 6th Floor 580 E. Main Street Norfolk, VA 23510 Margaret Elizabeth Fitzgerald c/o Thorton & Naumes, LLP Attn: Michael P. Thornton, Esquire 100 Summer Street 30th Floor Boston, MA 02110 Yolanda England c/o Peter G. Angelos, Esquire 5905 Harford Road Baltimore, MD 21214 Deborah Jean Johnson Personal Representative of the Estate of Stephen Johnson c/o Bergman Senn Pageler & Frockt Attn: Matthew Bergman, Esquire P.O. Box 2010 17530 Vashon Highway SW Vashon, WA 98070 Joyce Salinas Plaintiff on her own behalf and representative of John Salinas (deceased) c/o Kazan, McClain, Eaises, Abrams, Fernandez, Lyons & Farrise Attn: Steven Kazan, Esquire 171 Twelfth Street 3rd Floor Oakland, CA 94607 Counsel for the Asbestos Claimants' Committee: CAPLIN & DRYSDALE, CHARTERED 399 Park Avenue New York, NY 10022-4614 CAMPBELL & LEVINE, LLC 800 King Street Wilmington, DE 19801 Financial Advisors and Asbestos Personal Injury Claims Valuation Consultants for the Asbestos Claimants' Committee: L. TERSIGNI CONSULTING, P.C. 2001 West Main Street Suite 220 Stamford, CT 06902 Claims Expert for the Asbestos Claimants' Committee: LEGAL ANALYSIS SYSTEMS 970 Calle Arroyo Thousand Oaks, CA 91360 4. Future Claimants' Representative A key element of the Plan is the Asbestos Personal Injury Permanent Channeling Injunction, pursuant to which all current and future personal injury asbestos-related Claims and Demands against the Debtors and other covered Persons will be channeled to the Asbestos Personal Injury Trust established to equitably distribute available assets to holders of all such Allowed Claims and Demands. A channeling injunction is permitted by Section 524(g) of the Bankruptcy Code and may be issued if a number of specific conditions are met, including the appointment of a legal representative for the purpose of protecting the rights of persons that might subsequently assert future Demands against the Debtors. Specifically, Congress and the courts have recognized the need in Chapter 11 cases involving asbestos claims to protect and represent the interests of persons who may have claims and/or Demands against a debtor arising in the future, and have directed bankruptcy courts to appoint a legal representative (the "Future Claimants' Representative") for such claimants in cases where a channeling injunction is sought. Shortly after the commencement of the Chapter 11 Cases, the Debtors began discussions with the Unsecured Creditors' Committee and the Asbestos Claimants' Committee, and their respective legal and financial advisors, to consider the appointment of a Future Claimants' Representative. Following careful consideration of the potential candidates for Future Claimants' Representative, the Debtors determined that James J. McMonagle was well-qualified to represent the interests of any and all persons described in Section 524(g)(4)(B)(i) of the Bankruptcy Code who may assert Demands against one or more of the Debtors, and therefore, should be appointed as the Future Claimants' Representative for such persons in these cases. On September 28, 2001, the Court appointed James J. McMonagle, nunc pro tunc to June 12, 2001, as the Future Claimants' Representative of any and all persons described in Section 524(g)(4)(B)(i) of the Bankruptcy Code who may assert Demands for asbestos-related personal injury claims against one or more of the Debtors, including without limitation, OCD and Fibreboard. The Debtors believe the appointment of the Future Claimants' Representative has facilitated the negotiation of the Plan with the Asbestos Claimants' Committee and the Future Claimants' Representative by assuring that all parties in interest, including the future claimants, have had a fair opportunity to participate in the process. The name and address of the Future Claimants' Representative and the professionals retained by him are set forth below: Future Claimants' Representative: James J. McMonagle, Esq. Vorys Sater Seymour & Pease LLP 2100 One Cleveland Center 1375 E. Ninth Street Cleveland, OH 44114 Counsel to the Future Claimants' Representative: KAYE SCHOLER LLP 425 Park Avenue New York, NY 10022 YOUNG CONAWAY STARGATT & TAYLOR, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899-0391 Financial Advisor to the Future Claimants' Representative: PETER J. SOLOMON CO. 767 Fifth Avenue, 26th Floor New York, NY 10153 Asbestos Personal Injury Claims Valuation Consultants for the Future Claimants' Representative: HAMILTON, RABINOVITZ & ALSCHULER, INC. Francine Rabinovitz, Executive Vice President 6033 West Century Blvd., Suite 890 Los Angeles, CA 90045 5. Other Professionals and Advisors (a) The Claims, Noticing and Balloting Agent On October 6, 2000, the Bankruptcy Court appointed Robert L. Berger & Associates, Inc., 16501 Ventura Blvd., Suite 440, Encino, CA 91436, as the claims, noticing and balloting agent ("Claims Agent" or "Voting Agent", as the context requires) in the Chapter 11 Cases, pursuant to 28 U.S.C.ss.156(c). (b) Special Voting Agent On March 19, 2003, the Debtors filed an application to retain Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, as Special Voting Agent to address notice issues related to securities. (c) Fee Auditor On June 20, 2002, the Bankruptcy Court appointed Warren H. Smith & Associates, P.C. 900 Jackson Street, 120 Founders Square, Dallas, Texas 75202, as the Fee Auditor, to act as a special consultant to the Bankruptcy Court for professional fee and expense review and analysis, nunc pro tunc to April 29, 2002. E. "First Day" and Other Orders On or about October 6, 2000, the Debtors filed a series of motions seeking relief by virtue of so-called "first day" orders. First day orders are intended to facilitate the transition between a debtor's pre-petition and post-petition business operations by approving certain regular business practices that may not be specifically authorized under the Bankruptcy Code or as to which the Bankruptcy Code requires prior approval by the Bankruptcy Court. These orders were designed to allow the Debtors to continue business operations with minimum disruptions and to ease the strain on the Debtors' relationships with their employees and other parties. The first day orders obtained in these cases are typical for large Chapter 11 cases. Set forth below is a brief summary of the significant first day orders and other orders relating to motions filed by the Debtors at or near the commencement of the Chapter 11 Cases. The descriptions of the relief sought or obtained in the Chapter 11 Cases set forth below and throughout this Disclosure Statement are summaries only and reference should be made to the actual pleadings and orders for their complete content. The first day orders and other orders, entered at or near the commencement of the Chapter 11 Cases, provide for, among other things: o the payment of employees' accrued pre-petition wages, salaries, commissions and reimbursable business expenses; the continuation of employee benefit plans and programs post-petition; and the direction for all banks to honor pre-petition checks for payment of employee obligations; o the payment of certain pre-petition import obligations (including customs duties, freight, trucking charges and brokerage fees), shipping charges and related possessory liens; o the payment of certain miscellaneous contractors in satisfaction of perfected or potential mechanics', materialmen's or similar liens; o a prohibition on the Debtors' utility services providers from discontinuing services on account of outstanding pre-petition invoices and establishing procedures for utility providers to seek adequate assurance of the Debtors' future performance; o the payment of certain pre-petition tax claims; o the honoring of certain pre-petition obligations to customers under various warranty and other customer programs, and the continuation of warranty and customer programs post-petition; o the payment of certain critical pre-petition trade vendors' claims; o the joint administration of each of the Debtors' bankruptcy cases; o confirming administrative expense treatment for obligations arising from post-petition delivery of goods, administrative expense treatment for certain holders of valid reclamation claims and a prohibition against third parties reclaiming goods or interfering with delivery of goods to the Debtors; and o the extension of time for filing the Debtors' Schedules and Statement of Financial Affairs (the "SOFAS"). F. Significant Events During the Chapter 11 Cases In addition to the first day relief sought and received in the Chapter 11 Cases, the Debtors have sought and received authority with respect to various matters designed to assist in the administration of the Chapter 11 Cases, to maximize the value of the Debtors' Estates and to provide the foundation for the Debtors' emergence from Chapter 11. Set forth below is a brief summary of the principal motions the Debtors have filed, and to which they have been granted relief by the Bankruptcy Court, during the pendency of the Chapter 11 Cases. 1. Employee Related Matters In connection with the filing of the Chapter 11 Cases, the Debtors obtained orders of the Bankruptcy Court authorizing the Debtors to (a) pay employees pre-petition wages, salaries and other compensation, (b) continue certain employee benefit programs, including maintenance of self-insured workers' compensation programs, (c) adopt a Retention Program and a supplemental Severance Program (as defined in the Retention and Severance Motion described below), and (d) modify certain employee retirement benefits programs to provide limited enhancement to those programs and to bring them into compliance with certain provisions of the Tax Reform Act of 1986. On December 22, 2000, the Debtors filed a Motion For Order Under 11 U.S.C. ss.ss. 105, 363 and 365 Authorizing Continuation or Implementation of Employee Retention, Emergence, Severance, Incentive, 401(k) Contribution and Global Awards Programs (the "Retention and Severance Motion"), which sought approval of various new or existing programs designed to prevent excessive turnover of key employees during the Chapter 11 Cases. On January 17, 2001, the Bankruptcy Court entered an order approving in part the Retention and Severance Motion. Thereafter, on February 16, 2001, the Debtors filed a Supplement to the Retention and Severance Motion by which the Debtors sought an order approving and authorizing the continuation, modification and implementation of certain employee compensation programs. On March 26, 2001, following certain modifications, the Bankruptcy Court approved the remaining portion of the Retention and Severance Motion. Pursuant to the January 17, 2001 and March 26, 2001 orders approving the Retention and Severance Motion, the Debtors were authorized to continue or to implement the following programs: (a) an employee retention program under which the Debtors were authorized to pay retention bonuses at specified intervals to approximately 236 key employees; (b) a supplemental employee retention and emergence program, under which certain key employees are entitled to receive additional bonuses in the event that the Debtors emerge from bankruptcy by 2004; (c) continuation of the Debtors' existing employee severance programs consisting of a "Salaried Employee Separation Allowance Plan," which extends to all salaried employees in the United States except senior management, as well as individually negotiated severance agreements; (d) certain of the Debtors' existing incentive-based compensation programs, consisting of (i) the "Corporate Incentive Plan," which provides for discretionary performance-based incentive payments to approximately 1,250 of the Debtors' employees, and (ii) the "Officer Stretch Incentive Plan," an incentive program for approximately 59 of the Debtors' senior managers and key employees; (e) certain of the Debtors' existing 401(k)-related employee programs, consisting of (i) a 401(k) plan, a non-incentive based program pursuant to which the Debtors make matching contributions for the benefit of a broad cross-section of the Debtors' employees and (ii) the "Profit Sharing Contribution Plan", an incentive-based program pursuant to which the Debtors make additional cash contributions for the benefit of a broad cross-section of the Debtors' employees in an amount based on objective Company performance measures; and (f) the Debtors' "Global Awards Program," originally a stock-based employee incentive program, which, as modified, provides for additional cash awards to employees based on objective company performance measures. On March 5, 2002, the Debtors filed a Motion to Authorize the Continuance of Employee Compensation Programs. On September 10, 2002, the Court entered an Order Authorizing Continuation, Modification and Implementation of Employee Compensation Programs. In addition, the Court authorized the Debtors to continue the employee compensation programs in the ordinary course of the Debtors' business without additional court approval, subject to a specific procedure identified in the motion. Specifically, court authority is unnecessary to continue the compensation programs; provided, however, that the Debtors advise the Committees and the Future Claimants' Representative of the Company's annual Business Plan and annual funding criteria for the employee compensation programs, including the data necessary to assess the reasonableness of the Debtors' business judgment as soon as possible after January 1 in any given year, but under no circumstances later than February 28. In the event that the Committees and/or the Future Claimants' Representative do not consent to the Debtors' proposed employee compensation programs, they are required, within 30 days after receipt of the annual program review, to provide written notice to the Debtors' counsel of their specific objections to the proposed employee compensation programs. If the parties are unable to resolve the objections, the Debtors are required to file the appropriate pleading with the Bankruptcy Court. On April 28, 2003, the Court approved a Stipulation and Order Regarding Employee Compensation Programs, by and between the Debtors, Committees, and Future Claimants' Representative, which authorized the continuation of the Employee Compensation Programs (as defined in the Stipulation), eliminated the Corporate Stretch Incentive Plan, and approved the implementation of the Long Term Incentive Plan by the Debtors. The Court's approval of the Stipulation was intended to constitute "shareholder approval" for the purposes of all applicable law, including, without limitation, section 162(m) of the Internal Revenue Code. 2. Vendor and Customer Issues Immediately following the commencement of the Chapter 11 Cases, the Debtors received numerous inquiries from their vendors, customers, and other parties providing services to the Debtors concerning the Debtors' ability to satisfy debts incurred prior to the Petition Date and their continuing commitments. The Debtors believe that the maintenance of relationships with their vendors, customers and other business partners has been, and will continue to be, a critical factor in the continued viability of the Debtors' ongoing business operations and the ultimate success of their rehabilitation effort. (a) Relief at Commencement of Chapter 11 Cases In order to enable the Debtors to minimize the adverse effects of the Chapter 11 Cases, and in their efforts to maintain relationships and goodwill with certain of their vendors and customers, the Debtors obtained orders from the Bankruptcy Court that authorized them to: (i) honor certain pre-petition obligations to customers under the Debtors' warranty and other customer programs (including product warranties, cash discounts, rebates, category management, preferred contractor incentive programs, and customer dispute resolution), and to continue and maintain such programs on a post-petition basis; (ii) pay pre-petition claims of contractors (including mechanics, tradespersons and other contractors) in satisfaction of perfected or potential mechanics', materialmen's or similar liens or interests; (iii) grant administrative expense status to vendors and suppliers for undisputed obligations arising from pre-petition purchase orders outstanding as of the Petition Date for products and goods received by the Debtors on or subsequent to the Petition Date; (iv) pay vendors and suppliers for post-petition delivery of goods in the ordinary course of business; (v) pay critical pre-petition trade claims (discussed below); and (vi) grant administrative expense treatment for certain holders of valid reclamation claims; and prohibit third parties from reclaiming goods or interfering with the delivery of goods to the Debtors (discussed below). (b) Critical Trade Vendors Recognizing the importance of certain vendors to the Debtors' businesses, the Debtors included among their "first day" motions several motions for authorization to pay critical pre-petition trade vendors, which were granted by orders of the Bankruptcy Court dated October 6, 2000 (the "Critical Vendor Orders"). The Critical Vendor Orders authorized, but did not require, the Debtors to pay the pre-petition claims of certain critical suppliers of raw and processed materials, goods and services with whom the Debtors continued to do business and whose materials, goods and services were essential to the Debtors' business operations. In connection with the Critical Vendor Orders, the Debtors were authorized to pay critical vendors up to an aggregate amount of approximately $123 million. Such amount was comprised of certain elements: (a) $3.0 million for critical trade payments on account of customs duties, ocean freight, air freight and the like; (b) $25 million on account of amounts owed to commercial common carriers; (c) $48 million on account of amounts owed to critical materials vendors; (d) $19 million, on account of amounts owed to critical project vendors; (e) $23 million, on account of amounts owed to critical affiliated vendors; and (f) $5.0 million, on account of amounts owed to mechanics lien creditors. In return for receiving payment of these claims, the critical vendors were required to extend normalized trade credit terms to the Debtors for the duration of the Chapter 11 Cases. By order dated November 21, 2000, the Bankruptcy Court supplemented one of the Critical Vendor Orders and granted the Debtors authority to pay the pre-petition claims of foreign taxing authorities, foreign landlords and other foreign creditors, as necessary to facilitate the continued operation of the Debtors' foreign divisions. The Debtors identified approximately 860 of its vendors and suppliers as "critical" vendors, many of which were freight carriers. The Debtors reached settlements with the critical vendors whereby, in general, the Debtors paid the vendors less than the total pre-petition amounts owed in satisfaction of claims those vendors may have held against the Debtors for pre-petition goods or services, and those vendors agreed to maintain or return to normal credit terms. (c) Reclamation Claims At the commencement of the Chapter 11 Cases, the Debtors anticipated that many of their vendors and suppliers would attempt to assert their right to reclaim goods delivered to the Debtors shortly before or soon after the Petition Date pursuant to Section 546(c) of the Bankruptcy Code and Section 2-702 of the Uniform Commercial Code. As part of their "first day" motions, the Debtors sought certain initial relief in connection with the treatment of reclamation claims, which relief was granted by order dated October 6, 2000 (the "Initial Reclamation Procedures Order"). The Initial Reclamation Procedures Order established preliminary reclamation procedures in order to facilitate the continued operation of the Debtors' businesses, to prevent distraction of the Debtors' management and professionals and to allow the Debtors the opportunity to conduct a thorough review and evaluation of the reclamation claims. Among other things, the Initial Reclamation Procedures Order provided that vendors would be entitled to administrative expense claims if and to the extent that the vendor made a valid, written reclamation demand for the goods at issue, and to the extent that such vendor proved the validity of its demand. The Initial Reclamation Procedures Order also prohibited vendors and other third parties from reclaiming or interfering with the post-petition delivery of goods to the Debtors. As anticipated, the Debtors received a large number of reclamation claims - approximately 220 claims, with an aggregate approximate amount of $34 million, exclusive of claims which did not specify an amount. The Debtors devoted substantial time and effort in reviewing and analyzing the claims, in order to determine which claims were valid reclamation claims. Between February and September, 2002, the Debtors filed five separate motions (each of which addressed certain of the 220 reclamation claims), requesting orders approving their proposed allowance and/or disallowance of the reclamation claims, and approving their proposed treatment of the allowed reclamation claims (together, the "Reclamation Motions"). More specifically, in the Reclamation Motions, the Debtors requested orders (i) granting administrative expense priority status for reclamation claims to the extent, and in the amounts, the Debtors determined such claims to be allowable pursuant to the applicable provisions of the Bankruptcy Code; (ii) denying administrative expense priority status for all other reclamation claims; and (iii) authorizing the Debtors to pay the Allowed amount of each valid reclamation claim. The Bankruptcy Court granted the Reclamation Motions and, upon Court approval of the Debtors' proposed treatment of the individual reclamation claims, the Debtors were authorized to pay the Allowed claims. Approximately sixteen reclamation claimants filed objections and/or responses to the Reclamation Motions, and many other reclamation claimants contacted the Debtors concerning the Debtors' proposed treatment of their claims as described in the Reclamation Motions. Through discussions, negotiations and/or the exchange of documents and information between parties, the Debtors reached a consensual resolution with the majority of these claimants, either by entering a settlement stipulation or by the Bankruptcy Court's entry of a modified order. As of the date of this Disclosure Statement, the vast majority of reclamation claims have been resolved. The Debtors continue to negotiate with the specific claimants in their efforts to resolve the few outstanding claims. (d) Setoffs Section 553 of the Bankruptcy Code recognizes the right of setoff of mutual, pre-petition obligations if certain criteria are met. However, Section 362(a)(7) of the Bankruptcy Code operates as a stay of the setoff of any debt owing to the debtor that arose pre-petition against any pre-petition claim against the debtor. Rule 4001 of the Bankruptcy Rules allows for parties to consensually modify the automatic stay provisions to allow for setoff in appropriate circumstances. Throughout the Chapter 11 Cases, the Debtors have entered a number of stipulations (the "Setoff Stipulations") with various vendors and suppliers authorizing a modification of the automatic stay to effectuate the setoff of pre-petition mutual debts. The Debtors determined that entering the Setoff Stipulations would be in the best interest of the Debtors' estates and their creditors because, in general, among other reasons, the setoffs allowed the Debtors to reconcile their books and records without further dispute, maintain amicable relationships with their customers and vendors, and continue the free flow of goods and services from their customers and vendors. 3. Debtor-in-Possession Financing and the DIP Facility In connection with the Filing, and in order to fund its on-going business operations during the pendency of the Chapter 11 Cases, the Debtors, excluding Jefferson Holdings, Inc., obtained a debtor-in-possession credit facility (the "DIP Facility") from a group of lenders (the "DIP Lenders") led by Bank of America, N.A., as administrative agent (the "DIP Agent"). On November 17, 2000, the Bankruptcy Court approved the Final Order Authorizing Post-Petition Financing on a Superpriority Administrative Claim Basis Pursuant to 11 U.S.C. ss. 364(c)(1) and Granting Relief from the Automatic Stay Pursuant to 11 U.S.C. ss. 362 (the "DIP Order"). The DIP Order authorized, among other things, (a) the Debtors to borrow from the DIP Lenders, on specified terms and conditions, post-petition financing of up to $500 million, including revolving loans and letters of credit, pursuant to an agreement among the Debtors and Lenders; (b) the execution by the Debtors of notes and other documents requested by the DIP Lenders evidencing the post-petition financing; and (c) the granting of certain protections to the DIP Agent and the DIP Lenders including without limitation a superpriority administrative claim over any and all administrative expenses of the kinds specified in Sections 503(b), 105, 326, 328, 330, 331, 506(c), 507(a), 546(c), 726 or 1112 of the Bankruptcy Code. The DIP Facility also provided for unsecured post-petition financing from the DIP Lenders for general working capital and other general corporate purposes in an aggregate principal amount not to exceed $500 million. The amount available under the DIP Facility depends on a borrowing base of qualifying receivables and inventory of the Debtors. Borrowings under the DIP Facility bear interest at a floating rate equal to LIBOR plus a margin varying from 0.75% to 2.00%, based upon the average daily outstanding balance. In addition, a commitment fee is payable on unused portions of the aggregate commitment amount under the DIP Facility of 0.375% per annum and a letter of credit fee is payable based on the average daily maximum aggregate amount available to be drawn under all outstanding letters of credit and certain other expenses incurred by the DIP Lenders issuing the letters of credit. The DIP Facility contains covenants, representations and warranties, events of default, and other terms and conditions typical of credit facilities of a similar nature. The DIP Facility was to expire on November 15, 2002 in accordance with its terms. On October 28, 2002, the DIP Lenders and the Debtors entered into an amendment to the DIP Facility, approved by the Bankruptcy Court, pursuant to which, among other things, the maximum available credit amount under the DIP Facility was reduced at the Debtors' request to $250 million and its term was extended through November 15, 2004. The Debtors have never utilized the facility except for standby letters of credit and similar uses. As of December 31, 2002, approximately $62 million of availability under this facility was utilized for standby letters of credit and similar uses. As of the Effective Date, the Debtors expect to have no outstanding borrowings, but approximately $90 million in outstanding standby letters of credit and similar uses. Obligations under the DIP Facility have "superpriority" claim status under Section 364(c)(1) of the Bankruptcy Code, meaning that such obligations have priority as to repayment over all administrative expenses, with certain limited exceptions. The claims of the DIP Lenders are subject to the fees and expenses of the Office of the United States Trustee (under Section 1930 of Title 28 of the United States Code) and the Clerk of the Bankruptcy Court, and are also subject to the payment of professional fees and disbursements (capped at $10 million upon the occurrence of an event of default under the DIP Facility) incurred by the borrowers under the DIP Facility and statutory committees approved under the Chapter 11 Cases. 4. Standstill Agreement with the Bank Holders (a) The Standstill Agreement Prior to the Petition Date, OCD, as borrower and guarantor, certain other borrowers and guarantors and Credit Suisse First Boston, as agent and lender (the "Pre-petition Agent") and approximately forty-six banks (including their assignees and participants, the "Bank Holders") entered into the 1997 Credit Agreement. On or about the Petition Date, certain of the Bank Holders imposed an administrative freeze on funds of certain Debtors and Non-Debtor Subsidiaries, including foreign Subsidiaries and Affiliates in the approximate amount of $46 million. On the Petition Date, the Debtors filed a Verified Complaint for Declaratory and Injunctive Relief (the "Complaint") against the Bank Holders, commencing the adversary proceeding entitled Owens Corning, et al. v. Credit Suisse First Boston, et al., Adv. Pro. No. A-00-1575 (the "Standstill Adversary Proceeding"). By the Complaint, the Debtors sought to enjoin the Bank Holders from (i) exercising their purported rights of setoff under Section 13.06 of the 1997 Credit Agreement against money in bank accounts of the Debtors and Non-Debtor Subsidiaries held by the Bank Holders; (ii) declaring any Non-Debtor Subsidiaries in default under any separate banking agreements as a result of the Filings; (iii) accelerating the payments under any separate banking agreements as a result of the Filings; (iv) freezing, impairing or otherwise moving against the funds of Non-Debtor Subsidiaries that are held by the Bank Holders as a result of the Filings; and (v) declaring the rights and obligations of the parties under Section 13.06 of the 1997 Credit Agreement. Concurrent with the filing of the Complaint, the Debtors filed a Motion for Temporary Restraining Order and Preliminary Injunction under Sections 105(a) and 362(a) of the Bankruptcy Code (the "TRO Motion"). By the TRO Motion, the Debtors requested an order that enjoined (i) the Bank Holders from calling, canceling, or revoking credit facilities of the Non-Debtor Subsidiaries solely as a result of the Debtors' seeking relief under Chapter 11 of the Bankruptcy Code; and (ii) the Bank Holders and their affiliates from setting off against funds deposited by the Non-Debtor Subsidiaries in bank accounts at the Bank Holders or their affiliates. The purpose of the Standstill Adversary Proceeding and the TRO Motion was to protect the assets of the Non-Debtor Subsidiaries by preventing their assets from being used to satisfy all or a portion of the obligations under the 1997 Credit Agreement that had been guaranteed by certain Non-Debtor Subsidiaries. On October 10, 2000, with the consent of the Bank Holders, the Court entered a temporary restraining order ("TRO") enjoining and restraining the Bank Holders from exercising any enforcement right or remedy under the 1997 Credit Agreement against any Non-Debtor Subsidiaries, including any setoff rights, under any other agreement, or under applicable law. Notwithstanding the injunction, the TRO permitted the Bank Holders to impose an administrative freeze on any funds in accounts of the designated Non-Debtor Subsidiaries as of the Petition Date and to refuse to make additional loans or advances to the Non-Debtor Subsidiaries. Following negotiations between counsel for the Debtors and the Bank Holders (except for the China Lenders as discussed below), and in order to preserve the status quo for the benefit of the Debtors' bankruptcy estates and their creditors, the Debtors and the Bank Holders entered into various modifications and extensions of the TRO, which were approved by the Court. The Debtors and the Bank Holders continued to engage in discussions for the purpose of entering into an agreement pursuant to which the Bank Holders would stand still from exercising certain enforcement rights and remedies against the Non-Debtor Subsidiaries, waive certain rights and remedies under the 1997 Credit Agreement and certain credit facilities with the Non-Debtor Subsidiaries (the "Bilateral Facilities"), amend the 1997 Credit Agreement to release, discharge and waive all claims against certain Non-Debtor Subsidiaries, and resolve disputes regarding setoff rights. On May 30, 2001, after successful negotiations between the Debtors and the Bank Holders, the Debtors filed the Motion for Order Under 11 U.S.C. ss.ss. 105(a), 362(a), and Fed. R. Bankr. P. 6004, 7065 and 9019 (I) Authorizing the Debtors to Enter Into, and to Take All Necessary or Appropriate Action to Effectuate the Terms of, a Standstill and Waiver Agreement with Certain Defendants, (II) Terminating the Temporary Restraining Order Entered with Respect to Certain Defendants, (III) Dismissing this Adversary Proceeding with Respect to Certain Defendants, (IV) Authorizing the Debtors to Compromise and Settle Setoff Rights Asserted by the Defendants and Terminating the Stay of 11 U.S.C. ss. 362(a) with Respect to Certain Setoff Rights, and (V) Releasing, Discharging, and Waiving Certain Claims of Defendants (the "Standstill Motion"). The Standstill Motion was approved by Court Order dated June 19, 2001 (the "Standstill Order"). The Standstill Order, among other things, authorized the Debtors to enter into the Standstill and Waiver Agreement among the Debtors, certain Non-Debtor Subsidiaries and the Bank Holders (the "Standstill Agreement"), authorized the Debtors to settle the setoff rights asserted by the Bank Holders, released, discharged and waived certain claims of the Defendants, and dismissed, without prejudice, the Standstill Adversary Proceeding and terminated the TRO with respect to all the Defendants except the China Lenders, as defined below. Pursuant to the terms of the Standstill Agreement, the Bank Holders agreed not to exercise certain remedies against the Non-Debtor Subsidiaries during the Specified Period (the "Standstill Period") in consideration of certain undertakings of the Debtors and Non-Debtor Subsidiaries, including subjecting certain Non-Debtor Subsidiaries to affirmative and negative covenants. The Standstill Period would expire on the earliest to occur of (i) the date of filing of a plan or plans of reorganization, (ii) a termination due to an event of default under the Standstill Agreement, or (iii) a date no earlier than October 31, 2002 which is 45 days after written notice to the Debtors and their counsel by the Pre-petition Agent that the requisite number of Bank Holders (as determined in the 1997 Credit Agreement) elected to terminate the Standstill Period. More specifically, the Standstill Agreement provides that, during the Standstill Period the Bank Holders are not to exercise any right or remedy for the enforcement, collection or recovery of any of the guaranteed obligations under the 1997 Credit Agreement from any of the Non-Debtor Subsidiaries other than with respect to valid setoff rights in existence on the Petition Date. In addition, the Standstill Agreement precludes those Bank Holders that are parties to the Bilateral Facilities from exercising, as a result of any default under such facilities arising solely from the commencement of the Chapter 11 Cases (which default is waived during the Standstill Period), enforcement rights or remedies against such Non-Debtor Subsidiaries other than with respect to valid setoff rights existing as of the Petition Date. However, the Bank Holders are not required to make additional loans or advances under a Bilateral Facility nor are they prevented from exercising any other rights or remedies available to them under a Bilateral Facility. The Standstill Agreement also provided that the Debtors, the Non-Debtor Subsidiaries and the Bank Holders would provide information to determine the validity of setoff rights and seek in good faith to resolve all disputes regarding setoff rights. Pending resolution of the setoff rights, the TRO remained in effect and all parties' rights with respect to the setoff issue were preserved. Pursuant to the Standstill Agreement, OCD made a payment of $3 million to the Pre-petition Agent for and on behalf of the Bank Holders executing the Standstill Agreement (the "Participating Lenders") with each Participating Lender receiving a pro rata share of such fee based on such Participating Lender's outstanding commitment under the 1997 Credit Agreement. OCD also paid a fee of $200,000 to each of the Pre-petition Agent and Chase Manhattan Bank, in their respective capacities as co-chairs of the Bank Holders' steering committee. OCD was also responsible for payment of certain fees and expenses of the Bank Holders, subject to certain monetary limits. On November 25, 2002, the parties to the Standstill Agreement executed a Stipulation and Order to Amend the Standstill and Waiver Agreement (the "Standstill Amendment") to, among other things, extend the Standstill Period, which was approved by the Court on November 25, 2002. The Standstill Amendment provides, in part, that the extended Standstill Period will end on the earliest to occur of (i) a termination due to an event of default specified in the Standstill Amendment, or (ii) the date which is 45 days after written notice of intention to terminate the Standstill Agreement has been given to OCD or the Pre-petition Agent as provided in the Standstill Amendment. The Standstill Amendment also provides that the Pre-petition Agent approved of the first amendment to the DIP Facility and that the fraudulent conveyance actions filed on or about October 4, 2002 by the Debtors, as described in more detail below, or the appointment of a limited purpose trustee or examiner would not constitute an event of default under the Standstill Agreement. (b) The China Standstill Agreement Since the Petition Date, the Debtors also have been engaged in ongoing negotiations with Standard Chartered Bank ("SCB"), as agent and co-ordinating arranger for the Loan Facility Agreement, dated March 12, 1998 (the "Revolving Loan Facility") among SCB, Societe Generale ("Soc Gen") and KBC Bank, N.V. ("KBC" and, together with SCB and Soc Gen, the "China Lenders"), Owens Corning (China) Investment Company, Ltd. ("OCI"), Owens-Corning (Guangzhou) Fiberglas Co., Ltd. ("OC Guangzhou"), Owens-Corning (Shanghai) Fiberglas Co., Ltd. ("OC Shanghai"), as borrowers, and OCD as guarantor, to effectuate the continued servicing of the Revolving Loan Facility and to settle certain setoff rights asserted by SCB in the approximate amount of $7.8 million. Resolution of the issues surrounding the Revolving Loan Facility was necessary to settle the setoff rights asserted by SCB and would permit OC to realize future value and profits from OC Guangzhou and OC Shanghai, which provide valuable production support to OC's global insulation business and are strategically important to OC's long term business strategy in China. Following negotiations, OCD, OC Guangzhou, OC Shanghai and the China Lenders reached agreement on the key terms of a Standstill and Amendment Agreement (the "China Standstill Agreement"). On October 16, 2002, the Debtors filed a motion for an order under 11 U.S.C.ss.ss.363 and 105, and Fed. R. Bankr. P. 6004 and 9019 authorizing and approving (i) execution of the China Standstill Agreement by and among OCD, OC Guangzhou, OC Shanghai, and the China Lenders; (ii) consummation of the transactions contemplated in the China Standstill Agreement; and (iii) granting the China Lenders an Allowed, General Unsecured Claim against OCD in the amount of $22 million conditioned upon the closing of the China Standstill Agreement (the "China Standstill Motion"). The Court approved the China Standstill Motion on December 9, 2002. The China Standstill Agreement became effective and on January 27, 2003, the Bankruptcy Court entered a Stipulation and Order terminating the TRO and dismissing the Standstill Adversary Proceeding as related to the China Lenders. A portion of the $7.8 million setoff has been released, a portion has been used to cover outstanding obligations in connection with letters of credit, and the remaining portion will be released by SCB upon full payment of the outstanding letter of credit obligations, which is scheduled to occur approximately June 30, 2003. (c) Setoff of Bank Accounts In connection with the consummation of the Standstill Agreement, the Debtors and the Bank Holders agreed to conduct discussions in an attempt to reach a consensual resolution with respect to the Bank Holders' setoff rights against both the Debtors and the Non-Debtor Subsidiaries. The dispute concerning the Bank Holders' potential setoff rights centered around the accounts upon which the Bank Holders had placed an administrative freeze after the commencement of the Chapter 11 Cases (as described above). In their efforts to reach a resolution, the parties to the Standstill Agreement exchanged information and documents which enabled them to stipulate to material facts regarding most of the frozen accounts. These facts were set forth in a Stipulation Concerning Debtors' Frozen Bank Accounts, which was filed in the Bankruptcy Court on February 15, 2002. Contemporaneous with the filing of the factual stipulation, the Bank Holders filed a motion in the Bankruptcy Court, entitled Motion of Credit Suisse First Boston, as Agent, for an Order Modifying the Automatic Stay to Permit Setoff of Frozen Funds (the "Setoff Motion"). By the Setoff Motion, the Bank Holders requested relief from the automatic stay to exercise setoff rights against 22 frozen bank accounts of certain Debtors Non-Debtor Subsidiaries, totaling approximately $35 million. The Debtors, as well as certain other creditor groups, objected to the Setoff Motion. In their objection, the Debtors disputed the amount of the Bank Holders' setoff rights and asserted, among other things, that the Bank Holders were wrongfully withholding the entire balance of many of the frozen accounts, and that the Bank Holders did not have valid setoff rights with respect to a substantial number of the frozen accounts. After extensive settlement negotiations, the Debtors and the Bank Holders agreed to settle the Setoff Motion and the parties' competing claims to the bank accounts at issue, together with certain other bank accounts not covered by the Setoff Motion, which accounts totaled $36,779,719.99, plus interest earned after the Petition Date. The parties executed an agreement for the settlement of the Setoff Motion, the terms of which authorized the release of specified funds totaling $18,953,325.31 plus 51.532% of the interest accrued on the frozen funds to the Debtors and permitted the Bank Holders to exercise their setoff rights with respect to the balance of the frozen funds, $17,826,394.68 plus 48.468% of the accrued interest. The settlement agreement was approved by order of the Bankruptcy Court, dated June 20, 2002. (d) Cash Management System On October 6, 2000, the Debtors filed a motion for interim and final orders (i) authorizing (a) the maintenance of certain existing bank accounts, (b) the continued use of existing business forms, (c) the use of a modified cash management system and (d) the transfer of funds to Non-Debtor Subsidiaries and (ii) waiving certain investment and deposit requirements of Section 345(b) of the Bankruptcy Code (the "Cash Management Motion"). The Court granted the relief requested in the Cash Management Motion, as modified by an "Exhibit D-1" (which was introduced into evidence at the hearing on the Cash Management Motion), by "so ordering" the record, to be followed by the submission of an agreed-upon form of written order. On June 19, 2001, the Court approved the Agreed-Upon Interim Order Under 11 U.S.C. ss.ss. 105, 345(b) and 363 (I) Authorizing (A) Maintenance of Certain Existing Bank Accounts, (B) Continued Use of Existing Business Forms, (C) Use of Modified Cash Management System, and (D) Transfer of Funds to Non-Debtor Subsidiaries; and (II) Waiving, on an Interim Basis, Investment and Deposit Requirements of 11 U.S.C. ss. 345(b) (the "Interim CMO"). The Interim CMO originally had an expiration date of December 18, 2001. On December 17, 2001, the Court entered a Stipulation and Order which extended the expiration date of the Interim CMO until February 26, 2002. The Debtors and Creditors submitted and the Court approved the final cash management order (the "Final CMO"), which became effective on February 25, 2002 and is to continue in effect until confirmation of the Plan. Pursuant to the Final CMO, in accordance with Sections 105 and 363 of the Bankruptcy Code, the Debtors may (i) designate, maintain and continue to use all of their respective collection, collateral, operating, depository, payroll and other accounts existing at the Petition Date in accordance with existing account agreements, (ii) close any such accounts, and (iii) treat such accounts as accounts of the Debtors in their capacity as debtors-in-possession. The Final CMO provides that the Debtors and Non-Debtor Subsidiaries are permitted to utilize their cash management system existing prior to the Petition Date. With certain allowed exceptions, the Final CMO prohibits the Debtors and Non-Debtor Subsidiaries from transferring funds to pay pre-petition intercompany indebtedness. However, the Final CMO permits transfers of funds among Debtors and Non-Debtor Subsidiaries in payment for goods and services provided to the payor after the Petition Date. The Final CMO also permits transfers of funds among Debtors and Non-Debtor Subsidiaries for capital expenditures, working capital and short term liquidity as long as the transfers are evidenced as loans, within the appropriate monetary limits and properly recorded on applicable accounts, with additional limits on transfers of funds to negative net worth Debtors and Non-Debtor Subsidiaries. The Final CMO permits the Debtors and Non-Debtor Subsidiaries to invest and deposit funds in accordance with their established deposit and investment practices as of the Petition Date. The Final CMO also approved eight specific transactions as exceptions to the limitations set forth in the Final CMO. 5. Unexpired Leases and Executory Contracts As of the Petition Date, the Debtors were party to thousands of unexpired leases and executory contracts, including, among others, real property leases, information technology agreements, equipment leases, plant-related service agreements, and supply agreements. During the pendency of the Chapter 11 Cases, the Debtors have evaluated the costs and potential benefits of these agreements, including the availability of alternate services and more profitable end-users for its products, all without disrupting core business operations. Section 365 of the Bankruptcy Code authorizes a debtor, subject to approval of the Bankruptcy Court, to assume or reject unexpired leases and executory contracts. Under the Bankruptcy Code, a debtor has until confirmation of a plan of reorganization to assume or reject executory contracts and unexpired leases of residential real property or of personal property of the debtor. A debtor in a Chapter 11 case ordinarily must assume or reject unexpired leases of nonresidential real property within sixty (60) days after commencement of the case. If a debtor fails to assume this type of lease within the applicable time period, the lease is deemed rejected. The bankruptcy court may extend the relevant time periods for cause. (a) Real Property Leases The Debtors are lessees under approximately 200 unexpired nonresidential real property leases. Most of the unexpired leases are for space used by the Debtors for conducting the production, warehousing, distribution, sales, sourcing, accounting and general administrative functions that comprise the Debtors' businesses. Given the size and complexity of the Chapter 11 Cases, the Debtors determined that they would be unable to complete their analysis of all nonresidential real property leases during the time limitation prescribed in Section 365(d)(4) of the Bankruptcy Code. Accordingly, the Debtors sought, and the Bankruptcy Court approved, six (6) extensions of the time by which the Debtors must assume or reject their unexpired leases of nonresidential real property. The last extension was granted by the Bankruptcy Court on May 21, 2003, and expires on the earlier of (i) December 4, 2003, or (ii) the effective date of any confirmed plan in the Chapter 11 Cases. Throughout the Chapter 11 Cases, the Debtors were actively engaged in an ongoing review of the unexpired nonresidential real property leases to determine whether the rejection or assumption and assignment of the leases was in the best interest of their respective estates. Through the end of 2002, the Debtors had rejected approximately seventy (70) nonresidential real property leases; assumed six (6) nonresidential real property leases; and assumed and assigned three (3) nonresidential real property leases. The Debtors continue their review and analysis of their unexpired nonresidential real property leases. Generally, all unexpired nonresidential real property leases that have not previously been assumed or rejected by the Debtors will be assumed under the Plan, except for those leases specified on Schedule IV of the Plan, which must be filed at least five (5) days prior to the Objection Deadline. See Section VII.F of this Disclosure Statement entitled "Treatment of Executory Contracts and Leases." (b) Executory Contracts and Unexpired Leases Since the Petition Date, the Debtors have instituted an internal process to review all executory contracts and unexpired leases to evaluate the economic costs and benefits to each of them. Throughout the Chapter 11 Cases, the Debtors have successfully renegotiated or rejected numerous leases and executory contracts, resulting in a reduction in fixed costs. The Debtors also have assumed, assumed as modified, or assumed and assigned a number of executory contracts and unexpired personal property leases since the Petition Date. By their review process, the Debtors have realized significant savings without business interruption. Generally, all unexpired nonresidential real property leases that have not previously been assumed or rejected by the Debtors will be assumed under the Plan, except for those leases specified on Schedule IV of the Plan, which must be filed at least five (5) days prior to the Objection Deadline. See Section VII.F of this Disclosure Statement entitled "Treatment of Executory Contracts and Leases." The following is a description of the disposition of certain of the Debtors' executory contracts and unexpired leases throughout the Chapter 11 Cases: (i) Enron. In January 2001, the Debtors, with Bankruptcy Court authority, assumed their various executory contracts with Enron Energy Services, Inc. and other Enron-related entities. Among other things, these contracts required Enron to provide to the Debtors certain commodities and commodity-related services, as well as certain energy, energy efficiency and consultation services. Among the services provided by Enron were billing consolidation services, by which Enron would assemble and consolidate third-party energy bills for presentation to OCD. OCD would make payment on such bills to Enron, which was contractually obligated to convey the appropriate portion of such payments to the underlying third party providers. In connection with the assumption of these contracts, the Debtors made a cure payment of approximately $20 million to Enron, on account of funds owed to Enron and/or to third party energy providers. By order dated August 28, 2001, the Debtors obtained Bankruptcy Court approval to amend the previously-assumed Enron agreements so as to, among other things, expand the services provided thereunder to additional facilities of the Debtors. On December 2, 2001, Enron Corp. and certain of its affiliates filed Chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the Southern District of New York. Prior to Enron Corp.'s bankruptcy filing, the Debtors sent one or more notices to Enron by which the Debtors terminated their various contractual agreements with Enron. Enron has asserted significant post-petition claims against OCD as a result of the foregoing contract terminations. By motion filed on May 9, 2003, OCD sought Court approval of a settlement with Enron Corp. and certain of its affiliates that would resolve all disputes among the parties. Among other things, such settlement resolved the following issues: (i) the amount, if any, owed by OCD to Enron on account of OCD's purchase of commodities from Enron subsequent to the Petition Date; (ii) the amount, if any, owed by OCD in connection with certain projects under construction for OC by Enron or parties controlled by Enron, including incomplete projects; (iii) the amount, if any, owed by OCD on account of OCD's alleged cost savings from such projects; and (iii) invoices allegedly issued by Enron or affiliated parties in connection with uncompleted projects under construction for OCD; (iv) the appropriate disposition of Owens Corning Energy LLC, a limited liability company owned by OCD and an Enron affiliate; (v) whether OCD or any of its affiliates were entitled to an allowed claim against any of the Enron bankruptcy cases; (vi) whether any of the Enron debtors were entitled to an allowed administrative or other claim against OCD or any of the Debtors; (vii) the status and disposition of certain of the property leased to OCD pursuant to certain lease agreement among the parties; and (viii) which of the parties was entitled to certain natural gas stored at OCD's natural gas storage facilities. Under the terms of such settlement, which was approved by Court Order dated June 13, 2003: (a) certain agreements among the parties are deemed to have been terminated as of December 1, 2001; (b) the master leases among the parties will be terminated and the property leased to OCD thereunder was transferred to OCD "as is, where is and with all faults" with no representations or warranties and free and clear of the liens or encumbrances, other than certain excluded liens; (c) OCD will pay to Enron Energy Services Operations, Enron Energy Services International Leasing, Inc. and Owens Corning Energy LLC $43.0 million in cash as follows: $13,805,312 to Owens Corning Energy LLC, $427,505 to Enron Energy Services International Leasing, Inc. and the remainder to Enron Energy Services Operations; (d) releases are to be exchanged among the parties; (e) certain other assets are to be transferred to OCD free and clear of all liens, claims and encumbrances, other than specified excluded liens; (f) OCD is to withdraw with prejudice any claims filed by it or any controlled affiliate in the Enron bankruptcy cases arising out of certain specified agreements and the transactions contemplated thereby; (g) Enron and certain affiliates are to withdraw with prejudice any proof of claim filed by them or any controlled affiliate against any of the Debtors arising out of specified agreements and the transactions contemplated thereby; (h) OCD is to assign its interests in Owens Corning Energy LLC to Enron Energy Services Organization; and (i) Enron and specified affiliates are to transfer to OCD any natural gas currently stored at OCD's natural gas storage facilities. (ii) Xerox Corp. OCD and Xerox Corp. were parties to a pre-petition services agreement pursuant to which Xerox Corp. was obligated to operate OCD's global documents management systems, the term of which expired on December 31, 2001. Prior to the expiration of the agreement, and after extensive negotiations, OCD and Xerox Corp. entered into a post-petition document services agreement, which was approved by order of the Bankruptcy Court dated July 16, 2001. OCD's execution of the post-petition document services agreement, which replaced the original agreement as of May 21, 2001, was necessary to the Debtors' ongoing business operations. In accordance with the entry of the post-petition agreement, Xerox Corp. became entitled to an Allowed General Unsecured Claim against OCD in the approximate amount of $3 million, and became entitled to assert an additional General Unsecured Claim against OCD in the approximate amount of $892,000. (iii) SAP America, Inc. With Bankruptcy Court approval in June 2001, OCD assumed, with certain modifications, its software license agreement with SAP America, Inc. Under the agreement, SAP America, Inc. licenses certain software to OCD, which software is absolutely fundamental to the Debtors' business operations. Upon the assumption of the agreement, OCD and SAP America, Inc. agreed to make modifications to the agreement in order to provide the Debtors with greater operational flexibility and to facilitate the Debtors' potential divestiture of certain assets and/or business units. In connection with the assumption of the agreement, OCD made a cure payment to SAP America, Inc. in the approximate amount of $6.3 million. In addition, SAP America, Inc. became entitled to an Allowed General Unsecured Claim against OCD in the approximate amount of $287,000. (iv) Owens-Corning (India) Limited. In connection with the restructuring of OCD's Indian joint venture, Owens-Corning (India) Limited ("OCIL") (discussed in Section III.A.3.b of this Disclosure Statement), OCD assumed, as amended and restated, several executory contracts between OCD and OCIL pursuant to which OCD provides OCIL with certain services and OCIL provides certain products to OCD. Assumption of the agreements, as modified (which included technology license agreements, a trademark and trade name license agreement, an alloy services agreement, an offtake contract, a shareholder agreement and an investment agreement), was part of the overall restructuring of OCIL, which provided significant benefit to OCD's estate. No cure payments were owed with respect to the assumption of the agreements. The Bankruptcy Court authorized OCD's assumption of the agreements by order dated June 18, 2002. (v) Miscellaneous executory contracts and unexpired leases. Since the Petition Date and through the end of January 2003, the Debtors have filed twelve (12) motions rejecting miscellaneous contracts and unexpired leases that no longer were required for the Debtors' business operations, and have filed numerous additional motions to reject specific contracts and leases, which have resulted in the rejection of such contracts and unexpired leases. 6. Insurance (a) General During the 20-year period prior to the initiation of the Chapter 11 Cases, billions of dollars of insurance proceeds were paid out by various insurers to directly fund or reimburse OCD for funding the settlement and defense of asbestos claims. During the pendency of the Chapter 11 Cases, the Debtors have been involved in litigation, arbitration and negotiation in which the Debtors have sought to establish asbestos-related coverage rights under policies that were not previously released in full with respect to asbestos claims. In the second quarter of 2001, OCD entered into a settlement agreement with a group of its excess level insurance carriers, resolving a dispute concerning coverage from such insurers for non-products asbestos-related personal injury claims. As a result, during the third quarter of 2001, those carriers funded $55 million into an escrow account to be released upon the substantial consummation of a plan of reorganization confirmed by the entry of a final order of the Bankruptcy Court in the Chapter 11 Cases. During the third and fourth quarters of 2001 and the second quarter of 2002, OCD also received payments of approximately, $5 million, $2 million and $5 million, respectively, in respect of previously allowed claims from liquidators of insolvent insurers, and expect to receive significant additional amount over the next several years in respect of distribution on asbestos claims previously allowed. OCD also has other unconfirmed potential coverage rights for asbestos-related bodily injury claims against solvent excess level carriers and liquidators and others who now bear responsibility for insolvent carriers. OCD is actively pursuing insurance recoveries under these remaining excess policies in litigation, arbitration and otherwise. In October 2001, OCD filed a lawsuit in Lucas County, Ohio, against ten excess level insurance carriers for declaratory relief and damages for failure to make payments for asbestos non-products claims; that lawsuit is in the discovery stages. Under the ADR procedures of the Wellington Agreement, OCD is seeking recovery for asbestos non-products claims against one excess carrier and expects to initiate ADRs against the remaining Wellington insurers with which it has not previously settled all asbestos products and non-products issues. OCD is also pursuing litigation against a state guaranty association on account of its responsibility for asbestos claims that would otherwise have been paid by a now-insolvent excess insurer. Finally, OCD is continuing to pursue asbestos-related coverage rights against liquidators of certain of its excess insurers and recently entered into an agreement with one such liquidator that is contingent on approval by both the Bankruptcy Court and the court supervising the liquidation. In addition, on June 27, 2001, the Court entered an order approving the stipulation between Fibreboard and Continental, one of Fibreboard's insurers, resolving disputes relating to Continental's obligations under a certain settlement agreement and directing funds be transferred to the Fibreboard Insurance Settlement Trust. Prior to the Petition Date, Fibreboard and Continental had entered into an agreement (the "Buckets Agreement") which reapportioned their respective liabilities to certain asbestos personal injury claimants. The Buckets Agreement provided for, among other things, the payment of Committed Disputed Presently Settled Claims and Committed Unsettled Present Claims (collectively, the "Committed Claims") through a $44 million Committed Claims Account funded by Continental. Continental and Fibreboard further agreed that any money remaining in the Committed Claims Account after all Committed Claims have been paid pursuant to the Buckets Agreement would be transferred to the Fibreboard Insurance Settlement Trust. The Stipulation approved by the Court provides, among others, that no funds would be released from the Committed Claims Account while the Chapter 11 Cases were pending, and that Continental would have a first priority perfected security interest in the Committed Claims Account securing its rights under the Buckets Agreement to reimbursement or other payment in respect of Continental's payments under the Buckets Agreement. As of the Petition Date, approximately $30 million remained in the Committed Claims Account. The Plan provides that, pursuant to the Stipulation, the remaining funds in the Committed Claims Account will be transferred to the FB Sub-Account of the Asbestos Personal Injury Trust to compensate holders of Allowed FB Asbestos Personal Injury Claims. (b) Insurance Coverage Issues OCD has unconfirmed potential coverage rights for asbestos-related bodily injury claims against solvent excess level carriers and liquidators and others who now bear responsibility for insolvent carriers. OCD is actively pursuing insurance recoveries under these remaining excess policies in litigation, arbitration and otherwise. (i) Litigation Against Non-Wellington Carriers. On October 26, 2001, OCD filed a lawsuit in Lucas County, Ohio, styled Owens Corning v. Birmingham Fire Insurance Co. et al. No. CI0200104929, against the following ten excess level insurance carriers for declaratory relief and damages for failure to make payments for asbestos non-products claims under excess policies issued in the period between June 18, 1974 and September 1, 1984: Birmingham Fire Insurance Company of Pennsylvania, Granite State Insurance Company, Landmark Insurance Company, Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, Pa., Mt. McKinley Insurance Company, Allianz Insurance Company, Allianz Underwriters Insurance Company, Affiliated FM Insurance Company, and Royale Belge, S.A. That lawsuit is in the discovery stages; the trial date in the Case Management Order is April 6, 2004. The insurer defendants each have raised numerous defenses and dispute OCD's right to any coverage for non-products claims. On June 6, 2003, the defendants filed a partial summary judgment motion with respect to policies issued after September 1, 1980, contending that there is no coverage available under those policies because all of the claims fall under the completed operations hazard. OCD strongly disputes the defendants' position. The motion is pending. (ii) Wellington ADR Proceedings. Under the ADR procedures of the Wellington Agreement, OCD is seeking recovery for asbestos non-products claims under policies issued by Insurance Company of North America. In addition to its claims against corporate affiliates of ACE USA, Owens Corning is pursuing coverage for asbestos non-products claims from the following insurer groups that are signatories to the Wellington Agreement: Royal, Continental, and Zurich. Those companies have reserved their rights with respect to coverage. These claims are not yet in an ADR proceeding. (iii) Proceedings Involving Policies Issued By Insolvent Carriers. OCD is pursuing litigation against a state guaranty association on account of its responsibility for asbestos claims that would otherwise have been paid by a now-insolvent excess insurer. Also, OCD is continuing to pursue asbestos-related coverage rights against liquidators of certain of its excess insurers. OCD recently entered into an agreement with Midland's liquidator that is now before the court on an approval motion. OCD is involved in another proceeding in which it seeks coverage for asbestos and other claims from an insolvent carrier estate. 7. Baron & Budd Administrative Deposits Prior to the Petition Date, B&B was the law firm of record for various plaintiffs in a number of asbestos-related personal injury lawsuits against OCD and Fibreboard who were participants in the NSP. Under a settlement agreement between OCD, Fibreboard and B&B, OCD and Fibreboard were required to pay Administrative Deposits into settlement accounts to be maintained by B&B for the benefit of its clients. The settlement agreement provided for payments to be made in each of 2000, 2001, and 2002. OCD made its first required payment of approximately $66 million on March 13, 2000 and Fibreboard made its first required payment of approximately $44 million on April 6, 2000. Prior to the Petition Date, and after receiving written approval from OCD and/or Fibreboard, B&B distributed approximately $23 million from the settlement accounts to its clients pursuant to the terms of the settlement agreement. Because of the Chapter 11 filings, the Debtors did not make the 2001 or 2002 payments to B&B and B&B did not make the 2001 or 2002 distributions to plaintiffs. Under the settlement agreement, B&B was required to invest the funds held for the plaintiffs and maintain the funds in settlement accounts. Any income from the funds was designated as Investment Proceeds under the agreement ("Investment Proceeds") and declared to be the property of either OC or Fibreboard (the entity that deposited the funds). After the Petition Date, B&B proposed to distribute the funds remaining in the settlement accounts to its various beneficiaries and, on September 12, 2001, filed a motion with the Bankruptcy Court for an order determining that the automatic stay does not apply to the undistributed settlement funds made by OCD and Fibreboard or, in the alternative, terminating the automatic stay. B&B argued that the settlement payments were not property of the Debtors' Estate because an enforceable trust had been created and the Debtors did not retain an equitable interest in the payments. Numerous objections and/or responses were filed to B&B's motion, including by the Debtors, the Unsecured Creditors' Committee, the Asbestos Claimants' Committee, the Future Claimants' Representative and Plant Insulation Company ("Plant"). In their response, the Debtors disagreed with B&B's characterization that the settlement agreement created an express trust; instead, the Debtors argued that the agreement created an escrow account. On November 15, 2001, B&B filed an amended motion for relief from the stay (if the automatic stay were applicable), by which it no longer maintained its position that the settlement agreement was an express trust. Without arguing whether the funds were held in an express trust or in an escrow account, B&B asserted that, in either instance, the automatic stay does not apply to B&B's proposed disbursement of the funds. The Future Claimants' Representative and the Unsecured Creditors' Committee disputed the existence of a trust or an escrow arrangement and asserted that the entire balance in each of the settlement accounts was property of OCD's and Fibreboard's respective estates. After numerous hearings on the pleadings during 2001 and 2002, on June 20, 2002, the Bankruptcy Court issued an order granting B&B's amended motion in part and denying it in part. The Bankruptcy Court ordered, among other things, that: (a) the Investment Proceeds (approximately $8 million) were property of OCD and Fibreboard's respective estates and must be returned to OCD and Fibreboard; (b) as to those plaintiffs who received written notice of approval for payment pursuant to the agreement from OCD or Fibreboard, and who had received payment of the first installment of their settlement prior to the Petition Date (the "Qualifying OC and Fibreboard Plaintiffs"), B&B, OCD and Fibreboard had met the standards under Texas law to establish that the requirements of an escrow were fulfilled pre-petition as to the principal balance; (c) to the extent that the principal balance in the B&B settlement accounts of the settlement payments by OCD and Fibreboard represented amounts due under the settlement agreement to the Qualifying OC and Fibreboard Plaintiffs, then such balance (the "Qualifying OC and Fibreboard Balance," approximately $70 million) was not property of the Debtors' estates; (d) the Qualifying OC and Fibreboard Plaintiffs were entitled to receive the second and third installments of their settlement out of the Qualifying OC and Fibreboard Balance; and (e) the principal balance remaining in the B&B settlement account, after deducting the Qualifying OC and Fibreboard Balance (the "OC and Fibreboard Residual Balance", approximately $6 million) was property of the Debtors' estates and must be returned to OCD (amounts due under settlement agreements to Qualifying Fibreboard Plaintiffs would exhaust the remaining principal balance in the Fibreboard settlement account). On June 27, 2002, B&B filed a motion to amend the judgment, requesting that the Bankruptcy Court amend its June 20, 2002 order to clarify the method of calculating the Investment Proceeds and the OC and Fibreboard Residual Balance, or, in the alternative, for a new trial. In the motion, B&B asserted that the Qualifying OC and Fibreboard Plaintiffs were entitled to the payment of interest from the dates they were to have received their second and third installments. The Debtors, the Unsecured Creditors' Committee, the Future Claimants' Representative and Plant each filed objections to B&B's motion to amend the judgment. On September 20, 2002, the Bankruptcy Court amended its order of June 20, 2002 and ordered that the Investment Proceeds earned subsequent to June 20, 2002 and all interest and other earnings on the post-June 20, 2002 Investment Proceeds, should be allocated as follows: (i) the Investment Proceeds on the Qualifying OC and Fibreboard Balance should be allocated respectively to the Qualifying OC and Fibreboard Plaintiffs; and (ii) the Investment Proceeds on the OC and Fibreboard Residual Balance should be payable respectively to OCD and Fibreboard. The Bankruptcy Court further ordered that the Investment Proceeds, interest and other earnings on the Qualifying OC and Fibreboard Balance and the OC and Fibreboard Residual Balance earned prior to June 20, 2002, should be payable respectively to OCD and Fibreboard. On October 2, 2002, B&B filed a notice of appeal of the Bankruptcy Court's September 20, 2002 order. The Future Claimants' Representative and the Unsecured Creditors' Committee also filed notices of appeal from the June 20 and September 20, 2002 orders. The appeals have been consolidated and the parties proceeded under a briefing schedule established by the District Court, by order dated December 23, 2002. The briefing of the issues is complete and the appeal is pending before Judge Wolin. The Plan Proponents express no opinion as to the outcome of the appeal. 8. Coordination Between the Debtors, the Committees and the Future Claimants' Representative Since their formation, the Committees and the Future Claimants' Representative have consulted with the Debtors concerning the administration of the Chapter 11 Cases. The Debtors have kept the Committees and the Future Claimants' Representative informed concerning their operations and have sought the concurrence of the Committees and the Future Claimants' Representative for actions outside the ordinary course of business. The Asbestos Claimants' Committees and the Future Claimants' Representative participated actively, together with the Debtors' management and advisors, in the negotiation and formulation of the Plan. 9. Implementation of Process for Resolution of Inter-Creditor Issues Shortly after the Petition Date, the Debtors' counsel began an extensive review of the facts and circumstances relating to certain potential inter-creditor issues (the "Inter-Creditor Issues"), including issues relating to the Guarantees (the "Subsidiary Guarantees") entered into by the Subsidiary Guarantors under the 1997 Credit Agreement, which include a number of the Debtors and certain Non-Debtor Subsidiaries. (See Section V.G.3.c of this Disclosure Statement entitled "Guarantee/Bank Holders Action" for further discussion of the adversary proceedings filed in the Chapter 11 Cases to avoid and set aside or equitably subordinate the Claims of the Bank Holders under the Subsidiary Guarantees as fraudulent conveyances.) The Inter-Creditor Issues include any and all claims, objections, motions, contested matters, adversary proceedings or any other proceedings involving, related to or affecting issues of the amount, validity, enforceability or priority of Claims by the Bank Holders against any of the Debtors or any Non-Debtor Subsidiary (to the extent the Bankruptcy Court has jurisdiction to affect the Claims against Non-Debtor Subsidiaries) which is a Subsidiary Guarantor of the Debtors' obligations to the Bank Holders, including without limitation: (a) any claims relating to substantive consolidation of the Debtors; (b) any claims relating to the validity, enforcement or priority of the Pre-petition Bonds; (c) any claims relating to the validity or enforceability of a License Agreement, dated as of October 1, 1991, by and between OCD and OCFT (as amended) and a License Agreement, dated as of April 27, 1999, by and between OCFT and Amerimark; (d) any claims regarding the amount, validity, enforceability or priority of the Subsidiary Guarantees; (e) any claims against any direct or indirect Subsidiary of OCD in respect of OCD's asbestos liability; and (f) any claims as to the amount, validity, enforceability, priority or avoidability of any intercompany transfers. The Debtors' counsel advised the various creditor constituencies that the manner of resolution of Inter-Creditor Issues could materially impact their respective recoveries. To assist the various creditor constituencies in their analysis of the Inter-Creditor Issues, the Debtors proposed a process by which the corporate and financial interrelationships between the Subsidiary Debtors and the Non-Debtor Subsidiaries could efficiently be reviewed. The Debtors' goal was to inform the creditor constituencies about these issues in order to initiate negotiations and thus avoid a litigated resolution of the complex legal and factual issues, or in the event that a consensual resolution could not be reached, to provide an efficient manner for conducting factual discovery. To facilitate a consensual resolution of the Chapter 11 Cases, in the spring of 2001, the Debtors voluntarily agreed to produce a documentary record that would aid in this review. During the period between July 2001 and October 2001, the Debtors produced a large volume of documents designed to be a compilation of relevant documents that would be useful in reviewing and investigating each Debtor or Subsidiary Guarantor's corporate history, major creditor relationships, and significant cash and value transfers (the "Inter-Creditor Project"). The Debtors established an information and document depository (the "Information Depository") at the offices of Skadden, Arps, Slate, Meagher & Flom LLP in New York City. To date, over four hundred-fifty thousand pages of information and materials have been deposited in the Information Depository, available to be reviewed by those who entered into a confidentiality agreement with the Company (the "Participating Parties"), which confidentiality agreements were necessary to assure the protection of privileged and confidential material included in the production of documents to the Information Depository. In addition to the Information Depository, the Debtors also created a secure, web-enabled database by which the Participating Parties were able to access the same documents and materials located in the Information Depository. After the initial production of the Debtors' documents and materials described above, the parties formalized the Inter-Creditor Project. On September 24, 2001, the Debtors proposed an "Inter-Creditor Stipulation and Order" which the Bankruptcy Court adopted on such date after hearing from the various creditor constituencies. The Inter-Creditor Stipulation and Order delineated a schedule for additional discovery regarding the investigation of the Inter-Creditor Issues. The Inter-Creditor Stipulation and Order also directed the Debtors to provide a report to the Court at each omnibus hearing regarding the status of compliance with the Inter-Creditor Stipulation and Order. Pursuant to the Inter-Creditor Stipulation and Order, on October 20, 2001, the Debtors and the Participating Parties exchanged written discovery requests. The Debtors searched for documents potentially relevant to such requests at the Company's headquarters, at its off-site storage facility in Toledo, Ohio, at its off-site storage facility in Granville, Ohio, and at the offices of certain of the Debtors' outside professionals. Debtors' counsel responded to the request for documents. In addition to the Debtors' production, in December, 2001, and January, 2002, the Participating Parties commenced document production in response to the requests received from the other Participating Parties. In January and February, 2002, the Debtors and the Participating Parties met to discuss the results of their review and to share their views regarding the issues. The Debtors and other Participating Parties identified certain issues and entities for further investigation and resolution. On February 19, 2002, the Pre-petition Agent under the 1997 Credit Agreement filed a statement (the "Statement") regarding the resolution of Inter-Creditor Issues. The Statement requested the implementation of a process designed to result in the efficient resolution of questions relating to the value of the Subsidiary Guarantors. On February 22, 2002, the Debtors filed a Status Report recommending that the Inter-Creditor Project proceed. More specifically, the Debtors proposed that they develop proposed factual stipulations and proffer them to the other Participating Parties pursuant to a specific schedule. Further, the Debtors urged the continuance of the monthly meetings with the Participating Parties and the presentation of status reports to the Court. By order dated March 18, 2002 (the "Inter-Creditor Issues Order"), the Bankruptcy Court established a schedule for addressing the resolution of Inter-Creditor Issues. The schedule established the dates on which the Debtors were to submit to the Participating Parties certain proposed factual stipulations, generally concerning corporate history and governance, management and business operations, the financial condition of the entities, and relationships with Affiliates, the dates on which the Participating Parties were to provide the Debtors with responses and comments to the proposed factual stipulations, and the dates of the circulation by the Debtors of a revised version of the proposed factual stipulations. At a hearing on June 20, 2002, the Bankruptcy Court authorized the filing of the stipulations under seal if the parties so desired. In June 2002, Blue Ridge Investments LLC ("Blue Ridge") moved, in part, to compel the Debtors to comply with the Inter-Creditor Stipulation and Order and the Inter-Creditor Issues Order and sought to be deemed a Participating Party. Following a hearing on Blue Ridge's motion, the Debtors and Blue Ridge agreed to a consensual resolution of the motion, which was approved by the Court on August 26, 2002, whereby upon executing a confidentiality agreement, Blue Ridge was granted full access to the Information Depository and was also entitled to receive and comment on the proposed Stipulations of Fact concerning Integrex. Blue Ridge was also entitled to receipt of the final stipulations of fact concerning OCFT, OCD, IPM and Fibreboard. In response to the Inter-Creditor Issues Order, the Debtors submitted their proposed factual stipulations with respect to OCFT, IPM, OCD, Integrex, Fibreboard to the Participating Parties; the Participating Parties responded and commented on the proposed factual stipulations and the Debtors circulated revised versions of each of the proposed factual stipulations. Pursuant to the Inter-Creditor Issues Order, with certain modified deadlines, the Debtors filed, under seal, the following Final Stipulations: (1) On November 21, 2002, the Debtors filed, under seal, Stipulations and Objections to Proposed Stipulations of Fact Concerning OC, and Document Summaries. (2) On November 21, 2002, the Debtors filed, under seal, Stipulations and Objections to Proposed Stipulations of Fact Concerning Integrex, and Document Summaries. (3) On December 18, 2002, the Debtors filed, under seal, Stipulations and Objections to Proposed Stipulations of Fact Concerning IPM, Inc., and Document Summaries. (4) On January 7, 2003, the Debtors filed, under seal, Stipulations and Objections to Proposed Stipulations of Fact Concerning Fibreboard Corporation. (5) On January 16, 2003, the Debtors filed, under seal, Stipulations and Objections to Proposed Stipulations of Fact Concerning OCFT, and Document Summaries. At the omnibus hearing on January 27, 2003, the Debtors' counsel advised the Court that, as a result of the Inter-Creditor Project, approximately 4,500 proposed stipulations had been filed with the Court. 10. Consolidation of Five Asbestos Bankruptcy Cases Before Judge Wolin (a) Asbestos-Related Chapter 11 Cases in Delaware On November 27, 2001, five asbestos-related Chapter 11 cases pending in the District of Delaware (the Chapter 11 Cases of the Debtors and the cases of Armstrong World Industries, Inc., W.R. Grace & Co., Federal-Mogul Global, Inc., and USG Corporation) were ordered transferred from the Bankruptcy Court to the United States District Court for the District of Delaware and were assigned to the Honorable Alfred M. Wolin of the United States District Court for the District of New Jersey (sitting by designation) to facilitate development and implementation of a coordinated plan for management of the cases. On December 10, 2001, the District Court entered an order referring these Chapter 11 Cases back to the Bankruptcy Court for resolution, subject to the District Court's ongoing right to withdraw such referral with respect to any proceedings or issues. The case issues were allocated between the District Court and the Bankruptcy Court as follows: District Court: Future and present asbestos claims, valuation and litigation analysis (if the parties were unable to consensually resolve them in an agreed-upon time frame); co-defendant asbestos issues; Section 524(g) trust and trust distribution provisions; asbestos automatic stay matters; and asbestos bar date matters. Bankruptcy Court: Inter-Creditor Issues; retention, fee application, employee, environmental, cash management, tax, executory contract and lease matters, avoidance actions, utilities, asset acquisitions and dispositions, business operational matters, bank claims and litigation, intellectual property and licenses, non-asbestos automatic stay and claims matters, settlements of bonded asbestos appeals, and NSP settlement escrow issues. (b) Withdrawal of the Reference On December 23, 2002, Judge Wolin signed an order (the "Case Management Order") withdrawing the reference with respect to the adversary proceeding captioned Owens Corning, et al. v. Credit Suisse First Boston, et al., No. 02-5829 (the "Bank Holders Action", also referred to by Judge Wolin as the "Bank Guarantee Adversary") and the Debtors' Motion for Approval of Substantive Consolidation as Part of Proposed Chapter 11 Plan of Reorganization (the "Substantive Consolidation Motion"), which was filed on January 17, 2003. Under the Case Management Order, the Honorable Judith K. Fitzgerald was appointed settlement judge for the two matters for which the reference was withdrawn. Professor Francis McGovern was appointed mediator for those same matters and the parties were directed to appear for mediation. In addition, the Court appointed William A. Drier, Esquire, as Special Master for limited purposes related to discovery. The Court scheduled a hearing on the Substantive Consolidation Motion, as part of the proceedings concerning confirmation of the Plan, which began on April 8, 2003, and concluded on May 2, 2003. The hearing on the Substantive Consolidation Motion was for the purpose of taking evidence regarding the positions of the Debtors, the Asbestos Claimants' Committee, the Future Claimants' Representative, the Unsecured Creditors' Committee, the Designated Members and CSFB as Agent for the Bank Holders with respect to the Bank Holders' opposition to the substantive consolidation provisions of the Plan. It is anticipated that Judge Wolin will issue final findings of fact and conclusions of law with respect to the Substantive Consolidation Motion in conjunction with any Order confirming the Plan in these Cases. A hearing on the Bank Holders Action was scheduled to commence April 2003, but was subsequently postponed. The Bank Holders Action was to include the taking of evidence regarding the positions of the parties on the validity, extent and value of the Subsidiary Guarantees for the purpose of determining any benefits and harms resulting from the substantive consolidation provisions of the Plan. (c) The Appointment of Consultants By order dated December 28, 2001 (the "Consultants Order"), the District Court ordered that William A. Drier, Esq., David R. Gross, Esq., C. Judson Hamlin, Esq., John E. Keefe, Esq., and Professor Francis E. McGovern be designated as court appointed consultants (the "Court Appointed Consultants") to advise the District Court and to undertake, in connection with the Chapter 11 Cases of the Debtors and the cases of Armstrong World Industries, Inc., W.R. Grace & Co., Federal-Mogul Global, Inc., and USG Corporation, such responsibilities, including by way of example and not limitation, mediation of disputes, holding case management conferences, and consultation with counsel, as the District Court may delegate to them individually. The Consultants Order also provided that the District Court could, without further notice, appoint any of the Court-Appointed Consultants to act as a special master ("Special Master") to hear any disputed matter and to make a report and recommendation to the District Court on the disposition of such matter. By the same order, the District Court ordered that the fees of the Court Appointed Consultants and Special Masters are to be borne by the debtors in such manner and apportionment as the District Court or the bankruptcy court of each respective case may direct. (d) The Appointment of a Mediator Consistent with the terms and purpose of the Consultants Order, on June 17, 2002, the Debtors filed a motion seeking an order appointing Professor Francis E. McGovern as mediator ("Mediator") nunc pro tunc to May 1, 2002, and directing the Mediator to report periodically to the District Court and Bankruptcy Court during the pendency of the Chapter 11 Cases on the status of the mediation process between the Committees. The Bankruptcy Court appointed Francis E. McGovern as Mediator, effective May 1, 2002, and ordered that the Mediator report periodically to the District Court and/or the Bankruptcy Court (as may be determined by the circumstances or by future orders of either court) on the status of the negotiations between the parties. The Bankruptcy Court further ordered that the Mediator not serve as Special Master to hear disputed matters and report to the Bankruptcy Court or the District Court on any matters on which he previously served as mediator, or on any matter materially related thereto, and not serve as Mediator on any disputed matter on which he previously heard and reported to the Bankruptcy Court or the District Court as a Special Master, or on any matter materially related thereto. Pursuant to Judge Wolin's December 23, 2002 order directing mediation, the Debtors, the Bank Holders, the Designated Members, the Committees and the Future Claimants' Representative reported for mediation. 11. Extension of Exclusive Right to File and Confirm a Plan Section 1121(b) of the Bankruptcy Code provides for an initial 120-day period after the Petition Date within which the Debtors have the exclusive right to file a plan of reorganization in their cases (the "Exclusive Period"). Section 1121(c) of the Bankruptcy Code further provides for an initial 180-day period after the Petition Date within which the Debtors have the exclusive right to solicit and obtain acceptances of a plan filed by the Debtors during the Exclusive Period (the "Solicitation Period"). Pursuant to the provisions of Section 1121 of the Bankruptcy Code, the Debtors' Exclusive Period expired on February 2, 2001, and the Solicitation Period expired on April 3, 2001. By motions filed with the Bankruptcy Court, the Debtors requested several extensions of the Exclusive Period and the Solicitation Period to afford the Debtors additional time to develop, negotiate and propose a plan of reorganization. The Bankruptcy Court granted five (5) extensions of the Exclusive Period and the Solicitation Period, as follows: (i) by order dated January 17, 2001, the Exclusive Period was extended through August 2, 2001 and the Solicitation Period extended through October 3, 2001; (ii) after a hearing held before the Bankruptcy Court on August 28, 2001, the Exclusive Period was extended through February 2, 2002 and the Solicitation Period extended through April 3, 2002; (iii) by order dated March 18, 2002, the Exclusive Period was extended through August 30, 2002 and the Solicitation Period extended through October 31, 2002; (iv) on September 24, 2002, at a hearing held before the Bankruptcy Court, the Court extended the Exclusive Period through November 26, 2002 and extended the Solicitation Period through January 8, 2003; and (v) by supplemental order dated November 25, 2002, the Exclusive Period was extended through January 10, 2003 and the Solicitation Period extended through March 14, 2003. In certain instances, certain creditor groups lodged limited objections and/or responses to the Debtors' request for extensions. By Order dated November 25, 2002, the Bankruptcy Court extended the Exclusive Period through and including January 10, 2003, and extended the Solicitation Period through and including March 14, 2003, without prejudice to (i) the Debtors' right to seek further extensions of the Exclusive Period, or (ii) the right of parties-in-interest to seek to terminate or modify the Exclusive Period. Subsequently, on December 23, 2002, Judge Wolin signed an order partially withdrawing the reference and directing that "the period within which the debtors have the exclusive right to file a plan of reorganization is hereby extended to January 17, 2003, and the debtors shall file their plan of reorganization on or before that date...." On January 17, 2003, the Debtors, together with the Asbestos Claimants' Committee and the Future Claimants' Representative, filed the Plan within the Exclusive Period. On March 7, 2003, the Debtors filed a motion seeking extension of the Solicitation Period through September 30, 2003. By Order dated May 12, 2003, the Court extended the Solicitation Period to November 30, 2003. On March 13, 2002, the Debtors filed a motion seeking an extension from March 14, 2003, until March 31, 2003, to file their proposed Disclosure Statement. By Order dated April 22, 2003, the Court further extended until March 31, 2003 the Debtors time to file their Disclosure Statement. The proposed Disclosure Statement was filed on March 28, 2003. 12. Extension of Time to Remove Actions The Debtors are parties to numerous judicial and administrative proceedings currently pending in multiple forums throughout the country (collectively, the "Actions"). The Actions involve a wide variety of claims. Pursuant to 28 U.S.C. ss. 1452 and Bankruptcy Rule 9027(a)(2), the Bankruptcy Court has entered orders extending the time period within which the Debtors may review Actions and determine whether to remove them to the District Court or the Bankruptcy Court. The date by which the Debtors must file notices of removal under Bankruptcy Rule 9027(a)(2)(A) has been extended through and including the later of (a) thirty (30) days after confirmation of a plan of reorganization, or (b) thirty (30) days after the entry of an order terminating the automatic stay with respect to the particular action sought to be removed. 13. Summary of Claims Process and Bar Dates Schedules and Statements of Financial Affairs As part of their "first day" motions, the Debtors filed a motion requesting additional time to file their SOFAS. Such motion was granted by order of the Bankruptcy Court dated October 6, 2000, and the Debtors were granted an extension until December 19, 2000. On November 22, 2000, the Debtors filed separate SOFAS for OCD and each of the 17 Subsidiary Debtors. Among other things, the SOFAS set forth the Claims of known creditors against each of the Debtors as of the Petition Date, based upon the Debtors' books and records. On November 20, 2001, the Debtors filed Amended and Restated Schedules of Assets and Liabilities (the "Amended Schedules") for OCD and each of the 17 Subsidiary Debtors. The Amended Schedules amended and wholly superseded the Schedules filed by the Debtors in November 2000. Revisions to the Amended Schedules were filed on January 30, 2002 for certain of the Debtors. Exclusive of asbestos-related personal injury and wrongful death claims, the total amount of liabilities listed in the Debtors' Amended Schedules was approximately $8,470 million, consisting of $1,460 million of pre-petition bank debt; $1,338 million of pre-petition bond debt; $190 million of pre-petition trade debt; $10 million of pre-petition tax debt; and $5,270 million in pre-petition intercompany debt and $212 million in other pre-petition debt. General Claims Bar Date and Proofs of Claim In connection with the Chapter 11 Cases, the Bankruptcy Court set April 15, 2002 as the last date by which holders of certain pre-petition Claims against the Debtors were required to file Proofs of Claim (the "General Bar Date"). The General Bar Date did not apply to certain claims, including Asbestos Personal Injury Claims other than OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims. Pursuant to order of the Bankruptcy Court dated November 27, 2001, any holder of a Claim that was required to but failed to file a Claim on or before the General Bar Date was barred from asserting such Claim against any of the Debtors and will not participate in any distribution in the Chapter 11 Cases on account of such Claim. Pursuant to notice procedures approved by the Bankruptcy Court, the Debtors sent out approximately 204,000 Proofs of Claim forms and notices of the General Bar Date to known claimants and their attorneys, and published notice of the General Bar Date twice in the national and (if applicable) international editions of The New York Times, The Wall Street Journal and USA Today; once in approximately 250 regional or local newspapers in the areas in which the Debtors had significant business operations at the time of publication; and once in approximately 35 trade publications in the primary lines of business in which the Debtors operate or formerly operated. In response to the General Bar Date, approximately 24,000 Proof of Claims, including late-filed claims, were filed with the Claims Agent and/or Bankruptcy Court, asserting approximately $16.1 billion of aggregate liabilities. The Debtors are investigating these claims to determine their validity. The Debtors have identified approximately 15,000 claims, asserting approximately $8.4 billion of aggregate liabilities, which they believe should be disallowed by the Bankruptcy Court, primarily because such claims appear to be duplicate or amended claims or claims that are not related to any of the Debtors' cases (the "Currently Disputed Claims"). It is the intention of the Debtors to file objections to these Currently Disputed Claims. While the Bankruptcy Court will ultimately determine liability amounts, if any, that will be allowed as part of the Chapter 11 Cases, the Debtors believe that all or substantially all of these claims will be disallowed. As of the date of the filing of this Disclosure Statement, the Debtors have filed eleven omnibus objections to claims, which have objected to approximately 1200 Claims, and which seek to disallow or expunge approximately $1.3 billion of asserted claims. Currently Disputed Claims contained therein have been expunged pursuant to an order of the Bankruptcy Court or are pending before the Bankruptcy Court. In addition to the Currently Disputed Claims described above, the remaining Proof of Claims include approximately 9,000 claims, totaling approximately $7.7 billion, as follows: - Approximately 2,900 OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims, totaling approximately $1.4 billion of asserted liabilities. - Approximately 600 OC Asbestos Property Damage Claims, OC Indirect Asbestos Property Damage Claims, FB Asbestos Property Damage Claims and FB Indirect Asbestos Property Damage Claims, totaling approximately $0.7 billion of asserted liabilities. The Debtors believe that most of these claims were submitted with insufficient documentation. The Debtors expect to vigorously contest any asserted asbestos-related property damage claims in the Bankruptcy Court. Based upon their historic experience in respect of asbestos-related property damage claims, the Debtors do not anticipate significant liability from such claims. - Approximately 5,500 claims, totaling approximately $5.6 billion, alleging rights to payment for financial, environmental, trade and other matters (the "General Claims"). The Company has previously recorded approximately $3.7 billion in liabilities for these claims. The General Claims with the largest variance from the recorded amounts are: claims by the United States Department of Treasury, totaling approximately $530 million, in connection with taxes; a contingent claim for approximately $458 million by the Pension Benefit Guaranty Corporation; claims for contract rejections, totaling approximately $310 million, of which approximately $250 million are protective claims covering contracts which have not yet been rejected by the Debtors; a $275 million class action claim involving alleged problems with a specialty roofing product, which claim the Debtors do not believe is meritorious based upon their historic experience with servicing their warranty program for such product; and environmental claims, totaling approximately $244 million. The Debtors have recorded liability amounts for those claims that can be reasonably estimated and which they believe are probable of being allowed by the Bankruptcy Court. At this time, it is impossible to reasonably estimate the value of all the claims that will ultimately be allowed by the Bankruptcy Court, due to the uncertainties of the Chapter 11 process, the in-progress state of the Debtors' investigation of submitted claims, and the lack of documentation submitted in support of many claims. The Debtors continue to evaluate claims filed in the Chapter 11 Cases and will make such adjustments as may be appropriate. Although the Debtors' review of all Claims filed is anticipated to be completed after the Confirmation Date, the Debtors estimate, based on their analysis of the Claims thus far, that the Claims that are likely to become Allowed Claims are as follows, on a class-by-class basis: o Class 1: The Debtors believe that no unpaid liabilities exist for this class. o Class 2A: $4.4 million to $5 million o Class 2B: $6 million o Class 3: $18.0 million to $18.5 million o Class 4 : $1,472 million to $1,577 million o Class 5: $1,389 million o Class 6: $323 million to $687 million o Class 7: See Sections IV.D.2 and VII.C.3.b(vi) of this Disclosure Statement o Class 8: See Sections IV.D.2 and VII.C.3.b(vii) of this Disclosure Statement o Class 9 $2 million to $7 million NOTWITHSTANDING THE DEBTORS' BEST ESTIMATES, THE ACTUAL AMOUNT OF CLAIMS AGAINST THE DEBTORS THAT ULTIMATELY BECOME ALLOWED CLAIMS COULD MATERIALLY EXCEED THESE AMOUNTS, AND IN SUCH EVENT, THE ESTIMATED PERCENTAGE RECOVERIES FOR HOLDERS OF CLAIMS COULD BE MATERIALLY LESS THAN AS ESTIMATED IN THIS DISCLOSURE STATEMENT. Asbestos Claims Bar Date and Proofs of Claim As indicated above, the General Bar Date did not apply to asbestos-related personal injury and asbestos-related wrongful death claims, although it did apply to asbestos property damage claims, OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims. A bar date for filing Proofs of Claim against the Debtors with respect to these types of Claims has not been set. Despite this, approximately 2,900 Proofs of Claim, totaling approximately $2.2 billion, were filed in response to the General Bar Date on account of asserted asbestos-related personal injury and asbestos-related wrongful death claims. The Unsecured Creditors' Committee asserts that a bar date should be established for Asbestos Personal Injury Claims. The Unsecured Creditors' Committee also maintains that the Debtors should currently implement procedures requiring holders of Asbestos Personal Injury Claims to provide evidence with respect to the claims in the manner in which holders of OC Asbestos Property Damage Claims are required to file claims and provide evidence. The Plan Proponents assert that there are valid reasons for the different approaches to these claims. OC Asbestos Property Damage Claims will not be channeled to a trust and will receive distributions as Class 6 Claims. In order to resolve these claims and reduce reserves needed to be maintained for Disputed Claims, the Debtors have commenced the process of analyzing these OC Asbestos Property Damage Claims as part of the claims review and objection process. Because the determination of Asbestos Personal Injury Claims will be governed by the Asbestos Personal Injury Trust Distribution Procedures after confirmation, as required by Section 524(g), the Debtors contend that there is no valid reason for the Debtors to supplant the function of the Asbestos Personal Injury Trust Distribution Procedures. By Order dated April 25, 2003, Judge Wolin withdrew the reference with regard to the motion of the Official Committee of Unsecured Creditors for an order establishing a bar date for filing proofs of claim for personal injury and wrongful death claims against the Debtors. The proceedings with regard to the Motion are stayed pending further order of the District Court. 14. Plant Insulation Company Motion to Appoint Examiner On September 28, 2001, Plant filed a motion (the "Plant Motion") under Section 1104(c)(2) of the Bankruptcy Code for an order appointing a disinterested examiner to conduct an examination of Fibreboard, including an investigation as to whether Fibreboard assets were diverted to pay OCD debts. Plant alleged that funds which were purportedly set aside for payment of Fibreboard's asbestos liability had been diverted to pay for certain liability of OCD, or, that when OCD and Fibreboard entered into various joint settlements for liability, disproportionate liability was assessed to Fibreboard. Plant argued that the appointment of an examiner was mandatory pursuant to the provisions of Section 1104(c)(2) of the Bankruptcy Code, which provides, in part, that "on request of a party in interest...the court shall order the appointment of an examiner to conduct...an investigation of the debtor as is appropriate...if...the debtor's fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceed $5,000,000." Plant argued that an examiner should be appointed because Fibreboard's fixed, liquidated, unsecured asbestos debts exceeded $5 million and because there was allegedly reason to believe that assets of the Fibreboard Insurance Settlement Trust had been diverted to help pay OCD's asbestos debts. The Plant Motion was opposed by the Debtors, the Future Claimants' Representative, the Unsecured Creditors' Committee and the Asbestos Claimants' Committee, all of which filed an objection and/or response to the Plant Motion. A fundamental dispute between Plant and the responding parties was whether Section 1104(c)(2) of the Bankruptcy Code is a mandatory provision which allegedly requires the Bankruptcy Court to appoint an examiner if the $5 million debt threshold is satisfied, or whether the Court retains discretion to deny a request for the appointment of an examiner under these circumstances. The United States Trustee also filed a response to the Plant Motion, stating its position that if the $5 million debt threshold of Section 1104(c)(2) of the Bankruptcy Code is satisfied, the appointment of an examiner is mandatory. Following a hearing, the Bankruptcy Court denied Plant's motion for the appointment of an examiner without prejudice, by order entered March 22, 2002. On March 27, 2002, Plant filed a notice of appeal of the Bankruptcy Court's order. By order dated December 4, 2002, Judge Wolin granted Plant's appeal and further ordered that "the Order of the Bankruptcy Court denying Plant's application for the appointment of an examiner on the ground that no motion for a trustee had been denied by the Bankruptcy Court is hereby vacated solely on the ground upon which it was based....." The District Court remanded the matter to the Bankruptcy Court for further proceedings on Plant's motion for the appointment of an examiner. On remand, the Bankruptcy Court directed the parties to file supplemental briefs and, following a hearing on April 8, 2003, the Court entered an Order for the Appointment of an Examiner. The Order directed the United States Trustee to appoint, subject to the Court's approval, one disinterested person to serve as an examiner and further ordered that "the examiner is not to perform any task or take up any duty or in any way perform any work or incur cost to the estate without further order of the Court." On May 2, 2003, Plant appealed the order appointing an examiner and on May 5, 2003, Shirley Gore, an individual asbestos claimant, appealed the order. The Debtors and the Futures Claimants' Representative are opposing the appeal. 15. Environmental Claims arising under Environmental Laws The Debtors have been deemed by the United States Environmental Protection Agency ("EPA") to be a Potentially Responsible Party ("PRP") with respect to certain third party sites under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund"). The Debtors have also been deemed a PRP under similar state or local laws. In other instances, other PRPs have made Claims against the Debtors as a PRP for contribution under such federal, state or local laws or under contractual agreements. The Debtors have established reserves for their Superfund (and similar state, local and private action) contingent liabilities. In connection with the Filing, the Debtors have initiated a program to identify and discharge contingent environmental liabilities as part of their Plan. Under the program, the Debtors sought settlements, subject to approval of the Bankruptcy Court, with various federal, state and local authorities, as well as private claimants. The Debtors will continue to review environmental reserves in light of such program and make such adjustments as may be appropriate. The Debtors are involved with environmental investigation or remediation at a number of other sites at which they have not been designated a PRP, particularly sites that they formerly owned or operated. Environmental conditions at currently owned and/or operated sites are being addressed in the ordinary course of the Debtors' business. At the General Bar Date, approximately 100 Proofs of Claim asserting liabilities arising under environmental laws had been filed with the Bankruptcy Court. Many of such Proofs of Claim did not state a dollar amount. Many of those that did state an amount assert liabilities beyond which the Debtors believe they could reasonably be held liable, if any liability exists, in that (a) they seek recovery of the total costs of cleanup at sites where numerous parties other than the Debtors were also jointly and severally liable or (b) they originated from multiple parties potentially liable at the same site. Claims arising under environmental laws relating to conduct of the Debtors before the Petition Date consisted of (a) Claims by the EPA against the Debtors for the costs of environmental investigation and clean up of sites that may have been contaminated as a result of releases of hazardous substances by the Debtors, including releases at third-party disposal sites used by the Debtors; (b) similar Claims by State and local environmental agencies; (c) Claims by private parties against the Debtors asserting contribution or indemnification claims with respect to cleanup costs under statutory law or contractual agreements; and (d) enforcement actions by federal, state and local environmental authorities with respect to alleged violations of environmental laws. The Debtors have been involved in negotiations to resolve as many of these Claims as possible. As of the present date, nearly half of the Claims have been resolved. In addition, in some cases where a Proof of Claim has not been filed, but where regulatory authorities are likely to exercise their police and regulatory authority against the Debtors with respect to environmental conditions, such as sites currently or formerly owned by the Debtors, the Debtors have been negotiating with regulatory authorities regarding environmental investigation and remediation. (a) Resolved as Allowed Class 6 Claims (i) EPA Claims The Debtors and the EPA signed a proposed agreement to resolve EPA's Claims at most of the sites where waste materials of the Debtors were disposed before the Petition Date and, consequently, for which the Debtors may be liable for cleanup and related costs. The proposed Environmental Settlement Agreement between the Debtors and the EPA quantifies liability at existing known sites as pre-petition Claims, with respect to some of which the EPA would have an Allowed Class 6 Claim (the "Liquidated Sites"). The proposed Environmental Settlement Agreement with the EPA also contains a provision that waste disposal sites used by the Debtors before the Petition Date that are not discovered until after confirmation of the Plan or where the Debtors' use of the site has been confirmed but an allocable share of liability cannot yet be determined (known as "Additional Sites") will be paid by the Reorganized Debtors at the rate of distribution for Allowed Class 6 Claims. The proposed Environmental Settlement Agreement also contains work plans for limited removal actions by the Debtors at two Rhode Island sites. The United States has lodged the proposed Environmental Settlement Agreement with the Court and published a notice of the lodging in the Federal Register on June 5, 2003. On June 17, 2003, the Debtors filed a Motion for Approval of Settlement of Environmental Claims of the United States (the "EPA Settlement Motion"). On July 17, 2003, the United States filed a joinder in support of the EPA Settlement Motion. The Court approved the EPA Settlement Motion on July 23, 2003. (ii) State Claims The Debtors have negotiated an Environmental Settlement Agreement similar to the Environmental Settlement Agreement with the EPA, discussed above, with the State of New York, where the Debtors conducted operations, which agreement covers only that State's costs at sites that are presently unknown. The Debtors also negotiated settlement agreements with the Texas Commission on Environmental Quality and the City of Tacoma. (iii) Private Party Claims The Debtors have settled various Claims covering various formerly owned properties (Ashton, Rhode Island, Snyder Lumber Sites and Gardena, California) or prior waste disposal sites (GBF Site). (iv) Enforcement Action Claims The Debtors have resolved most prepetition environmental actions, including an Ohio air settlement ($201,633), a Colorado air settlement ($9,000) and a federal Clean Water settlement ($40,000). (b) Claims Arising Under Environmental Laws Involving Formerly owned Properties Resolved as Administrative Claims The Debtors resolved the following claims: Oregon Department of Environmental Quality for the former St. Helens Plant ($900,000) and Industry factory rental for the former Ashton Plant ($75,000). (c) Unresolved Claims Arising Under Environmental Laws State Claims The Debtors have been engaged in extensive negotiations with the Rhode Island Department of Environmental Management ("RIDEM") regarding its Proof of Claim in the amount of $80 million with respect to five sites in Rhode Island where alleged releases of hazardous substances by the Debtors may have contributed to contamination. In an effort to focus settlement negotiations, the Debtors have recently completed a limited investigation of environmental conditions at the Dupraw and Mackland Farms sites and an investigation to identify other parties that used that site for waste disposal. Discussions with Rhode Island regarding its Proof of Claim are ongoing. The Debtors have also been engaged in extensive negotiations with the New Jersey Department of Environmental Protection ("NJDEP") regarding its Proof of Claim in the amount of approximately $74 million, concerning the BEMS landfill in Burlington, a multi-party waste disposal site used by the Debtors. Ongoing litigation may continue beyond the Debtors' emergence from bankruptcy. The Kansas Department of Health and Environment ("KDHE") has filed a Proof of Claim in the amount of approximately $1.9 million with respect to remedial costs at a landfill previously operated by the City of Kansas City and used for disposal by the Debtors and a number of other parties. The Debtors have been engaged in discussions with KDHE regarding this Claim and at this point, the Debtors expect that this Claim, and a related Claim by the Kansas National Guard, may require an estimation proceeding. The State of California has filed a Proof of Claim in the amount of $40 million with respect to costs at two disposal sites: Operating Industries, Inc. and the GBF landfill. The Debtors believe that the State's claim is without merit because, in each case, the Debtors have resolved their liability for cleanup costs through settlements with the EPA or private parties. Liabilities arising from environmental conditions at properties currently owned and operated by the Debtors are not generally subject to discharge and may need to be satisfied as Administrative Claims or by the Debtors after emergence from bankruptcy. On that basis, the Oklahoma Department of Environmental Quality has withdrawn a protective Proof of Claim regarding site conditions at the Debtors' facility in Oklahoma City, which the Debtors expect to resolve. Private Party Claims At the request of a Berlin Borough official, the Debtors and Owens-Illinois agreed to investigate the New Freedom Rd. Landfill, a former waste site believed to have been used by both companies in the 1950's. A Proof of Claim in an undetermined amount was filed by Owens-Illinois regarding cleanup costs which may be incurred. Several other private parties have filed Proofs of Claim for alleged contribution obligations with respect to a few different sites, but none of these claims is for any material amount, even without taking into account the Debtors' grounds for objecting to them. The Debtors believe that the following Claims by private parties arising under environmental laws are without merit, and the Debtors intend to object to them: a Proof of Claim based on contribution for cleanup costs with respect to the Dexter Quarry site in the amount of $5,000,000 by the estate of the former owner/operator; a Proof of Claim in the amount of $3,000,000 by Akzo Nobel Coatings, Inc. seeking indemnification for cleanup costs that it incurred with respect to the Mercer Drum site in Ohio; a Proof of Claim by GE Glegg alleging damages for soil and groundwater contamination in the vicinity of the Debtors' former Guelph, Ontario plant; a Proof of Claim by Bigge Investors in the amount of $350,000 regarding environmental conditions on property sold to it by the Debtors based on allegations of fraud in the sale; Proofs of Claim in the amount of approximately $4,000,000 by Wallace Development/Bezley based on allegations of fraud in the sale by Debtors of industrial real estate in California; and a Proof of Claim by Dr. and Mrs. Gregory Pharo alleging diminished value of their residence due to the nearby presence of Debtors' Aerohaven landfill. 16. IRS Claims The Company's federal income tax returns typically are audited by the IRS in multi-year audit cycles. The audit for the years 1992-1995 was completed in late 2000. Due to the Filing, the IRS also accelerated and completed the audit for the years ended 1996-1999 by March of 2001. As the result of these audits and unresolved issues from prior audit cycles, the IRS is asserting claims for approximately $390 million in income taxes plus interest of approximately $175 million. Pending audit of the Company's federal income tax return for the year 2000, the IRS has also filed a protective claim in the amount of approximately $50 million, covering a tax refund received by the Company for such year, plus interest. The United States Department of Treasury has filed Proofs of Claim, totaling approximately $530 million, in connection with these tax claims. In accordance with generally accepted accounting principles, the Company maintains tax reserves to cover audit issues. While the Company believes that the existing reserves are appropriate in light of the audit issues involved, its defenses, its prior experience in resolving audit issues, and its ability to realize the benefit of certain challenged deductions in subsequent tax returns if the IRS is successful, there can be no assurance that such reserves will be sufficient. The Company will continue to review its tax reserves on a periodic basis and to make such adjustments as may be appropriate. Any such revision could be material to the Company's consolidated financial position and results of operations in any given period. In this regard, the Company is in the process of attempting to negotiate a settlement of the United States federal income tax audits of the Company's taxable years 1984 - 1999 at the Appeals level of the IRS. The Company believes that it has reached a preliminary oral agreement to settle with the IRS pursuant to which, if finalized, the Company would owe the IRS up to $135 million in taxes and interest. The Company's preliminary oral settlement with the IRS is non-binding and subject to further negotiation and change. Even if agreed to by the Company, moreover, the settlement would have to be approved by the Joint Committee on Taxation, signed thereafter by the IRS, and approved by the Bankruptcy Court. There can be no assurance that this will occur and accordingly, there can be no assurance that the IRS will not continue to assert that the Company owes $530 million to the IRS. 17. Asset Dispositions Section 363(f) of the Bankruptcy Code authorizes a debtor, under certain circumstances and subject to approval of the Bankruptcy Court, to sell property of the estate free and clear of liens, claims and encumbrances, with such liens, claims and encumbrances to attach to the proceeds of sale. Since the Petition Date, the Debtors have, pursuant to section 363(f) of the Bankruptcy Code, sold certain property, including, but not limited to, the following assets. (a) Sale of Bradenton, Florida Plant Assets Exterior Systems, Inc. designed and manufactured aluminum windows and patio doors products at a plant located at 4504 30th Street, W., Bradenton, Florida. Unfortunately, due to a number of factors, including the older technology employed at the plant, Exterior Systems, Inc. was unable to operate the plant profitably. As a result, the Debtors contemplated selling the plant assets or, if a sale could not be consummated, closing the plant to limit their losses. Throughout the year 2002, the Debtors contacted and solicited levels of interest for the purchase of the plant from potential purchasers that would have an interest in such assets. Simonton Building Products, Inc. was determined to be the only viable purchaser, and the parties entered into an Asset Sale and Purchase Agreement, dated December 17, 2002, with a sale price of $4,351,500, subject to certain adjustments and other calculations. The parties also agreed to enter into a lease agreement pursuant to which the plant will be leased to the buyer and to enter into a supply agreement. On December 19, 2002, the Debtors filed a motion seeking authorization to sell the assets to Simonton Building Products, Inc. The motion was granted and the sale was approved by order of the Bankruptcy Court, dated January 27, 2003. (b) Sale of Real Property in South Gate, California Owens Corning owned an approximately 6.9 acre parcel of real property located at 4452 Ardine Street in South Gate, California, on which there was situated an outdated manufacturing facility. The Debtors' only use of the property was the storage of product manufactured at a nearby plant, for which they were in the process of securing other storage facilities. Accordingly, Owens Corning engaged a broker and ultimately entered into Purchase and Sale Agreement, dated December 10, 2002, with Cha Haw Trading Corporation, as buyer, for a sale price of $4,250,000. On December 19, 2002, the Debtors filed a motion seeking authorization to sell the property to Cha Haw Trading Corporation. The motion was granted and the sale was approved by order of the Bankruptcy Court, dated January 27, 2003. (c) Sale of Atlanta, Georgia Plant Assets Exterior Systems, Inc. designed and manufactured vinyl siding and related products at leased facilities located at 5625, 5655 and 5675 Fulton Industrial Boulevard in Atlanta, Georgia. As part of an ongoing review of its business operations, Exterior Systems, Inc. decided to reduce the excess capacity in its vinyl siding operations and to reduce the number of competing brands offered. To that end, the Debtors made a formal announcement in the fall of 2002 to discontinue the manufacture and sale of the Owens Corning brand of vinyl siding products, which were manufactured only at the Atlanta plant. Several potential purchasers in the vinyl siding manufacturing business expressed an interest in acquiring the assets of the plant. Alcoa Home Exteriors, Inc. was the only party that submitted an offer to acquire the ongoing operations of the plant, including hiring essentially all of the plant's employees. The proposal also contemplated an assignment of the real estate leases of the subject premises. The parties ultimately entered into an Asset Purchase Agreement, dated January 15, 2003, for a sale price of $5.5 million. On January 15, 2003, the Debtors filed a motion seeking authorization to sell the assets to Alcoa Home Exteriors, Inc. The motion was granted and the sale was approved by order of the Bankruptcy Court, dated February 27, 2003. (d) Sale of Real Property in Nappannee, Indiana Exterior Systems, Inc. owned real property located at 851 Tomahawk Drive, Nappannee, Indiana, at which the Debtors had ceased their equipment reconditioning activity. Before a brokerage firm could be engaged, an adjoining property owner expressed an interest in purchasing the property. Based on the opportunity for an immediate sale without the associated cost of a broker's commission and marketing time, Exterior Systems, Inc. negotiated and entered into a Purchase and Sale Agreement, dated March 17, 2003, with Dutch Real Estate Corp., as buyer, for a sale price of $476,000. On March 19, 2003, the Debtors filed a motion seeking authorization to sell the property to Dutch Real Estate Corp. The Debtors also sought in the motion authorization to pay from the sale proceeds certain real estate taxes totaling approximately $14,196.73 in principal. The motion was granted and the sale was approved by order of the Bankruptcy Court, dated April 24, 2003. (e) Sale of Phenix City, Alabama Plant Assets Owens Corning HT, Inc. ("OCHT") owned a plant located at 908 Owens Corning Drive, Phenix City, Alabama, at which it manufactured rock wool pipe, board and batts for use in insulation applications. As part of the Debtors' ongoing review of its business operations, the Debtors determined that the business at the facility was non-strategic and non-core. The business consistently under-performed financially and lost money at the gross margin level for the year 2002. Consequently, the Debtors decided to sell the assets of the Phenix City plant. The Debtors undertook marketing efforts targeted to sell the assets of the Phenix City plant to commercial and industrial insulation competitors, as well as to manufacturers of other insulation materials. After negotiating with the two interested parties who had made acceptable preliminary offers, OCHT and Owens Corning entered into an Agreement of Sale, dated March 18, 2003, with IIG Minwool, LLC ("IIG"). IIG agreed to purchase certain assets of the Phenix City plant for a purchase price of $6.7 million, $3.7 million of which was due at closing by wire transfer and $3 million of which was payable pursuant to a promissory note attached to the Agreement of Sale, which obligation was to be secured by security interests in all of the assets being acquired under the Agreement of Sale. On March 19, 2003, the Debtors filed a motion seeking authorization to sell the Phenix City plant assets. The Debtors also sought authorization to pay from the sale proceeds certain personal property taxes totaling approximately $121,069.18. Subsequent to the filing of the motion, the other interested party, Fibrex Insulation, LLC ("Fibrex"), contacted the Debtors to propose a counteroffer to the offer by IIG as set forth in the Agreement of Sale. The Debtors conducted an auction on April 28, 2003. After spirited bidding by IIG and Fibrex, IIG emerged as the highest bidder with its final bid of $8 million in cash. A hearing was held before the Bankruptcy Court on April 28, 2003. The sale to IIG was approved, subject to the submission of a revised proposed sale order. On May 12, 2003, the Bankruptcy Court entered an order approving the sale to IIG, nunc pro tunc to April 28, 2003. (f) Sale of Owens Corning Metal Systems Assets Owens Corning Metal Systems ("OCMS"), a division of Exterior Systems, Inc., was in the aluminum building products industry. As part of the Debtors' ongoing review of its business operations, the Debtors determined that the business of OCMS was non-strategic and non-core. Consequently, the Debtors decided to sell the assets utilized in the business of OCMS at auction. The Debtors, through their investment banker, Goldsmith Agio Helms Securities, Inc., undertook solicitation and marketing efforts directed at potential strategic buyers and financial sponsors. After consideration of the proposals submitted by interested bidders in January 2003 and following on-going discussions with those interested bidders who had made acceptable proposals, the Debtors determined that the offer proposed by ALSCO Acquisition Corp., now known as ALSCO Metals Corporation ("ALSCO") was the highest and best offer. Accordingly, Exterior Systems, Inc., Owens-Corning Fiberglas Technology, Inc. and, for limited purposes, Owens Corning, entered into an Asset Purchase Agreement, dated March 19, 2003, with ALSCO for the sale of certain assets, the assumption by ALSCO of certain liabilities, the execution and entry of a supply agreement and a transition services agreement and the Debtors' assumption and assignment to ALSCO of certain executory contracts and unexpired leases. The purchase price set forth in the Asset Purchase Agreement was $50 million in cash plus certain assumed liabilities. The Asset Purchase Agreement was subject to higher and better offers. On March 19, 2003, the Debtors filed a motion to approve sale procedures and bidding protections. This Motion was granted by order of the Bankruptcy Court, dated April 22, 2003. On March 19, 2003, the Debtors also filed a motion seeking authorization to sell the assets to ALSCO or to the successful bidder. The Debtors conducted an auction on May 16, 2003. After spirited bidding by ALSCO and another bidder, MIC Acquisition Corp., ALSCO emerged as the highest bidder with its final bid of $53 million in cash and a $3 million note. A hearing was held before the Bankruptcy Court on May 19, 2003. The sale to ALSCO was approved by order by the Bankruptcy Court, dated May 19, 2003. (g) Sale of Real Property in Hebron, Ohio Owens Corning owned property located at 341 O'Neill Drive in Hebron, Ohio. Owens Corning had ceased all activity at the property, and the property was no longer needed for the Debtors' operations. Accordingly, Owens Corning decided to sell the property and entered into Purchase and Sale Agreement, dated June 18, 2003, with Golden Property Management LLC, as buyer, for a sale price of $1,015,000. On June 18, 2003, the Debtors filed a motion seeking authorization to sell the property to Golden Property Management LLC. The Debtors also sought it the motion authorization to pay from the sale proceeds certain real estate taxes totaling approximately $16,900 in principal and any other delinquent taxes affecting the property. The motion was granted and the sale was approved by order of the Bankruptcy Court, dated July 23, 2003. 18. Certain Proposed Tax Legislation On April 4, 2001, the United States House of Representatives introduced proposed legislation (HR 1412, also known as the Asbestos Tax Fairness Act) to exempt income earned by qualifying asbestos-related settlement funds, including qualifying trusts established under Section 524(g) of the Bankruptcy Code, from federal income tax. The exemption from income tax would have benefited the Fibreboard Insurance Settlement Trust (described in Section IV.B.1 of this Disclosure Statement entitled "The Fibreboard Insurance Settlement Trust") by having the effect of enlarging the corpus of the trust through tax-free income accumulation. In addition, the legislation would have allowed asbestos defendants to carry-back net operating losses ("NOLs") created by asbestos payments to the years in which the products containing asbestos were produced or distributed (and to each subsequent year) in order to obtain a refund of federal income taxes paid in those periods. In the case of OC, this would have entitled the Company to carry-back its NOLs to the early 1950s. On June 14, 2001, a companion bill identical to HR 1412 was introduced in the United States Senate (S 1048). Despite strong bipartisan support for both bills, Congress did not act on them before it adjourned in late 2002, at which time both bills lapsed. Consequently, similar legislation will be considered in the current Congress only if newly introduced. 19. Certain Proposed Asbestos Legislation On May 22, 2003, Senate Judiciary Chairman Orrin Hatch introduced the Fairness in Asbestos Resolution Act of 2003, Bill S. 1125, which proposes to establish an asbestos administrative claims resolution structure through which all asbestos claims would be channeled and reviewed. It is impossible to predict whether any such legislation will become law. 20. Pension Claims The Company has several defined benefit pension plans covering most employees. Under the plans, pension benefits are generally based on an employee's pay and number of years of service. Company contributions to these pension plans are determined by an independent actuary to meet or exceed minimum funding requirements. Plan assets consist primarily of equity securities with the balance in fixed income investments. The pension plans are managed by an investment review committee which meets periodically to provide oversight, review long term investment strategies, assess plan and individual manager investment performance and evaluate the funding status of the plans. Over the last several years, various factors, such as the decline in asset value due to market conditions, the decrease in the discount rate, as well as the review of assumptions related to the valuation of pension plan liabilities have impacted OC's long-term pension plan liability and funding. Certain of the Company's pension plans have an accumulated benefit obligation in excess of the fair value of plan assets. The accumulated benefit obligation and fair value of plan assets for such plans are $1,115 million and $624 million, respectively, at October 31, 2002. Certain of the Company's pension plans are not funded. The portion of the total projected benefit obligation attributable to unfunded plans is approximately $7 million at October 31, 2002. The Company also sponsors defined contribution plans available to substantially all United States employees. Company contributions reflect a matching of a percentage of employee savings up to a maximum savings level and certain profit sharing awards. The Company recognized expense of $34 million in 2002. The Pension Benefit Guaranty Corporation ("PBGC"), an agency of the United States, filed a Claim on the General Bar Date in the amount of approximately $458 million, in connection with statutory liability for unfunded benefit liabilities of the Owens Corning Merged Retirement Plan (the "Merged Plan"). The Claim states that it is contingent upon termination of the Merged Plan. The Merged Plan is a tax-qualified defined benefit pension plan covered by and subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1301-1462 ("ERISA"). Pursuant to Title IV, each of the Debtors is a contributing sponsor of the Merged Plan or a member of a contributing sponsor's controlled group. 29 U.S.C. ss. 1301(a)(13)(14). The Plan specifically provides that OCD and any other of the Reorganized Debtors whose employees are covered by the Merged Plan shall assume and continue the Merged Plan, satisfy the minimum funding standards pursuant to 26 U.S.C. Section 412 and 29 U.S.C. Section 1082, and administer the Merged Plan in accordance with its terms and the provisions of ERISA. Further, nothing in the Plan of Reorganization shall be construed in any way as discharging, releasing or relieving the Debtors or the Debtors' successors, including the Reorganized Debtors, or any party, in any capacity, from liability imposed under any law or regulatory provision with respect to the Merged Plan or PBGC. OCD is required to comply with ERISA's minimum funding requirements. Funding is generally in cash but may also be in stock or debt (in general, not exceeding 10% of the plan's assets). OC has estimated that it will make cash payments to fund the Merged Plan in the range of $300 million to $400 million over 2003 and 2004 relating to post-petition service periods. It is assumed that the 2004 pension payments will be made from cash on hand and operating cash flow. As a consequence, for purposes of this Disclosure Statement it is assumed for purposes of projections of future performance and projected distributions under the Plan that (1) the Merged Plan will not be terminated, (2) OCD will make all minimum funding payments and (3) the Pension Plan will be less than 100% funded at December 31, 2003, and (4) OCD will not be required to reserve assets in the Plan to adequately fund the Pension Plan, but will be required to demonstrate its ability to fully fund the Merged Plan in future periods. 21. Summary of Certain Litigation (a) John Hancock Litigation Certain of OCD's current and former directors and officers, as well as certain underwriters, are named defendants in a class action lawsuit captioned John Hancock Life Insurance Company, et al. v. Goldman, Sachs & Co., et al., CA No. 01-10729-RWZ, pending in the United States District Court for the District of Massachusetts (the "Hancock Litigation"). The suit, commenced on or about April 30, 2001, is a securities-related class action on behalf of purchasers of securities pursuant to, or traceable to, two public offerings by OCD on or about April 30, 1998 and July 22, 1998. None of the Debtors is a defendant in the lawsuit. On or about April 27, 2001, a complaint was filed on behalf of purchasers of the $300 million aggregate principal amount of $550 Million Term Notes (First Series) issued by OCD due May 1, 2005 (consisting of 7.5% Term Notes) and the $250 million aggregate principal amount of $550 Million Term Notes (Second Series) issued by OCD due May 1, 2008 (consisting of 7.7% Term Notes) in offerings occurring on or about April 30, 1998. On or about July 5, 2001, an amended complaint was filed which added reference to the $400 million aggregate principal amount of $400 Million Debentures issued by OCD due August 1, 2018 (consisting of 7.5% Debentures), in an offering occurring on or about July 23, 1998. By the amended complaint, the plaintiffs allege, among other things, that the defendants violated the Securities Act of 1933 in that the SEC Form S-3 registration statements, including the prospectus and prospectus supplements, pursuant to which the debt offerings were made contained untrue and misleading statements of material fact and omitted to state certain required material facts. In particular, the amended complaint alleges that the registration statements for the debt securities contained the following untrue and misleading statements of fact and omissions of material facts: (a) the representation that the debt securities would "rank equally with all other unsecured and unsubordinated indebtedness of the Company," (b) misleading representations concerning OCD's other unsecured indebtedness, (c) the failure to disclose that certain of OCD's other unsecured and unsubordinated indebtedness was guaranteed by one or more of OCD's Subsidiaries, (d) the failure to disclose that OCD had a substantial debt to one of its Subsidiaries, (e) the failure to disclose the existence of and the terms of certain promissory notes issued by OCD to one of its Subsidiaries, and (f) the failure to disclose the existence of and terms of an intellectual property licensing arrangement between OCD and one of its Subsidiaries. The amended complaint sought, among other things, an unspecified amount of damages or, where appropriate, rescission of the plaintiffs' purchases of the securities. On November 14, 2001, and November 20, 2001, respectively, the underwriter defendants and the individual defendants filed motions to dismiss the amended complaint for failure to state a claim upon which relief can be granted. The individual defendants argued that the plaintiffs' action should be dismissed because the information which plaintiffs claim was omitted either was disclosed in OCD's filings with the SEC and incorporated by reference into the registration statements, or was not required to be disclosed under applicable SEC regulations. The individual defendants further argued that the plaintiffs' action was barred by the applicable statute of limitations because it was brought more than one year after the allegedly concealed facts were disclosed in public filings. On January 28, 2002, the plaintiffs filed a combined opposition to the underwriter and individual defendants' motions to dismiss. On March 29, 2002, both the individual defendants and the underwriter defendants filed reply memorandums in further support of their respective motions. A hearing was held on the motions to dismiss on April 11, 2002. On August 26, 2002, the United States District Court for the District of Massachusetts issued a memorandum of decision, wherein it determined that dismissal of the amended complaint is inappropriate because "several questions of fact remain," including: (i) "whether defendants' statement that the securities would 'rank equally with other unsecured and unsubordinated obligations of the Company,' was false or misleading when read in context with the rest of the information provided in the registration statement;" (ii) "whether the defendants' disclosures about intercompany licensing agreements and guarantees on other debt by OCD's subsidiaries were false or misleading with respect to the subordination rights of securities purchasers;" and (iii) "whether the registration statements provided plaintiffs with sufficient information to fully understand their rights relevant to other unsecured creditors." The court further concluded that, contrary to the defendants' argument, the plaintiffs' claims were not time-barred. The court, therefore, denied the defendants' motions to dismiss the amended complaint. The parties are currently involved in discovery proceedings with respect to this litigation. The named defendants in this proceeding have each filed contingent indemnification claims with respect to this litigation against OC pursuant to the General Bar Date process. Executive Risk Indemnity Inc. ("Executive Risk") issued to OCD Directors and Officers Liability Insurance Policy No. 8165-4021 for the policy period March 29, 2001 to March 29, 2002 (the "Policy"). Executive Risk received notice under the Policy relating to the Hancock Litigation and has indicated a willingness to pay on a current basis certain defense expenses, as that term is used in the Policy, incurred on or after March 29, 2002 under the Policy, subject to mutual reservations of rights, in connection with the Hancock Litigation to or on behalf of the insureds. A proposed Stipulation and Order Among Debtors, Executive Risk Indemnity Inc., Norman P. Blake, Jr., Gaston Caperton, Domenico Cecere, Leonard S. Coleman, Jr., William W. Colville, John H. Dasburg, Landon Hilliard, Glen H. Hiner, Sir Trevor Holdsworth, Jon M. Huntsman, Jr., Ann Iverson, W. Walker Lewis, Michael I. Miller, Furman C. Moseley, Jr., W. Ann Reynolds, and Steven J. Strobel was filed with the Court providing inter alia that, notwithstanding the automatic stay of 11 U.S.C.ss.362, Executive Risk shall be and hereby is authorized to make payments under the Policy to or for the benefit of the Insureds for Defense Expenses incurred in connection with the Hancock Litigation. (b) Deloitte Litigation On August 10, 2001, Deloitte Consulting, L.P. ("Deloitte") filed an Administrative Claim (the "Deloitte Administrative Claim") in the Chapter 11 Cases seeking not less than $2 million, on the theory that after the Petition Date, the Debtors had converted Deloitte's contributions to Debtors' HOMExperts home repair and inspection business. On February 5, 2002, Deloitte filed its adversary complaint against the Debtors, asserting copyright infringement, conversion, and post-petition use and benefit, seeking not less than $2 million in damages and/or administrative expenses (the "Deloitte Adversary Action"). The Debtors vigorously contested the Deloitte Administrative Claim and the Deloitte Adversary Action and moved to dismiss the Deloitte Administrative Claim. The Debtors and Deloitte exchanged discovery requests, documents and written responses, and commenced depositions. After considerable negotiations, the Debtors and Deloitte reached a settlement resolving, without further litigation, all of Deloitte's claims related to HOMExperts, the Deloitte Administrative Claim, and the Deloitte Adversary Action. Pursuant to the terms of the settlement, Deloitte was allowed an administrative expense claim of $350,000 to be paid within 30 days after entry of the order approving the settlement; Deloitte was allowed an unsecured pre-petition claim against OCD in the net amount of $400,000 by reason of the matters asserted in the Deloitte Administrative Claim and the Deloitte Adversary Action against OCD, Integrex and HOMExperts LLC, which shall be treated in the Chapter 11 Cases and pursuant to applicable provisions of the Bankruptcy Code as an Allowed General Unsecured Claim; the Deloitte Adversary Action was automatically dismissed upon entry of the order approving the settlement; and Deloitte released the Debtors for all claims resolved under the settlement. (c) Tobacco Litigation OC has spent significant monies to resolve claims of asbestos claimants whose injuries were caused or exacerbated by cigarette smoking. OCD and Fibreboard are pursuing litigation against tobacco companies (discussed below) for restitution/unjust enrichment, fraud, and violations of state antitrust law to obtain payment of monetary damages (including punitive damages) for payments made by OCD and Fibreboard to asbestos claimants who developed smoking-related diseases. There can be no assurance that any such litigation will go to trial or be successful. In October 1998, the Circuit Court for Jefferson County, Mississippi granted leave to file an amended complaint in an existing action to add claims by OCD against seven tobacco companies and several other tobacco industry defendants. The action brought by OCD in the Circuit Court of Jefferson County, Mississippi is styled Ezell Thomas, et al. v. R.J. Reynolds Tobacco Company, et al. and Owens Corning v. RJ Reynolds Tobacco Company , Docket No. 96-0065. On June 17, 2001, the Jefferson County court entered an order dismissing OCD's case in response to the defendants' motion for summary judgment on the basis that OCD's injuries were indirect and thus too remote under Mississippi law to allow recovery. OCD has appealed such dismissal to the Supreme Court of Mississippi. In addition to the Mississippi lawsuit, in December 1997, OCD and Fibreboard brought a lawsuit in the Superior Court of California, County of Alameda, against the same tobacco companies. That lawsuit, which is currently pending, is styled Fibreboard Corp., et al. v. R.J. Reynolds Tobacco Company, et al., Case No. 791919-8. In August 2001, the defendants filed motions to dismiss OCD's and Fibreboard's claims on the basis of the decision in the Mississippi lawsuit as well as California law. After a hearing on these motions on November 20, 2001, the California court denied the motion to dismiss Fibreboard's claims on the basis of the decision in the Mississippi lawsuit and otherwise stayed the proceeding pending the outcome of the Mississippi suit. If OCD and Fibreboard prevail, OCD's and Fibreboard's recoveries from such lawsuits against the tobacco companies will be transferred to the Litigation Trust. (d) Greenburg Class Action Securities Litigation On or about January 27, 2003, a class action lawsuit was filed in the United States District Court for the Northern District of Ohio, Western Division on behalf of certain purchasers of common stock and preferred stock of OCD during the period from September 20, 1999 through October 5, 2000. The complaint, entitled Robert Greenburg v. Hiner, et al., No. 03 Civ. 7036 (N.D. Ohio), names five of OCD's current and former directors and officers as defendants in the suit. None of the Debtors are named as defendants. The complaint asserts claims for violation of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934. In the complaint, the plaintiffs allege that the violations stem from the dissemination of materially false and misleading information by the defendants during the relevant time period that materially misrepresented OCD's financial health and performance, thereby causing OCD's stock to trade at artificially-inflated prices. Among other things, the action seeks to recover an unspecified amount of damages and/or rescission of the plaintiffs' purchases of the stock. No answer has yet been filed to the Complaint. Defense costs with respect to this litigation are covered by OCD's directors' and officers' insurance policy. Three substantially similar class actions were subsequently filed in the United States District Court for the Northern District of Ohio: an action entitled Nicholas Radosevich v. Hiner, et al., Case No. 3-03-07069 (N.D. Ohio) was filed on February 14, 2003; an action entitled entitled Howard E. Leppla v. Hiner, et al., No. 3-03-07088 (N. D. Ohio) was filed on March 3, 2003; and an action entitled William Benanchietti v. Hiner, et al., Case No. 3-03-07116 (N.D. Ohio), filed on March 12, 2003. (e) New York Packaging Corp.'s Administrative Claim New York Packaging Corporation ("NYPC"), a supplier of plastic sheets to certain of the Debtors' manufacturing facilities, filed a motion for allowance of administrative expense on January 22, 2002. NYPC claimed that the Debtors owed it approximately $1.4 million in connection with an unpaid invoice for the purchase order of plastic sheets placed by the Debtors in or around April 2001. The Debtors filed an objection to the motion on March 25, 2002, wherein they contended that the invoice was incorrect and that the Debtors owe NYPC only $7,154 on account of the order. The parties engaged in discovery and a trial was held before the Bankruptcy Court on January 21, 2003. As of the filing of this Disclosure Statement, the matter is pending in the Bankruptcy Court and the outcome is uncertain. The primary issues before the Court were (i) whether the purchase order contained an obvious mistake such that the contract should be rescinded or reformed under New York law; (ii) whether the purchase order should be interpreted consistently with the parties' prior course of dealing in accordance with the Uniform Commercial Code; and (iii) whether Section 503 of the Bankruptcy Code limits NYPC's claim to the actual value to the Debtors' Estates. On April 9, 2003, the Court issued a Memorandum Opinion finding that the purchase order contained an error in the price based upon a mistake of material fact. The Court reformed the contract and modified the price to avoid an unconscionable result. Having found that the Debtors previously paid the sum due, the Court determined that nothing further was owed to NYPC. (f) Foreland Refining Corporation Foreland Refining Corporation ("Foreland") is the owner of an asphalt manufacturing facility located in Salt Lake City, Utah which produces, manufactures, packages and sells in packages or in bulk certain oxidized asphalt products (the "Asphalt Product"). Prior to the Petition Date, the Debtors and Foreland entered into a Joint Asphalt Production and Marketing Agreement (the "Asphalt Agreement"), the initial term for which was five years, with automatic one year renewal terms unless terminated by either party. Pursuant to the Asphalt Agreement, Foreland agreed to sell and the Debtor agreed to buy Asphalt Product. Also pursuant to the Agreement, the Debtor was obligated to purchase a minimum of 40,000 tons of Asphalt Product per year. Pursuant to Exhibit E to the Agreement, Foreland was granted the exclusive right to market and sell Asphalt Product in Utah, Idaho, Montana, Wyoming, Nevada, Arizona, Washington, New Mexico and Northern California. On or about July 18, 2001, Debtors and Foreland entered into a Stipulation and Consent Order pursuant to which the Asphalt Agreement was rejected. After the Asphalt Agreement was rejected, Foreland continued to sell Asphalt product to Debtors. On or about March 6, 2002, Foreland filed an amended application alleging an administrative expense claim for the post-petition delivery of Asphalt Product to $104,853.93. The Debtors objected to the application. Thereafter, the Debtors and Foreland resolved the dispute and entered into a stipulation whereby Foreland withdrew its applications with prejudice subject to the Debtors payment of $75,000 in full and complete satisfaction of any and all claims asserted by Foreland in the Application or the Amended Application. In addition, the Stipulation provided for certain releases and waivers of claims, except, both Debtors and Foreland reserved and retained their respective rights, claims and defenses as to all other matters, including without limitation, their respective rights with respect to the Disputed Asphalt and to issues raised by Foreland in its Proof of Claim. Foreland alleges it holds that the exclusive marketing provisions are enforceable claim notwithstanding the rejection and give rise to an administrative claim in excess of $11 million. The Debtors maintain that pursuant to Sections 101(5) and 365(g) of the Bankruptcy Code, the rejection rendered all damages for breach of the Asphalt Agreement as General Unsecured Claims. The Debtors also dispute the amount of the Claim asserted by Foreland. The amount and priority of the Foreland claim will be determined by the Bankruptcy Court. G. Avoidance Actions In the Chapter 11 Cases 1. General Background The Bankruptcy Code creates certain "avoidance actions" which a debtor-in-possession or a trustee may pursue on behalf of the bankruptcy estate to recover funds transferred prior to and, in certain circumstances, after the filing of a debtor's bankruptcy petition. Included among such avoidance actions are "preferences" and "fraudulent conveyances." Preferences. Pursuant to the Bankruptcy Code, a debtor may recover (or "avoid") as "preferential" payments of funds and other transfers of property that were (a) made to or for the benefit of a creditor, (b) made while the debtor was insolvent, (c) made on account of pre-existing debts and (d) made during the ninety (90) days immediately prior to the debtor's bankruptcy filing, but only to the extent such payment or transfer permitted the recipient to receive more than it would have received if (i) the transfer had not been made, (ii) the debtor had been liquidated under Chapter 7 of the Bankruptcy Code and (iii) the transferee was paid in accordance with applicable bankruptcy law. The ninety (90) day recovery period is extended to one year if the recipient of the preferential transfer is an "insider" of the debtor. There are various defenses to preference actions. For example, transfers made in the ordinary course of the debtor's and the transferee's businesses, and made in accordance with ordinary business terms, may not be avoidable. Similarly, a transferee that extended credit subsequent to its receipt of an otherwise preferential transfer (and prior to the commencement of the debtor's bankruptcy case) for which the transferee was not repaid, is entitled to an offset/credit against an otherwise avoidable preference for the amount of such new value provided. Fraudulent Conveyances. Under Sections 548 and 544 of the Bankruptcy Code and under various state laws, a debtor may recover, on a "fraudulent conveyance" theory, transfers of property made while the debtor was insolvent or which rendered the debtor insolvent if and to the extent the debtor received less than reasonably equivalent value for such transfer. A debtor also may be able to recover, as a fraudulent conveyance, transfers made with the actual intent to hinder, delay or defraud creditors. 2. Description of Avoidance Actions During Chapter 11 Cases In accordance with their duties as debtors-in-possession, the Debtors undertook a review to determine the extent to which avoidance actions existed on behalf of their estates. The Debtors shared the results of their review with the Committees and the Future Claimants' Representative and discussed with them what avoidance actions should be commenced. The Debtors, the Committees and the Future Claimants' Representative generally agreed that the Debtors would (a) pursue actions against non-key vendors that received potential preferential transfers in the aggregate amount of $200,000 or more, to the extent tolling agreements could not be obtained, (b) obtain tolling agreements with each of their outside professionals that received potentially preferential payments exceeding $200,000, and (c) obtain tolling agreements from each of their present and former officers who received more than $200,000 of so-called "CIP" and/or "OSIP" incentive payments in September 2000. With the exception of three non-key vendors, the Debtors obtained each of the referenced tolling agreements. The Debtors commenced preference actions against the three vendors that did not execute tolling agreements, as described below. An intercompany tolling agreement was also executed between and among each of the Debtors and their Non-Debtor Subsidiaries. Such tolling agreement expires on December 31, 2003. Because not all parties agreed as to which actions should be brought or which party should bring certain avoidance actions, the Unsecured Creditors' Committee, the Future Claimants' Representative and the Designated Members filed motions to prosecute certain avoidance actions (the "Avoidance Actions") on behalf of the Debtors' estates. (a) The Future Claimants' Representative's Motion On September 6, 2002, the Future Claimants' Representative filed a motion (the "Future Claimants' Motion") for an order authorizing the Future Claimants' Representative (either alone or in combination with the other creditor constituencies) to commence certain avoidance actions on behalf of the Debtors' Estates under Sections 544, 545, 547, 548 and/or 553 of the Bankruptcy Code. The Future Claimants' Representative sought to bring avoidance actions against, among other parties, certain (i) trade vendors and outside professionals retained by the Debtors, and (ii) law firms holding NSP-related funds pursuant to the NSP Agreements. The Asbestos Claimants Committee' Committee joined in the Future Claimants' Motion. (b) The Unsecured Creditors' Committee Motion On September 10, 2002, the Unsecured Creditors' Committee filed a motion (the "Unsecured Committee Motion") for an order authorizing it to commence the following avoidance actions on behalf of the Debtors' Estates: (i) an action under Sections 547 and 550 of the Bankruptcy Code seeking the return of approximately $115 million in preferential transfers made to NSP claimants and their law firms during the 90 days prior to the Petition Date; (ii) an action under Sections 547 and 550 of the Bankruptcy Code seeking the return of approximately $290 million in preferential transfers made to NSP executive committee members and the NSP claimants represented by those members between approximately March 2000 and the Petition Date; (iii) an action under Sections 547 and 550 of the Bankruptcy Code seeking the return of payments made to the Debtors' officers and directors within one year prior to the Petition Date (which included mid-year bonuses based on performance during the first six months of 2000); (iv) an action under Sections 548, 544 and 550 of the Bankruptcy Code seeking the return of approximately $700 million in cash transferred by OCD and/or Fibreboard into the accounts of certain law firms participating in the NSP; and (v) an action under Sections 548, 544 and 550 of the Bankruptcy Code seeking to avoid obligations incurred, and the return of funds transferred, by OCD pursuant to some or all NSP Agreements which OCD entered into after January 1, 2000 and agreements entered into earlier but allegedly converted or accelerated as a result of OCD's financial difficulties. On September 17, 2002, the Unsecured Creditors' Committee filed a joinder and response to the Future Claimants' Motion, seeking authority to prosecute the claims identified in the Future Claimants' Motion, either with the Future Claimants' Representative, or independently, if the Future Claimants' Representative did not prosecute the claims. The Debtors filed a response to the Unsecured Committee Motion, in which the Debtors asked the Bankruptcy Court to deny the motion on several grounds. Among other things, the Debtors stated that they were actively pursuing tolling agreements with the NSP firms specified in the Unsecured Committee Motion and, if the Debtors were able to obtain tolling agreements, the Unsecured Committee Motion would be largely mooted. Further, the Debtors requested that the Unsecured Committee Motion be denied on substantive grounds because the Unsecured Creditors' Committee had not met its burden of establishing that the claims it sought to assert were colorable. Waters & Kraus LLP ("W&K") also filed a response in opposition to the Unsecured Committee Motion. W & K has contested the claims on the grounds that the administrative deposit held by W & K came exclusively from the Fibreboard Insurance Settlement Trust under the NSP and that the Fibreboard Insurance Settlement Trust is an independent legal entity, separate from the Debtors. Therefore, W & K asserts that the property of the Fibreboard Insurance Settlement Trust was not property of Fibreboard on the Petition Date. Accordingly, W & K believes that the Debtors lack standing to pursue recovery of the administrative deposit held by W & K. W & K executed a tolling agreement and no action has been filed against W & K as of the date of this Disclosure Statement. (c) The Designated Members' Motion On September 11, 2002, the Designated Members filed a motion for an order authorizing them to commence the following avoidance actions on behalf of the Debtors' Estates in addition to the actions sought to be asserted by the Unsecured Committee's Motion: (i) a fraudulent conveyance action pursuant to Section 544 of the Bankruptcy Code to avoid and set aside OCD's acquisition of Fibreboard's capital stock and related transactions. The Designated Members sought recovery of the property transferred or the value of such property for the benefit of the Debtors' estates and for creditors, as well as other relief, including realignment of the allocation of the purported asbestos liabilities of the Debtors as between Fibreboard and its pre-acquisition affiliates, on the one hand, and the rest of the Debtors, on the other; (ii) a fraudulent conveyance action pursuant to Section 544 of the Bankruptcy Code to avoid and set aside the claims of the Bank Holders against the Debtors and their Non-Debtor Subsidiaries under Subsidiary Guarantees supporting the Pre-petition loans made by the Bank Holders to certain of the Debtors or, alternatively, to equitably subordinate such claims; and (iii) a fraudulent conveyance action pursuant to Sections 544 and 548 of the Bankruptcy Code to avoid dividends paid to the Debtors' shareholders between 1996 and 2000, and to recover such dividends for the Debtors' Estates. (d) Subsequent Developments Relating to Motions Concerning Avoidance Actions On September 20, 2002, several days before the hearing on the above-described motions and the expiration of the statute of limitations, the United States Court of Appeals for the Third Circuit (in Official Comm. v. Chinery (In re Cybergenics Corp.), 304 F.3d 316 (3d Cir. 2002) reh'g en banc granted, op. vacated, 310 F.3d 785 (3d Cir. 2002), rev'd en banc, 330 F.3d 548 (3d Cir. 2003) determined that official creditors' committees in Chapter 11 cases cannot properly bring avoidance actions on behalf of a debtor and that such actions can only be prosecuted by a debtor-in-possession or trustee (the "Cybergenics Decision"). At a hearing held on September 24, 2002, the Bankruptcy Court, in accordance with the Cybergenics Decision, denied the motions of the Future Claimants' Representative, the Unsecured Creditors' Committee and the Designated Members to assert avoidance actions on behalf of the Debtors' Estates. By Order dated September 25, 2002, the Bankruptcy Court ordered that the Debtors file by September 27, 2002 a statement as to which Avoidance Actions they would not commence. It was further ordered that the Unsecured Creditors' Committee and any other interested party inform the Bankruptcy Court on October 1, 2002, based on the Debtors' September 27th statement: (i) whether it believed that the Debtors were unreasonably refusing to pursue any cause of action; and (ii) whether, as a result, such party sought the appointment of a trustee with special powers to bring any such avoidance action on behalf of the Estates. The Court's September 25, 2002 Order also provided that, in the event any party believed the Debtors were unreasonably refusing to commence any Avoidance Action, a hearing would be held on October 3, 2002 to consider whether a "special trustee" should be appointed to commence such action on behalf of the Estates. The Bankruptcy Court noted that it would not permit actions to be filed to recover settlement payments made to individual asbestos claimants on any legal theory. The Bankruptcy Court also required the Debtors to obtain any tolling agreements by noon on October 3, 2002. In accordance with the Bankruptcy Court's September 25, 2002 Order, the Debtors sent a letter to the Bankruptcy Court on September 27, 2002 which set forth their view that the alleged Avoidance Actions identified by the Unsecured Creditors' Committee should not be brought. Such letter concluded that, if the Bankruptcy Court were to find that the Unsecured Creditors' Committee's proposed Avoidance Actions stated a colorable claim as to particular NSP payments, the Debtors would file actions against named NSP firms that did not sign a tolling agreement. By Order dated October 2, 2002, the Bankruptcy Court (i) directed the Debtors to obtain valid and enforceable tolling agreements from certain specified law firms, (ii) directed the Debtors to commence an avoidance action against any NSP law firm that had not executed a tolling agreement, (iii) directed the Debtors to commence appropriate actions against any asbestos plaintiff as to whom an NSP law firm failed to produce, prior to the payments, sufficient evidence that the plaintiff had satisfied the conditions precedent to the payment, unless a tolling agreement had been obtained, and (iv) canceled the hearing scheduled for October 3, 2002. On November 18, 2002, the Third Circuit vacated the September 20, 2002 opinion and judgment in Cybergenics and granted rehearing en banc. On May 29, 2003, the Third Circuit, en banc, held that "bankruptcy courts can authorize creditors' committees to sue derivatively to avoid fraudulent transfers for the benefit of the estate." 3. Commencement of Avoidance Actions (a) Dividend Action On October 2, 2002, OC filed a class action complaint with the Bankruptcy Court pursuant to Sections 105, 544, 548 and 550 of the Bankruptcy Code, Sections 2201(a) and 2202 of Title 28 of the United States Code and Bankruptcy Rules 7001 and 7023, against certain shareholders of OCD common stock who each had received at least $100,000 in total dividends from June 1996 through the Petition Date, seeking the return of up to approximately $62 million. OC's complaint sought (i) a determination that the dividend payments constituted fraudulent transfers pursuant to bankruptcy and state law and were therefore voidable and (ii) the recovery of such transfers, or the value thereof, together with interest. (b) Bank of America Action On October 2, 2002, the Debtors filed a complaint against Bank of America Corp. with the Bankruptcy Court pursuant to Sections 105, 544 and 550 of the Bankruptcy Code, Sections 2201(a) and 2202 of Title 28 of the United States Code and Federal Rule of Bankruptcy Procedure 7001 seeking (i) a determination that the repayment of approximately $133 million to Bank of America Corp. relating to the acquisition of Fibreboard was a fraudulent transfer and was therefore voidable and (ii) recovery of such transfer or the value thereof, with interest. (c) Guarantee/Bank Holders Action On October 3, 2002, the Debtors and certain Non-Debtors filed a complaint against the Bank Holders with the Bankruptcy Court entitled Owens Corning, et al. v. Credit Suisse First Boston, et al., A-02-5829, (i) to avoid the fraudulent incurrence of the obligations under the Subsidiary Guarantees; (ii) in the alternative, for declaratory relief to limit and determine respective amounts of such obligations; (iii) to avoid and recover preferential transfers; and (iv) to determine the allowed amount of claims of the Pre-petition Agent and certain lenders party to the 1997 Credit Agreement. The plaintiffs argued that, given the opinion in Official Committee of Asbestos Personal Injury Claimants v. Sealed Air Corporation (In re: W.R. Grace & Co.), 281 B.R. 852 (D. Del. 2002), and the latency periods inherent in the continuing development of asbestos-related personal injuries, the entities subject to such asbestos-related claims may have been insolvent far earlier than previously understood and earlier than the entities themselves reasonably believed. The plaintiffs accordingly asserted, among other things, that (i) the Subsidiary Guarantors were insolvent or became insolvent and/or had unreasonably small capital in relation to their business or the transaction at the time or as a result of the guaranteed obligations incurred within a year of the Petition Date; (ii) within a year before the Petition Date, each Subsidiary Guarantor incurred guaranteed obligations for which they received less than reasonably equivalent value; and (iii) the obligations at issue could be avoided under applicable state law, including the Uniform Fraudulent Conveyance Act and the Uniform Fraudulent Transfer Act. In addition, the Debtors sought avoidance and recovery of transfers of certain payments made by OC during the 90-day period prior to the Petition Date to the Pre-petition Agent as "preferences" under Sections 547 and 550 of the Bankruptcy Code. (d) Fibreboard Shareholders Action On October 3, 2002, OCD and Fibreboard filed a class action complaint with the Bankruptcy Court seeking a determination that the tender offer and payment by OCD of up to approximately $515 million to Fibreboard's shareholders, through its wholly-owned subsidiary Sierra Corporation, for the acquisition of Fibreboard were fraudulent transfers pursuant to Section 544 of the Bankruptcy Code and applicable state law and seeking recovery of payments to those shareholders who received $198,000 or more. OCD and Fibreboard sought to recover these transfers or their value pursuant to Section 550 of the Bankruptcy Code. In applying the rationale set out in the Grace decision discussed above, OCD and Fibreboard asserted that OCD and Sierra Corporation were insolvent at the time of, or were rendered insolvent by, and/or had unreasonably small assets or capital in relation to their business or the transaction at the time or as a result of the tender offer or payment for the acquisition of Fibreboard, and Fibreboard was also insolvent at that time. OCD and Fibreboard accordingly asserted that the tender offer and payments at issue were voidable as fraudulent transfers by OCD and should be avoided pursuant to Section 544 of the Bankruptcy Code and applicable law, including the Uniform Fraudulent Conveyance Act and the Uniform Fraudulent Transfer Act. (e) NSP Actions and Tolling Agreements The Debtors executed tolling agreements with approximately 104 of the approximately 115 law firms that entered into NSP or non-NSP Agreements with the Debtors on behalf of claimants asserting asbestos-related personal injury or wrongful death claims. With respect to those law firms that did not sign tolling agreements, on October 4, 2002, OCD, Fibreboard and Integrex filed 11 complaints with the Bankruptcy Court, pursuant to Sections 544, 548 and 550 of the Bankruptcy Code, Sections 2201(a) and 2202 of Title 28 of the United States Code and Federal Rule of Bankruptcy Procedure 7001. These complaints sought declaratory relief determining, among other things, whether (i) the NSP Agreement with each respective defendant was a valid agreement enforceable in accordance with its terms, subject to applicable bankruptcy law; and (ii) the NSP payments made to each respective defendant were avoidable or recoverable as fraudulent transfers under applicable state and federal fraudulent conveyance law. These complaints were filed as declaratory judgment actions in order to preserve certain allegations asserted by the Unsecured Creditors' Committee, which do not reflect the views of the Debtors. In light of the Cybergenics Decision, the Unsecured Creditors' Committee was named as a defendant in each of these actions in order to make it a party to permit it to present its own position on the allegations. In the event that the Bankruptcy Court determines that the NSP payments made to each respective defendant are avoidable or recoverable as fraudulent transfers under applicable state and federal fraudulent conveyance law, one or more claims will exist against each defendant to avoid and recover some or all of the NSP-related payments at issue. Recoveries, if any, of funds held by attorneys under the NSP paid from the Fibreboard Insurance Settlement Trust are included in the definition of FB Reversions under Section 1.104 of the Plan as "recoveries, including any recoveries on account of Avoidance Actions, which recover funds paid from the Fibreboard Insurance Settlement Trust." As such, any such recoveries would be transferred to the FB Sub-Account of the Asbestos Personal Injury Trust under Section 10.3(b) of the Plan. (f) Third-Party Preference Actions The Debtors identified (i) approximately 44 non-affiliated parties that received potential preferences under Section 547 of the Bankruptcy Code, exceeding a threshold amount of $200,000; (ii) 12 present and former officers that received certain incentive payments exceeding a threshold of $200,000 in the aggregate per officer, in September 2000; (iii) one director that received a pre-petition pension payment in September 2000; and (iv) a joint venture affiliate of OC that received approximately $3.8 million in the one-year period prior to the commencement of the Chapter 11 proceedings. The Debtors executed tolling agreements with approximately 54 of the parties mentioned above, including some present and former officers, the director and the affiliate of OC. The officers and directors who executed tolling agreements each received amounts in excess of $200,000 in supplemental compensation within 90 days of the Petition Date; the Unsecured Creditors' Committee has alleged that such payments are either preferences or fraudulent conveyances. Between September 30, 2002 and October 2, 2002, the Debtors commenced actions against three vendors who had not executed tolling agreements, seeking the return of potential preferential funds received by those parties in an amount totaling approximately $1.2 million. (g) Turnover Action On October 2, 2002, the Debtors commenced an action against The Northern Trust Company, seeking the turnover of approximately $65,400 that was improperly subjected to an administrative freeze imposed by the bank in October 2000. 4. Events Subsequent to Filing of Avoidance Actions On October 16, 2002, the Debtors filed in each of the Avoidance Actions discussed above a Motion for Order Staying Adversary Actions Pending Introduction and Confirmation of Plan of Reorganization (the "Stay Motion"). In the Stay Motion, the Debtors asserted that staying the Avoidance Actions would (a) permit the Debtors and creditor constituencies to focus attention and resources on creating a consensual plan of reorganization, (b) allow the creditor constituencies to participate in the decision regarding whether and to what extent these claims are litigated and (c) maximize the efficient use of judicial and Debtor resources. Certain parties filed objections to the Stay Motion, including, among others, the Designated Members, and CSFB, as agent for the Bank Holders. On January 13, 2003, the Bankruptcy Court entered an order which stayed the Avoidance Actions until January 27, 2003 (with the exception of service of process). By further orders of the Bankruptcy Court the stay was further extended. Currently, the Avoidance Actions are stayed until February 2, 2004 (with the exception of service of process) and no party is required to answer, plead or otherwise respond to any complaint or counterclaim filed in any of the Avoidance Actions, or respond to any outstanding motions, pleadings and/or discovery requests, or take any other action in connection with the Avoidance Actions until March 4, 2004. Despite the orders of the Bankruptcy Court staying the Avoidance Actions, certain defendants have answered or otherwise responded to particular Avoidance Actions. In addition, Lewis & Lewis, one of the defendants, has orally requested termination of the stay. If the adversary action is not resolved, the Court will entertain Lewis & Lewis' oral motion to lift the stay will be heard at the August 25, 2003 hearing. (a) The Guarantee/Bank Holders Action On November 7, 2002, the Designated Members filed a cross-motion to intervene in the Bank Holders Action, to which CSFB, as agent, filed an objection. Pursuant to Judge Wolin's Case Management Order, dated December 23, 2002, the reference was withdrawn with respect to the Bank Holders Action. In accordance with the terms of the order, on December 31, 2002, the Designated Members filed an amended motion to intervene and a proposed complaint, which was amended on January 10, 2003. The Debtors and certain non-Debtors filed a partial opposition to the amended motion to intervene. Also on December 31, 2002, the Future Claimants' Representative and the Asbestos Claimants' Committee filed motions to intervene. On January 10, 2003, CSFB, as agent, filed a motion to dismiss the Bank Holders Action, an objection to the Designated Members' amended motion to intervene and a memorandum of law. The Debtors filed a memorandum of law in opposition to CSFB's motion to dismiss on January 16, 2003. At the request of the Debtors and in an effort to limit the number of issues to be presented at trial, on January 20, 2003, the Future Claimants' Representative filed a notice of withdrawal of certain counts of its complaint in intervention, but reserved the right to pursue such claims in the future. Although a hearing was scheduled to commence April 2003, it was subsequently postponed. (b) The Unsecured Creditors' Committee Motion to Intervene On August 5, 2003, the Unsecured Creditors Committee filed a motion to intervene as of right as a party plaintiff and to file complaints in the Avoidance Actions involving payments to law firms under NSP Agreeemnts. This Motion also seeks to lift the stay applicable to those actions, and for an order authorizing the Committee to commence actions against all of the law firms with which the Debtors have entered into tolling agreements. The Unsecured Creditors Committee also filed a motion to schedule the motion to intervene on shortened notice so that the motion is heard on August 25, 2003 and objections are filed August 18, 2003. Both motions are currently pending before the Court and no responses/objections have been filed to either motion. VI. FUTURE BUSINESS OF THE REORGANIZED DEBTORS A. Structure and Business of the Reorganized Debtors Following the Effective Date, the Reorganized Debtors intend to continue to operate their businesses as they have been operated to date, with the exception of such reorganization, divestitures and other restructurings as may be contemplated by the Plan. In addition, the Reorganized Debtors reserve the right, subject to such approvals of their respective boards of directors or shareholders as shall be required by law, to entertain and implement such opportunities for acquisitions, divestitures, restructuring or other internal reorganizations as shall be deemed appropriate under the circumstances. In that regard, OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines. The planning for this restructuring is in a preliminary stage. For a more detailed description of the Restructuring Transactions, see Appendix G of this Disclosure Statement entitled "Proposed Corporate Structure of the Reorganized Debtors." A detailed description of the actions and steps required to implement the Restructuring Transactions will be filed al least ten (10) Business Days prior to the Objection Deadline. On or prior to, or as soon as practicable after, the Effective Date, the Reorganized Debtors may take such steps as may be necessary or appropriate to effectuate Restructuring Transactions that satisfy the requirements set forth Section 5.6 of the Plan. B. Board of Directors and Management of Reorganized Debtors As of June 30, 2003, OCD's Board of Directors was composed of eleven directors, divided into three classes. Each class of directors serves for a term expiring at the third succeeding annual meeting of stockholders after the year of election of such class, and until their successors are elected and qualified. 1. Composition of the Board of Directors as of Date of Disclosure Statement The following is a list, as of August __, 2003, of the names of each of the Directors of OCD [the date, list and biographies contained in this section will be updated up to five (5) Business Days prior to the Disclosure Statement Hearing and thereafter, with the permission of the Bankruptcy Court].
Name Title Norman P. Blake, Jr. Director David T. Brown Director, President and Chief Executive Officer Gaston Caperton Director Leonard S. Coleman, Jr. Director William W. Colville Director Landon Hilliard Director Ann Iverson Director W. Walker Lewis Director Furman C. Moseley, Jr. Director W. Ann Reynolds Director Michael H. Thaman Director, Chairman of the Board and Chief Financial Officer
Norman P. Blake, Jr. has been a Director since 1992. He is former Chairman, President and Chief Executive Officer of Comdisco, Inc., global technology services, Rosemont, IL. A graduate of Purdue University, Mr. Blake previously has served as Chief Executive Officer of the United States Olympic Committee; Chairman, Chief Executive Officer and President of Promus Hotel Corporation; Chairman, Chief Executive Officer and President of USF&G Corporation; and Chairman and Chief Executive Officer of Heller International Corporation of Chicago. Mr. Blake is a member of the Purdue Research Foundation and Purdue University's President's Council and Dean's Advisory Council, Krannert Graduate School of Management. He is the recipient of the degree of Doctor of Economics honoris causa from Purdue University, granted jointly by the Krannert Graduate School of Management and School of Liberal Arts. He has also been awarded The Ellis Island Medal of Honor. David T. Brown has been a Director since January, 2002, and, since April 18, 2002, has been President and Chief Executive Officer of OCD. A graduate of Purdue University, Mr. Brown became Executive Vice President and Chief Operating Officer in January 2001. Previously, he held numerous leadership positions in sales and marketing at OC, including serving as President of the Insulating Systems Business beginning in 1998, President of Building Materials Sales and Distribution beginning in 1996, and President of the Roofing and Asphalt Business beginning in 1994. Mr. Brown joined OC in 1978 after working for Procter & Gamble, Shearson Hammill and Eli Lilly. Mr. Brown is a past board member of Asphalt Roofing Manufacturers Association Executive Committee, National Roofing Contractors Association Advisory Board, Thermal Insulation Manufacturers Association and Executive Committee of the North American Insulation Manufacturers Association. Gaston Caperton has been a Director since 1997. He is President and Chief Executive Officer of The College Board, a not-for-profit educational association, New York, NY, Chairman of The Caperton Group, a business investment and development company, Shepherdstown, WV and former Governor of the State of West Virginia. A graduate of the University of North Carolina, Mr. Caperton began his career in a small insurance agency, became its principal owner and chief operating officer, and led the firm to become the tenth largest privately-owned insurance brokerage firm in the U.S. He also has owned a bank and mortgage banking company. Mr. Caperton was elected Governor of West Virginia in 1988 and 1992. In 1997, Mr. Caperton taught at Harvard University as a fellow at the John F. Kennedy Institute of Politics. Prior to beginning his current position in mid-1999, Mr. Caperton also taught at Columbia University, where he served as Director of the Institute on Education and Government at Teachers College. Mr. Caperton is a director of United Bankshares, Inc., Energy Corporation of America, West Virginia Media Holdings, and Benedum Foundation. He was the 1996 Chair of the Democratic Governors' Association, and served on the National Governors' Association executive committee and as a member of the Intergovernmental Policy Advisory Committee on U.S. Trade. He also was Chairman of the Appalachian Regional Commission, Southern Regional Education Board, and the Southern Growth Policy Board. Leonard S. Coleman, Jr. has been a Director since 1996. He is Senior Advisor to Major League Baseball, professional sports, New York, NY. A graduate of Princeton and Harvard Universities, Mr. Coleman became President of The National League of Professional Baseball Clubs in 1994 after serving as Executive Director, Market Development of Major League Baseball. He assumed his current position with Major League Baseball in 1999. Mr. Coleman is a director of H. J. Heinz Company, the Omnicom Group, New Jersey Resources, Cendant Corporation, Electronic Arts Inc., Aramark Corporation, and Churchill Downs Incorporated. He also serves as a director of The Metropolitan Opera, The Schumann Fund, The Jackie Robinson Foundation and The Children's Defense Fund. William W. Colville has been a Director since 1995. He is now retired and was a former Senior Vice President, General Counsel and Secretary. A graduate of Yale University and the Columbia University Law School, Mr. Colville began his career at OC in 1984 as Senior Vice President and General Counsel. Prior to joining OC, he was President of the Sohio Processed Minerals Group from 1982 to 1984, and General Counsel of Kennecott Corporation from 1980 to 1982. Mr. Colville is a director of Nordson Corporation. Landon Hilliard has been a Director since 1989. He is a partner with Brown Brothers Harriman & Co., private bankers, New York, NY. A graduate of the University of Virginia, Mr. Hilliard began his career at Morgan Guaranty Trust Company of New York. He joined Brown Brothers Harriman in 1974 and became a partner in 1979. Mr. Hilliard is a director of Norfolk Southern Corporation and Western World Insurance Company. He is also Chairman of the Board of Trustees of the Provident Loan Society of New York and Secretary of The Economic Club of New York. Ann Iverson has been a Director since 1996. She is Chairman of Brooks Sports, Inc., athletic footwear and apparel, Bothell, WA and President and Chief Executive Officer of International Link, an international consulting firm, Scottsdale, AZ. Ms. Iverson began her career in retailing and held various buying and executive positions at retail stores in the U.S. through 1989, including Bloomingdales, Dayton Hudson, and US Shoe. She then joined British Home Stores as Director of Merchandising and Operations in 1990; Mothercare as Chief Executive Officer in 1992; Kay-Bee Toy Stores as President and Chief Executive Officer in 1994; and Laura Ashley Holdings plc. as Group Chief Executive in 1995. In 1998, she founded and became President and Chief Executive Officer of International Link. Ms. Iverson is a director of Candie's, Inc., as well as several privately-held companies. She is also a member of the Board of Trustees of the Thunderbird School of International Management, and a member of Financo Global Consulting. W. Walker Lewis has been a Director since 1993. He is Chairman of Devon Value Advisers, a financial consulting and investment banking firm in Greenwich, CT and New York, NY. Previously, Mr. Lewis served as Senior Advisor to SBC Warburg Dillon Read; Senior Advisor to Marakon Associates; and Managing Director, Kidder, Peabody & Co., Inc. Prior to April 1994, he was President of Avon U.S. and Executive Vice President, Avon Products, Inc. Prior to March 1992, Mr. Lewis was Chairman of Mercer Management Consulting, Inc., a wholly-owned subsidiary of Marsh & McLennan, which is the successor to Strategic Planning Associates, a management consulting firm he founded in 1972. He is a graduate of Harvard College, where he was President and Publisher of the Harvard Lampoon. Mr. Lewis is Chairman of London Fog Industries, Inc. and a director of Mrs. Fields' Original Cookies, Inc. He is also a member of the Council on Foreign Relations, the Washington Institute of Foreign Affairs, and The Harvard Committee on University Resources. Furman C. Moseley, Jr. has been a Director since 1983. He is Chairman of Sasquatch Books, Inc., publishing, Seattle, WA. Mr. Moseley joined Simpson Paper Company in 1960 and retired in June 1995 as Chairman of that company and President of Simpson Investment Company. Mr. Moseley is a director of Eaton Corporation. W. Ann Reynolds has been a Director since 1993. She is a Director of the Center for Community Outreach and Development, and a faculty member of The University of Alabama at Birmingham, Birmingham, AL. A graduate of Kansas State Teachers College and the University of Iowa, Dr. Reynolds assumed her current position in 2002. Previously, she was President of The University of Alabama at Birmingham for five years, Chancellor of City University of New York for seven years and for eight years Chancellor of the California State University system. Dr. Reynolds is a director of Humana, Inc., Abbott Laboratories and Maytag Corporation. She is also a member of the American Association for the Advancement of Science, the American Association of Anatomists, the Society for Gynecological Investigation, and the Perinatal Research Society. Michael H. Thaman has been a Director since January 2002 and is Chairman of the Board and Chief Financial Officer of OCD. A graduate of Princeton University, Mr. Thaman joined OC in 1992. He was elected Chairman of the Board in April 2002 and became Chief Financial Officer in 2000. Before assuming his current position, Mr. Thaman held a variety of leadership positions at OC, including serving as President of the Exterior Systems Business beginning in 1999 and President of the Engineered Pipe Systems Business beginning in 1997. Prior to joining OC, Mr. Thaman spent six years as a strategy consultant at Mercer Management Consulting, including as a Vice President in their New York office. 2. Identity of Executive Officers as of Date of Disclosure Statement The following is a list, as of August __, 2003, of the names of the executive officers of OC and the positions held by each such executive officer at OC [the date, list and biographies contained in this section will be revised up to five (5) Business Days prior to the Disclosure Statement Hearing and thereafter, with the permission of the Bankruptcy Court].
----------------------------------------- --------------------------------------------------------- Name Title ----------------------------------------- --------------------------------------------------------- Sheree L. Bargabos Vice President and President, Exterior Systems Business ----------------------------------------- --------------------------------------------------------- David T. Brown President and Chief Executive Officer ----------------------------------------- --------------------------------------------------------- Charles E. Dana Vice President, Corporate Controller and Global Sourcing ----------------------------------------- --------------------------------------------------------- Daniel J. Dietzel Vice President and President, Siding Solutions Business ----------------------------------------- --------------------------------------------------------- David L. Johns Senior Vice President and Chief Supply Chain and Information Technology Officer ----------------------------------------- --------------------------------------------------------- George E. Kiemle Vice President and President, Insulating Systems Business ----------------------------------------- --------------------------------------------------------- Stephen K. Krull Senior Vice President, General Counsel and Secretary ----------------------------------------- --------------------------------------------------------- Richard D. Lantz Vice President and President, Composite Solutions Business ----------------------------------------- --------------------------------------------------------- Edward Mirra, Jr. Senior Vice President, Human Resources ----------------------------------------- --------------------------------------------------------- Michael H. Thaman Chief Financial Officer ----------------------------------------- ---------------------------------------------------------
Sheree L. Bargabos has been Vice President and President of Exterior Systems since August 2002. She was formerly Vice President of Training and Development, Vice President of the Insulating Systems Business, Vice President and General Manager of the Foam Business, General Manager of the Foam Business and Sales Leader of the Building Materials Sales and Distribution, Canada. David T. Brown has been President and Chief Executive Officer of OCD since April 2002. He was formerly Executive Vice President and Chief Operating Officer and has also formerly served as Vice President and President of the Insulating Systems Business, President of Building Materials Sales and Distribution. He has also been a Director since January 2002. Charles E. Dana has been Vice President of Corporate Controller and Global Sourcing since January 2002. He was formerly Vice President of the Global Sourcing and eBusiness, Vice President of Owens Corning Supply Chain Solutions, Vice President of Global Sourcing Management and Vice President of Planning and Analysis - Composite Systems. Daniel J. Dietzel has been Vice President and President of the Siding Solutions Business since July 2002. He was formerly Vice President of the Distribution-Exterior Systems Business and President of Norandex Distribution. David L. Johns has been Senior Vice President and Chief Supply Chain and Information Technology Officer since April 2001. He was formerly Senior Vice President, Chief Technology Officer and Chief Information Officer. George E. Kiemle has been Vice President and President of the Insulating Systems Business since February 2001. He was formerly Vice President of the Manufacturing, Insulating Systems Business. Stephen K. Krull became Senior Vice President, General Counsel and Secretary of OCD on February 6, 2003. He was formerly Vice President of Corporate Communications, Vice President and General Counsel of Operations, Director, Law, and Senior Counsel, Law. Richard D. Lantz has been Vice President and President of the Composite Solutions Business since November 2001. He was formerly Vice President and President of the Roofing Solutions Business, Vice President and President of the Systems Thinking Sales and Distribution Business, Vice President-Marketing of the Insulation Business. Edward Mirra, Jr. has been Senior Vice President of Human Resources since July 2000. He was formerly Vice President of Roofing Operations and Vice President of Trumbull Asphalt. Michael H. Thaman has been Chairman of the Board and Chief Financial Officer of OCD since April 2002. He was formerly Senior Vice President and Chief Financial Officer, Vice President and President of the Exterior Systems Business and Vice President and President of Engineered Pipe Systems. He has also been a Director since January 2002. All of the executive officers referenced above, except Ms. Bargabos, Mr. Dana, Mr. Dietzel, Mr. Kiemle and Mr. Krull, served as executive officers of OC at or within two years before the Petition Date. In addition, all such listed executive officers except Ms. Bargabos and Messrs. Johns, Lantz and Mirra also served as executive officers of one or more domestic Subsidiaries at or within two years before the Petition Date. 3. Directors and Officers of Reorganized Debtors as of the Effective Date As disclosed in the Plan, on the Effective Date, the initial Board of Directors of Reorganized OCD will consist of twelve (12) members. The Asbestos Claimants' Committee and the Future Claimants Representative will jointly designate seven (7) directors, and the existing Board of Directors will appoint the remaining initial directors, one of which shall be the Company's Chief Executive Officer, provided that OCD's designees shall be reasonably acceptable to the Asbestos Claimants' Committee and the Future Claimants Representative. All of such initial directors shall be identified reasonably in advance of the confirmation hearing on the Plan. In addition, as long as the Asbestos Personal Injury Trust owns a specified percentage of the equity securities issued to it under the Plan, the Asbestos Claimants' Committee and the Future Claimants Representative shall each be entitled to designate a non-voting board observer, which board observer will be entitled to participate in all of OCD's Board of Directors meetings. The board observers shall receive (i) notice of each meeting of the Board of Directors at the same time that notice is provided to members of the Board of Directors, and (ii) copies of all materials distributed to members of the Board of Directors prior to any such meeting. The initial Board of Directors will include three individuals who will qualify under the New York Stock Exchange rules and applicable laws as independent outside directors and who would be eligible to serve on OCD's audit committee of the Board of Directors, pursuant to the requirements of the SEC. The initial Board of Directors will also include at least three individuals who will qualify as independent directors under Section 162(m) of the IRC and will be eligible to serve on the committee responsible for executive compensation (the "Compensation Committee"). One of the directors shall also qualify as an "audit committee financial expert" within the meaning of the SEC Regulation S-K Item 401(h). The initial term of the initial directors shall be until the first annual shareholders meeting following the second anniversary date of the Effective Date (the "Initial Term"). Neither the Asbestos Claimants' Committee, the Future Claimants' Representative or the existing Board of Directors has yet appointed any of the initial directors. It is expected that David T. Brown, the current Chief Executive Officer of OC, will be one of the members of the initial Board of Directors. In conformity with the requirements of Section 1129 of the Bankruptcy Code, the identities of the initial Board of Directors will be disclosed prior to confirmation of the Plan. The Plan Proponents will make this disclosure in a supplemental schedule to be filed at least ten (10) Business Days prior to the Objection Deadline. The initial terms of the Reorganized OCD board members and the procedures for filling any vacancy prior to the expiration of a board member's term will be set forth in the Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD, as approved in the Confirmation Order. 4. Treatment of Director and Officer Indemnification Under the Plan The Plan provides that the Debtors will treat indemnity obligations under their charters, by-laws, statutes or contracts as executory contracts that will be assumed by the Debtors. As a result, the Debtors will be obligated in accordance with the terms of their charters, by-laws, statutes or contracts to indemnify directors and officers for their services, except that such indemnification will not cover willful misconduct by any director or officer. However, the Debtors are not obligated to indemnify any director or officer from liability arising out of an Avoidance Action or for liability in connection with the Hancock Litigation. After the Effective Date, the Debtors will indemnify directors and officers in accordance with the Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD, substantially in the forms of Exhibit A and Exhibit B to the Plan, to be filed at least ten (10) Business Days prior to the Objection Deadline, and any employment contracts or other agreements with such directors and officers providing for indemnification. 5. Compensation of Executive Officers The following table sets forth information concerning compensation and stock-based awards received by each individual that served as Chief Executive Officer during 2002 and each of the next four highest paid executive officers who were serving as executive officers of the Company at the end of 2002 (these six individuals collectively are referred to as the "Named Executive Officers").
Long Term Compensation Annual Compensation Payouts Awards - ------------------------------------------------------------------------ ---------------------- Restricted Securities Other Annual Stock Underlying LTIP All Other Name and Salary Bonus Compensation Award(s) Options/ Payouts Compensation Principal Position4 Year ($) ($) ($)5 ($)6 SARs(#)7 ($) ($) 8 - ------------------- ---- ------ ----- ------------ ---------- ---------- ------- ------------ David T. Brown 2002 647,916 1,713,199 15,300 President and Chief 2001 400,000 1,200,000 483,550 Executive Officer 2000 343,750 425,000 245,275 Michael H. Thaman 2002 584,375 1,380,000 15,300 Chairman of the Board and 2001 425,000 1,175,000 517,800 Chief Financial Officer 2000 362,500 404,500 261,900 Maura Abeln Smith 2002 550,000 1,330,000 15,300 Senior Vice President 2001 500,000 1,160,000 692,717 2000 497,917 705,000 345,090 David L. Johns 2002 363,125 677,000 10,705 Senior Vice President and 2001 350,000 750,000 335,100 Chief Supply Chain and 2000 245,000 286,000 168,100 Information Technology Officer George E. Kiemle 2002 266,667 528,800 15,300 Vice President and 2001 245,000 405,000 216,300 President, Insulating 2000 220,000 140,000 113,400 Systems Business Glen H. Hiner 2002 303,030 909,090 165,413 81,831 Former Chief Executive 2001 1,000,000 3,000,000 267,036 1,361,976 Officer 2000 1,000,000 2,035,600 207,341 697,451
- ------------------- 4 Prior to April 2002, Mr. Brown served as Executive Vice President and Chief Operating Officer; prior to January 2001, he served as Vice President and President, Insulating Systems Business. Prior to April 2002, Mr. Thaman served as Senior Vice President and Chief Financial Officer; prior to April 2000, he served as Vice President and President, Exterior Systems Business. Prior to February 2003, Ms. Smith also served as Chief Restructuring Officer, General Counsel and Secretary; she assumed the duties of Chief Restructuring Officer in November 2000. Prior to April 2001, Mr. Johns served as Senior Vice President and Chief Technology Officer. Prior to February 2001, Mr. Kiemle served as Vice President Manufacturing, Insulating Systems Business. Mr. Hiner retired as Chairman of the Board and Chief Executive Officer in April 2002. 5 "Other Annual Compensation" includes perquisites and personal benefits, where such perquisites and personal benefits exceed the lesser of $50,000 or 10% of the Names Executive Officer's annual salary and bonus for the year, as well as certain other items of compensation. For the years shown, none of the Names Executive Officers received perquisites and/or personal benefits in excess of the applicable threshold. 6 There were no restructed stock awards to any of the Names Executive Officers in 2000, 2001, or 2002. At the end of 2002, Mr. Brown held a total of 11,350 shares of restricted stock, valued at $4,767; Mr. Thaman held a total of 10,800 shares of restricted stock, valued at $4,536; Ms. Smith held a total of 13,566 shards of restricted stock, valued at $5,698; Mr. Johns held a total of 4,200 shares of restricted stock, valued at $1,764; Mr. Kiemel held a total of 5,075 shares of restricted stock, valued at $2,132; and Mr. Hiner held no shares of restricted stock. The value of these aggregate restricted stock holdings was calculated by multiplying the number of shares held by the closing price of OCD common stock on December 31, 2002 (as reported on the Over The Counter Bulletin Board). Dividends are paid by OC on restricted stock held by the Names Executive Officers if paid on stock generally. 7 No stock options or stock appreciation rights (SARs) were awarded to any of the Names Executive Officers in 2000, 2001, or 2002. 8 Of Mr. Hiner's number for 2002, $63,333 represents amounts payable during 2002 pursuant to a post-retirement Release and Non-Competition Agreement and $3,198 was the present value (based upon the Applicable Federal Rate from date of payment to earliest date of repayment to OC) of split-dollar life insurance premiums paid by OC which were invested on his behalf in 2002. Upon Mr. Hiner's termination of employment, OC was reimbursed for all such insurance premiums previously invested on his behalf. For the year 2002, except as indicated in the preceding paragraph, the amount shown for each of the Names Executive Officers represents contributions made by OC to such officer's account in the Owens Corning Savings Plan during that year. 6. Compensation/Retirement Plans (a) Senior Leader Emergence Incentive Plan The Named Officers participate in the Senior Leader Emergence Incentive Plan. The Senior Leader Emergence Incentive Plan provides to each participant who remains employed by OC through the Effective Date a cash payment equal to the "Emergence Amount" as established by the Compensation Committee. The Emergence Amount for each Named Officer will be based on the Effective Date and shall be paid as follows:
---------------------------------- ---------------------------------- Date of Emergence Percentage of Emergence Amount ---------------------------------- ---------------------------------- December 31, 2001 125% ---------------------------------- ---------------------------------- June 30, 2002 100% ---------------------------------- ---------------------------------- December 31, 2002 90% ---------------------------------- ---------------------------------- June 30, 2003 80% ---------------------------------- ---------------------------------- December 31, 2003 70% ---------------------------------- ---------------------------------- June 30, 2004 60% ---------------------------------- ---------------------------------- December 31, 2004 50% ---------------------------------- ---------------------------------- Thereafter 0% ---------------------------------- ----------------------------------
Under the Senior Leader Emergence Incentive Plan, no payment will be made to any participant if the Debtors do not emerge from Chapter 11 by December 31, 2004. The Senior Leader Emergence Incentive Plan also provides for a pro rata payment upon a termination of a Named Officer's employment with OC after January 1, 2002 and before the Effective Date if the employment is terminated: (i) by OC other than for "cause," (ii) by reason of death or disability, or (iii) by reason of retirement at OC's request or with the consent of the chief executive officer of OC (or, in the case of the chief executive officer, with the consent of the Compensation Committee). (b) Retirement Benefits OC maintains a tax-qualified Cash Balance Plan covering certain of its salaried and hourly employees in the United States, including each of the Named Officers, in lieu of the qualified Salaried Employees' Retirement Plan maintained prior to 1996 ("Prior Plan"), which provided retirement benefits primarily on the basis of age at retirement, years of service and average earnings from the highest three consecutive years of service. In addition, OC has a non-qualified Executive Supplemental Benefit Plan ("ESBP") to pay eligible employees leaving OC the difference between the benefits payable under OC's tax-qualified retirement plan and those benefits which would have been payable except for limitations imposed by the Internal Revenue Code. Named Officers are eligible to participate in both the Cash Balance Plan and the ESBP. Cash Balance Plan - Under the Cash Balance Plan, each covered employee's earned retirement benefit under the Prior Plan (including the ESBP) was converted to an opening cash balance. Each year, eligible employees earn a benefit based on a percentage of such employee's covered pay. During 2002, the percentage was 2% for covered pay up to 50% of the Social Security Taxable Wage Base and 4% for covered pay in excess of such wage base; subject to, and effective upon, Internal Revenue Service approval, the percentage will be 4% for all subsequent covered pay. For this purpose, covered pay includes base pay, overtime pay, other wage premium pay and annual incentive bonuses payable during the year. Accrued benefits earn monthly interest based on the average interest rate for five-year U.S. treasury securities. Employees may receive benefit under the Cash Balance Plan as a lump sum or as a monthly payment when they leave OC. For employees who were at least age 40 with 10 years of service as of December 31, 1995 ("Grandfathered Employees"), including Messrs. Brown and Kiemle, the credit percentages applied to covered pay are increased pursuant to a formula based on age and years of service on such date. In addition, Grandfathered Employees are entitled to receive the greater of their benefit under the Prior Plan frozen as of December 31, 2000, or under the Cash Balance Plan (in each case including the ESBP). Supplemental Executive Retirement Plan - OC maintains a Supplemental Executive Retirement Plan ("SERP") covering certain employees. The SERP provides for a lump sum payment following termination of employment equal to a multiple of the covered employee's Cash Balance Plan balance minus an offset equal to the present value of retirement benefits attributable to prior employment. The applicable multiplier for each covered employee ranges from 0 to 4 (determined by the covered employee's age when first employed by OC). In 1992, OC established a Pension Preservation Trust for amounts payable under the ESBP as well as under the individual pension arrangements described above. Each year, the Compensation Committee determines the participants in and any amounts to be paid with respect to the Pension Preservation Trust, which may include a portion of benefits earned under the ESBP and the pension agreements described above. Amounts paid into the Trust and income from the Trust reduce the pension otherwise payable at retirement. During 2002, no payments were made to the Trust. The Debtors have analyzed the Pension Preservation Trust and provided the Unsecured Creditors' Committee the documents relating to the Pension Preservation Trust and the SERP. According to the Debtors' analysis, the Pension Preservation Trust is a true or "secular" trust, which is not property of the estate. The Compensation Committee continually reviews the nature of compensation and incentive plans available to officers and key employees and suggests revisions from time to time as it deems appropriate to reflect current trends in compensation programs and the needs of OC. To the extent that any changes in compensation programs are approved and proposed to be implemented, they will be described in an amendment to this Disclosure Statement. 7. Management Employment and Severance Agreements On January 18, 2001, the Bankruptcy Court approved the Order Under 11 U.S.C. ss.ss. 105, 363 and 365 Authorizing Continuation or Implementation of Employee, Emergence and Severance Programs. The Bankruptcy Court found that the reaffirmation of the Debtors' existing Employee Severance Program as defined in the Motion was necessary to the Debtors reorganization efforts and specifically authorized the Debtors to provide severance benefits to their employees in accordance with the Employee Severance Program and in accordance with certain employment contracts identified in Exhibit D thereto. The Court also authorized the filing of the exhibits to the Motion under seal. OC has entered into a Key Management Severance Agreement with each of the Named Officers (the "Severance Agreement"). Under the terms of the Severance Agreement, if the Named Officer's employment is terminated without "cause" or if the Named Officer terminates his or her employment due to "Constructive Termination" (which among other things, following the occurrence of a "change of control", includes a reduction in base pay or incentive opportunity) the Named Officer is entitled to a payment in an amount equal to two times the sum of base salary and annual incentive compensation, plus continuation of insurance benefits for a period of up to two years and, in the case of Messrs. Brown and Thaman, a payment equal to the additional lump sum pension benefit that would have accrued had such individuals been three years older, with three additional years of service, at the time of employment termination. Under the terms of the Severance Agreement, the consummation of the Plan on the Effective Date will constitute a "change of control" for purposes of the Severance Agreement. 8. Directors' Compensation Retainer and Meeting Fees - In 2002, OC paid each director who was not an OC employee an annual retainer of $35,000. Non-employee Committee Chairmen receive an additional retainer of $4,000 each year. In addition, OC paid non-employee directors a fee of $1,200 for (a) attendance at one or more meetings of the Board of Directors on the same day, (b) attendance at one or more meetings of each Committee of the Board of Directors on the same day, and (c) for each day's attendance at other functions in which directors were requested to participate. Prior to December 2000, a director could elect to defer all or a portion of his or her annual retainer and meeting fees under the Directors' Deferred Compensation Plan, in which case his or her account was credited with the number of shares of common stock that such deferred compensation could have purchased on the date of payment. The account was also credited with the number of shares that dividends on previously credited shares could have purchased on dividend payment dates. Account balances are payable in cash based on the value of the account, which is determined by the then fair market value of OC common stock, at the time the participant ceases to be a director. Stock Plan for Directors - OC maintains a stockholder approved Stock Plan for Directors, applicable to each director who is not an OC employee. The plan provides for two types of grants to each eligible director: (1) a one-time non-recurring grant of options to each new outside director to acquire 10,000 shares of common stock at a per share exercise price of 100 percent of the value of a share of common stock on the date of grant, and (2) an annual grant of 500 shares of common stock on the fourth Friday in April. Initial option grants become exercisable in equal installments over five years from date of grant, subject to acceleration in certain events, and generally expire ten years from date of grant. No grant may be made under the plan after August 20, 2007, and a director may not receive an annual grant of common stock in the same calendar year he or she receives an initial option grant. A director entitled to receive an annual grant may elect to defer receipt of the common stock until he or she leaves the Board of Directors. No initial option grants or annual grants were made under the Plan during 2002. Pursuant to action of the Board of Directors, additional option grants and annual grants under the Plan were suspended effective April 1, 2002, pending further action by the Board. C. Terms of Certificate of Incorporation of Reorganized OCD The Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of Reorganized OCD shall be acceptable to Reorganized OCD, the Asbestos Claimants' Committee and the Future Claimants' Representative. To date, OCD and the Asbestos Claimants' Committee and the Future Claimants' Representative have agreed in principle on most of the key terms to be included in the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws, but there remain certain issues that have not yet been agreed, principally relating to matters of corporate governance. The Amended and Restated Certificate of Incorporation will also include a provision that as long as the Asbestos Personal Injury Trust owns 35% of the equity securities issued to it under the Plan, Reorganized OCD will not authorize any action, without the approval of the Asbestos Personal Injury Trust, that would: (i) amend the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws in a manner that would reduce or eliminate rights or claims the Asbestos Personal Injury Trust has or elevate a class or series of capital stock to have rights equal or senior to the rights of the Asbestos Personal Injury Trust; (ii) authorize, create, designate any new class or series of capital stock or any security convertible into or exchangeable for capital stock of Reorganized OCD, or issue any shares of common stock or securities convertible into or exchangeable for common stock; (iii) authorize or alter the size of the Board of Directors; (iv) subject to specified exceptions to be agreed upon by the parties, authorize or enter into a transaction or a series of transactions involving Reorganized OCD or any Material Subsidiary involving a merger of all or substantially all of Reorganized OCD or a Material Subsidiary's assets, transaction(s) involving the liquidation, dissolution, sale or winding up of Reorganized OCD or any of its Material Subsidiaries or transaction(s) involving the disposition of more that 10% of the voting power or capital stock of Reorganized OCD or any of its Material Subsidiaries; (v) subject to specified exceptions, allow a Material Subsidiary to issue any capital stock, other equity securities or securities convertible into or exchangeable for capital stock or other equity interests; (vi) authorize, declare or pay dividends or distributions other than with respect to regular quarterly dividends or distributions of any kind on any equity securities of Reorganized OCD; or (vii) subject to specified exceptions, authorize or effect the purchase, repurchase, redemption, retirement or other acquisition of any securities of Reorganized OCD other than in accordance with the terms of such security. In addition, pursuant to the Amended and Restated Certificate of Incorporation, Reorganized OCD will opt out of the application of Section 203 of the Delaware Corporation law. D. Projected Financial Information 1. Responsibility For and Purpose of the Financial Projections Appendix B to this Disclosure Statement sets forth certain financial information with respect to the projected future operations of OC ("Financial Projections"). As a condition to confirmation of a plan, the Bankruptcy Code requires, among other things, that the bankruptcy court determine that the plan is "feasible" (i.e., that confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the debtor) as set forth in Section 1129(a)(11) of the Bankruptcy Code. In connection with the development of the Plan, and for purposes of determining whether the Plan satisfies feasibility standards, OC's management has, through the development of financial projections, analyzed the ability of OC to meet its obligations under the Plan to maintain sufficient liquidity and capital resources to conduct its business. The Financial Projections were also prepared to assist each holder of a claim entitled to vote under the Plan in determining whether to accept or reject the Plan. The Financial Projections indicate that the Reorganized Debtors should have sufficient cash flow to (a) make the payments required under the Plan, (b) repay and service debt obligations, and (c) maintain operations on a going-forward basis. Accordingly, the Debtors believe that the Plan complies with Section 1129(a)(11) of the Bankruptcy Code. The Financial Projections should be read in conjunction with the assumptions, qualifications and footnotes to tables containing the projections set forth herein, the historical consolidated financial information (including the notes and schedules thereto) and the other information set forth in OC's Annual Report on Form 10-K for the year ended December 31, 2002, as well as OC's Quarterly Report on Form 10-Q for the year ended March 31, 2003, OC's Annual Report on Form 10-K for the year ended December 31, 2001, and OC's Annual Report on Form 10-K for the year ended December 31, 2000, copies of which may be obtained, free of charge, through OC's website at www.owenscorning.com. OC's Annual Report on Form 10-K for the year ended December 31, 2002, may also be obtained by sending a written request. See directions for obtaining this document in Appendix D. The Financial Projections were prepared in good faith based upon assumptions believed to be reasonable and applied in a manner consistent with past practice. The Financial Projections are based on assumptions as of June, 2003. The Financial Projections were not prepared with a view towards complying with the guidelines for prospective financial statements published by the American Institute of Certified Public Accountants, but to comply with the disclosure requirement of Section 1125(a) of the Bankruptcy Code. Neither the Debtors' independent auditors, nor any other independent accountants, have compiled or examined the accompanying prospective financial information to determine the reasonableness thereof and, accordingly, have not expressed an opinion or any other form of assurance with respect thereto. The accompanying prospective financial information was in the view of the Debtors' management, was prepared on a reasonable basis, reflects the best available estimates and judgments at the time made, and presents, to the best of management's knowledge and belief, the expected course of action and the respective expected future financial performance of OC. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this Disclosure Statement are cautioned not to place undue reliance on the Financial Projections. Accordingly, the Debtors do not intend, and disclaim any obligation, to (a) furnish updated projections to holders of Claims or Interests prior to the Effective Date or to any party after the Effective Date, (b) include such updated information in any documents that may be required to be filed with the SEC, or (c) otherwise make such updated information publicly available. See the Disclaimer set forth below. 2. Summary of Significant Assumptions (i) The Debtors' management has developed the Financial Projections to assist holders of Claims and Interests in their evaluation of the Plan and to analyze its feasibility. The Financial Projections are based upon a number of significant assumptions, which along with the Financial Projections are set forth in Appendix B. DISCLAIMER THE FINANCIAL PROJECTIONS PROVIDED IN THIS DISCLOSURE STATEMENT HAVE BEEN PREPARED EXCLUSIVELY BY THE DEBTORS' MANAGEMENT. THESE FINANCIAL PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY MANAGEMENT, MAY NOT BE REALIZED, AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE DEBTORS' CONTROL. NO REPRESENTATIONS CAN BE MADE AS TO THE ACCURACY OF THESE FINANCIAL PROJECTIONS OR TO OC'S ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS INEVITABLY WILL NOT MATERIALIZE. FURTHER, EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THESE FINANCIAL PROJECTIONS WERE PREPARED MAY BE DIFFERENT FROM THOSE ASSUMED OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIAL AND POSSIBLY ADVERSE MANNER. THE FINANCIAL PROJECTIONS, THEREFORE, MAY NOT BE RELIED UPON AS A GUARANTEE OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR. THESE FINANCIAL PROJECTIONS SHOULD BE CONSIDERED IN CONJUNCTION WITH THE RISK FACTORS SET FORTH IN SECTION XV OF THIS DISCLOSURE STATEMENT ENTITLED "CERTAIN RISK FACTORS TO BE CONSIDERED." VII. SUMMARY OF THE PLAN OF REORGANIZATION THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND MEANS FOR IMPLEMENTATION OF THE PLAN, AND OF THE CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN (AS WELL AS THE EXHIBITS THERETO AND DEFINITIONS THEREIN), WHICH IS ATTACHED TO THIS DISCLOSURE STATEMENT AS APPENDIX A. SEE ALSO, THE GLOSSARY OF ADDITIONAL TERMS SET FORTH IN APPENDIX A-1 OF THIS DISCLOSURE STATEMENT. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN AND IN DOCUMENTS REFERRED TO THEREIN. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT DO NOT PURPORT TO BE PRECISE OR COMPLETE STATEMENTS OF ALL THE TERMS AND PROVISIONS OF THE PLAN OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS MADE TO THE PLAN AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS OF SUCH TERMS AND PROVISIONS. THE PLAN ITSELF AND THE DOCUMENTS REFERRED TO THEREIN WILL CONTROL THE ACTUAL TREATMENT OF CLAIMS AGAINST, AND INTERESTS IN, THE DEBTORS UNDER THE PLAN AND WILL, UPON THE EFFECTIVE DATE, BE BINDING UPON HOLDERS OF CLAIMS AGAINST, OR INTERESTS IN, THE DEBTORS, THE REORGANIZED DEBTORS AND OTHER PARTIES IN INTEREST. IN THE EVENT OF ANY CONFLICT BETWEEN THIS DISCLOSURE STATEMENT AND THE PLAN OR ANY OTHER OPERATIVE DOCUMENT, THE TERMS OF THE PLAN AND/OR SUCH OTHER OPERATIVE DOCUMENT WILL CONTROL. A. Structure of the Plan Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under Chapter 11, a debtor is authorized to reorganize its business for the benefit of its creditors and shareholders. Upon the filing of a petition for relief under Chapter 11, Section 362 of the Bankruptcy Code provides for an automatic stay of substantially all acts and proceedings against the debtor and its property, including all attempts to collect claims or enforce liens that arose prior to the commencement of the Chapter 11 case. The consummation of a plan of reorganization is the principal objective of a Chapter 11 case. A plan of reorganization sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a plan of reorganization by the Bankruptcy Court makes the plan binding upon the debtor, any issuer of securities under the plan, any person or entity acquiring property under the plan, and any creditor of or equity security holder in the debtor, whether or not such creditor or equity security holder (1) is impaired under or has accepted the plan or (2) receives or retains any property under the plan. Subject to certain limited exceptions and other than as provided in the plan itself or in the confirmation order, the confirmation order discharges the debtor from any debt that arose prior to the date of confirmation of the plan and substitutes therefor the obligations specified under the confirmed plan, and terminates all rights and interests of equity security holders. The terms of the Plan are based upon, among other things, the Debtors' assessment of their ability to achieve the goals of their Business Plan, make the distributions contemplated under the Plan and pay certain of their continuing obligations in the ordinary course of the Reorganized Debtors' businesses as approved by the Bankruptcy Court. Under the Plan, Claims against, and Interests in, the Debtors are divided into Classes according to their relative seniority and other criteria. If the Plan is confirmed by the Bankruptcy Court and consummated, (1) the Claims in certain Classes will be reinstated or modified and receive distributions equal to the full amount of such Claims, (2) the Claims in other Classes will be modified and receive distributions constituting a partial recovery on such Claims and (3) the Claims and Interests in other Classes will receive no recovery on such Claims or Interests. On the Effective Date and at certain times thereafter, the Reorganized Debtors will distribute cash, securities, notes or other property in respect of certain Classes of Claims as provided in the Plan. The Classes of Claims against the Debtors created under the Plan, the treatment of those Classes under the Plan and the securities and other property to be distributed under the Plan are described below. B. Substantive Consolidation under the Plan Generally, substantive consolidation of the estates of multiple debtors in a bankruptcy case effectively combines the assets and liabilities of the multiple debtors for certain purposes under a plan. The effect of consolidation is the pooling of the assets of and claims against the consolidated debtors; satisfying liabilities from a common fund; and combining the creditors of the debtors for purposes of voting on reorganization plans. The authority of a bankruptcy court to order substantive consolidation is derived from its general equitable powers under Section 105(a) of the Bankruptcy Code, which provides that the court may issue orders necessary to implement the provisions of the Bankruptcy Code, including Section 1123 of the Bankruptcy Code. As there are no statutorily prescribed standards for substantive consolidation, judicially developed standards control whether substantive consolidation should be granted in any given case. Under the Plan, the Debtors (but not the Fibreboard Insurance Settlement Trust) will be substantively consolidated for the purposes of voting, determining which Claims and Interests will be entitled to vote to accept or reject the Plan, confirming the Plan, the resultant discharge of Claims and cancellation of Interests and the distribution of consideration to holders of Allowed Claims. Subject to Section 5.6 of the Plan (concerning Restructuring Transactions), substantive consolidation under the Plan will not result in the merger of or the transfer or commingling of any assets of any of the Debtors or Non-Debtor Subsidiaries. Subject to Section 5.6 of the Plan, all assets (whether tangible or intangible) will continue to be owned by the respective Debtors or Non-Debtor Subsidiaries, as the case may be. In that regard, OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines. The planning for this restructuring is in a preliminary stage. It is anticipated that the restructuring plan which is adopted will be announced at least ten (10) Business Days prior to the approval of the Disclosure Statement and will be described in an amendment to the Plan. As a result of the substantive consolidation, on the Effective Date, for purposes set forth in the previous paragraph: (1) all assets and liabilities of each Subsidiary Debtor (excluding the Fibreboard Insurance Settlement Trust) will be treated as though they were merged into and with the assets and liabilities of OCD; (2) except as otherwise provided in the Plan, no distributions will be made under the Plan on account of Intercompany Claims among any of the Debtors; and (3) all guaranties of the Debtors of the obligations of any other Debtor will be deemed eliminated, so that any claim against any such Debtor and any guaranty thereof executed by any other such Debtor and any joint or several liability of any of such Debtors will be deemed to be one obligation of the Debtors with respect to the consolidated estate. Such substantive consolidation will not (other than for purposes of the Plan) affect (1) the legal and corporate structures of the Reorganized Debtors, subject to the right of the Debtors or Reorganized Debtors to effect the Restructuring Transactions as provided in Section 5.6 of the Plan, (2) the Intercompany Claims, (3) the Subsidiary Interests or (4) pre- and post-Petition Date guaranties that are required to be maintained in connection with executory contracts or unexpired leases that have been or will be assumed pursuant to the Plan. Thus, the Plan eliminates the separate obligations of the Subsidiary Debtors arising from the guaranties of the 1997 Credit Agreement. See Section VII C.3.b.(iii) of this Disclosure Statement entitled "Class 4: Bank Holders Claims"). The holders of Allowed Claims in Class 8 (the FB Asbestos Personal Injury Claims) will be the only claimants entitled to recover against the assets of the Fibreboard Insurance Settlement Trust, the FB Reversions, the Committed Claims Account and the FB Sub-Account Settlement Payment, which will be transferred to the FB Sub-Account of the Asbestos Personal Injury Trust (as discussed below). The holders of Allowed Claims in Class 9 (FB Asbestos Property Damage Claims) will be the only claimants to recover against the FB Asbestos Property Damage Insurance Assets transferred to the FB Asbestos Property Damage Trust. At the same time, holders of Allowed Claims in Classes 8 and 9 do not share on a Pro Rata basis with Classes 4, 5, 6 and 7 in the Combined Distribution Package. See Section VII C.3.b.(vii) of this Disclosure Statement entitled "Class 8: FB Asbestos Personal Injury Claims" and Section VII C.3.b.(viii) of this Disclosure Statement entitled "Class 9: FB Asbestos Property Damage Claims." The Plan Proponents believe that substantive consolidation under the Plan provides the mechanism for the prompt emergence from bankruptcy, the resolution of Claims and distributions to creditors. Failure to substantively consolidate the Debtors would require the resolution of many issues involving a large number of intercompany transactions that occurred prior to the Petition Date which resulted in the shifting of assets, obligations, and costs among the Debtors. Some of the transactions were not reflected as intercompany debts. These and other transactions would arguably constitute preferential transfers or fraudulent conveyances if each Debtor were required to be treated as a separate entity with separate assets and liabilities. The difficulty, delay and expense involved in determining issues involving the pre-petition relationships among the Debtors would be substantial, if not prohibitive, and would likely delay the resolution of the Chapter 11 Cases for a considerable time. It is unclear how this process could be undertaken consistent with the need to preserve the value of the Debtors' operations, a value created through the operation of the Debtors as an integrated unit. Given the Debtors' unified management structure, the likely need for separate representation for each entity if the intercompany transactions require resolution, and the inability of the Subsidiaries to function on a stand-alone basis, it would be highly difficult, if not impossible, to propose and confirm a plan or plans providing for separate payments by each Debtor. The Plan Proponents also believe the substantive consolidation proposed under the Plan is warranted, appropriate, fair and equitable under the criteria established by the courts in ruling on the propriety of substantive consolidation in other cases. Pursuant to the Case Management Order, the Debtors filed the Substantive Consolidation Motion, seeking a determination that the substantive consolidation proposed under the Plan is permissible under applicable law based upon, among other things, (1) the substantial identity among OCD and the Subsidiary Debtors, (2) the benefits if substantive consolidation were granted and the harm if substantive consolidation were denied, and (3) the lack of any reasonable reliance by the Bank Holders on the separate credit of any of the Subsidiary Debtors who are guarantors of the 1997 Credit Agreement. The Bank Holders are opposing the Substantive Consolidation Motion and a hearing on the Substantive Consolidation Motion commenced April 8, 2003 and ended on May 2, 2003. The hearing scheduled on the Substantive Consolidation Motion is part of the confirmation proceedings and was for the purpose of taking evidence regarding the positions of the Debtors, the Asbestos Claimants' Committee, the Future Claimants' Representative, the Unsecured Creditors' Committee, the Designated Members and CSFB as Agent for the Bank Holders with respect to the Bank Holders' opposition to the substantive consolidation provisions of the Plan. See Section V.F.10.b of this Disclosure Statement entitled "Withdrawal of Reference." The Plan proposes to substantively consolidate only OCD and the Subsidiary Debtors. At the present time, certain of the guarantors of the obligations to the Bank Holders under the 1997 Credit Agreement are Non-Debtor Subsidiaries, namely, IPM, Vytec Corporation and Owens-Corning Fiberglas Sweden Inc. Because the Debtor has been unable to reach an agreement with the Bank Holders for release of these Non-Debtor Subsidiaries from their guaranty obligations, OCD expects to cause these Non-Debtor Subsidiaries to file for relief under Chapter 11 of the Bankruptcy Code, to join in the proposal of the Plan and to be substantively consolidated with the current Debtors for the purposes set forth in the Plan. The timing of any such filing would be determined at a later date, but any such filing would be made to permit the inclusion of such entities as part of the Plan. In the event of such filings, the Debtors would file first day motions seeking authority to pay all trade creditors as critical venndors in order to avoid any potential disruption of OC's foreign operations. In the event that an agreement is reached for a consensual plan of reorganization, the Debtors reserve the right not to cause these entities to file for bankruptcy protection. Since the Combined Distribution Package already includes the value of these non-Debtor Subsidiaries, no amendment to the Plan (other than revising the list of Subsidiary Debtors) would result from such filing. C. Classification and Treatment of Claims and Interests 1. General Discussion of Classification Section 1122 of the Bankruptcy Code provides that a plan of reorganization must classify the claims and interests of a debtor's creditors and equity interest holders. In accordance with Section 1122, the Plan classifies Claims and Interests into various Classes and sets forth the treatment for each Class. Certain claims are not required to be classified under Section 1123(a)(1) of the Bankruptcy Code, but are nonetheless treated under the Plan. These claims are defined as Unclassified Claims and include DIP Facility Claims, Administrative Claims and Priority Tax Claims. Section 1122(a) of the Bankruptcy Code requires that a plan classify claims and interests in the Debtors into classes that contain claims and interests that are substantially similar to the other claims and interests in such class. Section 1123(a)(2) requires that a plan specify classes of claims and interests which are not impaired under the plan. Section 1123(a)(3) requires a plan to specify the treatment of classes of claims and interests which are impaired under the plan. Under Section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be impaired under a plan unless (a) the plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof or (b) notwithstanding any legal right to an accelerated payment of such claim or interest, the plan (i) cures all existing defaults (other than certain defaults specified in Section 365(b)(2) of the Bankruptcy Code resulting from the occurrence of events of bankruptcy or the financial condition of the debtor), (ii) reinstates the maturity of such claim or interest as it existed before the default, (iii) compensates the holder of the claim or interest for any damages incurred as a result of any reasonable reliance by such holder on the contractual provision or applicable law entitling the holder to accelerate, and (iv) does not otherwise alter the legal, equitable, and contractual rights to which such claim or interest entitles the holder. Generally, only holders of claims and interests in impaired classes are entitled to vote to accept or reject a plan. Under Section 1126, holders of claims or interests in unimpaired classes are conclusively presumed to accept the plan and do not vote to accept or reject the plan. A class of claims or interests that does not receive or retain any property under a plan is deemed to have rejected the plan and does not vote to accept or reject the plan. Under the Plan, the following Classes are Unimpaired: Class 1 (Other Priority Claims); Class 2A (Other Secured Tax Claims); and Class 2B (Other Secured Claims). Under the Plan, the following Classes are Impaired: Class 3 (Convenience Claims); Class 4 (Bank Holders Claims); Class 5 (Bondholders Claims); Class 6 (General Unsecured Claims); Class 7 (OC Asbestos Personal Injury Claims); Class 8 (FB Asbestos Personal Injury Claims); Class 9 (FB Asbestos Property Damage Claims); Class 10 (Intercompany Claims); Class 11 (Subordinated Claims) and Class 12 (OCD Interests). Classes 10, 11 and 12 are deemed to have rejected the Plan and are not entitled to vote to accept or reject the Plan. The Debtors believe that separate classification and treatment of various types of unsecured non-priority claims (the Convenience Claims, the Bank Holders Claims, the Bondholders Claims, the General Unsecured Claims, the OC Asbestos Personal Injury Claims, the FB Asbestos Personal Injury Claims, the FB Asbestos Property Damage Claims and the Intercompany Claims) is appropriate, fair, and reasonable given the underlying facts and circumstances. Factors considered by the Debtors with respect to these issues include: (a) providing separate classification to the Bank Holders and Bondholders to give separate representation to their divergent interests and to provide a vehicle for resolving the separate dispute with the Bank Holders concerning substantive consolidation; (b) a recognition of the special historic circumstances requiring the different treatment to the OC Asbestos Personal Injury Claims and the FB Asbestos Personal Injury Claims, including the limitation of certain assets, such as the Fibreboard Insurance Settlement Trust, to the satisfaction of claims to which the assets are dedicated; (c) avoiding the severe impact on all other creditors if the FB Asbestos Personal Injury Claims are permitted to "spill over" as claims against the consolidated estate; (d) the need to obtain separate approval of holders of Asbestos Personal Injury Claims in order to qualify under Section 524(g) of the Bankruptcy Code to receive the benefits of the Asbestos Personal Injury Permanent Channeling Injunction; (e) the existence of insurance to pay FB Asbestos Property Damage Claims; and (f) the desire not to disenfranchise holders of the certain unsecured claims (such as trade creditors and creditors with smaller claims) by including such claims in a class with larger unsecured claims of different types (such as the Bondholders Claims). The Debtors believe that the Plan has classified all Claims and Interests in compliance with the provisions of Section 1122 of the Bankruptcy Code and applicable case law, but it is possible that a holder of a Claim or Interest may challenge the Debtors' classification of Claims and Interests or that the Bankruptcy Court may find that a different classification is required for the Plan to be confirmed. In that event, the Plan Proponents intend, to the extent permitted by the Bankruptcy Code, the Plan and the Bankruptcy Court, to consider reasonable modifications of the classifications under the Plan to permit confirmation and to use the Plan acceptances received in this solicitation for purposes of obtaining the approval of the reconstituted Class or Classes of which each accepting holder ultimately is deemed to be a member. Any such reclassification could adversely affect the Class in which such holder initially was a member, or any other Class under the Plan, by changing the composition of such Class and the vote required of that Class for approval of the Plan. The amount of any Impaired Claim that ultimately is Allowed by the Bankruptcy Court may vary from any estimated Allowed amount of such Claim and, accordingly, the total Claims ultimately Allowed by the Bankruptcy Court with respect to each Impaired Class of Claims may also vary from any estimates contained herein with respect to the aggregate Claims in any Impaired Class. Thus, the value of the property that ultimately will be received by a particular holder of an Allowed Claim under the Plan may be affected by the aggregate amount of Claims ultimately Allowed in the applicable Class. The classification of Claims and Interests and the nature of distributions to members of each Class are summarized below. The Debtors believe that the consideration, if any, provided under the Plan to holders of Claims and Interests reflects an appropriate resolution of their Claims and Interests, taking into account the differing nature and priority of such Claims and Interests and the fair value of the Debtors' assets. In view of the deemed rejection by Classes 11 and 12, however, as set forth below, the Debtors will seek confirmation of the Plan pursuant to the "cramdown" provisions of the Bankruptcy Code. Specifically, Section 1129(b) of the Bankruptcy Code permits confirmation of a Chapter 11 plan in certain circumstances even if the plan has not been accepted by all impaired classes of claims and interests. See Section XIV.G of this Disclosure Statement entitled "Confirmation Without Acceptance of All Impaired Classes: `Cramdown'." Although the Debtors believe that the Plan can be confirmed under Section 1129(b), there can be no assurance that the Bankruptcy Court or District Court will find that the requirements have been satisfied. 2. Treatment of Unclassified Claims Under the Plan (a) DIP Facility Claims The Plan provides for DIP Facility Claims to be paid in full. On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which a DIP Facility Claim becomes an Allowed DIP Facility Claim or (iii) the date on which a DIP Facility Claim becomes payable pursuant to any agreement between a Debtor and the holder of such DIP Facility Claim, each holder of an Allowed DIP Facility Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed DIP Facility Claim (x) Cash equal to the unpaid portion of such Allowed DIP Facility Claim or (y) such other treatment as the applicable Debtor and such holder shall have agreed in writing. The Debtors estimate that there will be no aggregate Allowed DIP Facility Claims that have not previously been paid pursuant to an order of the Bankruptcy Court as of the Effective Date. See Section III.B.2 of this Disclosure Statement entitled "Pre-petition Indebtedness." (b) Administrative Claims The Plan generally provides for Administrative Claims to be paid in full. Except as otherwise provided in and subject to the requirements of the Plan, on, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which an Administrative Claim becomes an Allowed Administrative Claim or (iii) the date on which an Administrative Claim becomes payable pursuant to any agreement between a Debtor and the holder of such Administrative Claim, each holder of an Allowed Administrative Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Administrative Claim (a) Cash equal to the unpaid portion of such Allowed Administrative Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing; provided, however, that Allowed Administrative Claims with respect to liabilities incurred by a Debtor in the ordinary course of business during the Chapter 11 Cases shall be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto. All payments to professionals in connection with the Chapter 11 Cases for compensation and reimbursement of expenses and all payments to reimburse expenses of members of the Unsecured Creditors' Committee and the Asbestos Claimants' Committee will be made in accordance with the procedures established by the Bankruptcy Code and the Bankruptcy Rules and will be subject to approval of the Bankruptcy Court as being reasonable. The Debtors estimate that the aggregate Allowed Administrative Claims that have not previously been paid pursuant to an order of the Bankruptcy Court (which will be primarily comprised of professional fees and Cure amounts) will be approximately $46 million as of the Effective Date, of which $25 million is estimated to be professional fees, $20 million is estimated to be Cure amounts, and $1 million miscellaneous other Claims. (c) Priority Tax Claims Priority Tax Claims are required under the Bankruptcy Code to be paid in full within the time period specified by Section 1129(a)(9)(C), unless the taxing authority has agreed to a different treatment. Under the Plan, except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Initial Distribution Date or has agreed in writing to a different treatment, each holder of an Allowed Priority Tax Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Priority Tax Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Priority Tax Claim on the later of the Initial Distribution Date and the date such Priority Tax Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Priority Tax Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. The Debtors estimate that aggregate Allowed Priority Tax Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be up to $135 million. See Section V.F.16 of this Disclosure Statement, entitled "IRS Claims." 3. Treatment of Classified Claims and Interests Under the Plan (a) Unimpaired Classes of Claims (i) Class 1: Other Priority Claims Class 1 consists of all Allowed Claims entitled to priority pursuant to Section 507(a) of the Bankruptcy Code other than DIP Facility Claims, Administrative Claims or Priority Tax Claims. The allowed priority claims are generally required to be paid in full on the Effective Date, subject to certain exceptions set forth in Sections 1129(a)(9)(A) and (B). Under the Plan, on, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 1 Claim becomes an Allowed Class 1 Claim, or (iii) the date on which such Class 1 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 1 Claim, each holder of an Allowed Class 1 Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 1 Claim (a) Cash equal to the unpaid portion of such Allowed Class 1 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. All Allowed Class 1 Claims which are not by their terms due and payable on or before the Effective Date will be paid in the ordinary course of business in accordance with the terms thereof. Because the Debtors received orders from the Bankruptcy Court which allowed them to satisfy their pre-petition wage claims and employee benefit obligations during the Chapter 11 Cases, the Debtors believe there will be no Allowed Other Priority Claims. Class 1 Claims are Unimpaired and holders of the Claims in Class 1 are therefore deemed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. (ii) Class 2A: Other Secured Tax Claims Class 2A consists of all Claims which otherwise would be tax claims entitled to priority under Section 507(a)(8) of the Bankruptcy Code, but which are secured by a valid and unavoidable Encumbrance in or on any of the Debtors' property (to the extent of the value of the Claim holder's interest in the Debtors' property, as determined pursuant to Section 506 of the Bankruptcy Code). Except to the extent that a holder of an Allowed Other Secured Tax Claim has been paid by the Debtors prior to the Initial Distribution Date or has agreed in writing to a different treatment, each holder of an Allowed Other Secured Tax Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Other Secured Tax Claim, at the sole discretion of the Debtors, (i) Cash equal to the amount of such Allowed Other Secured Tax Claim on the later of the Initial Distribution Date and the date such Other Secured Tax Claim becomes an Allowed Claim, or as soon thereafter as is practicable, (ii) deferred Cash payments, having a value as of the Effective Date equal to such Allowed Other Secured Tax Claim, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based as the applicable Debtor and such holder shall have agreed in writing, or (iii) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Each holder of an Allowed Class 2A Claim shall retain the Encumbrances (or replacement Encumbrances as may be contemplated under nonbankruptcy law) securing its Allowed Class 2A Claim as of the Effective Date until full and final payment of such Allowed Class 2A Claim is made as provided in the Plan and, upon such full and final payment, such Encumbrances shall be deemed null and void and shall be unenforceable for all purposes. Although for Unsecured Claims, a Claim becomes Allowed unless objected to by the Claims Objection Deadline, the Debtors' failure to object to any Class 2A Claim in the Chapter 11 Cases will be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Furthermore, nothing in the Plan or elsewhere will preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or the value of any collateral notwithstanding a failure to file an objection by the Claims Objection Deadline. The Debtors estimate that aggregate Allowed Other Secured Tax Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be approximately $5.0 million. Class 2A Claims are Unimpaired and holders of the Claims in Class 2A are therefore deemed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. (iii) Class 2B: Other Secured Claims Class 2B consists of Claims secured by a valid Encumbrance in or on any of the Debtors' property, which is not void or voidable under the Bankruptcy Code or any other applicable law, to the extent of the value of the Claim holder's interest in the Debtors' property, but excluding the Other Secured Tax Claims. On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 2B Claim becomes an Allowed Class 2B Claim or (iii) the date on which such Class 2B Claim becomes due and payable pursuant to any agreement between a Debtor and the holder of an Allowed Class 2B Claim, each holder of an Allowed Class 2B Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 2B Claim, at the sole discretion of the Debtors, (a) Cash equal to the unpaid portion of such Allowed Class 2B Claim, (b) Reinstatement of the legal, equitable and contractual rights of the holder of such Allowed Class 2B Claim, subject to the provisions of Article VII of the Plan, or (c) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Although for Unsecured Claims, a Claim becomes Allowed unless objected to by the Claims Objection Deadline, the Debtors' failure to object to any Class 2B Claim in the Chapter 11 Cases will be without prejudice to the rights of the Debtors or the Reorganized Debtors to contest or otherwise defend against such Claim in the appropriate forum when and if such Claim is sought to be enforced by the holder of such Claim. Furthermore, nothing in the Plan or elsewhere will preclude the Debtors or Reorganized Debtors from challenging the validity of any alleged Encumbrance on any asset of a Debtor or the value of any collateral notwithstanding a failure to file an objection by the Claims Objection Deadline. The Debtors estimate that aggregate Allowed Other Secured Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be between approximately $6 million. Class 2B Claims are Unimpaired and holders of the Claims in Class 2B are therefore deemed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. (b) Impaired Classes of Claims (i) Class 3: Convenience Claims Class 3 consists of all Claims against any of the Debtors that would otherwise be classified as a Class 6 Claim, which (i) is in an amount that is equal to or less than $5,000 or (ii) on the Ballot has been reduced to $5,000 by the holder of such Claim. On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, or (ii) the date on which such Class 3 Claim becomes an Allowed Class 3 Claim, or (iii) the date on which such Class 3 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 3 Claim, each holder of an Allowed Class 3 Claim shall receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 3 Claim (a) Cash equal to the amount of such Allowed Class 3 Claim or (b) such other treatment as the applicable Debtor and such holder shall have agreed in writing. Any holder of a Claim in Class 6 that desires treatment of such Claim as a Convenience Claim shall make such election on the Ballot to be provided to holders of Impaired Claims entitled to vote to accept or reject the Plan and return such Ballot to the address specified therein on or before the Voting Deadline. See Section XVII of this Disclosure Statement entitled "The Solicitation; Voting Procedure". Any election made after the Voting Deadline shall not be binding on the Debtors unless the Voting Deadline is expressly waived in writing by the Debtors with respect to any such Claim. The Debtors estimate that Allowed Convenience Claims (after adjustment to account for the holders of Convenience Claims in amounts greater than $5,000 who have elected to opt into Class 3) will aggregate between approximately $18.0 million and $18.5 million. Class 3 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 3 shall be entitled to vote to accept or reject the Plan. (ii) General Description of Certain Terms of the Plan Applicable to the Treatment of Classes 4, 5, 6, and 7 The primary source of distributions under the Plan to Classes 4, 5, 6 and 7 is a combination of Available Cash, Senior Notes and shares of New OCD Common Stock, in which holders in such Classes share on a Pro Rata basis. Additionally, Classes 4, 5, 6 and 7 will share in the Litigation Trust Recoveries. The Plan Proponents previously attempted to resolve the dispute over substantive consolidation with the Bank Holders by providing the holders of Class 4 Claims with an "off the top" settlement payment, in addition to Class 4's Pro Rata share distribution of the combination of Available Cash, Senior Notes, New OCD Common Stock and Litigation Trust Recoveries. Despite extensive negotiations among the Debtors, Bank Holders, Bondholders, Asbestos Claimants' Claimants Committee and the Future Claimants' Representative, no agreement was reached to resolve this dispute on a consensual basis. Thus the Plan provides for substantive consolidation as described herein. The separate claims of the holders of the Class 4 Claims arising from the guaranties of the 1997 Credit Agreement would be eliminated by the substantive consolidation. Class 4 is expected to object to the confirmation of the Plan and the substantive consolidation provided for in the Plan. Under this Plan, Classes 4, 5, 6 and 7 would share in the Combined Distribution Package (as defined below). The Combined Distribution Package consists of (i) Available Cash less $7 million to be paid to the FB Sub-Account of the Asbestos Personal Injury Trust for the benefit of Class 8 as part of the FB Sub-Account Settlement Payment, (ii) Senior Notes in the aggregate principal amount of $1,400 million, less the sum of (a) the amount of any deferred portion of the Allowed Priority Tax Claims and (b) Senior Notes in the aggregate principal amount of $63 million as the Senior Notes component of the FB Sub-Account Settlement Payment, (iii) 80 million shares of New OCD Common Stock, with an estimated value of $2,000 million, less 2.8 million shares, with an estimated value of $70 million, as the as the New OCD Common Stock component of the FB Sub-Account Settlement Payment and (c) ___ million shares of New OCD Common Stock to be held for employee incentive programs, and (iv) the Litigation Trust Recoveries. For a discussion of the FB-Sub-Account Settlement Payment, see Section VII.C.3.b(vii) entitled "Class 8: FB Asbestos Personal Injury Claims." For a discussion of the estimated value of the New OCD Common Stock, see Section XIV.E entitled "Valuation of the Reorganized Debtors." The distributions to Classes 4, 5, 6 and 7 will occur in two phases, with a first distribution on the Initial Distribution Date and a second one on the Final Distribution Date. The initial distribution excludes any distribution to holders of Disputed Claims (Claims which have not yet become Allowed Claims or Disallowed Claims) in Classes 4, 5 and 6. Such distributions on account of Disputed Claims will be held in a Disputed Distribution Reserve pending resolution thereof. See Section VII.G.2 of this Disclosure Statement entitled "Disputed Distribution Reserve." After all Disputed Claims in Classes 4, 5 and 6 have been Allowed or Disallowed and the amounts of Allowed Claims in these Classes are determined, the reserves on account of the Disallowed Claims will be distributed to the holders of Allowed Claims in Classes 4, 5, 6 and 7 on the Final Distribution Date. The unique nature of Asbestos Personal Injury Claims, which include both Claims and Demands, requires a different approach for allocating the Pro Rata share of distributions to the OC Sub-Account of the Asbestos Personal Injury Trust for the benefit of Class 7. Because the identity of claimants and amounts of claims may not be ascertainable for years (or perhaps decades), a process for establishing reserves for disputed Asbestos Personal Injury Claims, reducing such reserves for the benefit of all creditors upon reductions in the amounts of predicted claims or increasing such reserves in the event of increases in predicted claims, would be largely impractical. As a result, allocation of the portion of the Combined Distribution Package allocated for the OC Sub-Account of the Asbestos Personal Injury Trust is based on the Class 7 Aggregate Amount, a projection of the anticipated amount of OC Asbestos Personal Injury Claims as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing, less the OCD Insurance Escrow and the OC Asbestos Personal Injury Liability Insurance Assets, as shall be estimated by the Bankruptcy Court or the District Court at the Confirmation Hearing. Because Classes 8 and 9 are limited to recovery from specific assets, the Class 8 Aggregate Amount and the total Allowed Claims in Class 9 do not affect the distributions to the other Classes of Claims. (iii) Class 4: Bank Holders Claims Class 4 consists of Claims held by the Bank Holders arising under or as a result of the Debtors' obligations under the 1997 Credit Agreement (the "Bank Holders Claims" or "Class 4 Claims"). On, or as soon as reasonably practicable after, the latest of (i) the Initial Distribution Date, (ii) the date on which such Class 4 Claim becomes an Allowed Class 4 Claim, or (iii) the date on which such Class 4 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 4 Claim, each holder of an Allowed Class 4 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 4 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 4 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 4 claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 4 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 4 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 4 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 4 Final Distribution Percentage of the Excess Litigation Trust Recoveries. The Debtors estimate that aggregate Allowed Class 4 Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be between approximately $1,472 million to $1,577 million. Class 4 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 4 shall be entitled to vote to accept or reject the Plan. (iv) Class 5: Bondholders Claims Class 5 consists of Claims held by the Bondholders arising under or as a result of the Debtors' obligations under the Pre-petition Bonds (the "Bondholders Claims" or "Class 5 Claims"). On, or as soon as reasonable practicable after, the later of (i) the Initial Distribution Date, (ii) the date on which such Class 5 Claim becomes an Allowed Class 5 Claim, or (iii) the date on which such Class 5 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 5 Claim, each holder of an Allowed Class 5 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 5 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 5 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 5 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 5 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 5 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 5 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 5 Final Distribution Percentage of the Excess Litigation Trust Recoveries. Holders of Class 5 Bond Holder Claims may have their distributions under the Plan reduced to the extent Pre-petition Indenture Trustees exercise any applicable rights under the Pre-petition Bond Indentures to recover their costs and/or expenses from the distributions to be paid to Holders of Class 5 Bond Holder Claims under the Plan. Any payment of such costs or expenses will commensurately reduce the recovery realized under the Plan by holders of Class 5 Bond Holder Claims. The Debtors estimate that aggregate Allowed Bondholders Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be between approximately $1,389 million. Class 5 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 5 shall be entitled to vote to accept or reject the Plan. (v) Class 6: General Unsecured Claims Class 6 consists of those Claims against the Debtors that are General Unsecured Claims, which are Claims against any of the Debtors that are not a DIP Facility Claim, an Administrative Claim, a Priority Tax Claim, an Other Priority Claim, an Other Secured Tax Claim, an Other Secured Claim, a Convenience Claim, a Bank Holders Claim, a Bondholders Claim, an OC Asbestos Personal Injury Claim, an FB Asbestos Personal Injury Claim, an FB Asbestos Property Damage Claim, an Intercompany Claim, a Subordinated Claim or an OCD Interest. General Unsecured Claims include, without limitation, all Environmental Claims and OC Asbestos Property Damage Claims ("General Unsecured Claims" or "Class 6 Claims"). On, or as soon as reasonably practicable after, the later of (i) the Initial Distribution Date, (ii) the date on which such Class 6 Claim becomes an Allowed Class 6 Claim, or (iii) the date on which such Class 6 Claim becomes due and payable pursuant to any agreement between a Debtor and a holder of a Class 6 Claim, each holder of an Allowed Class 6 Claim will receive in full satisfaction, settlement, release and discharge of and in exchange for such Allowed Class 6 Claim such holder's Pro Rata share of the portion of the Combined Distribution Package equal to the Class 6 Initial Distribution Percentage. In addition, on or as soon as reasonably practicable after the Final Distribution Date, each holder of an Allowed Class 6 Claim shall receive its Pro Rata share of the (i) Cash in an amount equal to the Class 6 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount to the Class 6 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 6 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 6 Final Distribution Percentage of the Excess Litigation Trust Recoveries. The Debtors estimate that aggregate Allowed Class 6 Claims that have not previously been paid pursuant to an order of the Bankruptcy Court will be between approximately $323 million and $687 million. OC Asbestos Property Damage Claims are Class 6 Claims. Holders of OC Asbestos Property Damage Claims were required to file Proofs of Claim by the April 15, 2002 General Bar Date. OCD received over 300 property damage Proofs of Claim. Of these, approximately 65 claims asserted aggregate damages of approximately $730 million, including the Claim of the State of Louisiana in the amount of $582 million. The remaining claims did not provide a claimed amount and provided almost no documentation to support their claim or to allow the Debtors to estimate the value of their claim. On January 7, 2003, the Debtors filed a motion for an order establishing case management procedures for asbestos-related property damage claims requesting that property damage claimants be required to provide the Debtors with basic supporting evidence to enable the Debtors to value their claims. On March 31, 2003, the Court entered an Order Establishing Case Management Procedures for Asbestos-Related Property Damage Claims (the "Asbestos-Related Property Damage Case Management Order") which provides, in part, that each holder of an OC Asbestos Property Damage Claim is required to provide the Debtors with certain supporting evidence within 120 days of the date of the Order to enable the Debtors to value their claims. Based on a review of their records, the Debtors believes that the number and value of these claims are out of proportion with its historical experience. As of the Petition Date, only six property damage cases were pending against OCD, four of which had been dormant for more than five years. Prior to the Petition Date, OCD had resolved 93% of all property damage claims against it for $0 per claim. The Debtors also note that in other asbestos bankruptcies in which hundreds of property damage claims were filed, such claims were resolved for substantially less than the claimed amounts. For example, Eagle-Picher Industries received 1,000 property damage proofs of claim asserting $11.5 billion and its plan of reorganization provided only $3 million to resolve such claims. More recently, Armstrong World Industries settled 360 property damage claims (four of which alone asserted claims in excess of $200 million), for $2 million. Of these settled claims, 144 were also filed against the Debtors. Given the lack of information on these claims at this time, the Debtors cannot estimate the likely amount of Allowed OC Asbestos Property Damage Claims with certainty, but believe that such claims will likely be allowed in the aggregate range between $1 million and $5 million. THIS ESTIMATED AMOUNT MAY BE REVISED BASED ON THE DEBTORS' ANALYSIS OF THE INFORMATION PROVIDED PURSUANT TO THE ASBESTOS-RELATED PROPERTY DAMAGE CASE MANAGEMENT ORDER. Class 6 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 6 shall be entitled to vote to accept or reject the Plan. (vi) Class 7: OC Asbestos Personal Injury Claims Class 7 consists of OC Asbestos Personal Injury Claims ("Class 7 Claims"). An "OC Asbestos Personal Injury Claim" means any present or future right to payment, claim, remedy, liability or Demand against any OC Person for death, bodily injury, or other personal damages (whether physical, emotional or otherwise), whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products for which any OC Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any OC Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. OC Asbestos Personal Injury Claims (i) include OC Indirect Asbestos PI Trust Claims and Unpaid OC Resolved Asbestos Personal Injury Claims, but (ii) exclude OC Resolved Asbestos Personal Injury Claims, OC Asbestos Property Damage Claims, OC Indirect Asbestos Property Damage Claims, workers' compensation claims, FB Asbestos Personal Injury Claims, FB Indirect Asbestos PI Trust Claims, FB Asbestos Property Damage Claims, and FB Indirect Asbestos Property Damage Claims. ALL CLASS 7 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. SEE SECTION VIII.C. OF THIS DISCLOSURE STATEMENT ENTITLED "THE ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION." THE SOLE RECOURSE OF THE HOLDER OF A CLASS 7 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 7 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS OF THE PLAN). The Asbestos Personal Injury Trust will be funded as follows: On the Effective Date, or as soon as practicable thereafter, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) the portion of the Combined Distribution Package equal to the Class 7 Initial Distribution Percentage, (ii) the OC Asbestos Personal Injury Liability Insurance Assets and (iii) the OCD Insurance Escrow. On or as soon as reasonably practicable after the Final Distribution Date, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account the following: (i) Cash in an amount equal to the Class 7 Final Distribution Percentage of Excess Available Cash, (ii) Excess Senior Notes in an aggregate principal amount equal to the Class 7 Final Distribution Percentage of the Excess Senior Notes Amount, (iii) shares of New OCD Common Stock in an aggregate number equal to the Class 7 Final Distribution Percentage of the Excess New OCD Common Stock, and (iv) Cash in an amount equal to the Class 7 Final Distribution Percentage of the Excess Litigation Trust Recoveries. The Reorganized Debtors will also execute and deliver to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request to issue the Distributable Shares to be distributed to the Asbestos Personal Injury Trust in the name of the Asbestos Personal Injury Trust or a nominee and transfer and assign to the Asbestos Personal Injury Trust all other assets which constitute the assets of the Asbestos Personal Injury Trust. See Section IV.D.2 entitled "Estimation of Asbestos Liability for Plan Purposes" and Section VII.C.3.b(ii) entitled "General Description of Certain Terms of the Plan Applicable to the Treatment of Classes 4, 5, 6, and 7" for a further discussion of the estimation of OC Asbestos Personal Injury Claims. Class 7 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 7 are entitled to vote to accept or reject the Plan. Among such conditions to confirmation is the requirement that at least 75% of the holders of Class 7 that vote on the Plan vote in favor of the Plan. (vii) Class 8: FB Asbestos Personal Injury Claims Class 8 consists of FB Asbestos Personal Injury Claims ("Class 8 Claims"). An "FB Asbestos Personal Injury Claim" means any present or future right to payment, claim, remedy, liability or Demand against any FB Person for death, bodily injury, or other personal damages (whether physical, emotional or otherwise), whether or not such right, claim, remedy, liability or Demand is reduced to judgment, liquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, whether or not the facts of or legal basis for such right, claim, remedy, liability or Demand are known or unknown, under any theory of law, equity, admiralty, or otherwise, to the extent caused or allegedly caused, directly or indirectly, by the presence of, or exposure to asbestos or asbestos-containing products that for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released, or in any way at any time marketed or disposed of by any FB Person, including, without express or implied limitation, any right, claim, remedy, liability or Demand for compensatory damages (such as loss of consortium, wrongful death, survivorship, proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Personal Injury Claims (i) include FB Indirect Asbestos PI Trust Claims and Unpaid FB Resolved Asbestos Personal Injury Claims, but (ii) exclude FB Resolved Asbestos Personal Injury Claims, FB Asbestos Property Damage Claims, FB Indirect Asbestos Property Damage Claims, workers' compensation claims, OC Asbestos Personal Injury Claims, OC Indirect Asbestos PI Trust Claims, OC Asbestos Property Damage Claims, and OC Indirect Asbestos Property Damage Claims. ALL CLASS 8 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. SEE SECTION VIII.C. OF THIS DISCLOSURE STATEMENT ENTITLED "THE ASBESTOS PERSONAL INJURY PERMANENT CHANNELING INJUNCTION." THE SOLE RECOURSE OF THE HOLDER OF A CLASS 8 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 8 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS OF THE PLAN). On the Effective Date, or as soon as practicable thereafter, the Reorganized Debtors shall irrevocably transfer and assign to the Asbestos Personal Injury Trust for allocation to the FB Sub-Account the following: (i) the FB Reversions, (ii) the Committed Claims Account, and (iii) the FB Sub-Account Settlement Payment. The Reorganized Debtors will, or will use all commercially reasonable efforts to, cause the trustee of the Fibreboard Insurance Settlement Trust to irrevocably transfer and assign (i) the Existing Fibreboard Insurance Settlement Trust Assets, and (ii) any and all of the Fibreboard Insurance Settlement Trust's rights in the FB Reversions, to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, on the Effective Date or as soon as practicable thereafter. The Reorganized Debtors will also execute and deliver, or will use all commercially reasonable efforts to cause the trustee of the Fibreboard Insurance Settlement Trust to execute and deliver, to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request in connection with the transfer and assignment of the Existing Fibreboard Insurance Settlement Trust Assets and the FB Reversions. The Reorganized Debtors will, or will use all commercially reasonable efforts to, cause the trustee of the Fibreboard Insurance Settlement Trust to irrevocably transfer and assign (i) the Existing Fibreboard Insurance Settlement Trust Assets, and (ii) any and all of the Fibreboard Insurance Settlement Trust's rights in the FB Reversions, to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, on the Effective Date or as soon as practicable thereafter. The Reorganized Debtors will also execute and deliver, or will use all commercially reasonable efforts to cause the trustee of the Fibreboard Insurance Settlement Trust to execute and deliver, to the Asbestos Personal Injury Trust such documents as the Asbestos Personal Injury Trustees reasonably request in connection with the transfer and assignment of the Existing Fibreboard Insurance Settlement Trust Assets and the FB Reversions. For a discussion of the Fibreboard Insurance Settlement Trust, see Section IV.B.1 of this Disclosure Statement entitled "The Fibreboard Insurance Settlement Trust." The FB Sub-Account Settlement Payment is $140 million. It consists of the following: (a) $7 million in Cash, (b) Senior Notes in the aggregate principal amount of $63 million; and (c) 2.8 million shares of New OCD Common Stock, with an estimated value of $70 million. The FB Sub-Account Settlement Payment is a payment for the benefit of the holders of FB Asbestos Personal Injury Claims in resolution of a number of issues and after consideration of several factors. Although the Plan Proponents believe that substantive consolidation is justified by the facts of this case and applicable law, the strict application of principles of substantive consolidation would enable the holders of FB Asbestos Personal Injury Claims to receive distributions against the assets of the consolidated OCD estate. These distributions from OCD, when combined with the specific assets dedicated for payment of FB Asbestos Personal Injury Claims, would provide these claimants with a substantially greater recovery than other creditors, including the holders of OC Asbestos Personal Injury Claims. Based on the reasonable expectations of the holders of FB Asbestos Personal Injury Claims at a time just prior to the acquisition of Fibreboard, this disparity in recoveries could be viewed as a windfall. Permitting the unpaid portion of FB Asbestos Personal Injury Claims to "spill over" against the consolidated OCD estate would have a significant detrimental effect on distributions to other creditors. On the other hand, limiting the FB Asbestos Personal Injury Claims to Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions and the Committed Claims Account arguably would be unfair to holders of these Claims and Demands. Prior to the acquisition of Fibreboard by OCD, additional assets were available to pay these claims, but the subsequent corporate restructuring, asset swaps, and guaranties of the 1997 Credit Agreement left Fibreboard without any material assets to pay FB Asbestos Personal Injury Claims other than the Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions and the Committed Claims Account. These transactions comprise part of the factual basis for substantive consolidation under the Plan. Thus, the FB Sub-Account Settlement Payment represents a settlement and compromise of any right of FB Asbestos Personal Injury Claims to "spill over" against the consolidated OCD estate. In determining the amount of the FB Sub-Account Settlement Payment, the Debtors, the Asbestos Claimants' Committee and the Future Claimants' Representative reviewed various information including (1) the hypothetical enterprise value of Fibreboard and its operating subsidiaries, (2) the restructuring of Fibreboard and its subsidiaries and the asset swaps between Fibreboard and OCD subsequent to the acquisition by OCD (in particular the swap of the Cultured Stone business in 1999 for certain OCD assets), (3) the estimated claims against Fibreboard and its operating subsidiaries, both external claims and intercompany claims, and (4) administrative expenses and other obligations borne by the OCD estate on behalf of the Fibreboard estate. Accordingly, the parties analyzed the values that might have been available to holders of FB Asbestos Personal Injury Claims (in addition to the Fibreboard Insurance Settlement Trust) had Fibreboard not been absorbed into the OC consolidated operation and guaranteed the obligations to the Bank Holders. The Plan Proponents view these factors as an appropriate basis for a payment to compensate the holders of FB Asbestos Personal Injury Claims to give up the so-called "spillover claim", which claim would arguably provide a windfall to the holders of these claims. The Plan Proponents believe the FB Sub-Account Settlement Payment represents a fair and equitable resolution of all issues concerning the source of payment to the holders of FB Asbestos Personal Injury Claims and the agreement for these holders not to participate in the substantive consolidation. See Section IV.D.2 entitled "Estimation of Asbestos Liability for Plan Purposes" and Section VII.C.3.b(ii) entitled "General Description of Certain Terms of the Plan Applicable to the Treatment of Classes 4, 5, 6, and 7" for a further discussion of the estimation of FB Asbestos Personal Injury Claims. Class 8 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 8 are entitled to vote to accept or reject the Plan. Among such conditions to confirmation is the requirement that at least 75% of the holders of Class 8 that vote on the Plan vote in favor of the Plan. (viii) Class 9: FB Asbestos Property Damage Claims Class 9 consists of FB Asbestos Property Damage Claims ("Class 9 Claims"). An "FB Asbestos Property Damage Claim" means any present or future right to payment, claim, remedy, or liability against, or debt or obligation of, any FB Person, whether or not the facts or legal basis for such right, claim, remedy, liability, debt or obligation are known or unknown, under any theory of law, equity, admiralty, or otherwise for, relating to, or arising by reason of, directly or indirectly, damage to property, including, without limitation, diminution in the value thereof, or environmental damage or economic loss related thereto, caused or allegedly caused, directly or indirectly, in whole or in part by the presence in buildings or other systems or structures of asbestos or asbestos-containing products for which any FB Person may be legally liable, including, without limitation, the presence of, or exposure to, asbestos or asbestos-containing products that were manufactured, installed, fabricated, sold, supplied, produced, distributed, released or in any way at any time marketed or disposed of by any FB Person prior to the Petition Date, or for which any FB Person is liable due to the acts or omissions of any FB Person, including, without express or implied limitation, any right, claim, remedy, liability against, or debt or obligation for compensatory damages (such as proximate, consequential, general and special damages) and including punitive damages. FB Asbestos Property Damage Claims include FB Indirect Asbestos Property Damage Claims. ALL CLASS 9 CLAIMS SHALL BE CHANNELED TO THE FB ASBESTOS PROPERTY DAMAGE TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE FB ASBESTOS PROPERTY DAMAGE TRUST AGREEMENT AND THE FB ASBESTOS PROPERTY DAMAGE TRUST DISTRIBUTION PROCEDURES. THE FB ASBESTOS PROPERTY DAMAGE TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF AN ALLOWED CLASS 9 CLAIM SHALL BE THE FB ASBESTOS PROPERTY DAMAGE TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLASS 9 CLAIM AGAINST ANY FB PERSON. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY FB ASBESTOS PROPERTY DAMAGE CLAIMS (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE FB ASBESTOS PROPERTY DAMAGE TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS HEREOF). On the later of the Effective Date and the date by which the FB Asbestos Property Damage Trustee has executed the FB Asbestos Property Damage Trust Agreement, the Reorganized Debtors shall transfer and assign, or cause to be transferred and assigned, the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. The FB Asbestos Property Damage Insurance Assets means rights to coverage for FB Asbestos Property Damage Claims under liability insurance policies issued to Fibreboard and identified in Schedule XV to the Plan, to be filed at least ten (10) Business Days prior to the Objection Deadline. The foregoing includes, without limitation, (i) rights under such insurance policies, rights under settlement agreements made with respect to such insurance policies, Insolvent Insurer PD Rights, and Insurance Guarantee Fund PD Rights; and (ii) the right, on behalf of the Debtors, to give a full release of the insurance rights of the Debtors for FB Asbestos Property Damage Claims under any such policies or related agreements, provided that a reciprocal release of the Debtors in connection with said policies or agreements is given in exchange by the insurer or other released insurance entity and further provided that any such release shall not encompass rights with respect to coverage for workers' compensation claims or with respect to coverage other than for FB Asbestos Property Damage Claims. Holders of FB Asbestos Property Damage Claims were required to file Proofs of Claim by the General Bar Date. Fibreboard received over 275 property damage Proofs of Claim, 26 of which collectively asserted damages in excess of $592 million. One of these claims was filed by the State of Louisiana in the amount of $582 million. The State of Louisiana also filed a claim in the same amount against OCD, but the Debtors understand that the State of Louisiana believes it has a single claim against the Debtors in the aggregate amount of $582 million. The Bankruptcy Court dismissed 11 of these claims after the Debtors filed objections. The remaining claims did not state a claimed amount and provided almost no documentation to support their claim or to enable Fibreboard to estimate the value of their claims. The Debtors filed a motion for a case management order requesting that property damage claimants be required to provide the Debtors with basic supporting evidence to enable the Debtors to value their claims. On March 31, 2003, the Court entered Asbestos-Related Property Damage Case Management Order which provides, in part, that each holder of an FB Asbestos Property Damage Claim is required to provide the Debtors with certain supporting evidence within 120 days of the date of the Order to enable the Debtors to value their claims. Based on a review of its records, Fibreboard believes that the number and value of these claims are out of proportion with its historical experience. As of the Petition Date, only six property damage cases were pending against Fibreboard, four of which had been dormant for more than five years. Prior to the Petition Date, Fibreboard had resolved 92% of all property damage claims against it for $0 per claim. Fibreboard also notes that in other asbestos bankruptcies in which hundreds of property damage claims were filed, such claims were resolved for substantially less than the claimed amounts. For example, Eagle-Picher Industries received 1,000 property damage proofs of claim asserting $11.5 billion and its plan of reorganization provided only $3 million to resolve such claims. More recently, Armstrong World Industries settled 360 property damage claims (four of which alone asserted claims in excess of $200 million), for $2 million. Of these settled claims, 144 were also asserted against Fibreboard. Given the lack of information on these claims at this time, the Debtors cannot estimate the likely amount of Allowed FB Asbestos Property Damage Claims with certainty, but believe that such claims will likely be allowed in the aggregate range between $2 million and $7 million. THIS ESTIMATED AMOUNT MAY BE REVISED BASED ON THE DEBTORS' ANALYSIS OF THE INFORMATION PROVIDED PURSUANT TO THE ASBESTOS-RELATED PROPERTY DAMAGE CASE MANAGEMENT ORDER. The Debtors believe that FB has insurance coverage sufficient to pay FB Asbestos Property Damage Claims. Class 9 Claims are Impaired and, to the extent and in the manner provided in the Voting Procedures Order, holders of the Claims in Class 9 shall be entitled to vote to accept or reject the Plan. (ix) Class 10: Intercompany Claims Class 10 consists of Intercompany Claims ("Class 10 Claims"). An "Intercompany Claim" is any Claim, including, without limitation, any Administrative Claim, by a Debtor against another Debtor or a non-Debtor Subsidiary against a Debtor, but excluding the Claims set forth on Schedule XIII to the Plan, as it may be filed or amended at least ten (10) Business Days prior to the Objection Deadline. Under the Plan, on the Effective Date, all Intercompany Claims other than such Claims set forth in Schedule XIII, to be filed or amended at least ten (10) Business Days prior to the Objection Deadline, shall be deemed cancelled and extinguished in accordance with Section 5.2 of the Plan. Except as specified on Schedule XIII, no holder on an Intercompany Claim shall be entitled to, or shall receive or retain any property or interest in property on account of, such Intercompany Claim. Schedule XIII shall indicate the classification and/or treatment of the Claims set forth therein. The Plan Proponents reserve the option to preserve a Claim by a Debtor against another Debtor to the extent that extinguishing such Claim under the Plan has a detrimental effect on the Debtors. Class 10 Claims are Impaired. The holders of the Claims in Class 10 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. (x) Class 11: Subordinated Claims Class 11 consists of all Subordinated Claims ("Class 11 Claims"). "Subordinated Claims" consist of Claims or Interests (in the event that a Claim might be characterized as an Interest) of any Person who has entered in a subordination agreement that is enforceable under applicable non-bankruptcy law and which subordinates such Claims or Interests to any holders of Claims who will not be paid in full on account of such holders Allowed Claims under the Plan. Subordinated Claims include, without limitation, the MIPS Claims and Interests. On the Effective Date, all of the Subordinated Claims shall be deemed cancelled and extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such Subordinated Claims. Class 11 Claims are Impaired. The holders of the Claims in Class 11 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. (xi) Class 12: OCD Interests Class 12 consists of all OCD Interests ("Class 12 Interests"). "OCD Interests" consist of (i) collectively, all Existing OCD Common Stock, Existing OCD Preferred Stock and Existing OCD Options, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, to acquire or receive any Existing OCD Common Stock, Existing OCD Preferred Stock, Existing OCD Options or other capital stock in OCD, or any contract subscription, commitment or agreement pursuant to which any Person was or could have been entitled to receive any share of the capital stock of OCD, or any such option, warrant, conversion right, right of first refusal or other right (including, without limitation, any rights of any 401(k) plan or the interest of any participant therein), in each case issued or entered into by, or otherwise the obligation of, OCD or another Debtor; and (ii) all shares of Preferred Stock and Class A Common Stock of Integrex, together with any options, warrants, conversion rights, rights of first refusal or other rights, contractual, equitable or otherwise, relating to such stock, held by Blue Ridge Investments, L.L.C. or its successors and assigns. On the Effective Date, all of the OCD Interests outstanding at the Effective Date shall be deemed cancelled and extinguished. No holder thereof shall be entitled to, or shall receive or retain any property or interest in property on account of, such OCD Interests. Class 12 Interests are Impaired. The holders of the Interests in Class 12 are deemed to reject the Plan and, accordingly, are not entitled to vote to accept or reject the Plan. D. Summary of Debt to be Incurred, Securities to be Issued and Other Consideration Under the Plan; Execution of Related Documents The Plan provides that the holders of Allowed Claims in Classes 4, 5, 6, 7 and 8 will receive consideration in the form of a combination of (1) Cash, (2) Senior Notes, (3) shares of New OCD Common Stock and (4) the Litigation Trust Recoveries. Class 7 will receive additional distributions consisting of the OC Asbestos Personal Injury Liability Insurance Assets and the OCD Insurance Escrow. Class 8 will receive additional distributions consisting of Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions and the Committed Claims Account. The following discussion summarizes certain provisions of securities and other consideration to be distributed pursuant to the Plan. These summaries do not purport to be complete and are subject to, and qualified in their entirety by reference to, all provisions of the instruments pursuant to which such securities are to be issued, forms of which are attached as Exhibits to the Plan. 1. Cash As of the date of the Disclosure Statement, the total amount of cash that will be available on the Effective Date to fund the cash component of distributions under the Plan has been estimated at $302 million. The sources of the cash that will be used to fund that cash component will include the following: (a) Restricted Cash, OCD Reversions and FB Reversions Restricted Cash consists of the administrative deposits (together with earnings thereon) made by OCD (OCD Restricted Cash) and Fibreboard (FB Restricted Cash) which were deposited in settlement accounts in respect of Asbestos Personal Injury Claims to facilitate claims processing under the NSP remaining in those settlement accounts as of five (5) Business Days prior to the Effective Date. As discussed above, there has been litigation commenced with respect to funds in the settlement accounts. See Section IV.E.7 of this Disclosure Statement entitled "Baron & Budd Administrative Deposits" and Section V.G.3.e of this Disclosure Statement entitled "NSP Actions and Tolling Agreements." To the extent that the Bankruptcy Court authorizes such Restricted Cash to be used to conclude OC Resolved Asbestos Personal Injury Claims or FB Resolved Asbestos Personal Injury Claims, such funds will continue to be used for those purposes. OC Resolved Asbestos Personal Injury Claims and FB Resolved Asbestos Personal Injury Claims are Asbestos Personal Injury Claims with respect to which (i) the holder of such Claim (a) is represented by an attorney of record who has entered into an enforceable NSP Agreement with OC or Fibreboard, respectively, and (b) has satisfied all of the preconditions to payment under the applicable NSP Agreement prior to the Petition Date as determined by the Bankruptcy Court and (ii) such Claims are eligible to be paid from settlement accounts in respect of FB Asbestos Personal Injury Claims, to facilitate claims processing under the NSP, including settlement accounts maintained by (a) Baron & Budd, P.C., (b) Foster & Sear, LLP, (c) W&K, or (d) Weitz & Luxenberg, and such monies are available to pay such claims and have not been or are not avoided and recovered for the benefit of the Debtors' Estates or the Fibreboard Insurance Settlement Trust. OCD Reversions are such amounts as may from time to time be released from the settlement accounts in respect of OC Asbestos Personal Injury Claims and returned to OCD. If released to OCD so that it would be shown as cash or cash equivalents on a consolidated balance sheet of OC as of the last day of the month prior to the month in which the Effective Date occurs, such OCD Reversions would become Available Cash. OCD Restricted Cash which is released as a result of an Avoidance Action becomes a Litigation Trust Asset. FB Reversions are such amounts as may from time to time be released from the settlement accounts in respect of FB Asbestos Personal Injury Claims and returned to the Fibreboard Insurance Settlement Trust or FB Sub-Account of the Asbestos Personal Injury Trust, whichever is applicable. FB Reversions shall include any recoveries, including any recoveries on account of Avoidance Actions, of those funds previously paid from the Fibreboard Insurance Settlement Trust. (b) Available Cash Available Cash means Cash in the amount of the sum of (i) all Cash that would be shown as cash or cash equivalents on a consolidated balance sheet of OC as of the last day of the month prior to the month in which the Effective Date occurs, prepared in accordance with United States generally accepted accounting principles consistent with the past practices of OC, and (ii) the OCD Reversions to the extent set forth in the immediately preceding paragraph, and excluding (a) the OCD Insurance Escrow, (b) the aggregate amount of Cash to be distributed to holders of Unclassified Claims, Unimpaired Claims and Allowed Class 3 Claims, (c) Restricted Cash, (d) the Existing Fibreboard Insurance Settlement Trust Assets, (e) the FB Reversions, (f) the Litigation Trust Assets, and (g) necessary reserves for working capital and pension contributions as determined by the Debtors and approved by the other Plan Proponents. Based upon the assumptions used in preparing the Financial Projections included in Appendix B of the Disclosure Statement and assuming that the Effective Date will occur on December 31, 2003, the Debtors expect that approximately $302 million of cash will be Available Cash for distribution in accordance with the provision of the Plan (such estimate has been utilized for purposes of calculating estimated recoveries). This estimate of Available Cash assumes cash of $792 million as of the Effective Date and excludes (i) a reserve of $380 million for working capital and pension contribution purposes, (ii) $40 million for Exit Facility fees and employee retention payments, (retention program previously approved by the Bankruptcy Court and due upon emergence from bankruptcy), and (iii) $70 million in the aggregate for distributions to holders of Unclassified Claims, Unimpaired Claims and Allowed Class 3 Claims. 2. Senior Notes The Senior Notes component of the distributions under the Plan will consist of an issue of unsecured unsubordinated debt securities in the aggregate principal amount of $1,400 million less the sum of (a) the aggregate principal amount of the debt to the IRS which is an Allowed Priority Tax Claim and (b) the amount of, if any, to be drawn under the Exit Facility at the Effective Date. The principal terms and conditions of the Senior Notes are set forth in the preliminary term sheet set forth as Appendix E to this Disclosure Statement. The Senior Notes may be issued in one or more series, each of which may have different terms, maturities and interest rates. While the specific terms of the Senior Notes will be established in consultation with OC's financial advisors closer to the Effective Date, the terms are expected to be similar to the terms of unsubordinated obligations issued by comparably rated industrial companies at that time, including the following: (a) interest, payable semi-annually, at a fixed rate based upon U.S. Treasury Notes with like maturities plus a spread determined to be the average corporate spread over the Treasury Notes for outstanding issues of comparable maturities and comparably rated U.S. industrial companies over the 30-day period ending on the last day of the month immediately preceding the Effective Date and (b) a maturity, as selected by the Debtors, expected to be no less than five years and no more than 10 years, with no sinking fund or other required principal payments made on the Senior Notes until the maturity date. 3. New OCD Common Stock The common stock component of the distributions under the Plan will consist of newly issued shares of New OCD Common Stock. As of the Effective Date, the authorized capital stock of Reorganized OCD will consist of 200 million shares of New OCD Common Stock, par value $0.10 per share. The Amended and Restated Certificate of Incorporation of Reorganized OCD will provide, in accordance with Section 1123(a)(6) of the Bankruptcy Code, that Reorganized OCD shall not have authority to issue any nonvoting equity securities. As of the Effective Date, after giving effect to the distributions under the Plan, 80 million shares of New OCD Common Stock will be issued and outstanding. All shares of New OCD Common Stock will be identical and will entitle the holders thereof to the same rights and privileges and, except as otherwise required by law, on all matters submitted for a vote of OCD's stockholders, the holders of New OCD Common Stock will be entitled to one vote, in person or by proxy, for each share of New OCD Common Stock owned. The New OCD Common Stock will be subject to dilution as a result of future issuances, including shares that are or may be issued under any stock-based management incentive plans. Holders of New OCD Common Stock will be entitled to receive such dividends, if any, as may be declared from time to time by the Board of Directors of Reorganized OCD in its discretion from funds legally available therefore. When and as dividends or other distributions are paid, whether payable in Cash, in property or in securities of Reorganized OCD, the holders of New OCD Common Stock will be entitled to share equally, share for share, in such dividends or other distributions. In the event of any liquidation, dissolution or winding up of the affairs of Reorganized OCD, whether voluntary or involuntary or otherwise, the holders of New OCD Common Stock will be entitled to share, Pro Rata, in any property available for distribution after satisfaction of all other claims. Holders of the shares of New OCD Common Stock will have no preemptive or other subscription rights and there will be no conversion rights or redemption or sinking fund provisions with respect to such shares. All of the shares of New OCD Common Stock that will be issued as of the Effective Date will be fully paid and nonassessable. OC will determine the equity value of the New OCD Common Stock as of the Effective Date, based upon the residual value of the equity of Reorganized OCD, with the assistance of its financial advisors and the financial advisors for the other Plan Proponents. See Section XIV of the Disclosure Statement entitled "Feasibility of the Plan and Best Interests of Creditors." 4. Litigation Trust Recoveries As part of the distributions to be made under the Plan, the holders of Allowed Claims in Classes 4, 5, and 6 and the OC Sub-Account of the Asbestos Personal Injury Trust will receive a proportionate interest in Litigation Trust Recoveries, if any. The Litigation Trust Recoveries will be distributed to holders of the Allowed Claims in each of Classes 4, 5, and 6 (with appropriate reserves of Litigation Trust Recoveries for holders of Disputed Claims in each of such Classes) and to the OC Sub-Account of the Asbestos Personal Injury Trust, in each case, in accordance with the formulas described in Section VII C.3.b.(ii)-(vi) of this Disclosure Statement. See Section X entitled "The Litigation Trust" for a summary of the terms of the Litigation Trust Agreement. E. Distributions under the Plan 1. The Disbursing Agent The Disbursing Agent or, in the case of the Bondholders Claims, the appropriate Pre-petition Indenture Trustee, shall make all distributions required under the Plan, except to holders of Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims. Asbestos Personal Injury Claims shall be satisfied in accordance with the distribution procedures described in the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures. FB Asbestos Property Damage Claims shall be satisfied in accordance with the distribution procedures described in the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. The Reorganized OCD or any other Person designated by the Plan Proponents, shall serve as a disbursing agent under the Plan. If the Disbursing Agent is an independent third party designated to serve in such capacity, such Disbursing Agent will be entitled to receive, without further Bankruptcy Court approval, reasonable compensation for distribution services rendered pursuant to the Plan as well as reimbursement of reasonable out-of-pocket expenses incurred in connection with rendering such services from the Reorganized Debtors on terms acceptable to the Reorganized Debtors. No Disbursing Agent will be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. 2. Distributions for Claims Allowed as of the Initial Distribution Date Except as otherwise provided in the Plan or as ordered by the Bankruptcy Court, distributions to be made on account of Claims that are Allowed Claims as of the Initial Distribution Date shall be made on, or as soon as practicable after, the Initial Distribution Date, which means with respect to holders of Allowed Class 1, 2A, 2B, 3, 4, 5, and 6 Claims, a date that is not later than thirty (30) days after the Effective Date. Distributions on account of (a) Class 7 and 8 Claims shall be made in accordance with the terms or conditions of the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures (see Section VIII of this Disclosure Statement entitled "The Asbestos Personal Injury Trust"), and (b) Class 9 Claims shall be made in accordance with the terms or conditions of the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures (see Section IX of this Disclosure Statement entitled "The FB Asbestos Property Damage Trust"). Distributions on account of Claims that first become Allowed Claims after the Initial Distribution Date shall be made pursuant to Section 9.4 of the Plan, as described in Section VII. G.3 of this Disclosure Statement entitled "Distributions on Account of Disputed Claims Once They are Allowed". Notwithstanding the date on which any distribution of New OCD Securities is actually made to a holder of a Claim that is an Allowed Claim on the Initial Distribution Date, as of the date of the distribution such holder shall be deemed to have the rights of a holder of such securities distributed as of the Initial Distribution Date. "Allowed" means: (a) with respect to any Claim, other than an Administrative Claim, an Asbestos Personal Injury Claim or an FB Asbestos Property Damage Claim, proof of which was filed within the applicable period of limitation fixed in accordance with Federal Rule of Bankruptcy Procedure 3003(c)(3) by the Bankruptcy Court, (i) as to which no objection to the allowance thereof has been interposed on or before the Initial Distribution Date and as to which the Debtors have not sent a notice to the holder of such Claim by the Initial Distribution Date that the Claim in under review for possible objection, or (ii) as to which no objection is filed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court, to the extent asserted in the proof of such Claim or (iii) as to which an objection has been interposed, to the extent that such Claim has been allowed in whole or in part by a Final Order of the Bankruptcy Court; (b) with respect to any Claim, other than an Administrative Claim, an Asbestos Personal Injury Claim or an FB Asbestos Property Damage Claim, as to which no Proof of Claim was filed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court, to the extent that such Claim has been listed by one of the Debtors in its SOFAS as liquidated in amount and not disputed or contingent and (i) as to which no objection to the allowance thereof has been interposed on or before the Initial Distribution Date and as to which the Debtors have not sent a notice to the holder of such Claim by the Initial Distribution Date that the Claim in under review for possible objection, or (ii) as to which no objection to the allowance thereof has been interposed within the applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or a Final Order of the Bankruptcy Court or (iii) as to which an objection has been interposed, to the extent that such Claim has been allowed in whole or in part by a Final Order of the Bankruptcy Court; (c) with respect to any other Claim that is asserted to constitute an Administrative Claim, other than a Claim of a professional person employed under Section 327 or 1103 of the Bankruptcy Code that is required to apply to the Bankruptcy Court for the allowance of compensation and reimbursement of expenses pursuant to Section 330 of the Bankruptcy Code, (a) that represents an actual or necessary expense of preserving the Estate or operating the business of the Debtors, to the extent that such Claim is reflected as a postpetition liability of any of the Debtors on the Debtors' books and records as of the Effective Date, or (b) that the Debtors dispute, to the extent that such Claim is allowed in whole or in part by a Final Order of the Bankruptcy Court and only to the extent that such allowed portion is deemed, pursuant to a Final Order of the Bankruptcy Court, to constitute a cost or expense of administration under Sections 503(b) and 507(a)(1) of the Bankruptcy Code; (d) with respect to any other Claim that is asserted to constitute an Administrative Claim that represents a Claim of a professional person employed under Section 327 or 1103 of the Bankruptcy Code that is required to apply to the Bankruptcy Court for the allowance of compensation and reimbursement of expenses pursuant to Section 330 of the Bankruptcy Code, to the extent that such Claim is allowed by a Final Order of the Bankruptcy Court under Section 330 of the Bankruptcy Code; (e) with respect to any Asbestos Personal Injury Claim, such Claim to the extent that it is Allowed in accordance with the procedures established pursuant to the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures; or (f) with respect to any FB Asbestos Property Damage Claim, proof of which was filed within the applicable period of limitation fixed in accordance with Bankruptcy Rule 3003(c)(3) by the Bankruptcy Court, such Claim to the extent that it is Allowed in accordance with the procedures established pursuant to the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. 3. Interest on Claims Unless otherwise specifically provided for in the Plan, the Confirmation Order, or the Asbestos Personal Injury Trust Distribution Procedures, or required by applicable bankruptcy law, post-petition interest shall not accrue or be paid on Claims, and no holder of a Claim shall be entitled to interest accruing on or after the Petition Date on any Claim. Interest shall not accrue or be paid upon any Disputed Claim in respect of the period from the Petition Date to the date a final distribution is made thereon if and after such Disputed Claim becomes an Allowed Claim. 4. Record Date for Distributions to Holders of Bank Holders Claims and Bondholders Claims At the close of business on the Distribution Record Date, the transfer records for the Bank Holders Claims and Bondholders Claims will be closed, and there shall be no further changes in the record holders of Bank Holders Claims or Bondholders Claims. None of the Reorganized Debtors, the Disbursing Agent, if any, CSFB, as agent for the Bank Holders nor the applicable Pre-petition Indenture Trustee under the Pre-petition Bond Indenture for the Bondholders will have any obligation to recognize any transfer of Allowed Bank Holders Claims or Allowed Bondholders Claims, as applicable, occurring after the Distribution Record Date, and they will be entitled instead to recognize and deal for all purposes hereunder with only those record holders as of the close of business on the Distribution Record Date. Distributions to holders of Bondholder Claims administered by the Pre-petition Indenture Trustees will be made by means of book-entry exchange through the facilities of the Despository Trust Corporation ("DTC") in accordance with the customary practices of the DTC, as and to the extent practicable. In connection with such book-entry exchange, each Pre-petition Indenture Trustee will deliver instructions to the DTC directing the DTC to effect distributions on a pro rata basis as provided under the Plan with respect to the Bondholder Claims upon which such Indenture Trustee acts as trustee. 5. Delivery of Distributions (a) General Distributions to holders of Allowed Claims in Classes 1, 2A, 2B, 3, 4, 5 and 6 shall be made by the Disbursing Agent or the applicable Pre-petition Indenture Trustee, as the case may be. A "Pre-petition Indenture Trustee" means collectively, the Persons serving from time to time as trustees or paying agents under the Pre-petition Bond Indentures, pursuant to the terms of the applicable Pre-Petition Bond Indentures. If any holder's distribution is returned as undeliverable, no further distributions to such holder shall be made until the Disbursing Agent (or the Pre-petition Indenture Trustee as applicable) is notified of such holder's then current address, at which time all missed distributions shall be made to such holder without interest. Amounts in respect of undeliverable distributions made by the Disbursing Agent (or the Pre-petition Indenture Trustee as applicable) shall be returned to the Reorganized Debtors until such distributions are claimed. All the claims for undeliverable distributions made by the Disbursing Agent or the Pre-petition Indenture Trustee, as the case may be, must be made on or before the first (1st) anniversary of the Effective Date, after which date all unclaimed property shall revert to the Reorganized Debtors free of any restrictions thereon and the claim of any holder or successor to such holder with respect to such property shall be discharged and forever barred, notwithstanding any federal or state escheat laws to the contrary. Nothing contained in the Plan shall require the Debtors, the Reorganized Debtors, any Disbursing Agent, the Administrative Agent for the Bank Holders or any Pre-petition Indenture Trustee to attempt to locate any holder of an Allowed Claim after the first (1st) anniversary of the Effective Date. Cash payments made pursuant to the Plan will be in United States funds by means agreed to by the payor and the payee, including by check or wire transfer, or, in the absence of an agreement, such commercially reasonable manner as the payor shall determine in its sole discretion. (b) Fractional New OCD Common Stock; Other Distributions (i) No fractional shares of New OCD Common Stock will be issued or distributed under the Plan. If any distribution pursuant to the Plan would otherwise result in the issuance of New OCD Common Stock that is not a whole number, the actual distribution of shares of such stock shall be rounded to the next higher or lower whole number as follows: (a) fractions of greater than one-half (1/2) shall be rounded to the next higher whole number, and (b) fractions of one-half (1/2) or less shall be rounded to the next lower whole number. The total number of shares of New OCD Common Stock and the Senior Notes to be distributed pursuant to the Plan shall be adjusted as necessary to account for the rounding provided for herein. (ii) No consideration shall be provided in lieu of fractional shares that are rounded down. The Senior Notes will only be issued with a principal amount in multiples of $1,000 or integral multiples thereof. The principal amount of the Senior Notes that would have been distributed in amounts of other than $1,000 shall be rounded as follows: (a) amounts equal to or less than $500 shall be reduced to $0.00 and (b) amounts greater than $500 shall be increased to $1,000. (iii) The payment of fractions of dollars shall not be made. Whenever any payment of a fraction of a dollar under the Plan would otherwise be called for, the actual payment made shall reflect a rounding of the fraction to the nearest whole dollar (up and down), with half dollars rounded down. (iv) The Disbursing Agent, or any agent or servicer, as the case may be, shall not make any payment of less than thirty dollars ($30.00) with respect to any Claim. (c) Surrender of Pre-petition Bonds (i) Manner of Surrender of the Pre-petition Bonds Except as provided in connection with lost, stolen, mutilated or destroyed Pre-petition Bonds, each holder of an Allowed Claim evidenced by a Pre-petition Bond shall tender such Pre-petition Bond to the respective Pre-petition Indenture Trustee in accordance with written instructions to be provided in a letter of transmittal to such holders by the Pre-petition Indenture Trustee as promptly as practicable following the Effective Date. Such letter of transmittal shall specify that delivery of such Pre-petition Bonds will be effected, and risk of loss and title thereto will pass, only upon the proper delivery of such Pre-petition Bonds with the letter of transmittal in accordance with such instructions. Such letter of transmittal shall also include, among other provisions, customary provisions with respect to the authority of the holder of the applicable note or Pre-petition Bonds to act and the authenticity of any signatures required on the letter of transmittal. All surrendered Pre-petition Bonds shall be marked as cancelled and delivered by the respective Pre-petition Indenture Trustee to the Reorganized Debtors. (ii) Lost, Mutilated or Destroyed Pre-petition Bonds In addition to any requirements under the applicable certificate or articles of incorporation or bylaws of the applicable Debtor, any holder of indebtedness or obligation of a Debtor evidenced by a Pre-petition Bond that has been lost, stolen, mutilated or destroyed shall, in lieu of surrendering the Pre-petition Bond, deliver to the Pre-petition Indenture Trustee (a) evidence satisfactory to the Pre-petition Indenture Trustee of the loss, theft, mutilation or destruction; and (b) such indemnity as may be required by the Pre-petition Indenture Trustee to hold the Pre-petition Indenture Trustee harmless from any damages, liabilities or costs incurred in treating such individual as a holder of a Pre-petition Bond. (iii) Failure to Surrender Cancelled Pre-petition Bonds Any holder of a Pre-petition Bond that fails to surrender or be deemed to have surrendered such Pre-petition Bond before the first (1st) anniversary of the Effective Date shall have its Claim for a distribution on account of such Pre-petition Bond discharged and shall be forever barred from asserting any such Claim against any Reorganized Debtor or their respective property. (iv) Distributions upon Receipt of Pre-petition Bonds No distribution of property under the Plan shall be made to or on behalf of any such holders unless and until such Pre-petition Bond is received by the appropriate Pre-petition Indenture Trustee, or the unavailability of such Pre-petition Bond is established to the reasonable satisfaction of the appropriate Pre-petition Indenture Trustee or such requirement is waived by the Reorganized Debtors. (d) Withholding and Reporting Requirements For distributions under the Plan, the Disbursing Agent shall, to the extent applicable, comply with all tax withholding and backup withholding and reporting requirements imposed by any federal, state, provincial, local or foreign taxing authority, and all distributions thereunder shall be subject to any such withholding and reporting requirements. The Disbursing Agent shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements. (e) Setoffs The Reorganized Debtors may, but shall not be required to, set off against any Claim and the payments or other distributions to be made pursuant to the Plan in respect of such Claim, claims of any nature whatsoever that the Debtors or Reorganized Debtors may have against the holder of such Claim; provided, however, that neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Reorganized Debtors of any such claim that the Debtors or Reorganized Debtors may have against such holder. F. Treatment of Executory Contracts and Unexpired Leases 1. Assumption and Rejection of Executory Contracts and Unexpired Leases Under Section 365 of the Bankruptcy Code, the Debtors have the right, subject to Bankruptcy Court approval, to assume or reject any executory contracts or unexpired leases. If the Debtors reject an executory contract or unexpired lease that was entered into before the Petition Date, the contract or lease will be treated as if it had been breached on the date immediately preceding the Petition Date, and the other party to the agreement will have a Class 6 Claim for damages incurred as a result of the rejection. In the case of rejection of employment severance agreements and real property leases, damages are subject to certain limitations imposed by Sections 365 and 502 of the Bankruptcy Code. (a) Assumed Contracts and Leases Except as otherwise provided in the Plan, or in any contract, instrument, release, indenture or other agreement or document entered into in connection with the Plan, as of the Effective Date, each Debtor shall be deemed to have assumed each executory contract and unexpired lease to which it is a party, unless such contract or lease (i) was previously assumed or rejected by such Debtor, (ii) previously expired or terminated pursuant to its own terms, (iii) is the subject of a motion pending before the Bankruptcy Court as of the Confirmation Date to assume or reject such contract or lease or (iv) is listed on Schedule IV, to be filed at least ten (10) Business Days prior to the Objection Deadline, as being an executory contract or unexpired lease to be rejected; provided, however, that the Plan Proponents reserve the right, at any time prior to the Confirmation Date, to amend Schedule IV to the Plan to add or delete any unexpired lease or executory contract. The Confirmation Order shall constitute an order of the Bankruptcy Court under Section 365 of the Bankruptcy Code approving the contract and lease assumptions described above, as of the Effective Date. Each executory contract and unexpired lease that is assumed and relates to the use, ability to acquire, or occupancy of real property shall include (i) all modifications, amendments, supplements, restatements or other agreements made directly or indirectly by any agreement, instrument or other document that in any manner affect such executory contract or unexpired lease and (ii) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, usufructs, reciprocal easement agreements, vaults, tunnel or bridge agreements or franchises and any other interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements has been rejected pursuant to an order of the Bankruptcy Court. Except to the extent previously assumed or rejected by an order of the Bankruptcy Court, on or before the Confirmation Date, all employment and severance practices and policies and all compensation and benefit plans, policies and programs of the Debtors applicable to their directors, officers or employees, including, without limitation, all savings plans, retirement plans, health care plans, severance benefit plans, incentive plans, workers' compensation programs and life, disability or other insurance plans and programs subject to Sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition Date and not since terminated, shall be deemed to be and shall be treated as though they are executory contracts under the Plan that are assumed pursuant to Section 365(b)(2) of the Bankruptcy Code, except for (i) executory contracts or plans specifically rejected pursuant to the Plan and (ii) executory contracts or plans as have been previously rejected, are the subject of a motion to reject or have been specifically waived by the beneficiary of any plans or contracts; provided, however, that the debtors may pay "retiree benefits" (as defined in Section 1114(a) of the Bankruptcy Code). Certain employee benefit plans will be terminated or amended on the Effective Date or earlier, as follows: (i) The Stock Performance Plan, the 1995 Stock Plan and the 1987 Stock Plan for Directors, each of which is an equity incentive plan providing for grants of equity-based awards, including stock options and restricted stock, will be deemed terminated, cancelled and of no further force and effect, and the participants thereunder will have no further rights under such plans. (b) Payments Related to Assumption of Contracts and Leases Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to the Plan is in default will be satisfied, under Section 365(b)(1) of the Bankruptcy Code, at the option of the applicable Debtor party to the contract or lease or the assignee of such Debtor assuming such contract or lease, by Cure. If there is a dispute regarding (i) the nature or amount of any Cure, (ii) the ability of a Reorganized Debtor or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be assumed or (iii) any other matter pertaining to assumption, Cure will occur following the entry of a Final Order of the Bankruptcy Court resolving the dispute and approving the assumption or assumption and assignment, as the case may be. The Confirmation Order shall contain provisions for notices of proposed assumptions and proposed Cure amounts to be sent to applicable third parties and for procedures for objecting thereto and resolution of disputes by the Bankruptcy Court. If no proposed Cure amount is proposed by the Debtors, it shall be presumed that the Debtors are asserting that no Cure amount is required to be paid under Section 365(b)(1) of the Bankruptcy Code. The Debtors estimate that the aggregate amount to be paid as Cure associated with the assumption of executory contracts, that have not been previously paid pursuant to an order of the Bankruptcy Court, will be between $20 million and $25 million. (c) Rejected Contracts and Leases On the Effective Date, each executory contract and unexpired lease that is listed on Schedule IV to the Plan, shall be rejected pursuant to Section 365 of the Bankruptcy Code. Each contract or lease listed on Schedule IV to the Plan shall be rejected only to the extent that any such contract or lease constitutes an executory contract or unexpired lease. The Plan Proponents reserve their right, at any time prior to the Confirmation Date, to amend Schedule IV to the Plan to delete any unexpired lease or executory contract therefrom or add any unexpired lease or executory contract thereto. To the extent that an executory contract or unexpired lease (i) is not listed on Schedule IV to the Plan, (ii) has not been previously rejected or (iii) is not subject to a motion to reject at the time of the Confirmation Date, such executory contract or unexpired lease shall be deemed assumed. Listing a contract or lease on Schedule IV to the Plan shall not constitute an admission by a Debtor nor a Reorganized Debtor that such contract or lease is an executory contract or unexpired lease or that such Debtor or Reorganized Debtor has any liability thereunder. Without limiting the foregoing, any agreement entered into prior to the Petition Date by or on behalf of the Debtors with a holder of an Asbestos Personal Injury Claim with respect to the settlement of any OC Asbestos Personal Injury Claim or FB Asbestos Personal Injury Claim shall be deemed rejected as of the Effective Date to the extent such settlement agreement is deemed to be an executory contract within the meaning of Section 365(a) of the Bankruptcy Code. The Confirmation Order shall constitute an order of the Bankruptcy Court approving such rejections as of the Effective Date, pursuant to Section 365 of the Bankruptcy Code. The Debtors estimate that the total aggregate allowed amount of claims resulting from rejecting executory contracts and unexpired leases that have not been paid pursuant to Order of the Bankruptcy Court will be between $46 and $87 million. (d) Rejection Damages Bar Date If the rejection by a Debtor, pursuant to the Plan or otherwise, of an executory contract or unexpired lease results in a Claim, then such Claim shall be forever barred and shall not be enforceable against any Debtor or Reorganized Debtor, or the properties of any of them, unless a Proof of Claim is filed with the clerk of the Bankruptcy Court and served upon counsel to the Debtors, counsel to the Unsecured Creditors' Committee and counsel to the Asbestos Claimants' Committee, within thirty (30) days after service of the notice that the executory contract or unexpired lease has been rejected. (e) Insurance Policies and Agreements The Plan contains separate provisions with respect to insurance policies and agreements. The Debtors do not believe that the insurance policies issued to, or insurance agreements entered into by, the Debtors prior to the Petition Date constitute executory contracts. To the extent that such insurance policies or agreements are considered to be executory contracts, then the Plan shall constitute a motion to assume such insurance policies and agreements, and, subject to the occurrence of the Effective Date, the entry of the Confirmation Order shall constitute approval of such assumption pursuant to Section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such assumption is in the best interest of each Debtor, its Estate, and all parties in interest in the Chapter 11 Cases. Unless otherwise determined by the Bankruptcy Court pursuant to a Final Order or agreed to by the parties thereto prior to the Effective Date, no payments are required to cure any defaults of the Debtors existing as of the Confirmation Date with respect to each such insurance policy or agreement. To the extent that the Bankruptcy Court determines otherwise as to any such insurance policy or agreement, the Debtors reserve the right to seek rejection of such insurance policy or agreement or other available relief. Nonetheless, the Debtors may elect to reject certain insurance policies and agreements to the extent they are determined to be executory contracts. To the extent that any or all of the insurance policies and agreements set forth on Schedule XI to the Plan, to be filed no later than ten (10) Business Days prior to the Objection Deadline, are considered to be executory contracts, then, notwithstanding anything contained in Section 7.1 or 7.3 of the Plan to the contrary, the Plan shall constitute a motion to reject the insurance policies and agreements set forth on Schedule XI to the Plan, and the entry of the Confirmation Order by the clerk of the Bankruptcy Court shall constitute approval of such rejection pursuant to Section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such rejected insurance policy or agreement set forth on Schedule XI to the Plan is burdensome and that the rejection thereof is in the best interest of each Debtor, its Estate, and all parties in interest in the Chapter 11 Cases. The rights under the insurance policies and agreements constituting (i) the OC Asbestos Personal Injury Liability Insurance Assets shall, to the extent necessary, be deemed assigned to the OC Sub-Account of the Asbestos Personal Injury Trust as of the Effective Date and (ii) the FB Asbestos Property Damage Insurance Assets shall, to the extent necessary, be deemed assigned to the FB Asbestos Property Damage Trust as of the Effective Date, and, pursuant to Section 365 of the Bankruptcy Code, the Debtors shall have no further liability thereunder from and after June 18, 2001. Nothing contained in the Plan shall constitute a waiver of any claim, right, or cause of action that the Debtors, the Asbestos Personal Injury Trust, the FB Asbestos Property Damage Trust, or the Reorganized Debtors, as the case may be, may hold against the insurer under any policy of insurance or insurance agreement. (f) Indemnification Obligations and Agreements Concerning Obligations to Indemnify Indemnification Obligations shall be deemed to be, and shall be treated as though they are, executory contracts that are assumed pursuant to Section 365 of the Bankruptcy Code under the Plan and such obligations shall survive confirmation of the Plan, remain unaffected by the Plan and shall not be discharged or impaired by the Plan, irrespective of whether indemnification or reimbursement obligation is owed in connection with an event occurring before or after the Petition Date. "Indemnification Obligations" mean any legally enforceable obligations of any of the Debtors under their charters, by-laws, contracts assumed by them pursuant to Section 365 of the Bankruptcy Code, or statute, to indemnify, reimburse or provide contribution to any or all persons who may serve or who have served at any time as directors, officers, employees, agents, professionals or advisors of such Debtor, or who at the request of any of the Debtors served as directors, officers, employees, agents, professionals or advisors of another corporation (including Subsidiaries of the Debtors) or of any partnership, joint venture, trust or other enterprise, and any directors, officers, employees, agents, professionals or advisors of any of the Debtors who at the request of such Debtor may serve or have served as agents or fiduciaries of an employee benefit plan of such Debtor or any of its Subsidiaries, from and against any of the expenses, liabilities or other matters arising under or in or covered by applicable law, provided that the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent, professional or advisor or in any other capacity while serving as a director, officer, employee, agent, professional or advisor, and provided that such obligations shall not cover willful misconduct. Notwithstanding anything to the contrary herein, Indemnification Obligations shall not include any obligations of the Debtors to pay or reimburse any party in connection with (i) funds recovered or to be recovered from such party pursuant to an Avoidance Action, or (ii) claims arising out of or in connection with the case of John Hancock Life Insurance Co., et al. v. Goldman, Sachs & Co., et al., in the United States District Court for the District of Massachusetts, C.A. No. 01-10729-RWZ. Except as otherwise provided in this Plan, indemnification obligations that are not Indemnification Obligations hereof shall be deemed to be, and shall be treated as though they are, executory contracts that are rejected pursuant to Section 365 of the Bankruptcy Code as of the Effective Date. The Plan does provide the Debtor the right to honor certain distributorship indemnification claims. See Section 14.10 the Plan. G. Resolution and Treatment of Disputed, Contingent, and Unliquidated Claims 1. Objections Unless otherwise ordered by the Bankruptcy Court, only the Debtors, the Reorganized Debtors or the Disbursing Agent shall have the authority to file objections to settle, compromise, withdraw or litigate objections to Claims, other than with respect to (a) Professional Fee Claims, (b) Asbestos Personal Injury Claims (which Claims and Demands shall be governed solely in accordance with the procedures established pursuant to the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures), and (c) FB Asbestos Property Damage Claims (which Claims shall be governed solely in accordance with the procedures established pursuant to the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures, respectively). Nothing herein shall be construed as limiting the right of the United States Trustee to be heard under Sections 307 or 502(a) of the Bankruptcy Code with regard to any Professional Fee Claims or other similar claims or requests for payment of administrative expenses. From and after the Confirmation Date, the Reorganized Debtors or the Disbursing Agent may settle or compromise any Disputed Claim (any Class 1, Class 2A, Class 2B, Class 3, Class 4, Class 5, or Class 6 Claim, or any portion thereof, that is neither an Allowed Claim nor a Disallowed Claim) without approval of the Bankruptcy Court. All objections to Claims, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims, must be filed and served on the holders of such Claims by the Claims Objection Deadline. Nothing contained herein, however, shall limit the Debtors' or Reorganized Debtors' right to object to any Claims, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims filed or amended after the Claims Objection Deadline, which day shall be one hundred and eighty (180) days after the Effective Date, unless extended by order of the Bankruptcy Court. If an objection has not been filed to a Proof of Claim or a scheduled Claim, other than Asbestos Personal Injury Claims and FB Asbestos Property Damage Claims, by the Claims Objection Deadline, the Claim to which the Proof of Claim or scheduled Claim relates will be treated as an Allowed Claim if such Claim has not been Allowed earlier. Notwithstanding any other provision in this Plan, no payments or distributions shall be made with respect to all or any portion of a Disputed Claim unless and until all objections to such Disputed Claim have been settled or withdrawn or have been determined by Final Order, and the Disputed Claim, or some portion thereof, has become an Allowed Claim. 2. Disputed Distribution Reserve The Disbursing Agent shall establish appropriate reserves for Disputed Claims by withholding the lesser of (i) 100% of distributions to which holders of Disputed Claims would be entitled under the Plan if such Disputed Claims were Allowed Claims, or (ii) such other amount as may be approved by the Bankruptcy Court. On, or as soon as practicable after, the Initial Distribution Date, the Reorganized Debtors shall transmit to the Disbursing Agent, and the Disbursing Agent shall reserve for the account of each holder of a Disputed Claim, (a) Cash, Senior Notes, New OCD Common Stock, or such other property which would otherwise be distributable to such holder on such date in accordance with the Plan were such Disputed Claim an Allowed Claim on such date, in the Face Amount thereof, or (b) Cash, Senior Notes, New OCD Common Stock, or such other property of a lesser value as such holder and the Reorganized Debtors may agree. Cash, Senior Notes, New OCD Common Stock, or such other property reserved under the Plan shall be set aside and segregated by Class of Claims and, in the case of Cash, Cash dividends or Cash payments in respect thereof, to the extent practicable, held by the Disbursing Agent in an interest bearing escrow fund (which may be a single account for each Class, provided that separate book entries for each Claim are maintained by the Disbursing Agent) to be established and maintained by the Disbursing Agent pending resolution of such Disputed Claims. 3. Distributions on Account of Disputed Claims Once They are Allowed On each Quarterly Distribution Date (the calendar quarters ending in March, June, September and December), the Disbursing Agent shall make payments and distributions from the reserve established for Disputed Claims to each holder of a Disputed Claim that has become an Allowed Claim during the preceding calendar quarter. After the date that the order or judgment of the Bankruptcy Court allowing such Claim becomes a Final Order, the Reorganized Debtors shall distribute to the holder of such Claim any property in the reserve established for Disputed Claims that would have been distributed to the holder of such claim had such Claim been an Allowed Claim, pursuant to the provisions of Article III governing the applicable Class. Holders of such Claims that are ultimately Allowed will also be entitled to receive, on the basis of the amount ultimately Allowed, the amount of any dividends or other distributions received on account of the property in reserve between the Effective Date and the date such distribution is made to such holder of a Claim. H. Exit Facility The Debtors anticipate that they will obtain new bank financing on the Effective Date (the "Exit Facility") for general working capital and corporate purposes, in such amounts and on such terms as are satisfactory to the Debtors and the Plan Proponents. The Debtors have not yet ascertained the amount or the terms of the Exit Facility. I. Conditions Precedent to Confirmation and Effectiveness of the Plan 1. Conditions to Confirmation Relating to the Asbestos Permanent Channeling Injunction The Plan will not be confirmed, and the Confirmation Order will not be entered, until and unless the Confirmation Conditions set forth below have been satisfied or waived by the Plan Proponents. These Confirmation Conditions are designed to, inter alia, ensure that the Asbestos Personal Injury Permanent Channeling Injunction will be effective, binding and enforceable and will be based on the following general findings of the Bankruptcy Court, each of which will be contained in the Confirmation Order in form and substance acceptable to the Plan Proponents. The following are conditions to the Plan which relate to Asbestos Personal Injury Claims and the Asbestos Personal Injury Permanent Channeling Injunction, although such conditions may be relevant to the FB Asbestos Property Damage Claims and the FB Asbestos Property Damage Trust. (a) The Asbestos Personal Injury Permanent Channeling Injunction is to be implemented in connection with the Asbestos Personal Injury Trust and the Plan. (b) At the time of the order for relief with respect to OC and Fibreboard, OC and Fibreboard had been named as defendants in personal injury, wrongful death or property damage actions seeking recovery for damages allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products. (c) The Asbestos Personal Injury Trust, as of the Effective Date, will assume the liabilities of all of the OC Persons with respect to OC Asbestos Personal Injury Claims and, upon such assumption, the Reorganized Debtors and the OC Persons shall have no liability for any OC Asbestos Personal Injury Claims. (d) The Asbestos Personal Injury Trust, as of the Effective Date, will assume the liabilities of all of the FB Persons with respect to FB Asbestos Personal Injury Claims and, upon such assumption, the Reorganized Debtors and the FB Persons shall have no liability for any FB Asbestos Personal Injury Claims. (e) The OC Sub-Account of the Asbestos Personal Injury Trust is to be funded in whole or in part with Cash, Senior Notes, New OCD Common Stock, the OCD Insurance Escrow, the OC Asbestos Personal Injury Liability Insurance Assets, distributable proceeds of the Litigation Trust Assets, and by the obligation of Reorganized OCD to make future payments, including dividends. (f) The FB Sub-Account of the Asbestos Personal Injury Trust is to be funded in whole or in part with the Existing Fibreboard Insurance Settlement Trust Assets, the FB Reversions, the Committed Claims Account, and the FB Sub-Account Settlement Payment. (g) The Asbestos Personal Injury Trust is to own, upon the Initial Distribution Date, a majority of the voting shares of Reorganized OCD. (h) In light of the benefits provided, or to be provided, to the Asbestos Personal Injury Trust on behalf of each Protected Party, the Asbestos Personal Injury Permanent Channeling Injunction is fair and equitable with respect to the persons that might subsequently assert Asbestos Personal Injury Claims against any Protected Party. (i) Reorganized OCD and Reorganized Fibreboard are likely to be subject to substantial Demands for payment arising out of the same or similar conduct or events that gave rise to (a) OC Asbestos Personal Injury Claims and (b) FB Asbestos Personal Injury Claims, respectively, that are addressed by the Asbestos Personal Injury Permanent Channeling Injunction. (j) The actual amounts, numbers, and timing of such Demands cannot be determined. (k) Pursuit of such Demands outside the procedures prescribed by the Plan is likely to threaten the Plan's purpose to deal equitably with Claims and Demands. (l) The terms of the Asbestos Personal Injury Permanent Channeling Injunction, including any provisions barring actions against the Protected Parties pursuant to Section 524(g)(4)(A) of the Bankruptcy Code, are set forth in the Plan and in any disclosure statement supporting the Plan. (m) The Plan establishes, in Classes 7 and 8, separate Classes of claimants whose Claims are to be addressed by the Asbestos Personal Injury Trust. (n) Class 7 and Class 8 claimants have each voted, by at least 75 percent (75%) of those voting, in favor of the Plan. (o) Pursuant to court orders or otherwise, the Asbestos Personal Injury Trust will operate through mechanisms such as structured, periodic or supplemental payments, pro rata distributions, matrices or periodic review of estimates of the numbers and values of present Claims and Demands, or other comparable mechanisms, that provide reasonable assurance that the Asbestos Personal Injury Trust will value, and be in a financial position to pay, present Claims and Demands that involve similar Claims in substantially the same manner. (p) The Future Claimants' Representative was appointed as part of the proceedings leading to the issuance of the Asbestos Personal Injury Permanent Channeling Injunction for the purpose of protecting the rights of persons that might subsequently assert Demands of the kind that are addressed in the Asbestos Personal Injury Permanent Channeling Injunction and channeled to and assumed by the Asbestos Personal Injury Trust. The Future Claimants' Representative has in all respects fulfilled his duties, responsibilities, and obligations as the future representative in accordance with Section 524(g) of the Bankruptcy Code. (q) Identifying or describing each Protected Party in the Asbestos Personal Injury Permanent Channeling Injunction is fair and equitable with respect to persons that might subsequently assert Demands against each such Protected Party, in light of the benefits provided, or to be provided, to the Asbestos Personal Injury Trust by or on behalf of any such Protected Party. (r) The Plan complies in all respects with Section 524(g) of the Bankruptcy Code. (s) The Asbestos Personal Injury Trust is to use its assets and income to pay Asbestos Personal Injury Claims. (t) The Plan and its Exhibits constitute a fair, equitable, and reasonable resolution of the liabilities of the Debtors for Asbestos Personal Injury Claims. (u) The confirmation and consummation of the Plan, including the discharge of the Debtors pursuant to the Plan and the issuance of Asbestos Personal Injury Permanent Channeling Injunction, shall not provide the insurers a defense to liability for insurance coverage based upon the alleged elimination of the liability of the insured(s). (v) The duties and obligations of the insurers that issued policies and their successors and assigns, or, with respect to any insolvent insurers, their liquidators and/or the state insurance guaranty funds that bear responsibility with respect to such rights under such policies which constitute the OC Asbestos Personal Injury Liability Insurance Assets are not eliminated or diminished by (i) the discharge, release and extinguishment of all the liabilities of the Debtors or Reorganized Debtors pursuant to the Plan in respect to the OC Asbestos Personal Injury Claims; (ii) the assumption of liability for the OC Asbestos Personal Injury Claims by the Asbestos Personal Injury Trust; or (iii) the transfer pursuant to the Plan of the Debtors' rights to the OC Asbestos Personal Injury Liability Insurance Assets to the extent determined and permitted under applicable bankruptcy law. (w) All insurers of the Debtors affording insurance coverage that is the subject of the OC Asbestos Personal Injury Liability Insurance Assets and all insurers of the Debtors whose policies provide coverage for the FB Asbestos Property Damage Claims have been given notice and an opportunity to be heard on matters relating to the Plan and its Exhibits. (x) The sum of the Class 7 Aggregate Amount and the Class 8 Aggregate Amount as determined by the Bankruptcy Court and the District Court shall be an amount not less than $16 billion prior to the deductions of (i) the OCD Insurance Escrow, (ii) the OC Asbestos Personal Injury Liability Insurance Assets, (iii) the Existing Fibreboard Insurance Settlement Trust Assets, (iv) the FB Reversions and (v) the Committed Claims Account. (y) Class 6 Claims shall be Allowed or estimated in such maximum aggregate amount as the Plan Proponents shall agree and have filed at least ten (10) Business Days prior to the Objection Deadline. Certain insurers who have contested their obligations to OC with respect to coverage for Asbestos Personal Injury Claims have objected to various aspects of the Plan as violative of their rights under policies of insurance and otherwise, including rights they claim to be subject to resolution outside the bankruptcy proceedings. In particular, the insurers criticize aspects of the Plan that: (i) assign OC Asbestos Personal Injury Liability Insurance Assets to the Asbestos Personal Injury Trust, (ii) provide for estimation, resolution, and payment of Asbestos Personal Injury Claims, (iii) allegedly eliminate their ability to pursue counterclaims or set-off defenses in coverage actions initiated by OC, and (d) condition confirmation on the Bankruptcy Court or District Court making certain findings contained in Section 12.1 of the Plan that may relate to insurance. These insurers assert that the Plan must be made so-called insurance neutral. The Plan Proponents believe that many of the insurers' criticisms -- while ostensibly advanced in support of insurance neutrality -- seek to alter provisions that are already insurance neutral in purpose or effect and thereby to place insurance rights at jeopardy rather than to assure true neutrality. The Plan Proponents do not believe that provisions should be eliminated that are either usual and customary in bankruptcy plans or are insurance neutral in the sense that they are designed neither to enhance nor to diminish access to coverage for the payment of Asbestos Personal Injury Claims. To the extent that the Plan Proponents and insurers do not resolve their disputes, such issues may be resolved by the Bankruptcy Court or District Court as part of confirmation and/or in separate proceedings or in various arbitral or judicial proceedings in which coverage issues may be adjudicated. 2. Conditions to Confirmation Relating to the FB Asbestos Property Damage Trust The following are conditions to the Plan which relate to the FB Asbestos Property Damage Claims and the FB Asbestos Property Damage Trust: (a) With respect to any FB Asbestos Property Damage Claim that is Allowed in accordance with the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures or by the Bankruptcy Court, other court of competent jurisdiction or otherwise, such allowance shall establish the amount of legal liability against the FB Asbestos Property Damage Trust in the Allowed amount of such FB Asbestos Property Damage Claim. (b) Upon confirmation and consummation of the Plan, including the effectuation of the transfer of the FB Asbestos Property Damage Insurance Assets, the FB Asbestos Property Damage Trust shall have access to insurance coverage and/or insurance payments pursuant to the transfer of the FB Asbestos Property Damage Insurance Assets so that the proceeds of such insurance may be used to defend, resolve, and satisfy (subject to any applicable policy limits) the FB Asbestos Property Damage Trust's obligations to defend, resolve and satisfy FB Asbestos Property Damage Claims, and no insurer shall have any insurance coverage defense based on the Plan, the transfer of the FB Asbestos Property Damage Insurance Assets, the FB Asbestos Property Damage Trust Agreement, or the FB Asbestos Property Damage Trust Distribution Procedures or allowance of claims thereunder, or the negotiations that produced any of the foregoing. (c) The Debtors do not need the consent of their insurers to transfer the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. Alternatively, the Debtors' insurers have an obligation not to withhold consent to such transfer unreasonably, and the refusal to consent to the transfer under the circumstances would be unreasonable. 3. General Conditions to Confirmation. In addition to the foregoing conditions expressly stated in the Plan, including those which are also included in Section 524(g) of the Bankruptcy Code as conditions to the issuance of a channeling injunction, in order to confirm the Plan, the Bankruptcy Court or the District Court must determine at the Confirmation Hearing whether the requirements for confirmation set forth in Section 1129 of the Bankruptcy Code have been satisfied. Such requirements include determinations with respect to the following: (a) The Plan complies with the applicable provisions of the Bankruptcy Code. (b) The Debtors have complied with the applicable provisions of the Bankruptcy Code. (c) The Plan has been proposed in good faith and not by any means forbidden by law. (d) Any payment made or promised by the Debtors or by a person issuing securities or acquiring property under the Plan for services or for costs and expenses in, or in connection with, the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been disclosed to the Bankruptcy Court, and any such payment made before confirmation of the Plan is reasonable or, if such payment is to be fixed after confirmation of the Plan, such payment is subject to the approval of the Bankruptcy Court as reasonable. (e) The Debtors have disclosed (i) the identity and affiliations of (x) any individual proposed to serve, after confirmation of the Plan, as a director, officer or voting trustee of the Reorganized Debtors, (y) any Affiliate of the Debtors participating in a joint plan with the Debtors, or (z) any successor to the Debtors under the Plan (and the appointment to, or continuance in, such office of such individual(s) is consistent with the interests of Claims and Interest holders and with public policy), and (ii) the identity of any insider that will be employed or retained by the Reorganized Debtors and the nature of any compensation for such insider. (f) With respect to each Class of Claims or Interests, each holder of an Impaired Claim or Impaired Interest either has accepted the Plan or will receive or retain under the Plan on account of the Claims or Interests held by such entity, property of a value, as of the Effective Date, that is not less than the amount that such entity would receive or retain if the Debtors were liquidated on such date under Chapter 7 of the Bankruptcy Code. See Section XIV of this Disclosure Statement entitled "Best Interests Test." (g) The Plan provides that Administrative Claims and DIP Facility Claims will be paid in full on the Effective Date and that Priority Tax Claims will receive on account of such Claims the treatment required by 1129(a)(9)(C) of the Bankruptcy Code. (See Section VII.C.2.c of this Disclosure Statement entitled "Treatment of Unclassified Claims Under the Plan - -Priority Tax Claims." (h) If a Class of Claims is Impaired under the Plan, at least one Class of Impaired Claims has accepted the Plan, determined without including any acceptance of the Plan by insiders holding Claims in such Class. (i) Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors or any successor to the Debtors under the Plan, unless such liquidation or reorganization is proposed in the Plan. See Section XIV.A of this Disclosure Statement entitled "Feasibility of the Plan." (j) All fees payable under Section 1930 of Title 28 have been paid or the Plan provides for the payment of all such fees on the Effective Date. (k) The Plan provides for the continuation after the Effective Date of all retiree benefits, if any, at the level established pursuant to Sections 1114(e)(1)(B) or 1114(g) of the Bankruptcy Code at any time prior to the Confirmation Date, for the duration of the period the Debtors have obligated themselves to provide such benefits. The Debtors believe that, upon receipt of the votes required to confirm the Plan, the Plan will satisfy all the statutory requirements of Chapter 11 of the Bankruptcy Code, that the Debtors have complied or will have complied with all of the requirements of Chapter 11, and that the Plan has been proposed and submitted to the Bankruptcy Court in good faith. 4. Conditions to the Effective Date The following are conditions precedent to the occurrence of the Effective Date, each of which may be satisfied or waived in accordance with Section 12.3 of the Plan: (a) The Confirmation Order shall have been entered, shall have become a Final Order, and shall be in form and substance reasonably satisfactory to the Plan Proponents. (b) The Asbestos Personal Injury Permanent Channeling Injunction shall be in full force and effect. (c) All agreements or other instruments which are exhibits to the Plan shall be in form and substance reasonably acceptable to the Plan Proponents and shall have been executed and delivered. (d) All actions, documents and agreements necessary to implement the Plan shall have been effected or executed. (e) The Asbestos Personal Injury Trustees shall have accepted their appointment as Asbestos Personal Injury Trustees and shall have executed the Asbestos Personal Injury Trust Agreement. (f) The individuals designated to serve as members of the TAC shall have accepted their appointment as TAC members. (g) The Future Claimants' Representative shall have agreed to continue to serve in such capacity following the Confirmation Date. (h) The Private Letter Ruling ("PLR") with respect to the qualification of the trust formed pursuant to Section 524(g) of the Bankruptcy Code described therein as a "qualified settlement fund" within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the Internal Revenue Code of 1986, as amended ("IRC"), shall not have been cancelled, withdrawn or revoked and shall remain in full force and effect. Alternatively, the Reorganized Debtors shall have received an opinion of counsel with respect to the tax status of the Asbestos Personal Injury Trust as a "qualified settlement fund" reasonably satisfactory to the Plan Proponents, and, (i) if Class 4 accepts the Plan, the Bank Holders, and/or (ii) if Class 6 accepts the Plan, the Unsecured Creditors' Committee. (i) The FB Asbestos Property Damage Trustee shall have accepted his or her appointment as FB Asbestos Property Damage Trustee and shall have executed the FB Asbestos Property Damage Trust Agreement. (j) The Reorganized Debtors shall have entered into and shall have credit availability under the Exit Facility in an amount sufficient to meet the needs of Reorganized Debtors, as determined by the Plan Proponents. (k) Each of the Exhibits shall be in form and substance acceptable to the Plan Proponents. (l) The Existing Fibreboard Insurance Settlement Trust Assets will be irrevocably assigned and transferred on the Effective Date to the Asbestos Personal Injury Trust, for allocation to the FB Sub-Account, or the Existing Fibreboard Insurance Settlement Trust Assets will be treated in accordance with Section 10.5 of the Plan. 5. Waiver of Conditions to the Effective Date Under the Plan, the Plan Proponents reserve, in their sole discretion, the right, with the written consent of (a) if Class 4 accepts the Plan, the Bank Holders, and/or (b) if Classes 4, 5 and 6 all accept the Plan, the Unsecured Creditors' Committee, to waive the occurrence of any of the foregoing conditions precedent to the Effective Date or to modify any of such conditions precedent. Any such written waiver of a condition precedent set forth in this section may be effected at any time, without notice, without leave or order of the Bankruptcy Court, and without any formal action other than proceeding to consummate the Plan. Any actions required to be taken on the Effective Date shall take place and shall be deemed to have occurred simultaneously, and no such action shall be deemed to have occurred prior to the taking of any other such action. If the Plan Proponents decide that one of the foregoing conditions cannot be satisfied, and the occurrence of such condition is not waived in the manner set forth above, then the Plan Proponents shall file a notice of the failure of the Effective Date with the Bankruptcy Court, at which time the Plan and the Confirmation Order shall be deemed null and void. J. Certain Releases and Injunctions Under the Plan This section of the Disclosure Statement contains a discussion of certain releases and injunctions under the Plan. The following releases and injunctions are described in this Disclosure Statement: (1) an injunction of Enjoined Actions against the Debtors (See Section VII.J.2 of this Disclosure Statement entitled "Releases by Holders of Claims and Interests"); (2) the Debtors' discharge and the discharge injunction (See Section VII.L.2 of this Disclosure Statement entitled "Discharge of the Debtors"); (3) the Asbestos Personal Injury Permanent Channeling Injunction (See Section VII.L.4 of this Disclosure Statement entitled "The Asbestos Personal Injury Permanent Channeling Injunction"); (4) the injunction related to FB Asbestos Property Damage Claims (See Section IX.C of this Disclosure Statement entitled "Injunction Channeling FB Asbestos Property Damage Claims"); and (5) an injunction with respect to claims against the Hartford Entities (See Section VII.J.6 of this Disclosure Statement entitled "Injunction with Respect to Claims Against the Hartford Entities"). 1. Debtors' Releases of Claims Effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, to the fullest extent permissible under applicable law, each of the Debtors and Reorganized Debtors and their respective Estates and each of their respective Related Persons will be deemed to completely and forever release, waive, void, extinguish and discharge all Released Actions (other than the rights to enforce the Plan and any right or obligation under the Plan, and the securities, contracts, instruments, releases, indentures and other agreements or documents delivered thereunder or contemplated thereby) that may be asserted by or on behalf of the Debtors or Reorganized Debtors or their respective Estates or each of their respective Related Persons against (a) the Released Parties, (b) the Pre-petition Indenture Trustees, (c) the DIP Agent and the holders of DIP Facility Claims and (d) the Persons who are Related Persons of Persons listed in clauses (b) - (c) above. Unless listed on Schedule XIV of the Plan, the Plan would release certain actions against insiders of the Debtor. The proposed releases to insiders by the Debtor would release the certain claims which are currently subject to tolling agreements. These claims have been identified by the Debtors using the thresholds (minimums) agreed to with Unsecured Creditors' Committee and consist of the following: (1) alleged causes of action against twelve former and present officers and directors to recover approximately $6,750,000 in payments under the Officer Stretch Incentive Plan and Corporate Incentive Plan in September, 2000 (from individuals who received in excess of $200,000 from such payments; (2) an alleged cause of action against William Coleville, a director, to recover $ 164,327 for a consulting fee paid just before the bankruptcy filing; (3) an alleged cause of action against Glenn Hiner to recover $103,131.07 in dividends. If these payments were 100% recoverable without any cost to the estate, such recoveries are estimated to result in an additional payment to creditors of approximately .05% of their claims. Thus a creditor with a $1000 claim would receive an additional 50(cent). The "Related Persons" means, with respect to any Person, such Person's predecessors, successors and assigns (whether by operation of law or otherwise) and their respective present and former Affiliates and each of their respective present and former members, partners, equity-holders, officers, directors, employees, representatives, advisors, attorneys, agents and professionals, acting in such capacity, and any Person claiming by or through any of them. "Released Actions" means all Claims, obligations, suits, judgments, damages, debts, rights, causes of action and liabilities, and all Interests and rights of an equity security holder, whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other circumstance taking place or existing on or prior to the Effective Date in connection with or related to the Debtors and Reorganized Debtors and their respective Estates, the Chapter 11 Cases or the Plan, except for the (a) Tobacco Causes of Action, (b) the Avoidance Actions listed on Schedule XIV to the Plan as it may be amended up to ten (10) Business Days prior to the Objection Deadline, (c) the claims against CSFB and/or the Bank Holders in the Bank Holders Action, (d) the Material Rights of Action listed on Schedule XIV to the Plan, and (e) Asbestos Personal Injury Claims. Released Actions includes the release of all Claims, obligations, suits, judgments, damages, debts, rights, causes of action and liabilities against the Debtors and the Non-Debtor Subsidiaries arising from the 1997 Credit Agreement or the guaranties of the 1997 Credit Agreement. "Released Parties" means (a) the Unsecured Creditors' Committee and its present and former members, representatives, advisors, attorneys, agents and professionals, acting in such capacity, (b) the Asbestos Claimants' Committee and its present and former members, representatives, advisors, attorneys, agents and professionals, acting in such capacity, (c) the Future Claimants' Representative and his present and former representatives, advisors, attorneys, agents and professionals, acting in such capacity, (d) the respective Related Persons of the Debtors and the Reorganized Debtors and their respective Estates as of the Petition Date and thereafter and (e) the present and former officers and directors of the Debtors and Reorganized Debtors; except in each case for the Persons listed on Schedule III, to be filed no later than ten (10) Business Days prior to the approval of the Disclosure Statement, as it may be amended up to ten (10) Business Days prior to the Objection Deadline, against which Claims, obligations, suits, judgments, damages, Demands, debts, rights, causes of action, liabilities, Interests and other rights of an equity security holder shall not be released under the Plan. The Plan also provides for the exculpation of various parties with respect to their actions during the Chapter 11 Cases and their efforts to have the Plan confirmed. See Section VII.L.5 of this Disclosure Statement entitled "Exculpation and Limitation of Liability; Indemnity." 2. Releases by Holders of Claims and Interests Effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, to the fullest extent permissible under applicable law, each Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability that is discharged or an Interest or other right of an equity security holder that is terminated, and each of their respective Related Persons will be deemed to completely and forever release, waive, void, extinguish and discharge all Released Actions (other than the rights to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan, and any right or obligation of such holder under the Plan, and the securities, contracts, instruments, releases, indentures and other agreements or documents delivered thereunder or contemplated thereby) that otherwise may be asserted against the Claimant Released Parties. "Claimant Released Parties" means (a) the Debtors, the Reorganized Debtors and their respective predecessors, successors and assigns (whether by operation of law or otherwise) and their respective present and former Affiliates as of the Petition Date or thereafter, and additionally (b) if the Person granting the release votes in favor of the Plan, the Released Parties. The terms "Released Parties" and "Related Persons" are defined in the previous section of this Disclosure Statement. UNDER THE ABOVE-DESCRIBED PROVISIONS OF THE PLAN, PARTIES WHO VOTE IN FAVOR OF THE PLAN AGREE AND ARE DEEMED TO RELEASE CERTAIN CLAIMS AGAINST PARTIES WHO ARE NOT DEBTORS IN THESE CHAPTER 11 CASES, INCLUDING AFFILIATED OFFICERS AND DIRECTORS BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER CIRCUMSTANCE TAKING PLACE OR EXISTING ON OR PRIOR TO THE EFFECTIVE DATE IN CONNECTION WITH OR RELATED TO THE DEBTORS AND REORGANIZED DEBTORS AND THEIR RESPECTIVE ESTATES, THE CHAPTER 11 CASES OR THE PLAN. PARTIES WHO RELEASE SUCH CLAIMS PURSUANT TO THE PLAN ARE SUBJECT TO AN INJUNCTION AGAINST ASSERTING SUCH CLAIMS, AS DESCRIBED BELOW. 3. Injunctions Related to Releases EXCEPT AS OTHERWISE PROVIDED HEREIN OR IN THE CONFIRMATION ORDER, AS OF THE CONFIRMATION DATE, BUT SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, EACH PERSON THAT HAS HELD, CURRENTLY HOLDS OR MAY HOLD A CLAIM THAT IS RELEASED PURSUANT TO THIS SECTION 5.13 OF THE PLAN (DESCRIBED IN THE PREVIOUS SECTION) OR OTHER OBLIGATION, SUIT, JUDGMENT, DAMAGES, DEBT, RIGHT, CAUSE OF ACTION, LIABILITY, INTEREST OR OTHER RIGHT OF AN EQUITY SECURITY HOLDER RELEASED PURSUANT TO SECTION 5.13 OF THE PLAN, AND EACH OTHER PARTY IN INTEREST AND EACH OF THEIR RESPECTIVE RELATED PERSONS ARE PERMANENTLY, FOREVER AND COMPLETELY STAYED, RESTRAINED, PROHIBITED AND ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS, WHETHER DIRECTLY OR INDIRECTLY, DERIVATIVELY OR OTHERWISE ON ACCOUNT OF OR BASED ON THE SUBJECT MATTER OF ANY SUCH RELEASED CLAIMS OR OTHER RELEASED OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES OR INTERESTS OR OTHER RIGHTS OF AN EQUITY SECURITY HOLDER: (I) COMMENCING, CONDUCTING OR CONTINUING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY SUIT, ACTION OR OTHER PROCEEDING (INCLUDING, WITHOUT LIMITATION, TO ANY JUDICIAL, ARBITRAL, ADMINISTRATIVE OR OTHER PROCEEDING) IN ANY FORUM; (II) ENFORCING, ATTACHING (INCLUDING, WITHOUT LIMITATION, ANY PREJUDGMENT ATTACHMENT), COLLECTING, OR IN ANY WAY SEEKING TO RECOVER ANY JUDGMENT, AWARD, DECREE, OR OTHER ORDER; (III) CREATING, PERFECTING OR IN ANY WAY ENFORCING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY ENCUMBRANCE; (IV) SETTING OFF, SEEKING REIMBURSEMENT OR CONTRIBUTIONS FROM, OR SUBROGATION AGAINST, OR OTHERWISE RECOUPING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY AMOUNT AGAINST ANY LIABILITY OR OBLIGATION OWED TO ANY PERSON RELEASED UNDER SECTION 5.13(A) OR SECTION 5.13(B), AS APPLICABLE; AND (V) COMMENCING OR CONTINUING IN ANY MANNER, IN ANY PLACE OF ANY ACTION, WHICH IN ANY SUCH CASE DOES NOT COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THE PLAN. 4. Deemed Consent BY VOTING TO ACCEPT THE PLAN, EACH HOLDER OF A CLAIM WILL BE DEEMED, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TO HAVE SPECIFICALLY CONSENTED TO THE RELEASES AND INJUNCTIONS AS DESCRIBED ABOVE. 5. No Waiver The releases described above shall not, however, limit, abridge or otherwise affect the rights of the Reorganized Debtors to enforce, sue on, settle or compromise the rights, claims and other matters retained by the Reorganized Debtors pursuant to the Plan. 6. Injunction With Respect to Claims Against the Hartford Entities OCD has entered into a Settlement Agreement between it and the Hartford Financial Services Group, Inc., dated June 18, 2001, and approved by the Bankruptcy Court by Order dated July 16, 2001. Pursuant to the Settlement Agreement, the Debtors propose the following injunction under the Plan: EXCEPT AS TO ANY RIGHTS WITH RESPECT TO WHICH THE DEBTORS EXPLICITLY DECLINED TO GIVE A RELEASE TO THE HARTFORD ENTITIES PURSUANT TO SECTION VI OF THE HARTFORD SETTLEMENT AGREEMENT, EFFECTIVE AS OF THE CONFIRMATION DATE, BUT SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, FOR GOOD AND VALUABLE CONSIDERATION, PURSUANT TO SECTION 105(A) OF THE BANKRUPTCY CODE, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EACH PERSON THAT HAS HELD, CURRENTLY HOLDS OR MAY HOLD A CLAIM SHALL BE PERMANENTLY ENJOINED PURSUANT TO 11 U.S.C. ss.105(A) FROM TAKING ANY ACTION OR SEEKING ANY RECOVERY AGAINST OR FROM ANY OF THE HARTFORD ENTITIES THAT SEEKS TO ENFORCE ANY RIGHTS UNDER, THROUGH OR RELATED TO THE HARTFORD POLICIES. "Hartford Entities" means (a) the Hartford Financial Services Group, Inc., Excess Insurance Company, Ltd., Fencourt Reinsurance Company, Ltd., First State Insurance Company, Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Canada, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Insurance Company of the Southeast, Hartford Insurance, Ltd. (Bermuda), Hartford Lloyds Insurance Company, Hartford Underwriters Insurance Company (formerly New York Underwriters Insurance Company), New England Insurance Company, New England Reinsurance Corporation, Nutmeg Insurance Company, Pacific Insurance Company, Ltd., Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company, and Twin City Fire Insurance Company; as well as (b) all of their respective predecessors, successors, assigns, subsidiaries, affiliates, holding companies (if any), parent companies (if any), merged companies and acquired companies, exclusive of any former asset, affiliate, or member company of Reliance Group Holdings, Inc.; and (c) all of the respective employees, officials, agents, attorneys, representatives, officers, and directors, in their capacity as such, of the entities encompassed by clauses (a) and (b). "Hartford Policies" means the following policies issued to OCD:
-------------------------------- ------------------------------- ------------------------------ Issuer Policy Period Policy Number -------------------------------- ------------------------------- ------------------------------ First State 06/18/74 to 10/22/74 921434 -------------------------------- ------------------------------- ------------------------------ 10/22/74 to 10/22/75 921434 -------------------------------- ------------------------------- ------------------------------ 10/22/75 to 10/22/76 921434 -------------------------------- ------------------------------- ------------------------------ 10/22/76 to 10/22/77 923542 -------------------------------- ------------------------------- ------------------------------ 10/22/77 to 9/01/78 925625 -------------------------------- ------------------------------- ------------------------------ 09/01/78 to 09/01/79 926735 -------------------------------- ------------------------------- ------------------------------ 03/08/79 to 09/01/79 927953 -------------------------------- ------------------------------- ------------------------------ 09/01/82 to 09/01/83 934962 -------------------------------- ------------------------------- ------------------------------ Twin City 09/01/82 to 09/01/83 TXX111365 -------------------------------- ------------------------------- ------------------------------ Excess 09/01/79 to 09/01/80 EL 10300 (EL 10-87) -------------------------------- ------------------------------- ------------------------------ First State 09/01/82 to 09/01/83 933186 -------------------------------- ------------------------------- ------------------------------ 09/01/83 to 09/01/84 EU 935321 -------------------------------- ------------------------------- ------------------------------ 09/01/83 to 09/01/84 EU 935324 -------------------------------- ------------------------------- ------------------------------ 10/31/79 to 11/29/82 GC802752 -------------------------------- ------------------------------- ------------------------------ 04/01/81 to 04/01/84 GC802770 -------------------------------- ------------------------------- ------------------------------ 05/01/88 to 05/01/89 GC009556 -------------------------------- ------------------------------- ------------------------------ 05/01/89 to 05/01/90 GC010810 -------------------------------- ------------------------------- ------------------------------ Hartford 12/01/74 to 12/01/75 57 IC 620122 -------------------------------- ------------------------------- ------------------------------ Pacific 05/01/93 to 05/01/94 ZG 0001003 -------------------------------- ------------------------------- ------------------------------ 04/01/94 to 04/01/95 ZG 0002864 -------------------------------- ------------------------------- ------------------------------ 05/01/95 to 05/01/96 ZG 0004839 -------------------------------- ------------------------------- ------------------------------ 05/01/96 to 05/01/97 ZG 0006912 -------------------------------- ------------------------------- ------------------------------ 05/01/97 to 05/01/98 ZG 0008946 -------------------------------- ------------------------------- ------------------------------ Twin City 09/01/83 to 09/01/84 TXX 102719 -------------------------------- ------------------------------- ------------------------------
The term "Hartford Policies" also includes all insurance policies other than the above-listed policies ("Unknown Policies"), that were issued prior to January 1, 2001, by and in the name of one of the specifically named Hartford Entities, either to OCD or that insure OCD, including all known and unknown primary, umbrella, excess, or other insurance policies, contracts, and/or agreements of any nature, type, or kind (including but not limited to: all comprehensive general liability policies; general liability policies; casualty policies; environmental liability policies; environmental impairment policies; difference in conditions policies; directors' and officers' liability policies; errors and omissions liability policies; contractual liability policies; automobile liability policies; products liability policies; and workers' compensation policies). Notwithstanding any of the foregoing and for the avoidance of any doubt, Unknown Policies shall not include: (a) policies issued by one of the specifically named Hartford Entities to Persons other than OCD or the Debtors (except to the extent of the interest of OCD in such policies); (b) policies issued to Persons that become Affiliates of OCD or Reorganized OCD after June 18, 2001; (c) policies issued or subscribed by Excess Insurance Company Ltd. that are subject to a May 15, 1999 settlement agreement between OCD and London Market Insurers; (d) First State policy number EU 935321 to the extent that it provides coverage for products/completed operations claims other than asbestos claims; and (e) policies issued to or insuring Fibreboard. K. Summary of Other Provisions of the Plan 1. Dissolution of the Creditors' Committees and Termination of Futures Claimants' Representative (a) Creditors' Committees Under the Plan, on the Effective Date, each of the Unsecured Creditors' Committee and the Asbestos Claimants' Committee will dissolve and their respective members will be released and discharged from all duties and obligations arising from or related to the Chapter 11 Cases, except for the purpose of completing any matters, including, without limitation, litigation or negotiations, pending as of the Effective Date. The professionals retained by each of the Unsecured Creditors' Committee and the Asbestos Claimants' Committee and the respective members thereof will not be entitled to compensation or reimbursement of expenses for any services rendered after the Effective Date, except (i) as authorized in the preceding sentence or (ii) to the extent such services are rendered in connection with the hearing on final allowances of compensation pursuant to Section 330 of the Bankruptcy Code. (b) Futures Claimants' Representative On the Effective Date, the existence of the Future Claimants' Representative and his rights to ongoing reimbursement of expenses and the rights of his professionals to ongoing compensation and reimbursement of expenses shall continue after the Effective Date only for (i) the purposes set forth in the Asbestos Personal Injury Trust Agreement and the annexes thereto and (ii) the purposes of completing any matters, including, without limitation, litigation or negotiations, pending as of the Effective Date, and shall otherwise terminate on the Effective Date. 2. Cancellation of Debt and Debt Agreements On the Effective Date, (a) the Debt shall be cancelled and extinguished and (b) the obligations of the Debtors, CFSB as agent for the Bank Holders and the Pre-petition Indenture Trustees under the Debt Agreements shall be discharged. Notwithstanding the foregoing, each of the Pre-petition Bond Indentures shall continue in effect solely for the purposes of (x) allowing the Pre-petition Indenture Trustee to make distributions to holders of Allowed Class 5 Claims pursuant to the Plan and (y) permitting the Pre-petition Indenture Trustee to maintain any rights or liens it may have for fees, costs, expenses and indemnification under its indenture or other agreement or applicable law, but the foregoing shall not result in any expense or liability to any Reorganized Debtor other than as expressly provided for in the Plan. No Reorganized Debtor shall have any obligations to any Pre-petition Indenture Trustee, agent or service (or to any disbursing agent replacing a Pre-petition Indenture Trustee, agent or service) for any fees, costs or expenses, except as expressly provided in the Plan. Except as provided in any contract, instrument or other agreement or document entered into or delivered in connection with the Plan, on the Effective Date and immediately following the completion of distributions to holders of Claims in Class 5, the Pre-petition Indenture Trustees shall be released from all duties, without any further action on the part of the Debtors or Reorganized Debtors. 3. Cancellation of OCD Interests As of the Effective Date, by virtue of the Plan, and without any action necessary on the part of the holders thereof or any corporate action, except as specified in the Plan, all of the OCD Interests outstanding at the Effective Date shall be cancelled, extinguished and retired, and no consideration will be paid or delivered with respect thereto. Holders of OCD Interests shall not be required to surrender their certificates or other instruments evidencing ownership of such OCD Interests. 4. Certificates of Incorporation and Bylaws The certificate or articles of incorporation and bylaws of each Debtor will be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code and will include, among other things, pursuant to Section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity securities, but only to the extent required by Section 1123(a)(6) of the Bankruptcy Code. The Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD will also include provisions (a) creating the New OCD Common Stock, and (b) to the extent necessary or appropriate, effectuating the provisions of the Plan. The Amended and Restated Certificate of Incorporation of Reorganized OCD and the Amended and Restated Bylaws of Reorganized OCD shall be in substantially the forms of Exhibit A and Exhibit B to the Plan, to be filed at least ten (10) Business Days prior to the Objection Deadline. 5. Administrative Claims Bar Date All requests for payment of an Administrative Claim (other than Administrative Claims incurred within the ordinary course of business excepted from filing under Section 3.1 of the Plan and final requests for compensation or reimbursement of the fees of any professional employed in the Chapter 11 Cases pursuant to Section 327 or 1103 of the Bankruptcy Code or otherwise, including the professionals seeking compensation or reimbursement of costs and expenses relating to services performed after the Petition Date and prior to and including the Effective Date in connection with the Chapter 11 Cases, pursuant to Sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code for services rendered to the Debtors, the Unsecured Creditors' Committee, the Asbestos Claimants' Committee, the Future Claimants' Representative, the advisors to the Bank Holders' sub-committee and the advisors to the Bondholders' and trade creditors' sub-committee prior to the Effective Date and Claims for making a substantial contribution under Section 503(b)(4) of the Bankruptcy Code (collectively, "Professional Fee Claims")) must be filed with the Bankruptcy Court and served on counsel for the Debtors not later than forty-five (45) days after the Effective Date. Unless the Debtors object to an Administrative Claim within forty-five (45) days after receipt, such Administrative Claim shall be deemed Allowed in the amount requested. In the event that the Debtors object to an Administrative Claim, the Bankruptcy Court shall determine the Allowed amount of such Administrative Claim. Notwithstanding the foregoing, no request for payment of an Administrative Claim need be filed with respect to an Administrative Claim which is paid or payable by a Debtor in the ordinary course of business. 6. Professional Fee Claims All Professional Fee Claims must be filed and served on the Reorganized Debtors and their counsel not later than sixty (60) days after the Effective Date, unless otherwise ordered by the Bankruptcy Court. Objections to applications of such professionals or other entities for compensation or reimbursement of expenses must be filed and served on the Reorganized Debtors and their counsel and the requesting professional or other entity not later than twenty (20) days after the date on which the applicable application for compensation or reimbursement was served. Nothing herein shall be construed as limiting the right of the United States Trustee to be heard under Section 307 or 502(a) of the Bankruptcy Code with regard to any Professional Fee Claims or other similar claims or requests for payment of administrative expenses. 7. Continuation of Certain Orders Notwithstanding anything in the Plan to the contrary, the Debtors will continue to pay any Claims authorized to be paid by an order of the Bankruptcy Court during the Chapter 11 Cases, pursuant to the terms and conditions of any such order. L. Effects of Confirmation 1. Binding Effect The Plan will be binding upon and inure to the benefit of each of the Debtors and Reorganized Debtors and their respective Estates and each of their respective Related Persons and any Person claiming by or through them, and any Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or any right of an equity security holder, against or in the Debtors whether or not such Person will receive or retain any property or interest in property under the Plan and each of their respective successors and assigns; in each case, including, without limitation, all parties-in-interest in the Chapter 11 Cases. 2. Discharge of the Debtors Except as otherwise provided in the Plan or in the Confirmation Order, all consideration distributed under the Plan and the treatment of the Claims thereunder will be in exchange for, and in complete satisfaction, settlement, discharge, and release of, all Claims or other obligations, suits, judgments, damages, debts, Demands, rights, causes of action or liabilities, or Interests or other rights of an equity security holder, relating to the Debtors or the Reorganized Debtors or their respective Estates, and regardless of whether any property will have been distributed or retained pursuant to the Plan on account of such Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities (other than Demands), or Interests or other rights of an equity security holder, and upon the Effective Date, the Debtors and the Reorganized Debtors shall (i) be deemed discharged under Section 1141(d)(1)(A) of the Bankruptcy Code and released from any and all Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or Interests or other rights of an equity security holder of any nature whatsoever, including, without limitation, liabilities that arose before the Confirmation Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a Proof of Claim based upon such debt is filed or deemed filed under Section 501 of the Bankruptcy Code, (b) a Claim based upon such debt is Allowed under Section 502 of the Bankruptcy Code, or (c) the holder of a Claim based upon such debt voted to accept the Plan and (ii) terminate all rights and interests of holders of OCD Interests. Pursuant to 11 U.S.C. ss. 1141(d)(1), the Debtors and the Internal Revenue Service agree that the confirmation of the Plan does not discharge any liabilities to the Internal Revenue Service that may be due from the any of Debtors after the Petition Date and prior to the Confirmation Date. Should any such tax liabilities be determined by the Internal Revenue Service to be due from any of the Debtors, such liabilities shall be determined administratively or in a judicial forum in the manner in which such liabilities would have been resolved had the Chapter 11 Cases not been commenced. Any resulting liabilities shall be paid as if the Chapter 11 Cases had not been commenced. As of the Confirmation Date, except as otherwise provided herein or in the Confirmation Order, all Persons shall be precluded from asserting against the Debtors or the Reorganized Debtors or their respective Related Persons any other or further Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or Interests or other rights of an equity security holder relating to the Debtors or the Reorganized Debtors or their respective Estates based upon any act, omission, transaction or other activity of any nature that occurred prior to the Confirmation Date. In accordance with the foregoing, except as otherwise provided herein or in the Confirmation Order, the Confirmation Order shall be a judicial determination of discharge of all such Claims or other obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or Interests or other rights of an equity security holder against the Debtors or the Reorganized Debtors or their respective Estates and termination of all OCD Interests, pursuant to Sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void any judgment obtained against the Debtors or the Reorganized Debtors or their respective Estates at any time, to the extent that such judgment relates to a discharged Claim or terminated OCD Interest. 3. Permanent Injunctions Related to the Discharge Except as provided in the Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons and any Person claiming by or through them, that have held, currently hold or may hold a Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability (other than a Demand) that is discharged or an Interest or other right of an equity security holder that is terminated pursuant to the terms of the Plan will be permanently, forever and completely stayed, restrained, prohibited and enjoined from taking any Enjoined Action against any of the Released Parties or Claimant Released Parties whether directly or indirectly, derivatively or otherwise for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any such discharged Claim or other obligation, suit, judgment, damages, debt, right, cause of action or liability, or terminated Interest or right of an equity security holder on account of, or based on the subject matter of, any such discharged Claims, obligations, suits, judgments, damages, debts, rights, causes of action or liabilities or terminated Interests or rights of an equity security holder. 4. Asbestos Personal Injury Permanent Channeling Injunction The Confirmation Order will establish, among other things, the Asbestos Personal Injury Permanent Channeling Injunction. Pursuant to Section 524(g) of the Bankruptcy Code and pursuant to and in conjunction with the Confirmation Order, all Persons will be permanently, forever and completely stayed, restrained, prohibited and enjoined from taking any Enjoined Action, or proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the Asbestos Personal Injury Trust Agreement, including, without limitation, with respect to any Resolved Asbestos Personal Injury Claim, except in conformity and compliance therewith, against any Protected Party or property or interests in property of any Protected Party, whether directly or indirectly, derivatively or otherwise, for the purpose of, directly or indirectly, collecting, recovering or receiving payment of, on or with respect to any Asbestos Personal Injury Claims (other than pursuant to the provisions of the Asbestos Personal Injury Trust Agreement or to enforce the provisions of the Plan). "Protected Party" means any of the following: (a) any Debtor and its Related Persons, but solely to the extent set forth on Schedule X to the Plan, as it may be amended up to ten (10) Business Days prior to the Objection Deadline; (b) any Reorganized Debtor and its Related Persons, but solely to the extent set forth on Schedule X; (c) any Person that, pursuant to the Plan or after the Effective Date becomes a direct or indirect transferee of, or successor to, any assets of any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust (but only to the extent that liability is asserted to exist by reason of such Person's becoming or being such a transferee or successor); (d) any Person that, pursuant to the Plan or after the Effective Date, makes a loan to any of the Reorganized Debtors or the Asbestos Personal Injury Trust or to a successor to, or transferee of, any assets of any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust (but only to the extent that liability is asserted to exist by reason of such Person's becoming or being such a lender or to the extent any pledge of assets made in connection with such a loan is sought to be upset or impaired); (e) any Person to the extent such Person is alleged to be directly or indirectly liable for the conduct of, Claims against, or Demands on any of the Debtors, the Reorganized Debtors, or the Asbestos Personal Injury Trust on account of Asbestos Personal Injury Claims by reason of one or more of the following: (i) such Person's ownership of a financial interest in any of the Debtors or Reorganized Debtors, a past or present Affiliate of any of the Debtors or the Reorganized Debtors, or predecessor in interest of any of the Debtors or the Reorganized Debtors, but solely to the extent set forth on Schedule X, (ii) such Person's involvement in the management of any of the Debtors or the Reorganized Debtors or any predecessor in interest of any of the Debtors or the Reorganized Debtors, but solely to the extent set forth on Schedule X, or (iii) such Person's service as an officer, director, or employee of any of the Debtors, the Reorganized Debtors or any Interested Party; (f) any past, present or future purchaser or other transferee of the assets or business, in whole or in part, or all of the outstanding capital stock, of any one or more of the Debtors, Reorganized Debtors, or past or present Affiliates of the Debtors or Reorganized Debtors, however effectuated, by operation of law or otherwise, and any Related Person of such purchaser or transferee, including such Persons set forth in Schedule VI to the Plan, as it may be amended up to ten (10) Business days prior to the Objection Deadline, but only to the extent that liability is asserted to exist by reason of such Person becoming or being such a purchaser, transferee or successor; (g) the Hartford Entities, to the extent set forth in the Hartford Settlement Agreement, with respect to the liability for any Asbestos Personal Injury Claims that arise out of or in connection with the Hartford Policies; and (h) such other insurance companies, liquidators of insolvent insurance companies, and state guaranty associations, including, without limitation, those insurance companies, liquidators, and guaranty associations to the extent set forth in Schedule VII, to be filed no later than five (5) Business Days prior to the Disclosure Statement Hearing, as it may be amended up to ten (10) Business days prior to the Objection Deadline, and with respect to liability for any Asbestos Personal Injury Claims, but only if and to the extent that any such insurance company, liquidator, or guaranty association has entered into a settlement agreement with one or more of the Debtors with respect to liability for Asbestos Personal Injury Claims prior to the Effective Date, or such later date to which the Plan Proponents may agree, and such agreement expressly provides for the payment by any such Person of insurance or other proceeds and either the comprehensive release of such Person's further liability for Asbestos Personal Injury Claims or such Person's entitlement to the protection of the Asbestos Permanent Channeling Injunction in the Chapter 11 Cases as a Protected Party. "Enjoined Action" means (a) the commencement, conduct, or continuation in any manner, directly or indirectly (including an action directly against a provider of insurance), of any suit, action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) in any forum; (b) the enforcement, attachment (including, without limitation, any prejudgment attachment), collection or seeking to recover any judgment, award, decree, or other order; (c) the creation, perfection or enforcement in any manner, directly or indirectly, of any Encumbrance; (d) the setting off, seeking reimbursement of, contribution from, or subrogation against, or other recoupment in any manner, directly or indirectly, of any amount against any liability owed to any Protected Parties; and (e) the commencement or continuation, in any manner, in any place, of any action which, in any such case, does not comply with or is inconsistent with the provisions of the Plan. ALL CLASS 7 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT OF THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. THE ASBESTOS PERSONAL INJURY TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF A CLASS 7 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 7 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS THEREOF). ALL CLASS 8 CLAIMS SHALL BE CHANNELED TO THE ASBESTOS PERSONAL INJURY TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES AND THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT. THE ASBESTOS PERSONAL INJURY TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF A CLASS 8 CLAIM SHALL BE THE ASBESTOS PERSONAL INJURY TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLAIM OR DEMAND AGAINST ANY PROTECTED PARTY. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY CLASS 8 CLAIM (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE ASBESTOS PERSONAL INJURY TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS THEREOF). Nothing contained in the Asbestos Personal Injury Permanent Channeling Injunction shall be deemed a waiver of any claim, right or cause of action that the Debtors, the Reorganized Debtors or the Asbestos Personal Injury Trust may have against any Person in connection with or arising out of an Asbestos Personal Injury Claim, and the injunction shall not apply to the assertion of any such claim, right, or cause of action by the Debtors, the Reorganized Debtors, the Asbestos Personal Injury Trust, or the Litigation Trust. For a description of the Asbestos Personal Injury Trust, the Asbestos Personal Injury Trust Agreement, and the Asbestos Personal Injury Trust Distribution Procedures, see Section VII of this Disclosure Statement. 5. Exculpation and Limitation of Liability; Indemnity No Claimant Released Party shall have or incur any liability to any Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or other right of an equity security holder, or any other party in interest, or any Person claiming by or through them, or any of their respective Related Persons, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan, the solicitation of acceptances of the Plan, the pursuit of confirmation of the Plan, the confirmation of the Plan, the consummation of the Plan or the administration of the Plan or the property to be distributed under the Plan, except for willful misconduct or gross negligence, and, in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. Notwithstanding any other provision herein, no Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, Demand, debt, right, cause of action or liability or Interest or other right of an equity security holder, no person claiming by or through them, nor any of their respective Related Persons, shall have any right of action against any Claimant Released Party for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan, solicitation of acceptances of the Plan, the pursuit of confirmation of the Plan, the consummation of the Plan, the confirmation of the Plan or the administration of the Plan or the property to be distributed under the Plan, except for willful misconduct or gross negligence. The foregoing exculpation and limitation on liability shall not, however, limit, abridge or otherwise affect the rights of the Reorganized Debtors to enforce, sue on, settle or compromise the rights, claims and other matters retained by the Reorganized Debtors pursuant to Section 5.10 of the Plan. M. Retention of Jurisdiction Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, the District Court, together with the Bankruptcy Court to the extent of any reference made to it by the District Court and the Reference Order, will retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan, including, among other things, jurisdiction to: (a) interpret, enforce, and administer the terms of the Asbestos Personal Injury Trust Agreement (including all annexes and exhibits thereto); (b) allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim (other than an Asbestos Personal Injury Claim and an FB Asbestos Property Damage Claim) or Interest not otherwise Allowed under the Plan, including the resolution of any request for payment of any Administrative Claim and the resolution of any objections to the allowance or priority of Claims or Interests; (c) hear and determine all applications for compensation and reimbursement of expenses of professionals under the Plan or under Sections 330, 331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; provided, however, that from and after the Effective Date, the payment of the fees and expenses of the retained professionals of the Reorganized Debtors shall be made in the ordinary course of business and shall not be subject to the approval of the Bankruptcy Court; (d) hear and determine all matters with respect to the assumption or rejection of any executory contract or unexpired lease to which a Debtor is a party or with respect to which a Debtor may be liable, including, if necessary, the nature or amount of any required Cure or the liquidation or allowance of any Claims arising therefrom; (e) effectuate performance of and payments under the provisions herein; (f) hear and determine any and all adversary proceedings, motions, applications, and contested or litigated matters arising out of, under, or related to, the Chapter 11 Cases; (g) enter such orders as may be necessary or appropriate to execute, implement, or consummate the provisions herein and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement or the Confirmation Order; (h) hear and determine disputes arising in connection with the interpretation, implementation, consummation, or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan; (i) consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order; (j) issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any entity with implementation, consummation, or enforcement of the Plan or the Confirmation Order; (k) enter and implement such orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed, revoked, modified or vacated; (l) hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order; (m) enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings entered in connection with the Chapter 11 Cases; (n) except as otherwise limited herein, recover all assets of the Debtors and property of the Debtors' Estates, wherever located; (o) hear and determine matters concerning state, local and federal taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code; (p) hear and determine all disputes involving the existence, nature or scope of the Debtors' discharge; (q) hear and determine such other matters as may be provided in or that may arise in connection with the Plan, the Confirmation Order, the Claims Trading Injunction, the Asbestos Personal Injury Permanent Channeling Injunction, or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code; (r) enter a final decree closing the Chapter 11 Cases; and (s) to hear and determine all objections to the termination of the Asbestos Personal Injury Trust and/or the FB Asbestos Property Damage Trust. Notwithstanding entry of the Confirmation Order and/or the occurrence of the Effective Date, the reference to the Bankruptcy Court pursuant to the Reference Order shall continue, but subject to any modifications or withdrawals of the reference specified in the Confirmation Order, Reference Order, Case Management Order or other Order of the District Court; provided, however, that nothing in the Plan, the Reference Order or other Order shall affect the procedures established pursuant to the Asbestos Personal Injury Trust Agreement, the Asbestos Personal Injury Trust Distribution Procedures, the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. N. Revesting of Assets Pursuant to Section 1141(b) of the Bankruptcy Code, all property of the respective Estate of each Debtor, together with any property of each Debtor that is not property of its Estate and that is not specifically disposed of pursuant to the Plan, shall revest in the applicable Reorganized Debtor on the Effective Date. Thereafter, the Reorganized Debtors may operate their businesses and may use, acquire and dispose of property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules and the Bankruptcy Court. As of the Effective Date, all property of each Reorganized Debtor shall be free and clear of all Encumbrances, Claims and Interests, except as specifically provided in the Plan or the Confirmation Order. Without limiting the generality of the foregoing, each Reorganized Debtor may, without application to or approval by the Bankruptcy Court, pay fees that it incurs after the Effective Date for professional services and expenses. O. Rights of Action Except as otherwise provided in the Plan or the Confirmation Order, or in any contract, instrument, release, indenture or other agreement entered into in connection with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code, the Reorganized Debtors shall retain and may enforce, sue on, settle or compromise (or decline to do any of the foregoing) all rights, claims, causes of action, suits or proceedings accruing to the Debtors or the Estates pursuant to the Bankruptcy Code or pursuant to any statute or legal theory, including, without limitation, any avoidance or recovery actions under Sections 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code and any suits or proceedings for recovery under any policies of insurance issued to or on behalf of the Debtors. Except to the extent such rights, title and interest in the Litigation Trust Assets are transferred and assigned to the Litigation Trust, the Reorganized Debtors shall be deemed the appointed representative to, and may pursue, litigate, compromise and settle any such rights, claims, causes of action, suits or proceedings as appropriate, in accordance with the best interests of the Reorganized Debtors or their respective successors who hold such rights. The Reorganized Debtors will transfer and assign, or cause to be transferred and assigned, all their right, title and interest in and to the Litigation Trust Assets to the Litigation Trust in accordance with Section 5.8 of the Plan, or, if deemed necessary, any right, title and interest in and to Litigation Trust Assets shall be pursued in the name of the Debtors or the Reorganized Debtors for the benefit of the Litigation Trust. Notwithstanding anything in the Plan to the contrary, the Debtors, upon such transfer and assignment, shall forgo any interest they may have in the Litigation Trust Assets, except with respect to the Litigation Trust Reimbursement Obligation. P. Payment of Statutory Fees Under the Plan, all fees payable pursuant to Section 1930 of Title 28 of the United States Code, as determined by the Bankruptcy Court at the Confirmation Hearing, will be paid on or before the Effective Date. After the Effective Date, the Reorganized Debtors shall pay all required fees pursuant to Section 1930 of Title 28 of the United States Code or any other statutory requirement and comply with all statutory reporting requirements. Q. Post-Consummation Operations of the Debtors 1. Continued Corporate Existence and Restructuring Transactions Following confirmation and consummation of the Plan, but subject to the right of the Debtors or Reorganized Debtors to effect the Restructuring Transactions as provided in Section 5.6 of the Plan, the Reorganized Debtors will be authorized to continue to exist as separate corporate entities in accordance with the laws of their respective states of incorporation and pursuant to their respective certificates or articles of incorporation and bylaws in effect at the Effective Date. In that regard, OC intends to implement a restructuring plan which would reorganize OCD and its Subsidiaries along OC's major business lines. The planning for this restructuring is in a preliminary stage. It is anticipated that the restructuring plan which is adopted will be announced at least ten (10) days prior to the date the Disclosure Statement is approved and will be described in an amendment to the Plan. VIII. THE ASBESTOS PERSONAL INJURY TRUST The following summarizes the terms of the governing documents for the Asbestos Personal Injury Trust. These documents consist of the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures. The following is intended only to be a summary and is qualified in its entirety by reference to the full text of such documents. In the event of any inconsistency between the provisions of these documents and the summary contained herein, the terms of such documents will control. Interested parties should therefore review the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures, copies of which are attached to the Plan as Exhibits D and D-1, respectively. [THE ATTACHED ASBESTOS PERSONAL INJURY TRUST AGREEMENT AND ASBESTOS PERSONAL INJURY TRUST DISTRIBUTION PROCEDURES ARE IN DRAFT FORM AND ARE NOT COMPLETE. THEY ARE IN THE PROCESS OF BEING REVIEWED BY THE ASBESTOS CLAIMANTS' COMMITTEE AND THE FUTURE CLAIMANTS' REPRESENTATIVE, AND HAVE NOT BEEN APPROVED BY EITHER OF THEM OR BY THE DEBTORS. ALL RIGHTS WITH RESPECT TO THESE DOCUMENTS AND EACH OF THE PROVISIONS THEREOF ARE FULLY RESERVED.] A. General Description of the Asbestos Personal Injury Trust 1. Purposes of the PI Trust The Asbestos Personal Injury Trust will be established pursuant to the Asbestos Personal Injury Trust Agreement. The purposes of the Asbestos Personal Injury Trust are (a) to assume all liabilities of the Debtors, their successors in interest, and certain of their Affiliates with respect to OC and Fibreboard Asbestos Personal Injury Claims; (b) to use its assets and income to pay holders of valid OC and Fibreboard Asbestos Personal Injury Claims in accordance with the Asbestos Personal Injury Trust Distribution Procedures in such a way that such holders are treated fairly, equitably and reasonably in light of the limited assets available to satisfy such claims; and (c) to comply in all respects with the requirements for the Asbestos Personal Injury Trust that are described in section 524(g)(2)(B)(i) of the Bankruptcy Code. 2. The Trustees The individuals who will serve as the initial Trustees of the Asbestos Personal Injury Trust will be identified, and a complete biography for each initial Trustee will be provided, to the Bankruptcy Court prior to the Confirmation Hearing. The Trustees will serve staggered initial terms of five (5), four (4) and three (3) years from the effective date of the Asbestos Personal Injury Trust Agreement. Thereafter each Trustee will serve a five-year term. Each Trustee will serve until the end of the Trustee's term, his or her death, resignation or removal, or the termination of the Asbestos Personal Injury Trust. Any Trustee may be removed by the unanimous vote of the remaining Trustees and with the approval of the Bankruptcy Court, in the event he or she becomes unable to discharge his or her duties due to accident or physical or mental deterioration, or for good cause, including any substantial failure to comply with the general administration provisions of the Asbestos Personal Injury Trust Agreement. In the event of a vacancy in a Trustee position, the remaining Trustees will consult with the Trust Advisory Committee and the Future Claimants' Representative concerning appointment of a successor Trustee. The vacancy will be filled by the unanimous vote of the remaining Trustees unless a majority of the TAC or the Future Claimants' Representative vetoes the appointment. In that event, the Bankruptcy Court will make the appointment. Each Trustee will be entitled to receive annual compensation for his or her service, which compensation will be disclosed to the Bankruptcy Court prior to the Confirmation Hearing, plus a per diem allowance for meetings attended and out-of-pocket costs and expenses. The Trustees' annual and per diem compensation will be reviewed every three years and appropriately adjusted with the approval of the Bankruptcy Court. The Trustees may sit on the Board of Directors of the Reorganized Debtors, but they will not receive additional compensation for their service on such board over and above the compensation they receive as Trustees. The Trustees will receive from the Asbestos Personal Injury Trust, however, the same per diem allowance as the Reorganized Debtors pay their directors for attendance at meetings. Subject to a number of limitations set forth in the Asbestos Personal Injury Trust Agreement, the Trustees have the power to take any and all actions that are necessary to fulfill the purposes of the Asbestos Personal Injury Trust and need not obtain Bankruptcy Court approval to do so. 3. The Trust Advisory Committee The Asbestos Personal Injury Trust Agreement provides for the establishment of a Trust Advisory Committee. The initial members of the TAC will be identified, and a complete biography for each such initial member will be provided, to the Bankruptcy Court prior to the Confirmation Hearing. The members of the TAC will serve until his or her death, resignation or removal, or the termination of the Asbestos Personal Injury Trust. Any TAC member may be removed by the remaining TAC members with the approval of the Bankruptcy Court in the event he or she becomes unable to discharge his or her duties due to accident or physical or mental deterioration, or for good cause, including any substantial failure to comply with the general administration provisions of the Asbestos Personal Injury Trust Agreement. In the event of a vacancy caused by the resignation of a TAC member, his or her successor will be selected by the TAC member who is resigning, unless the remaining members unanimously veto the selection, in which case, the successor will be selected by a unanimous vote of the remaining members. If the remaining members cannot unanimously agree, the Bankruptcy Court will appoint the successor. In the event of a vacancy caused by removal or death of a TAC member, or in the event that a resigning member or retiring member does not name his or her successor, the remaining members of the TAC by unanimous vote will name the successor. If the remaining members of the TAC cannot reach unanimous agreement, the Bankruptcy Court will appoint the successor. The Trustees are required to consult with the TAC on the appointment of successor Trustees, the general implementation and administration of the Asbestos Personal Injury Trust and the Asbestos Personal Injury Trust Distribution Procedures, and on various other matters required by the Asbestos Personal Injury Trust Agreement. The Trustees must also obtain the consent of a majority of TAC members on a variety of matters, including material amendments to the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures, merger or participation with other claims resolution facilities, and termination of the Asbestos Personal Injury Trust under certain conditions specified in the Asbestos Personal Injury Trust Agreement. The members of the TAC will be entitled to receive compensation from the Asbestos Personal Injury Trust for their services as TAC members in the form of a per diem allowance for attendance at meetings or other conduct of Asbestos Personal Injury Trust business in the same amount as the per diem paid the Trustees for carrying out Asbestos Personal Injury Trust business. The members of the TAC will also be reimbursed promptly for all reasonable out-of-pocket costs and expenses incurred in connection with the performance of their duties hereunder. 4. The Future Claimants' Representative The Asbestos Personal Injury Trust Agreement provides for the appointment of a Future Claimants' Representative, James J. McMonagle, Esq., who will serve in a fiduciary capacity, representing the interests of the holders of Demands against the Asbestos Personal Injury Trust for the purposes of protecting the rights of such persons. The Future Claimants' Representative will serve until his death, resignation or removal, or the termination of the Asbestos Personal Injury Trust. The Future Claimants' Representative may resign at any time by written notice to the Trustees and may be removed by the Bankruptcy Court in the event he becomes unable to discharge his duties due to accident or physical or mental deterioration, or for good cause, including any substantial failure to comply with the general administration provisions of the Asbestos Personal Injury Trust Agreement. A vacancy in the position of Future Claimants' Representative caused by resignation will be filled by an individual nominated prior to the effective date of the resignation by the resigning Future Claimants' Representative. A vacancy caused by death or removal of the Future Claimants' Representative will be filled by an individual nominated by the Trustees, the TAC, or both. In any case, the nominee will be subject to the approval of the Bankruptcy Court. The Trustees are required to consult with the Future Claimants' Representative on the appointment of successor Trustees, the general implementation and administration of the Asbestos Personal Injury Trust and the Asbestos Personal Injury Trust Distribution Procedures, and on various other matters required by the Asbestos Personal Injury Trust Agreement. The Trustees must also obtain the consent of the Future Claimants' Representative on a variety of matters, including material amendments to the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures, merger or participation with other claims resolution facilities, and termination of the Asbestos Personal Injury Trust under certain conditions specified in the Asbestos Personal Injury Trust Agreement. The Future Claimants' Representative will be entitled to receive compensation from the Asbestos Personal Injury Trust in the form of payment at the Future Claimants' Representative's normal hourly rate for services performed and will be reimbursed by the Asbestos Personal Injury Trust for all reasonable out-of-pocket costs and expenses incurred by the Future Claimants' Representative in connection with the performance of his duties hereunder. 5. Transfer of Assets to the PI Trust On the Effective Date and on the Final Distribution Date, or as soon thereafter as is practicable, the Asbestos Personal Injury Trust will receive the consideration described in Section 10.3 of the Plan. On the Effective Date, or as soon thereafter as is practicable, at the sole cost and expense of the Asbestos Personal Injury Trust and in accordance with written instructions provided to the Reorganized Debtors by the Asbestos Personal Injury Trust, the Reorganized Debtors will transfer and assign, and will use all commercially reasonable efforts to cause the trustee of the Fibreboard Insurance Settlement Trust to transfer and assign, to the Asbestos Personal Injury Trust all books and records of the Debtors and the Fibreboard Insurance Settlement Trust that pertain directly to Asbestos Personal Injury Claims that have been asserted against the Debtors and/or the Fibreboard Insurance Settlement Trust. The Debtors will request that the Bankruptcy Court, in the Confirmation Order, rule that such transfers shall not result in the invalidation or waiver of any applicable privileges pertaining to such books and records. The Reorganized Debtors shall cooperate with the Asbestos Personal Injury Trust and use commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary or appropriate to effectuate the transfer of the OC Asbestos Personal Injury Liability Insurance Assets to the Asbestos Personal Injury Trust for allocation to the OC Sub-Account. By way of enumeration and not of limitation, the Reorganized Debtors shall be obligated (i) to provide the Asbestos Personal Injury Trust with copies of insurance policies and settlement agreements included within or relating to the OC Asbestos Personal Injury Liability Insurance Assets; (ii) to provide the Asbestos Personal Injury Trust with information necessary or helpful to the Asbestos Personal Injury Trust in connection with its efforts to obtain insurance coverage for Asbestos Personal Injury Claims; (iii) to execute further assignments or allow the Asbestos Personal Injury Trust to pursue claims relating to the OC Asbestos Personal Injury Liability Insurance Assets in its name (subject to appropriate disclosure of the fact that the Asbestos Personal Injury Trust is doing so and the reasons why it is doing so), including by means of arbitration, alternative dispute resolution proceedings or litigation, to the extent necessary or helpful to the efforts of the Asbestos Personal Injury Trust to obtain insurance coverage under the OC Asbestos Personal Injury Liability Insurance Assets for Asbestos Personal Injury Claims; and (iv) to pursue and recover insurance coverage in its own name or right to the extent that the transfer and assignment of the OC Asbestos Personal Injury Liability Insurance Assets to the Asbestos Personal Injury Trust is not able to be fully effectuated. The Asbestos Personal Injury Trust shall be obligated to compensate the Reorganized OCD for costs reasonably incurred in connection with providing assistance to the Asbestos Personal Injury Trust pursuant to this Section 10.6, including, without limitation, out-of-pocket costs and expenses, consultant fees, and attorneys' fees. 6. Establishment of the OC Sub-Account and the Fibreboard Sub-Account On the Effective Date or as soon thereafter as is practicable, the Asbestos Personal Injury Trust will establish two Sub-Accounts, the OC Sub-Account and the Fibreboard Sub-Account, and will transfer to the OC Sub-Account the consideration described in Section 10.3(a) of the Plan, and will transfer to the Fibreboard Sub-Account the consideration described in Section 10.3(b) of the Plan. All OC Asbestos Personal Injury Claims (which includes OC Indirect Asbestos Personal Injury Claims and Unpaid OC Resolved Asbestos Personal Injury Claims) and all OC Resolved Asbestos Personal Injury Claims shall be payable from the assets of the OC Sub-Account. All Fibreboard Asbestos Personal Injury Claims (which include Fibreboard Indirect Asbestos Personal Injury Claims and Unpaid Fibreboard Resolved Asbestos Personal Injury Claims) and all Fibreboard Resolved Asbestos Personal Injury Claims shall be payable from the assets of the Fibreboard Sub-Account. In all cases, such payments shall be made pursuant to the terms of the Asbestos Personal Injury Trust Distribution Procedures. 7. Asbestos Personal Injury Trust Termination Provisions The Asbestos Personal Injury Trust is irrevocable, but will terminate ninety (90) days after the first to occur of any of the following events: o the Trustees decide to terminate the Asbestos Personal Injury Trust because (a) they deem it unlikely that new asbestos claims will be filed against the Asbestos Personal Injury Trust, (b) all OC and Fibreboard Asbestos Personal Injury Claims duly filed with the Asbestos Personal Injury Trust have been liquidated and paid to the extent provided in the Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures or disallowed by a final, non-appealable order, to the extent possible based upon the funds available through the Plan, and (c) twelve (12) consecutive months have elapsed during which no new asbestos claim has been filed with the Asbestos Personal Injury Trust; or o if the Trustees have procured and have in place irrevocable insurance policies and have established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses of the Asbestos Personal Injury Trust in a manner consistent with this Asbestos Personal Injury Trust Agreement and the Asbestos Personal Injury Trust Distribution Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a final order; or o to the extent that any rule against perpetuities will be deemed applicable to the Asbestos Personal Injury Trust, twenty-one (21) years less ninety-one (91) days pass after the death of the last survivor of all of the descendents of the late Joseph P. Kennedy, Sr., father of the late President John F. Kennedy, living on the date hereof. On the termination date, after payment of all the Asbestos Personal Injury Trust's liabilities have been provided for, all monies remaining in the Asbestos Personal Injury Trust estate will be given to such organization(s) exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, which tax-exempt organization(s) will be selected by the Trustees using their reasonable discretion; provided, however, that (i) if practicable, the activities of the selected tax-exempt organization(s) will be related to the treatment of, research on, or the relief of suffering of individuals suffering from asbestos-related lung disorders, and (ii) the tax-exempt organization(s) will not bear any relationship to Reorganized Debtors within the meaning of section 468(d)(3) of the Internal Revenue Code. The Plan Proponents believe that the likelihood of any monies remaining in the Asbestos Personal Injury Trust after the Asbestos Personal Injury Trust terminates is extremely remote. 8. Amendment of the Asbestos Personal Injury Trust Documents The Trustees, subject to the TAC's and the Future Claimants' Representative's consent, may modify or amend certain provisions of the Asbestos Personal Injury Trust Agreement or any document annexed thereto. However, the Asbestos Personal Injury Trust provisions may not be modified or amended in any way that could jeopardize, impair, or modify the applicability of section 524(g) of the Bankruptcy Code, the efficacy or enforceability of the injunction entered thereunder, or the Asbestos Personal Injury Trust's qualified settlement fund status within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the Internal Revenue Code. B. Asbestos Personal Injury Trust Distribution Procedures 1. Asbestos Personal Injury Trust Goals The Trustees will implement and administer the Asbestos Personal Injury Trust Distribution Procedures, which are attached to the Plan as Exhibit D-1. These procedures have been adopted after lengthy negotiations between and among the ACC, the Future Claimants' Representative and the Debtors. Nothing approaching full payment of all OC and Fibreboard Asbestos Personal Injury Claims is possible in light of the value of all such claims that could be filed against the Asbestos Personal Injury Trust, both currently and in the future, and the value of the Asbestos Personal Injury Trust assets. The goal of the Asbestos Personal Injury Trust is to treat all claimants equitably. The Asbestos Personal Injury Trust Distribution Procedures further that goal by setting forth procedures for processing and paying claims generally on an impartial, first-in-first-out ("FIFO") basis, with the intention of paying all claimants over time as equivalent a share as possible of the value of their claims based on historical values for substantially similar claims in the tort system. 9 - ------------------- 9 As used in the Asbestos Personal Injury Trust Distribution Procedures, the phrase "in the tort system" shall include only claims asserted by way of litigation and not claims asserted against a trust established pursuant to section 524(g) and/or section 105 of the Bankruptcy Code or any other applicable law. To this end, the Asbestos Personal Injury Trust Distribution Procedures establish for both OC Asbestos Personal Injury Claims and Fibreboard Asbestos Personal Injury Claims a schedule of eight asbestos-related diseases ("Disease Levels"), all of which have presumptive medical and exposure requirements ("Medical/Exposure Criteria"). The Asbestos Personal Injury Trust Distribution Procedures also establishes two separate schedules with liquidated values ("Scheduled Values"), anticipated average values ("Average Values"), and caps on liquidated values ("Maximum Values") for the various Disease Levels. These separate schedules or matrices of values are applicable to OC and Fibreboard Asbestos Personal Injury Claims, respectively. The Disease Levels, Medical/Exposure Criteria, Scheduled Values, Average Values and Maximum Values have all been selected and derived with the intention of achieving a fair allocation of the Asbestos Personal Injury Trust funds among claimants suffering from different disease processes in light of the best available information considering the settlement history of OC or Fibreboard and the rights claimants would have in the tort system absent the bankruptcy. A claimant may assert separate claims against the OC Sub-Account and the Fibreboard Sub-Account based on separate exposures to asbestos or asbestos-containing products manufactured or distributed by OC and Fibreboard, respectively ("Multiple Exposure Claims"); however, all such Multiple Exposure Claims must be filed by the claimant at the same time. To the extent a Sub-Account has separate liabilities to a claimant based on multiple exposure, the Sub-Account shall pay the claimant its several share of the liquidated value of the separate claim or claims for which it is liable, subject to applicable Payment Percentage, Maximum Annual Payment and Claims Payment Ratio limitations described below. Under no circumstances, however, shall any claimant receive more than the full liquidated value of his or her claim. 2. Disease Levels, Scheduled Values and Medical/Exposure Criteria Set Forth in the Asbestos Personal Injury Trust Distribution Procedures The eight Disease Levels covered by the Asbestos Personal Injury Trust Distribution Procedures, together with the Medical/Exposure Criteria for each and the Scheduled Values for the seven Disease Levels eligible for Expedited Review, are set forth below. These Disease Levels, Scheduled Values, and Medical/Exposure Criteria will apply to all OC and Fibreboard Asbestos Personal Injury Trust Voting Claims filed with the Asbestos Personal Injury Trust on or before the Initial Asbestos Personal Injury Trust's Claims Filing Date (defined below). Thereafter, with the consent of the TAC and the Future Claimants' Representative, the Trustees may add to, change, or eliminate Disease Levels, Scheduled Values, or Medical/Exposure Criteria; develop subcategories of Disease Levels, Scheduled Values or Medical/Exposure Criteria; or determine that a novel or exceptional asbestos personal injury claim is compensable even though it does not meet the Medical/Exposure Criteria for any of the then current Disease Levels.
Disease Level Scheduled Value Medical/Exposure Criteria Mesothelioma (Level VIII) OC: $215,000 (1) Diagnosis of mesothelioma; and (2) credible evidence of OC or FB Exposure.10 FB: $135,000 Lung Cancer 1 (Level (VII) OC: $40,000 (1) Diagnosis of a primary lung cancer plus evidence of an underlying Bilateral FB: $27,000 Asbestos-Related Nonmalignant Disease,11 (2) six months OC or FB Exposure prior to December 31, 1982, (3) Significant Occupational Exposure12 to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Lung Cancer 2 (Level VI) None (1) Diagnosis of a primary lung cancer; (2) OC or FB Exposure prior to December 31, 1982, and (3) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Lung Cancer 2 (Level VI) claims are claims that do not meet the more stringent medical and/or exposure requirements of Lung Cancer (Level VII) claims. All claims in this Disease Level will be individually evaluated. The estimated likely average of the individual evaluation awards for this category is $20,000 for OCD and $12,000 for Fibreboard, with such awards capped at $50,000 for OCD and $30,000 for Fibreboard, unless the claim qualifies for Extraordinary Claim treatment. Level VI claims that show no evidence of either an underlying Bilateral Asbestos-Related Non-malignant Disease or Significant Occupational Exposure may be individually evaluated, although it is not expected that such claims will be treated as having any significant value, especially if the claimant is also a smoker. In any event, no presumption of validity will be available for any claims in this category. - ------------------- 10 As defined in the Asbestos Personal Injury Trust Distribution Procedures. 11 Evidence of "Bilateral Asbestos-Related Nonmalignant Disease" for purposes of meeting the criteria for establishing Disease Levels I, II, III, V, and VII is described in the Asbestos Personal Injury Trust Distribution Procedures. 12 As defined in the Asbestos Personal Injury Trust Distribution Procedures. Other Cancer (Level V) OC: $22,000 (1) Diagnosis of a primary colo-rectal, laryngeal, esophageal, pharyngeal, or FB: $12,000 stomach cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease, (2) six months OC or FB Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the other cancer in question. Severe Asbestosis (Level IV) OC: $42,000 (1) Diagnosis of asbestosis with ILO of 2/1 or greater, or asbestosis determined by FB: $29,000 pathological evidence of asbestos, plus (a) TLC less than 65%, or (b) FVC less than 65% and FEV1/FVC ratio greater than 65%, (2) six months OC or FB Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestos/Pleural Disease OC: $19,000 Diagnosis of Bilateral Asbestos-Related (Level III) Nonmalignant Disease, plus (a) TLC less than FB: $11,500 80%, or (b) FVC less than 80% and FEV1/FVC ratio greater than or equal to 65%, and (2) six months OC or FB Exposure prior to December 31, 1982, (3) Significant Occupational Exposure to asbestos, and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Asbestosis/Pleural Disease OC: $8,000 (1) Diagnosis of a Bilateral (Level II) Asbestos-Related Nonmalignant Disease, and FB: $4,500 (2) six months OC or FB Exposure prior to December 31, 1982, and (3) five years cumulative occupational exposure to asbestos. Other Asbestos Disease (Level I - Cash OC: $400 (1) Diagnosis of a Bilateral Asbestos- Discount Payment) Related Nonmalignant Disease or an FB: $240 asbestos-related malignancy other than mesothelioma, and (2) OC or FB Exposure prior to December 31, 1982.
3. Claims Liquidation Procedures OC and Fibreboard Asbestos Personal Injury Claims will be processed based on their place in the FIFO Processing Queue (defined below) to be established pursuant to the Asbestos Personal Injury Trust Distribution Procedures. The Asbestos Personal Injury Trust will liquidate all Asbestos Personal Injury Claims that meet the presumptive Medical/Exposure Criteria of Disease Levels I-V, VII and VIII efficiently and expeditiously under the Expedited Review described below. Claims involving Disease Levels I-V, VII and VIII that do not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level may undergo the Asbestos Personal Injury Trust's Individual Review Process described below. In such a case, notwithstanding that the claim does not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level, the Asbestos Personal Injury Trust can offer the claimant an amount up to the Scheduled Value of that Disease Level if the Asbestos Personal Injury Trust is satisfied that the claimant has presented a claim that would be cognizable and valid in the tort system. OC and Fibreboard claimants holding claims involving Disease Levels II-VIII may in addition or alternatively seek to establish a liquidated value for the claim that is greater than its Scheduled Value by electing the Asbestos Personal Injury Trust's Individual Review Process. However, the liquidated value of a more serious Disease Level II-VIII claim that undergoes the Asbestos Personal Injury Trust's Individual Review Process for valuation purposes may be determined by the Asbestos Personal Injury Trust to be less than its Scheduled Value, and in any event may not exceed the Maximum Value for the relevant Disease Level, unless the claim qualifies as an Extraordinary Claim (defined below), in which case its liquidated value cannot exceed the Maximum Value specified in that provision for such claims. Level VI (Lung Cancer 2) claims may be liquidated only pursuant to the Asbestos Personal Injury Trust's Individual Review Process. All unresolved disputes over a claimant's medical condition, exposure history and/or the liquidated value of the claim will be subject to binding or non-binding arbitration at the election of the claimant. OC and Fibreboard Asbestos Personal Injury Claims that are the subject of a dispute with the Asbestos Personal Injury Trust that cannot be resolved by non-binding arbitration may enter the tort system. However, if and when a claimant obtains a judgment in the tort system, the judgment will be payable from the Asbestos Personal Injury Trust subject to the Payment Percentage, Maximum Available Payment, and Claims Payment Ratio provisions set forth below. 4. Payment Percentage After the liquidated value of an OC or Fibreboard Asbestos Personal Injury Claim other than a claim involving Other Asbestos Disease (Disease Level I - Cash Discount Payment) is determined by the Asbestos Personal Injury Trust, the claimant will receive a pro-rata share of that value based on a payment percentage (the "Payment Percentage"). The initial Payment Percentage has been set at ___ percent (___%) (the "Initial Payment Percentage"), and will apply to all OC and Fibreboard Asbestos Personal Injury Trust Voting Claims accepted as valid by the Asbestos Personal Injury Trust, unless adjusted by the Asbestos Personal Injury Trust with the consent of the TAC and the Future Claimants' Representative. The term "Asbestos Personal Injury Trust Voting Claims" includes (i) Unpaid OC and Fibreboard Resolved Asbestos Personal Injury Claims (as defined in the Plan and described); (ii) claims filed against OC or Fibreboard in the tort system or actually submitted to OC or Fibreboard pursuant to an administrative settlement agreement prior to the Petition Date; and (iii) all claims filed against another defendant in the tort system prior to the date the Plan was filed with the Bankruptcy Court (the "Plan Filing Date"); provided, however, that the claim described in subsection (i), (ii) or (iii) above actually voted to accept or reject the Plan pursuant to the voting procedures established by the Bankruptcy Court, and provided further that the claim was subsequently filed with the Asbestos Personal Injury Trust by the Asbestos Personal Injury Trust's Initial Claims Filing Date (defined below). The Initial Payment Percentage has been calculated on the assumption that the Average Values will be achieved with respect to existing present claims and projected future claims involving Disease Levels IV - VIII. The Payment Percentage may be adjusted upwards or downwards from time to time by the Asbestos Personal Injury Trust with the consent of the TAC and the Future Claimants' Representative to reflect then-current estimates of the Asbestos Personal Injury Trust's assets and its liabilities, as well as then-estimated values of then-pending and future claims. If the Payment Percentage is increased over time, claimants whose claims were liquidated and paid in prior periods under the Asbestos Personal Injury Trust Distribution Procedures will not receive additional payments. Because there is uncertainty in the prediction of both the number and severity of future claims, and the amount of the Asbestos Personal Injury Trust's assets, no guarantee can be made of any Payment Percentage of a Asbestos Personal Injury Claim's liquidated value other than other than the Initial Payment Percentage of an Asbestos Personal Injury Trust Voting Claim. 5. Maximum Annual Payment and Maximum Available Payment The Asbestos Personal Injury Trust will estimate or model the amount of cash flow anticipated to be necessary over its entire life to ensure that funds will be available to treat all present and future claimants as similarly as possible. In each year, the Asbestos Personal Injury Trust will be empowered to pay out all of the interest earned during the year, together with a portion of its principal, calculated so that the application of Asbestos Personal Injury Trust funds over its life will correspond with the needs created by the anticipated flow of claims (the "Maximum Annual Payment"). The Asbestos Personal Injury Trust's distributions to all claimants for that year may not exceed the Maximum Annual Payment determined for that year. In distributing the Maximum Annual Payment, the Asbestos Personal Injury Trust will first allocate the amount in question to outstanding Unpaid OC and Fibreboard Resolved Asbestos Personal Injury Claims and to liquidated OC and Fibreboard Asbestos Personal Injury Claims involving Disease Level I (Cash Discount Payment), in proportion to the aggregate value of each group of claims. The remaining portion of the Maximum Annual Payment (the "Maximum Available Payment"), if any, will then be allocated and used to satisfy all other liquidated OC and Fibreboard Asbestos Personal Injury Claims, subject to the Claims Payment Ratio (discussed below). 6. Claims Payment Ratio Based upon OC's and Fibreboard's claims settlement history and analysis of present and future claims, a Claims Payment Ratio has been determined which, as of the Effective Date, will be set at sixty percent (60%) for Category A claims, which consist of OC and Fibreboard Asbestos Personal Injury Claims involving severe asbestosis and malignancies (Disease Levels IV - - VIII) that were unliquidated as of the Petition Date, and at forty percent (40%) for Category B claims, which are OC and Fibreboard Asbestos Personal Injury Claims involving non-malignant Asbestosis or Pleural Disease (Disease Levels II and III) that were similarly unliquidated as of the Petition Date. The Claims Payment Ratio will not apply to any Unpaid OC or Fibreboard Resolved Asbestos Personal Injury Claims or to any claims for Other Asbestos Disease (Disease Level I - Cash Discount Payment). In each year, after the determination of the Maximum Available Payment, sixty percent (60%) of that amount will be available to pay Category A claims and forty percent (40%) will be available to pay Category B claims. The 60%/40% Claims Payment Ratio will apply to all OC and Fibreboard Asbestos Personal Injury Trust Voting Claims and will not be amended until the fifth anniversary of the Effective Date. Thereafter, the Claims Payment Ratio will be continued absent circumstances, such as a significant change in law or medicine, necessitating an amendment to avoid a manifest injustice. In any event, no amendment to the Claims Payment Ratio may be made without the consent of the TAC and the Future Claimants' Representative. However, the Trustees, with the consent of the TAC and the Future Claimants' Representative, may offer the option of a reduced Payment Percentage to holders of claims in either Category A or Category B in return for prompter payment (the "Reduced Payment Option"). 7. Indemnity and Contribution Claims OC and Fibreboard Indirect Asbestos Personal Injury Claims for indemnity and contribution, if any, will be subject to the same categorization, evaluation, and payment provisions of these Asbestos Personal Injury Trust Distribution Procedures as all other OC and Fibreboard Asbestos Personal Injury Claims, subject to certain conditions and procedures germane to claims for indemnity and contribution. Plant asserted that various such special provisions of the Asbestos Personal Injury Trust Distribution Procedures were improper. Specifically, Plant alleged that two of the preconditions for processing and payment of OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims cannot be met in a substantial percentage of its cases, thus barring the payment of valid claims. Plant alleged that the requirement that the claimant establish that it has paid in full the liability and obligations of the Asbestos Personal Injury Trust to the individual claimant will be impossible to fulfill in a substantial number of cases involving Plant, because Plant's liability to the holder of the direct claim is allegedly less than Fibreboard's liability in many such cases. Plant also asserted that the requirement that holders of the OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims prove that the individual claimant has fully released the Asbestos Personal Injury Trust from all liability cannot be met in many cases due to the death of the claimant. Plant alleged that the Asbestos Personal Injury Trust Distribution Procedures should contain procedures for the processing of OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims and should not leave the Asbestos Personal Injury Trust with the discretion to formulate procedures, including forms for proofs of claim in addition to those they filed by the Bar Date of April 15, 2002. Plant objected to the Asbestos Personal Injury Trust Distribution Procedures based on other alleged ambiguities in the Asbestos Personal Injury Trust Distribution Procedures language that bars holders of OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims from having rights superior to the holders of the direct claims. The Plan Proponents made several changes to the Asbestos Personal Injury Trust Distribution Procedures to address the Plant objections. The Asbestos Personal Injury Trust Distribution Procedures now provide for individual consideration and evaluation of any OC Indirect Asbestos PI Trust Claim and FB Indirect Asbestos PI Trust Claim that fails to meet the requirements for presumptive validity, including those requirements objected to by Plant. The review shall determine whether the indirect claimant can establish under applicable state law that it has satisfied a liability or obligation that the Asbestos Personal Injury Trust would otherwise have to the direct claimant. Any unresolved disputes are subject to non-binding arbitration procedures set forth in the Asbestos Personal Injury Trust Distribution Procedures and, if not resolved by arbitration, resolution through litigation in the tort system. See Section VIII.B.26 of this Disclosure Statement entitled "Suits in the Tort System." The Plan Proponents contend that the conditions and other limitations in the Asbestos Personal Injury Trust Distribution Procedures concerning payment of OC Indirect Asbestos PI Trust Claims and FB Indirect Asbestos PI Trust Claims are consistent with both state law and bankruptcy law, including Sections 502(e) and 509(c) of the Bankruptcy Code. Plant's objections to the Asbestos Personal Injury Trust Distribution Procedures will be resolved, if necessary, by the Bankruptcy Court or District Court as part of the Confirmation Hearing. Plant and the Debtors have had a longstanding dispute with respect to the alleged claims of Plant. The Debtors have consistently maintained that Plant's claims are not valid and the Debtors may file objections to the majority of Plant's claims under both applicable state law and the Bankruptcy Code. The Debtors assert that is well established under California law that Plant does not have a right to contractual indemnity against Fibreboard. See Borromeo v. Raybestos Manhattan, Inc., Action No. 8201115 (San Francisco Super. Ct. June 2, 1989) (holding that Plant has no right to implied contractual indemnity against Fibreboard), discussed in Plant Insulation Co. v. Fibreboard Corp., No. A06116 (Cal. App. July 1, 1994); Plant Insulation Co. v. Fibreboard Corp., 224 Cal. App. 3d 781, 791 (1990) (holding that Plant has no right to express indemnity under its 1948 agreement with Fibreboard); Plant Insulation Co. v. Fibreboard Corp., No. A06116 (Cal. App. July 1, 1994) (affirming trial court's finding that Plant has no right to "implied-in-fact" express indemnity from Fibreboard). Moreover, a "good faith" settlement determination bars all claims for equitable or implied contractual indemnity. See Bay Development, Ltd. v. Superior Court of San Diego County, 791 P.2d 290 (Cal. 1990); Far West Financial Corp. v. D&S Co., Inc., 760 P.2d 399 (Cal. 1988). The Debtors will therefore argue that almost three quarters of Plant's proofs of claim (1,613 out of 2,213) should be disallowed on the grounds that they relate to claims previously settled by Fibreboard in good faith. Plant maintains it has a right to indemnification and that some of Fibreboard's settlements were not in good faith. Plant's claims for indemnification against Fibreboard may also be barred by Sections 502(e) and 509(c) of the Bankruptcy Code. 8. Ordering of Claims The Asbestos Personal Injury Trust will order claims that are sufficiently complete to be reviewed for processing purposes on a FIFO basis except as otherwise provided herein (the "FIFO Processing Queue"). For all claims filed on or before the date six months after the Effective Date (the "Initial Asbestos Personal Injury Claims Filing Date"), a claimant's position in the FIFO Processing Queue will be determined as of the earlier of (i) the date prior to the Petition Date (if any) that the specific claim was either filed against OC or Fibreboard in the tort system or was actually submitted to OC or Fibreboard pursuant to an administrative settlement agreement; (ii) the date before the Petition Date that a claim was filed against another defendant in the tort system if at the time the claim was subject to a tolling agreement with OC or Fibreboard; (iii) the date after the Petition Date (if any) but before the Effective Date that the claim was filed against another defendant in the tort system; (iv) the date the claimant filed a ballot in the Bankruptcy Court pursuant to the voting procedures approved by the Court in this Chapter 11 proceeding; or (v) the date after the Effective Date but on or before the Initial Asbestos Personal Injury Claims Filing Date that the claim was filed with the Asbestos Personal Injury Trust. Following the Initial Asbestos Personal Injury Claims Filing Date, the claimant's position in the FIFO Processing Queue will be determined by the date the claim was filed with the Asbestos Personal Injury Trust. 9. Effect of Statutes of Limitations and Repose To be eligible for a place in the FIFO Processing Queue, a claim must meet either (i) for claims first filed in the tort system against OC or Fibreboard prior to the Petition Date, the applicable federal, state and foreign statute of limitation and repose that was in effect at the time of the filing of the claim in the tort system, or (ii) for claims not filed against OC or Fibreboard in the tort system prior to the Petition Date, the applicable statute of limitation that was in effect at the time of the filing with the Asbestos Personal Injury Trust. However, the running of the relevant statute of limitation will be tolled for purposes of the Asbestos Personal Injury Trust as of the earliest of (A) the actual filing of the claim against OC or Fibreboard prior to the Petition Date, whether in the tort system or by submission of the claim to OC or Fibreboard pursuant to an administrative settlement agreement; (B) the filing of the claim against another defendant in the tort system prior to the Petition Date if the claim was tolled against OC or Fibreboard at the time by an agreement or otherwise; (C) the filing of a claim after the Petition Date but prior to the Effective Date against another defendant in the tort system; (D) the filing of the claim for voting purposes in this Chapter 11 proceeding; or (E) the filing of a proof of claim with the requisite supporting documentation with the Asbestos Personal Injury Trust after the Effective Date. If an OC or Fibreboard Asbestos Personal Injury Claim meets any of the tolling provisions described in the preceding sentence and the claim was not barred by the applicable statute of limitation at the time of the tolling event, it will be treated by the Asbestos Personal Injury Trust as timely filed if it is actually filed with the Asbestos Personal Injury Trust within three (3) years after the Effective Date. In addition, any claims that were first diagnosed after the Petition Date, irrespective of the application of any relevant statute of limitation or repose, may be filed with the Asbestos Personal Injury Trust within three (3) years after the date of diagnosis or within three (3) years after the Effective Date, whichever occurs later. However, the processing of any OC or Fibreboard Asbestos Personal Injury Claim by the Asbestos Personal Injury Trust may be deferred at the election of the claimant. 10. Payment of Claims Asbestos Personal Injury Claims that have been liquidated by the Expedited Review (described below), by arbitration or by litigation in the tort system, will be paid in FIFO order based on the date their liquidation became final (the "FIFO Payment Queue"). 11. Resolution of Unpaid OC and Fibreboard Resolved Asbestos Personal Injury Claims As soon as practicable after the Effective Date, the Asbestos Personal Injury Trust will pay, upon submission by the claimant of the applicable Asbestos Personal Injury Trust proof of claim form (included in Attachment B to the Asbestos Personal Injury Trust Distribution Procedures) together with all documentation required thereunder, all Unpaid OC and Fibreboard Resolved Asbestos Personal Injury Claims as defined in the Plan. The liquidated value of an Unpaid OC or Fibreboard Resolved Asbestos Personal Injury Claims will not include any punitive or exemplary damages. In the absence of a Final Order of the Bankruptcy Court determining whether an OC or Fibreboard Asbestos Personal Injury Claim is an Unpaid OC or Fibreboard Resolved Asbestos Personal Injury Claim, a dispute between the claimant and the Asbestos Personal Injury Trust over this issue will be resolved pursuant to the same procedures that are provided in the Asbestos Personal Injury Trust Distribution Procedures for resolving the validity and/or liquidated value of an OC or Fibreboard Asbestos Personal Injury Claim. Unpaid OC and Fibreboard Resolved Asbestos Personal Injury Claims will be processed and paid by the Asbestos Personal Injury Trust in accordance with their order in a separate FIFO queue to be established by the Asbestos Personal Injury Trust based on the date the Asbestos Personal Injury Trust received a completed proof of claim form with all required documentation for the particular claim; provided, however, the amounts payable with respect to such claims will not be subject to or taken into account in consideration of the Claims Payment Ratio, but will be subject to the Maximum Annual Payment and Payment Percentage provisions set forth above. 12. Resolution of Unresolved OC and Fibreboard Asbestos Personal Injury Claims Within six months after the establishment of the Asbestos Personal Injury Trust, the Trustees, with the consent of the TAC and the Future Claimants' Representative, are required to adopt procedures for reviewing and liquidating all unresolved Asbestos Personal Injury Claims, which will include deadlines for processing such claims. Such procedures will also require that claimants seeking resolution of unresolved Asbestos Personal Injury Claims must first file a proof of claim form, together with the required supporting documentation. It is anticipated that the Asbestos Personal Injury Trust will provide an initial response to the claimant within six months of receiving the proof of claim form. The proof of claim form will require the claimant to assert his or her claim for the highest Disease Level for which the claim qualifies at the time of filing. Irrespective of the Disease Level alleged on the proof of claim form, all claims will be deemed by the Asbestos Personal Injury Trust Distribution Procedures to be a claim for the highest Disease Level for which the claim qualifies at the time of filing, and all lower Disease Levels for which the claim may also qualify at the time of filing or in the future will be treated as subsumed into the higher Disease Level for both processing and payment purposes. Upon filing of a valid proof of claim form with the required supporting documentation, the claimant will be placed in the FIFO Processing Queue in accordance with the ordering described above, and will advise the Asbestos Personal Injury Trust whether the claim should be liquidated under the Asbestos Personal Injury Trust's Expedited Review Process or, in certain circumstances, the Asbestos Personal Injury Trust's Individual Review Process (both of which are described below). 13. Expedited Review The Asbestos Personal Injury Trust's Expedited Review Process ("Expedited Review") is designed primarily to provide an expeditious, efficient and inexpensive method for liquidating all claims (except those involving Lung Cancer 2 - Disease Level VI) where the claim can easily be verified by the Asbestos Personal Injury Trust as meeting the presumptive Medical/Exposure Criteria for the relevant Disease Level. Expedited Review thus provides claimants with a substantially less burdensome process for pursuing Asbestos Personal Injury Claims than does the Individual Review Process. Expedited Review is also intended to provide qualifying claimants a fixed and certain claims payment. Thus, claims that undergo Expedited Review and meet the presumptive Medical/Exposure Criteria for the relevant Disease Level will be paid the Scheduled Value for such Disease Level. However, except for claims involving Other Asbestos Disease (Disease Level I), all claims liquidated by Expedited Review will be subject to the applicable Payment Percentage, the Maximum Available Payment, and the Claims Payment Ratio limitations set forth above. Claimants holding claims that cannot be liquidated by Expedited Review because they do not meet the presumptive Medical/Exposure Criteria for the relevant Disease Level may elect the Asbestos Personal Injury Trust's Individual Review Process. 14. Claims Processing Under Expedited Review All claimants seeking liquidation of their claims pursuant to Expedited Review must file the Asbestos Personal Injury Trust's proof of claim form provided in Attachment B to the Asbestos Personal Injury Trust Distribution Procedures. As a proof of claim form is reached in the FIFO Processing Queue, the Asbestos Personal Injury Trust will determine whether the claim described therein meets the Medical/Exposure Criteria for one of the seven Disease Levels eligible for Expedited Review, and will advise the claimant of its determination. If a Disease Level is determined, the Asbestos Personal Injury Trust will tender to the claimant an offer of payment of the Scheduled Value for the relevant Disease Level multiplied by the applicable Payment Percentage, together with a form of release approved by the Asbestos Personal Injury Trust. 15. Individual Review Process The Asbestos Personal Injury Trust's Individual Review Process provides a claimant with an opportunity for individual consideration and evaluation of an OC or Fibreboard Asbestos Personal Injury Claim that fails to meet the presumptive Medical/Exposure Criteria for Disease Levels I - V, VII and VIII. In such a case, the Asbestos Personal Injury Trust will either deny the claim, or, if the Asbestos Personal Injury Trust is satisfied that the claimant has presented a claim that would be cognizable and valid in the tort system, the Asbestos Personal Injury Trust can offer the claimant a liquidated value amount up to the Scheduled Value for that Disease Level, unless the claim qualifies as an Extraordinary Claim, in which case its liquidated value cannot exceed the Maximum Value for such a claim. Claimants holding claims involving Disease Levels II - VIII will also be eligible to seek Individual Review of the liquidated value of their claims, as well as of their medical/exposure evidence. The Individual Review Process is intended to result in payments equal to the full liquidated value for each claim multiplied by the Payment Percentage; however, the liquidated value of any OC or Fibreboard Asbestos Personal Injury Claim that undergoes Individual Review may be determined to be less than the Scheduled Value the claimant would have received under Expedited Review. Moreover, the liquidated value for a claim involving Disease Levels II - VIII may not exceed the Maximum Value for the relevant Disease Level, unless the claim meets the requirements of an Extraordinary Claim, in which case its liquidated value cannot exceed the Maximum Value set forth in that provision for such claims. Because the detailed examination and valuation process pursuant to Individual Review requires substantial time and effort, claimants electing to undergo the Individual Review Process will necessarily be paid the liquidated value of their OC or Fibreboard Asbestos Personal Injury Claims later than would have been the case had the claimant elected the Expedited Review. 16. Valuation Factors to be Considered in Individual Review The Asbestos Personal Injury Trust will liquidate the value of each OC or Fibreboard Asbestos Personal Injury Claim that undergoes Individual Review based on the historic liquidated values of other similarly situated claims in the tort system for the same Disease Level. The Asbestos Personal Injury Trust will thus take into consideration all of the factors that affect the severity of damages and values within the tort system including, but not limited to (i) the degree to which the characteristics of a claim differ from the presumptive Medical/Exposure Criteria for the Disease Level in question; (ii) factors such as the claimant's age, disability, employment status, disruption of household, family or recreational activities, dependencies, special damages, and pain and suffering; (iii) evidence that the claimant's damages were (or were not) caused by asbestos exposure, including exposure to an asbestos-containing product or to conduct for which OC or Fibreboard has legal responsibility prior to December 31, 1982, (for example, alternative causes, and the strength of documentation of injuries); (iv) the industry of exposure; and (v) settlements, verdicts and the claimant's and other law firms' experience in the claimant's jurisdiction for similarly situated claims. 17. Scheduled, Average and Maximum Values The Scheduled, Average and Maximum Values for claims involving Disease Levels I - VIII are the following:
- ---------------------------------------------------------------------------------------------------------------------- OC SUB-ACCOUNT - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Scheduled Disease Scheduled Value Average Value Maximum Value - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Mesothelioma (Level VIII) $215,000 $270,000 $650,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Lung Cancer (Level VII) $ 40,000 $ 50,000 $150,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Lung Cancer (Level VI) None $ 20,000 $ 50,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Other Cancer (Level V) $ 22,000 $ 25,000 $ 60,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Severe Asbestosis (Level IV) $ 42,000 $ 50,000 $150,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Asbestos/Pleural Disease $ 19,000 $ 20,000 $ 35,000 (Level III) - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Asbestos/Pleural Disease $ 8,000 $ 9,000 $ 20,000 (Level II) - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Other Asbestos Disease (Cash $ 400 None None Discount Payment) (Level I) - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ---------------------------------------------------------------------------------------------------------------------- FB SUB-ACCOUNT - ---------------------------------------------------------------------------------------------------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Scheduled Disease Scheduled Value Average Value Maximum Value - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Mesothelioma (Level VIII) $135,000 $180,000 $450,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Lung Cancer (Level VII) $ 27,000 $ 35,000 $ 90,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Lung Cancer (Level VI) None $ 12,000 $ 30,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Other Cancer (Level V) $ 12,000 $ 15,000 $ 36,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Severe Asbestosis (Level IV) $ 29,000 $ 30,000 $ 90,000 - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Asbestos/Pleural Disease $ 11,500 $ 12,000 $ 21,000 (Level III) - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Asbestos/Pleural Disease $ 4,500 $ 5,400 $ 12,000 (Level II) - ----------------------------------- ------------------------ ---------------------------- ---------------------------- - ----------------------------------- ------------------------ ---------------------------- ---------------------------- Other Asbestos Disease (Cash $ 240 None None Discount Payment) (Level I) - ----------------------------------- ------------------------ ---------------------------- ----------------------------
These Scheduled Values, Average Values and Maximum Values will apply to all OC and Fibreboard Asbestos Personal Injury Trust Voting Claims filed with the Asbestos Personal Injury Trust on or before the Initial Claims Filing Date. Thereafter, the Asbestos Personal Injury Trust, with the consent of the TAC and the Future Claimants' Representative, may change these valuation amounts for good cause and consistent with other restrictions on the amendment power. 18. Extraordinary and/or Exigent Hardship Claims "Extraordinary Claim" means an OC or Fibreboard Asbestos Personal Injury Claim that otherwise satisfies the Medical Criteria for Disease Levels IV - VIII, and that is held by a claimant whose exposure to asbestos was at least 75% the result of exposure to an asbestos-containing product or conduct for which OC or Fibreboard has legal responsibility, and there is little likelihood of a substantial recovery elsewhere. All such Extraordinary Claims will be presented for Individual Review and, if valid, will be entitled to an award of up to a Maximum Value of five (5) times the Scheduled Value for claims qualifying for Disease Levels I -V, VII and VIII, and five (5) times the Average Value for claims in Disease Level VI, multiplied by the applicable Payment Percentage. An Extraordinary Claim, following its liquidation, will be placed in the FIFO Queue ahead of all other OC and Fibreboard Asbestos Personal Injury Claims except Exigent Hardship Claims, which will be first in said FIFO Queue, based on its date of liquidation, subject to the Maximum Available Payment and Claims Payment Ratio described above. At any time the Asbestos Personal Injury Trust may liquidate and pay certain OC or Fibreboard Asbestos Personal Injury Claims that qualify as Exigent Hardship Claims. Such claims may be considered separately by the Asbestos Personal Injury Trust no matter what the order of processing otherwise would have been under the Asbestos Personal Injury Trust Distribution Procedures. An Exigent Hardship Claim, following its liquidation, will be placed first in the FIFO Payment Queue ahead of all other liquidated OC or Fibreboard Asbestos Personal Injury Claims, subject to the Maximum Available Payment and Claims Payment Ratio described above. An OC or Fibreboard Asbestos Personal Injury Claim will qualify for payment as an Exigent Hardship Claim if the claim meets the Medical/Exposure Criteria for Severe Asbestosis (Disease Level IV) or an asbestos-related malignancy (Disease Levels V-VIII), and the Asbestos Personal Injury Trust, in its sole discretion, determines (a) that the claimant needs financial assistance on an immediate basis based on the claimant's expenses and all sources of available income, and (b) that there is a causal connection between the claimant's dire financial condition and the claimant's asbestos-related disease. 19. Secondary Exposure Claims If a claimant alleges an asbestos-related disease resulting solely from exposure to an occupationally exposed person, such as a family member, the claimant may seek Individual Review of his or her claim. In such a case, the claimant will be required to establish that the occupationally exposed person would have met the exposure requirements under the Asbestos Personal Injury Trust Distribution Procedures that would have been applicable had that person filed a direct claim against the Asbestos Personal Injury Trust. In addition, the claimant with secondary exposure must establish that he or she is suffering from one of the eight Disease Levels above, or an asbestos-related disease otherwise compensable under the Asbestos Personal Injury Trust Distribution Procedures, that his or her own exposure to the occupationally exposed person occurred within the same time frame as the occupationally exposed person was exposed to an asbestos-containing product or to conduct for which OC or Fibreboard has legal responsibility, and that such secondary exposure was a cause of the claimed disease. The proof of claim form included in Attachment B to the Asbestos Personal Injury Trust Distribution Procedures contains an additional section for Secondary Exposure Claims. All other liquidation and payment rights and limitations under the Asbestos Personal Injury Trust Distribution Procedures will be applicable to such claims. 20. Evidentiary Requirements (a) Medical Evidence The Asbestos Personal Injury Trust Distribution Procedures require that all diagnoses of a Disease Level presented to the Asbestos Personal Injury Trust be accompanied by either (i) a statement by the physician providing the diagnosis that at least 10 years have elapsed between the date of first exposure to asbestos or asbestos-containing products and the diagnosis, or (ii) a history of the claimant's exposure sufficient to establish a 10-year latency period. A finding by a physician after the Petition Date that a claimant's disease is "consistent with" or "compatible with" asbestosis will not alone be treated by the Asbestos Personal Injury Trust as a diagnosis. Except for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, all diagnoses of a non-malignant asbestos-related disease (Disease Levels I-IV) submitted to the Asbestos Personal Injury Trust must be based (i) in the case of a claimant who was living at the time the claim was filed, upon (A) a physical examination of the claimant by the physician providing the diagnosis of the asbestos-related disease; (B) for Disease Levels I - III, evidence of Bilateral Asbestos-Related Nonmalignant Disease (as defined in Footnote 3 of the Asbestos Personal Injury Trust Distribution Procedures), and for Disease Level IV, either an ILO reading of 2/1 or greater or pathological evidence of asbestosis, or (C) pulmonary function testing if the claim involves Asbestosis/Pleural Disease (Level III) or Severe Asbestosis (Level IV), or (ii) in the case of a claimant who was deceased at the time the claim was filed, upon (A) a physical examination of the claimant by the physician providing the diagnosis of the asbestos-related disease, or (B) pathological evidence of the non-malignant asbestos-related disease, or (C) for Disease Levels I - III, evidence of Bilateral Asbestos-Related Nonmalignant Disease (as defined in Footnote 3 of the Asbestos Personal Injury Trust Distribution Procedures), and for Disease Level IV, either an ILO reading of 2/1 or greater or pathological evidence of asbestosis. Except for claims filed against OC or Fibreboard or another asbestos defendant in the tort system prior to the Petition Date, diagnoses of an asbestos-related malignancy (Disease Levels V - VIII) submitted to the Asbestos Personal Injury Trust must be based upon either (i) a physical examination of the claimant by the physician providing the diagnosis of the asbestos-related disease, or (ii) on a diagnosis of such a malignant Disease Level by a board-certified pathologist. If the holder of an OC or Fibreboard Asbestos Personal Injury Claim has available the medical evidence described above, or if the holder has filed such medical evidence with another asbestos-related personal injury settlement trust that requires such evidence, the Asbestos Personal Injury Trust Distribution Procedures require that the holder provide such medical evidence to the Asbestos Personal Injury Trust notwithstanding any exceptions to the contrary. 21. Credibility of Medical Evidence The Asbestos Personal Injury Trust must have reasonable confidence that the medical evidence provided in support of the claim is credible and consistent with recognized medical standards before making any payment to a claimant. The Asbestos Personal Injury Trust may require the submission of X-rays, CT scans, detailed results of pulmonary function tests, laboratory tests, tissue samples, results of medical examination or reviews of other medical evidence, and may require that medical evidence submitted comply with recognized medical standards regarding equipment, testing methods and procedure to assure that such evidence is reliable. Medical evidence (i) that is of a kind shown to have been received in evidence by a state or federal judge at trial, (ii) that is consistent with evidence submitted to OC or Fibreboard to settle for payment similar disease cases prior to OC or Fibreboard's bankruptcy, or (iii) a diagnosis by a physician shown to have previously qualified as a medical expert with respect to the asbestos-related disease in question before a state or federal judge, is presumed by the Asbestos Personal Injury Trust to be reliable, although the Asbestos Personal Injury Trust may seek to rebut the presumption. In addition, claimants who otherwise meet the requirements of the Asbestos Personal Injury Trust Distribution Procedures for payment of an OC or Fibreboard Asbestos Personal Injury Claim will be paid by the Asbestos Personal Injury Trust irrespective of the results in any litigation at anytime between the claimant and any other defendant in the tort system. However, the Asbestos Personal Injury Trust Distribution Procedures contemplate that any relevant evidence submitted in a proceeding in the tort system, other than any findings of fact, a verdict, or a judgment, involving another defendant may be introduced by either the claimant or the Asbestos Personal Injury Trust in any Individual Review proceeding or any Extraordinary Claim proceeding conducted by the Asbestos Personal Injury Trust. 22. Exposure Evidence To qualify for any Disease Level, the Asbestos Personal Injury Trust Distribution Procedures require that the claimant demonstrate some exposure to an OC or Fibreboard asbestos-containing product or conduct for which OC or Fibreboard has legal responsibility. Claims based on conspiracy theories that involve no such OC or FB Exposure or conduct are not compensable under the Procedures. To meet the presumptive exposure requirements of Expedited Review, the claimant must show (i) for all Disease Levels, OC or FB Exposure as defined below prior to December 31, 1982; (ii) for Asbestos/Pleural Disease Level II, six months OC or FB Exposure prior to December 31, 1982, plus five years cumulative occupational asbestos exposure; and (iii) for Asbestosis/Pleural Disease (Disease Level III), Severe Asbestosis (Disease Level IV), Other Cancer (Disease Level V) or Lung Cancer 1 (Disease Level VII), the claimant must show six months OC or FB Exposure prior to December 31, 1982, plus Significant Occupational Exposure to asbestos. If the claimant cannot meet the relevant presumptive exposure requirements for a Disease Level eligible for Expedited Review, the claimant may seek Individual Review of his or her claim based on exposure to an asbestos-containing product or conduct for which OC or Fibreboard has legal responsibility. To recover from the Asbestos Personal Injury Trust, the claimant must demonstrate meaningful and credible exposure to asbestos or asbestos-containing products for which OC or Fibreboard has legal responsibility. For these purposes, the Asbestos Personal Injury Trust will consider meaningful and credible evidence, including an affidavit of the claimant, by an affidavit of a co-worker or the affidavit of a family member in the case of a deceased claimant (providing the Asbestos Personal Injury Trust finds such evidence reasonably reliable), by invoices, employment, construction or similar records, or by other credible evidence. The Asbestos Personal Injury Trust may also require submission of other or additional evidence of exposure when it deems such to be necessary. The specific exposure information required by the Asbestos Personal Injury Trust to process a claim under either Expedited or Individual Review is set forth on the proof of claim form to be used by the Asbestos Personal Injury Trust, which is attached as Attachment B to the Asbestos Personal Injury Trust Distribution Procedures. The Asbestos Personal Injury Trust may also require submission of other or additional evidence of exposure when it deems such to be necessary. 23. Second Disease (Malignancy) Claims The Asbestos Personal Injury Trust Distribution Procedures allow the holder of an OC or Fibreboard Asbestos Personal Injury Claim involving a non-malignant asbestos-related disease (Disease Levels I through IV) to assert a new OC or Fibreboard Asbestos Personal Injury Claim against the Asbestos Personal Injury Trust for a malignant disease (Disease Levels V - VIII) that is subsequently diagnosed. The Asbestos Personal Injury Trust will not reduce any additional payments to which such claimant may be entitled with respect to such malignant asbestos-related disease by the amount paid for the non-malignant asbestos-related disease, provided that the malignant disease had not been diagnosed at the time the claimant filed his or her original claim involving the non-malignant disease. 24. Punitive Damages In determining the value of any OC or Fibreboard Asbestos Personal Injury Claim, punitive or exemplary damages, i.e., damages other than compensatory damages, will not be considered or allowed, notwithstanding their availability in the tort system. 25. Interest Except for an OC or Fibreboard Asbestos Personal Injury Claim involving Other Asbestos Diseases (Disease Level I - Cash Discount Payment) and subject to the limitations set forth below, the Asbestos Personal Injury Trust Distribution Procedures provide that interest will be paid on all OC and Fibreboard Asbestos Personal Injury Claims with respect to which the claimant has had to wait a year or more for payment, provided, however, that no claimant will receive interest for a period in excess of seven (7) years. The applicable interest rate is to be six percent (6%) simple interest per annum for the first five (5) years after the Effective Date; thereafter, the Trustees have the discretion to change the annual interest rate with the consent of the TAC and the Future Claimants' Representative. Interest is payable on the Scheduled Value of any unresolved OC or Fibreboard Asbestos Personal Injury Claim that meets the requirements of Disease Levels II -V, VII and VIII, whether the claim is liquidated under Expedited Review, Individual Review, or by arbitration. Interest on an unresolved OC or Fibreboard Asbestos Personal Injury Claim that meets the requirements of Disease Level VI will be based on the Average Value of such a claim. Interest on all such unresolved claims will be measured from the date of payment back to the earliest of the date that is one year after the date on which (a) the claim was filed against OC or Fibreboard prior to the Petition Date; (b) the claim was filed against another defendant in the tort system on or after the Petition Date but before the Effective Date; (c) the claim was filed with the Bankruptcy Court during the pendency of these Chapter 11 proceedings; or (d) the claim was filed with the Asbestos Personal Injury Trust after the Effective Date. Interest is also payable on the liquidated value of all Unpaid OC or Fibreboard Resolved Asbestos Personal Injury Claims. In the case of such claims liquidated by verdict or judgment, interest will be measured from the date of payment back to the date that is one year after the date that the verdict or judgment was entered. In the case of such claims liquidated by a binding, judicially enforceable settlement, interest will be measured from the date of payment back to the date that is one year after the Petition Date. 26. Suits in the Tort System If the holder of a disputed claim disagrees with the Asbestos Personal Injury Trust's determination regarding the Disease Level of the claim, the claimant's exposure history or the liquidated value of the claim, and if the holder has first submitted the claim to non-binding arbitration, the Asbestos Personal Injury Trust Distribution Procedures contemplate that the holder may file a lawsuit in the claimant's jurisdiction. All defenses (including, with respect to the Asbestos Personal Injury Trust, all defenses which could have been asserted by OC or Fibreboard) will be available to both sides at trial; however, the Asbestos Personal Injury Trust may waive any defense and/or concede any issue of fact or law. If the claimant was alive at the time the initial pre-petition complaint was filed or on the date the proof of claim was filed, the case will be treated as a personal injury case with all personal injury damages to be considered even if the claimant has died during the pendency of the claim. If and when a claimant obtains a judgment in the tort system, the claim will be placed in the FIFO Payment Queue based on the date on which the judgment became final. Thereafter, the claimant will receive from the Asbestos Personal Injury Trust an initial payment (subject to the applicable Payment Percentage, the Maximum Available Payment, and the Claims Payment Ratio provisions set forth above) of an amount equal to one-hundred percent (100%) of the greater of (i) the Asbestos Personal Injury Trust's last offer to the claimant or (ii) the award that the claimant declined in non-binding arbitration. The claimant will receive the balance of the judgment, if any, in five equal installments in years six (6) through ten (10) following the year of the initial payment (also subject to the applicable Payment Percentage, the Maximum Available Payment and the Claims Payment Ratio provisions above). In the case of non-Extraordinary Claims involving Disease Levels II - VIII, the total amounts paid with respect to such claims may not exceed the Maximum Values for such Disease Levels. In the case of Extraordinary Claims, the total amounts paid with respect to such claims may not exceed the Maximum Value for such claims. Under no circumstances will interest be paid on any judgments obtained in the tort system. 27. Objections concerning the Asbestos Personal Injury Trust Distribution Procedures Some parties have indicated potential objections to the provisions of the Asbestos Personal Injury Trust Distribution Procedures, which set forth the Disease Levels, value of the Asbestos Personal Injury Claims ascribed to the Disease Level and the evidence to be required to support Asbestos Personal Injury Claims, as described above. For example, the Unsecured Creditors' Committee asserts that the values do not appropriately differentiate between those who have serious, life-altering injuries and those who have no daily life impairment. The Plan Proponents believe that the provisions of the Asbestos Personal Injury Trust Distribution Procedures are fair, equitable and provide appropriate procedures for the allowance of Asbestos Personal Injury Claims, including Disease Levels and values that are fair, equitable and appropriate. Any objections to the provisions of the Asbestos Personal Injury Trust Distribution Procedures shall be resolved by the Bankruptcy Court or District Court at the confirmation hearing. C. The Asbestos Personal Injury Permanent Channeling Injunction In 1994, the Bankruptcy Code was amended to add subsections (g) and (h) to Section 524. These subsections confirm the validity of existing injunctions (such as those used in the Chapter 11 cases of Johns-Manville Corporation and UNR Corporation) similar to the Asbestos Personal Injury Permanent Channeling Injunction and codify a court's authority to issue a permanent injunction in asbestos-related reorganizations under Chapter 11 to supplement the injunctive relief afforded by Section 524. Section 524(g) provides that, if certain specified conditions are satisfied, a court may issue a supplemental permanent injunction, such as the Asbestos Personal Injury Permanent Channeling Injunction, barring claims and demands against the reorganized company and certain identified protected parties and channeling those claims and demands to an independent trust. Pursuant to the Asbestos Personal Injury Permanent Channeling Injunction and the Plan, the entities listed or described in Schedules VI, VIII and X to the Plan, attached to this Disclosure Statement as Appendix A, will be "Protected Parties" and, therefore, protected by the scope of the Asbestos Personal Injury Permanent Channeling Injunction. Pursuant to the Asbestos Personal Injury Permanent Channeling Injunction, Protected Parties will be protected against "Enjoined Actions": (i) the commencement, conduct, or continuation in any manner, directly or indirectly (including an action directly against a provider of insurance), of any suit, action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) in any forum; (ii) the enforcement, attachment (including, without limitation, any prejudgment attachment), collection or seeking to recover any judgment, award, decree, or other order; (iii) the creation, perfection or enforcement in any manner, directly or indirectly, of any Encumbrance, (iv) the setting off, seeking reimbursement of, contribution from, or subrogation against, or other recoupment in any manner, directly or indirectly, of any amount against any liability owed to any Protected Parties, and (v) the commencement or continuation, in any manner, in any place, of any action which, in any such case, does not comply with or is inconsistent with the provisions of the Plan. PURSUANT TO THE PLAN, SECTION 524(g) OF THE BANKRUPTCY CODE, AND PURSUANT TO AND IN CONJUNCTION WITH THE CONFIRMATION ORDER, ALL PERSONS WILL BE PERMANENTLY, FOREVER AND COMPLETELY STAYED, RESTRAINED, PROHIBITED AND ENJOINED FROM TAKING ANY ENJOINED ACTION OR PROCEEDING IN ANY MANNER IN ANY PLACE WITH REGARD TO ANY MATTER THAT IS SUBJECT TO RESOLUTION PURSUANT TO THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY RESOLVED ASBESTOS PERSONAL INJURY CLAIM, EXCEPT IN CONFORMITY AND COMPLIANCE THEREWITH, AGAINST ANY PROTECTED PARTY OR PROPERTY OR INTERESTS IN PROPERTY OF ANY PROTECTED PARTY, WHETHER DIRECTLY OR INDIRECTLY, DERIVATIVELY OR OTHERWISE, FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY ASBESTOS PERSONAL INJURY CLAIM (OTHER THAN PURSUANT TO THE PROVISIONS OF THE ASBESTOS PERSONAL INJURY TRUST AGREEMENT OR TO ENFORCE THE PROVISIONS OF THE PLAN). IX. THE FB ASBESTOS PROPERTY DAMAGE TRUST The following summarizes certain terms of the FB Asbestos Property Damage Trust Agreement (including the purpose of the FB Asbestos Property Damage Trust , the powers and appointment of the FB Asbestos Property Damage Trustee, the transfer of certain property to the FB Asbestos Property Damage Trust and the termination provisions thereof) and the FB Asbestos Property Damage Trust Distribution Procedures. It is intended only to be a summary, and interested parties should review the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. The following summary is qualified in its entirety by such documents. A. General Description of the FB Asbestos Property Damage Trust 1. Purposes of the FB Asbestos Property Damage Trust The FB Asbestos Property Damage Trust will be established pursuant to the FB Asbestos Property Damage Settlement Trust Agreement ("FB Asbestos Property Damage Trust Agreement"), a copy of which will be attached to the Plan as Exhibit E. In accordance with Section 1.93 of the Plan, and Exhibit E to the Plan will be filed with the Clerk of the Bankruptcy Court at least ten (10) Business Days prior to the Objection Deadline. The purpose of the FB Asbestos Property Damage Trust is to assume any and all liabilities of Fibreboard or its Affiliates, with respect to any and all FB Asbestos Property Damage Claims, and to use the assets of the FB Asbestos Property Damage Trust and income to promptly pay holders of Allowed FB Asbestos Property Damage Claims. 2. Transfer of Certain Property to and Assumption of Certain Liabilities by the FB Asbestos Property Damage Trust On the later of the Effective Date and the date by which the FB Asbestos Property Damage Trustee has executed the FB Asbestos Property Damage Trust Agreement, the Reorganized Debtors shall transfer and assign, or cause the FB Asbestos Property Damage Insurance Assets to be transferred and assigned to the FB Asbestos Property Damage Trust . The FB Asbestos Property Damage Insurance Assets include, without limitation, the following agreements that provide coverage in place for FB Asbestos Property Damage Claims up to certain limits in a specified sequence: (1) Settlement Agreement dated on or around January 1, 1993 between Fibreboard and American Home Assurance Company, Granite State Insurance Company, Insurance Company of the State of Pennsylvania, Lexington Insurance Company, and New Hampshire Insurance Company; (2) Settlement Agreement dated on or around October 31, 1994 between Fibreboard and CIGNA Specialty Insurance Company, Central National Insurance Company of Omaha, Century Indemnity Company, CIGNA Property and Casualty Insurance Company, and Insurance Company of North America; (3) Settlement Agreement dated on or around August 7, 1997 between Fibreboard and New England Insurance Company. The insurers who are parties to these agreements reserve all rights to object to confirmation of the Plan, including to the extent any aspect of the Plan or its confirmation purports to alter their obligations or decide any matter adversely to them. Fibreboard also has unconfirmed coverage under policies issued by other carriers as set forth on Schedule XV. Lloyd's of London objects to the inclusion on Schedule XV of policy nos. 564/155055, 564/477688, 53/8540D, 54/83850, 55/7871D. On the Effective Date, or as soon thereafter as is practicable, at the sole cost and expense of the FB Asbestos Property Damage Trust and in accordance with written instructions provided to the Reorganized Debtors by the FB Asbestos Property Damage Trust, the Reorganized Debtors will transfer and assign to the FB Asbestos Property Damage Trust copies of all books and records of the Debtors that pertain directly to FB Asbestos Property Damage Claims that have been asserted against the Debtors and/or the Fibreboard Insurance Settlement Trust. The Debtors will request that the Bankruptcy Court, in the Confirmation Order, rule that such transfers shall not result in the invalidation or waiver of any applicable privileges pertaining to such books and records. In consideration for the property transferred to the FB Asbestos Property Damage Trust, and in furtherance of the purposes of the FB Asbestos Property Damage Trust and the Plan, the FB Asbestos Property Damage Trust shall assume all liability and responsibility for all FB Asbestos Property Damage Claims, and the Reorganized Debtors shall have no further financial or other responsibility or liability therefor. The FB Asbestos Property Damage Trust shall also assume all liability for premiums, deductibles, retrospective premium adjustments, security or collateral arrangements, or any other charges, costs, fees, or expenses (if any) that become due to any insurer in connection with the FB Asbestos Property Damage Insurance Assets as a result of FB Asbestos Property Damage Claims, asbestos-related property damage claims against Persons insured under policies included in the FB Asbestos Property Damage Insurance Assets by reason of vendors' endorsements, or under the indemnity provisions of settlement agreements that the Debtors made with any insurers prior to the Confirmation Date to the extent that those indemnity provisions relate to FB Asbestos Property Damage Claims, and the Reorganized Debtors shall have no further financial or other responsibility or liability for any of the foregoing; provided, however, that such liability of the FB Asbestos Property Damage Trust shall be limited to the extent of the benefits of such Trust, as reasonably determined by the Trustee of such Trust, so that the FB Asbestos Property Damage Trust may elect to terminate such liability in the event that the Trustee determines the benefits of maintaining the insurance policies are no longer worth the costs. The Reorganized Debtors shall cooperate with the FB Asbestos Property Damage Trust and use commercially reasonable efforts to take or cause to be taken all appropriate actions and to do or cause to be done all things necessary or appropriate to effectuate the transfer of the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust. By way of enumeration and not of limitation, the Reorganized Debtors shall be obligated (a) to provide the FB Asbestos Property Damage Trust with copies of insurance policies and settlement agreements included within or relating to the FB Asbestos Property Damage Insurance Assets; (b) to provide the FB Asbestos Property Damage Trust with information necessary or helpful to the FB Asbestos Property Damage Trust in connection with its efforts to obtain insurance coverage for FB Asbestos Property Damage Claims; (c) to execute further assignments or allow the FB Asbestos Property Damage Trust to pursue claims relating to the FB Asbestos Property Damage Insurance Assets in its name (subject to appropriate disclosure of the fact that the FB Asbestos Property Damage Trust is doing so and the reasons why it is doing so), including by means of arbitration, alternative dispute resolution proceedings or litigation, to the extent necessary or helpful to the efforts of the FB Asbestos Property Damage Trust to obtain insurance coverage under the FB Asbestos Property Damage Insurance Assets for FB Asbestos Property Damages Claims; and (d) to pursue and recover insurance coverage in its own name or right to the extent that the transfer and assignment of the FB Asbestos Property Damage Insurance Assets to the FB Asbestos Property Damage Trust is not able to be fully effectuated. The FB Asbestos Property Damage Trust shall be obligated to compensate the Reorganized Debtors for costs reasonably incurred in connection with providing assistance to the FB Asbestos Property Damage Trust, including without limitation, out-of-pocket costs and expenses, consultant fees, and attorneys' fees. On the Confirmation Date, the Debtors will be empowered and authorized to take or cause to be taken, prior to the Effective Date, all actions necessary to enable them to implement effectively the provisions of the Plan and the FB Asbestos Property Damage Trust Agreement. 3. The FB Asbestos Property Damage Trustee (a) Appointment of the FB Asbestos Property Damage Trustee On the Confirmation Date, effective as of the Effective Date, the Bankruptcy Court shall confirm the appointment of the individual selected by the Debtors to serve as the FB Asbestos Property Damage Trustee of the FB Asbestos Property Damage Trust. (b) FB Asbestos Property Damage Trustee's Powers and Duties The FB Asbestos Property Damage Trustee will act as a fiduciary to the FB Asbestos Property Damage Trust in accordance with the provisions of the FB Asbestos Property Damage Trust Agreement and the Plan. The FB Asbestos Property Damage Trustee will be obligated, among other things, at all times, to administer the FB Asbestos Property Damage Trust and the FB Asbestos Property Damage Trust Assets in a manner consistent with the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures. Subject to any limitations set forth in the FB Asbestos Property Damage Trust Agreement, the FB Asbestos Property Damage Trustee shall have the power to take any and all such actions as in the judgment of the FB Asbestos Property Damage Trustee that are necessary or proper to fulfill the purposes of the FB Asbestos Property Damage Trust . (c) FB Asbestos Property Damage Trustee's Compensation The FB Asbestos Property Damage Trustee will be entitled to receive annual compensation plus a per diem allowance for meetings attended in amounts to be determined, disclosed and filed with the Bankruptcy Court at least ten(10) Business Days prior to the Objection Deadline. The FB Asbestos Property Damage Trustee will also be entitled to be reimbursed for out-of-pocket costs and expenses. The FB Asbestos Property Damage Trustee's per annum compensation may only be increased annually at the rate of the Consumer Price Index - All Cities. Any increase in excess of such an adjustment based on the Consumer Price Index may be made only with the Bankruptcy Court's approval. 4. FB Asbestos Property Damage Trust Termination Provisions The FB Asbestos Property Damage Trust is irrevocable, but will terminate ninety (90) days after the first day any of the following events occurs: (i) the FB Asbestos Property Damage Trustee , in his or her sole discretion, decides to terminate the FB Asbestos Property Damage Trust because (a) all duly filed FB Asbestos Property Damage Claims have been liquidated and satisfied and two years have elapsed since the Effective Date, (b) the FB Asbestos Property Damage Trustee determines that it is unlikely that any new claims will be filed against the FB Asbestos Property Damage Trust; (ii) a final order of the Bankruptcy Court is obtained approving the FB Asbestos Property Damage Trustee's procurement of irrevocable insurance policies and establishment of claims handling agreements with suitable third parties adequate to discharge all expected remaining FB Asbestos Property Damage Trust obligations and expenses of the FB Asbestos Property Damage Trust in a manner consistent with the FB Asbestos Property Damage Trust Agreement and the FB Asbestos Property Damage Trust Distribution Procedures; (iii) in the judgment of the FB Asbestos Property Damage Trustee , with the consent of the Property Damage Advisory Committee ("PD Advisory Committee"), the continued administration of the FB Asbestos Property Damage Trust is uneconomic or inimical to the best interests of the persons holding FB Asbestos Property Damage Claims, and the termination will not expose Fibreboard, its Affiliates or any other Reorganized Debtor or any successor to any increased or undue risk of having claims asserted against it or them or in any way jeopardize the validity or the enforceability of the injunction channeling FB Asbestos Property Damage Claims; or (iv) 21 years less 91 days pass after the death of the last survivor of all of the descendants of George Herbert Walker Bush of Texas, living on the date of the establishment of the FB Asbestos Property Damage Trust. On the Termination Date, after payment of all the FB Property Damage Trust's liabilities have been provided for, the remaining FB Asbestos Property Damage Insurance Assets shall be transferred and assigned to Reorganized OC; all monies, if any, remaining in the FB Property Damage Trust estate shall be transferred to charitable organization(s) exempt from federal income tax under Section 501 (c)(3) of the Internal Revenue Code, which tax-exempt organization(s) shall be selected by the Trustee using his or her reasonable discretion; provided, however, that (i) if practicable, the tax-exempt organization(s) shall be related to the treatment of, research, or the relief of suffering of individuals suffering from asbestos-related disorders, and (ii) the tax-exempt organization(s) shall not bear any relationship to FB or its Affiliates within the meaning of Section 468(d)(3) of the Internal Revenue Code. The Plan Proponents believe that the likelihood of any monies remaining in the FB Asbestos Property Damage Trust after the FB Asbestos Property Damage Trust terminates is extremely remote. B. FB Asbestos Property Damage Claims Procedures The FB Asbestos Property Damage Trust Distribution Procedures provide the exclusive means of processing, liquidating, paying and satisfying all FB Asbestos Property Damage Claims as provided in and required by the Plan and the FB Asbestos Property Damage Trust Agreement. The FB Asbestos Property Damage Trust Distribution Procedures are designed to provide fair, prompt payment to holders of Allowed FB Asbestos Property Damage Claims and to provide a low transaction cost method of effectuating the resolution of FB Asbestos Property Damage Claims. The FB Asbestos Property Damage Trustee will implement and administer the FB Asbestos Property Damage Claims Procedures, which are attached to the Plan as Exhibit E-1. 1. Property Damage Advisory Committee The FB Asbestos Property Damage Trust Distribution Procedures provide for a PD Advisory Committee composed of three persons selected by the Trustees. The Trustee shall participate and consult with the PD Advisory Committee on all major policy and administrative decisions affecting, and the interpretation and implementation of, the FB Asbestos Property Damage Trust Distribution Procedures. 2. Claims Categories The FB Asbestos Property Damage Trust Distribution Procedures provide for two categories of claims, Category 1 Claims, based on a percentage of actual incurred Abatement Costs or documented anticipated Abatement Costs and Category 2 Claims, to be paid on a formula based on the linear square footage of asbestos-related products referred to "Discounted Payable Costs" in the FB Asbestos Property Damage Trust Distribution Procedures. All claimants must provide Convincing Evidence of a legally viable cause of action and that the asbestos containing product for which the Claim is submitted is a Fibreboard asbestos-containing product, and Category 1 Claims, only, must also provide Convincing Evidence of compensable injury and damages. "Convincing Evidence" means sufficient evidence to be a preponderance of the evidence. Pursuant to the FB Asbestos Property Damage Trust Distribution Procedures, the Trustee is required to disallow any Asbestos Property Damage Claim under the following conditions: (a) if the Claimant did not file a timely Proof of Claim within the meaning of the Bankruptcy Code and Bankruptcy Rules, such determination shall be made consistent with Section 3.3(c) of the Trust Agreement requiring the Trustee to enforce the Bankruptcy Court's bar date orders; (b) if the Claimant did not file a required Claim form within twelve months of the Effective Date; (c) if there has been a prior judicial determination or stipulation that the asbestos containing product for which the FB Asbestos Property Damage Claim was filed is not a Fibreboard asbestos-containing product; (d) if there is Convincing Evidence that Fibreboard would have been able to obtain summary judgment on the ground that the claim would have been barred as a matter of law or factually time-barred under the laws of the applicable jurisdiction if considered on the Petition Date, unless such claim has been revived or reinstated by reason of legislative enactment in the applicable jurisdiction, provided, however, there is a presumption that Pre-Existing Claims are not factually time-barred; or (e) if there has been a prior adjudication by Final Order (as defined in the Plan) that a FB Asbestos Property Damage Claim has been time-barred and may not be brought in any other jurisdiction or otherwise revived by the holder of such Claim. . "Pre-Existing Claims" means those claims on behalf of a claimant who prior to the General Bar Date filed or intervened in a lawsuit in a court of general jurisdiction against Fibreboard. 3. Required Documentation and Claims Processing The FB Asbestos Property Damage Trust Distribution Procedures require that all FB Asbestos Property Damage Claims be submitted within twelve (12) months of the Effective Date. Category 1 Claims must submit a completed Claim form and supporting documentation including, copies of all bulk sample analysis results and/or records thereof, Convincing Evidence that the asbestos-containing product that is the subject of the Claim is a Fibreboard asbestos-containing product, and Convincing Evidence supporting a Claim for Abatement Costs. "Abatement Costs" means the reasonable and customary costs of the removal, enclosure, encapsulation or repair of asbestos containing products, including, by way of example, costs for the abatement itself, design, consultant and laboratory fees and costs in connection with the abatement, and, except for abatement upon demolition, the reasonable costs of replacement, as allowed in these Property Damage Claims Procedures, of the asbestos containing products with a non-asbestos containing product. Category 2 Claims must submit a completed Claim form and Convincing Evidence that the asbestos-containing product that is the subject of the Claim is a Fibreboard asbestos-containing product. Claims shall be processed on a first-in-first-out ("FIFO") basis. The facility for the administration of these Claims will notify the Claimant in writing by mail of its determination of the Allowed amount of the Claim within 120 days of receipt of all necessary documentation. 4. Payment of Asbestos Property Damage Claims The FB Asbestos Property Damage Trust is funded with the FB Asbestos Property Damage Insurance Assets, consisting primarily of rights to insurance recoveries under liability insurance policies issued to Fibreboard for FB Asbestos Property Damage Claims and identified in Schedule XV to the Plan. Upon receiving all of the recoveries from these assets, or 5 years from the Effective Date, whichever occurs first, the Trustee shall determine the amounts to be paid to holders of Allowed Claims based on the total amount of recoveries available at that time. Allowed Category 1 Claims shall be paid based on the following calculations: (a) the Trustee shall subtract the total Allowed amount of all Allowed Category 2 Claims from the available recoveries to determine the available recoveries remaining to compensate holders of Allowed Category 1 Claims; (b) the Trustee, in consultation with the PD Advisory Committee, shall then determine the payment percentage to be used to pay holders of Allowed Category 1 Claims based on the remaining available recoveries; (c) holders of Allowed Category 1 Claims shall then receive payment calculated on the basis of the payment percentage multiplied by the Allowed amount of their Claim. Allowed Category 2 Claims shall be paid their Discounted Payable Costs calculated in accordance with the formula contained in FB Asbestos Property Damage Trust Distribution Procedures; except that, if the remaining available recoveries are insufficient to pay holders of Allowed Category 1 Claims at least as much as they would have received had they submitted their Claims as Category 2 Claims, then all of the holders of Allowed FB Asbestos Property Damage Claims, regardless of claim category, shall receive their pro rata share of all available recoveries. Because the FB Asbestos Property Damage Insurance Assets are estimated by the Debtors to exceed all Allowed FB Asbestos Property Damage Claims, the Debtors believe that recoveries will sufficient to pay these Claims in the amount Allowed. 5. Reconsideration of Claims The FB Asbestos Property Damage Trust Distribution Procedures permit claimants, within 60 days of receiving notice of the Allowed amount of their claim, to request reconsideration of the determined amount of their claim. On reconsideration, the Claim will be reviewed de novo within 90 days by a panel consisting of two claims analysts and one otherwise disinterested member of the PD Advisory Committee. After receipt of the final determination on reconsideration, a Claimant again has 60 days to request reconsideration of its Claim, this time through binding arbitration. C. Injunction Channeling FB Asbestos Property Damage Claims ALL CLASS 9 CLAIMS SHALL BE CHANNELED TO THE FB ASBESTOS PROPERTY DAMAGE TRUST, AND SHALL BE PROCESSED, LIQUIDATED AND PAID PURSUANT TO THE TERMS AND PROVISIONS OF THE FB ASBESTOS PROPERTY DAMAGE TRUST AGREEMENT AND THE FB ASBESTOS PROPERTY DAMAGE TRUST DISTRIBUTION PROCEDURES. THE FB ASBESTOS PROPERTY DAMAGE TRUST WILL BE FUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11.3 OF THE PLAN. THE SOLE RECOURSE OF THE HOLDER OF AN ALLOWED CLASS 9 CLAIM SHALL BE THE FB ASBESTOS PROPERTY DAMAGE TRUST, AND SUCH HOLDER SHALL HAVE NO RIGHT WHATSOEVER AT ANY TIME TO ASSERT ITS CLASS 9 CLAIM AGAINST ANY FB PERSON. WITHOUT LIMITING THE FOREGOING, ON THE EFFECTIVE DATE, ALL PERSONS SHALL BE PERMANENTLY AND FOREVER STAYED, RESTRAINED, AND ENJOINED FROM TAKING ANY ENJOINED ACTIONS FOR THE PURPOSE OF, DIRECTLY OR INDIRECTLY, COLLECTING, RECOVERING, OR RECEIVING PAYMENT OF, ON, OR WITH RESPECT TO ANY FB ASBESTOS PROPERTY DAMAGE CLAIMS (OTHER THAN ACTIONS BROUGHT TO ENFORCE ANY RIGHT OR OBLIGATION UNDER THE PLAN, ANY EXHIBITS TO THE PLAN, OR ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN THE DEBTORS OR REORGANIZED DEBTORS AND THE FB ASBESTOS PROPERTY DAMAGE TRUST, WHICH ACTIONS SHALL BE IN CONFORMITY AND COMPLIANCE WITH THE PROVISIONS HEREOF). X. THE LITIGATION TRUST A. General Description of the Litigation Trust 1. Creation of the Litigation Trust Effective on the Effective Date, the Litigation Trust will be created pursuant to the Litigation Trust Agreement, substantially in the form of Exhibit C to the Plan. For federal income tax purposes, it is intended that the Litigation Trust be classified as a liquidating trust under Section 301.7701-4 of the Treasury Regulations and that such trust is treated as owned by its beneficiaries. Accordingly, for federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a distribution of an undivided interest in the Litigation Trust Assets and then contributed such interests to the Litigation Trust. The purpose of the Litigation Trust is, among other things, to (a) hold, preserve, manage and maximize the value of the Litigation Trust Assets for distribution, including without limitation, to pursue the Potential Tax Refunds and litigate, settle or otherwise resolve the Tobacco Causes of Action, the Avoidance Actions and the Material Rights of Action transferred to the Litigation Trust; (b) liquidate the Litigation Trust Assets; and (c) distribute the Litigation Trust Recoveries to the holders of Claims as described in the Plan and the Litigation Trust Agreement. The Litigation Trustee will engage in the foregoing actions with no objective to engage in the conduct of a trade or business. 2. The Trustee The Litigation Trustee for the Litigation Trust will be designated by the Plan Proponents, subject to the approval of the Bankruptcy Court. The Plan Proponents expect to file a notice on or prior to the Disclosure Statement Hearing designating the Person whom they have selected as Litigation Trustee and seeking approval of such designation at the Confirmation Hearing. Any dispute regarding the designation of the Litigation Trustee will be resolved by the Bankruptcy Court. If approved by the Bankruptcy Court, the Person so designated will become the Litigation Trustee on the Effective Date and will have the duties, responsibilities, rights and obligations set forth in the Litigation Trust Agreement. The Litigation Trustee will have full authority to take any steps necessary to administer the Litigation Trust Agreement, including, without limitation, the duty and obligation to liquidate Litigation Trust Assets, transfer, sell, dispose of or otherwise resolve or compromise the Litigation Trust Assets, to make distributions therefrom to the Disbursing Agent for disbursement to holders of Allowed Claims in Classes 4, 5 and 6 and to the OC Sub-Account of the Asbestos Personal Injury Trust, to pursue and settle any of the rights and claims with respect to the Litigation Trust Assets, to retain such professionals as it may deem necessary to aid in the performance of its responsibilities and to be responsible for filing all federal, state and local tax returns of the Litigation Trust. 3. Funding of the Litigation Trust The Debtors will deliver $1 million, or such other amount upon which the Plan Proponents may agree no later than ten (10) Business Days prior to the Objection Deadline (the "Litigation Trust Initial Deposit"), to the Litigation Trustee on the Effective Date. The Litigation Trustee will use the Litigation Trust Initial Deposit consistent with the purpose of the Litigation Trust and subject to the terms and conditions of the Plan and the Litigation Trust Agreement. 4. Transfer of Certain Assets to the Litigation Trust On the Effective Date, the Debtors will irrevocably transfer the Litigation Trust Assets (except such assets as have been previously settled) to the Litigation Trust, for and on behalf of each of Class 4, 5, and 6 and the OC Sub-Account of the Asbestos Personal Injury Trust. The Litigation Trust Assets are comprised of (a) the Litigation Trust Initial Deposit, (b) the Potential Tax Refunds, if and when recovered by the Debtors, (c) all of the Debtors' rights and standing to object to, litigate, settle and otherwise resolve (i) the Tobacco Causes of Action, (ii) the Avoidance Actions, (iii) the Material Rights of Action, and (d) any and all proceeds of the foregoing, including interest actually earned thereon. Litigation Trust Assets will not include the FB Reversions, the proceeds of which, when recovered, will be transferred to the FB Sub-Account of the Asbestos Personal Injury Trust for the benefit of Class 8 only. Material Rights of Action means all rights, claims, causes of action, suits or proceedings accruing to any Debtor pursuant to the Bankruptcy Code or pursuant to any statute or legal theory which, if determined in favor of the Debtors or the Estates, would reasonably be expected to result in a recovery in excess of $200,000, but excluding Commercial Claims. Commercial Claims, excluded from the definition of Material Rights of Action and therefore not included in the Litigation Trust Assets, means rights, causes of action, suits or proceedings (whether arising out of contract, tort or otherwise) accruing to any Debtor for the payment and collection of money or other consideration or the enforcement of rights and remedies in connection with, resulting from or arising out of any commercial transaction with any of the Debtors or the performance of services by or for any of the Debtors. "Commercial Claims" shall include, without limitation, claims arising from damage or alleged damage to property of any Debtor, or personal injuries sustained by any employee, contractor or other business agent of any Debtor (other than Asbestos Personal Injury Claims) in any case resulting from or arising out of the conduct of business by such Debtor, the collection of debts owed to any Debtor from purchasers of goods and services from any Debtor or the collection of money or other consideration from vendors, suppliers or other parties for breaches of contract in commercial relationships with any of the Debtors or the recovery of money based on such other commercial relationship of a Debtor that arise in the ordinary course of business. Commercial Claims does not include Avoidance Actions or any other rights, claims, causes of action, suits or proceedings created by Title 11 of the United States Code 5. Cooperation of the Debtors The Reorganized Debtors will make available, upon reasonable terms, its personnel, books and records to representatives of the Litigation Trust in order to enable the Litigation Trustee to perform its duties under the Litigation Trust Agreement. In addition, the Litigation Trustee will enter into a confidentiality agreement with the Reorganized Debtors for the purpose of maintaining the confidentiality of and retaining any applicable privilege of any information provided by the Reorganized Debtors. 6. Litigation Trust Termination Provisions The Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) will approve the termination of the Litigation Trust after the Litigation Trust has distributed all of the Litigation Trust Assets, provided that the Litigation Trust terminates no later than [ ] years from the date of the Litigation Trust's creation. The parties may extend the Litigation Trust's termination date for one or more terms, subject to the approval of the Bankruptcy Court (or the District Court in the event that the District Court modifies the Reference Order to retain jurisdiction over the Litigation Trust) that the extension is necessary for the Litigation Trust's liquidating purpose. B. Distributions of Litigation Trust Recoveries The Litigation Trustee shall apply Litigation Trust Recoveries as follows: (a) first, to pay Litigation Trust Expenses; (b) second, to pay the Litigation Trust Reimbursement Obligation until the Litigation Trust Reimbursement Obligation is paid in full; (c) third, to the Disbursing Agent for any further remaining disbursement amounts (i) to holders of Allowed Claims in each of Classes 4, 5 and 6 in accordance with Sections 3.3(b), 3.3(c) and 3.3(d), respectively of the Plan; and (ii) to the Asbestos Personal Injury Trust for distribution in accordance with Section 3.3(e) of the Plan. The Litigation Trustee will distribute Litigation Trust Recoveries to the Disbursing Agent as soon as practicable after receiving the Litigation Trust Recoveries, except the Litigation Trustee may withhold any distribution, or any portion thereof, if it reasonably believes it is necessary to pay Litigation Trust Expenses or the Litigation Trust Reimbursement Obligation, or if the aggregate proceeds and income available for distribution is insufficient. XI. REGISTRATION RIGHTS/RESTRICTIONS ON TRANSFERS OF CORPORATE SECURITIES AND CERTAIN CLAIMS Reorganized OCD will enter into registration rights agreements with the Asbestos Personal Injury Trust with respect to the Senior Notes (the "Senior Notes Registration Rights Agreement") and the shares of New OCD Common Stock (the "Equity Registration Rights Agreement") issued to the Asbestos Personal Injury Trust. To date, OCD and the Asbestos Claimants' Committee and the Future Claimants' Representative have agreed in principle on most of the key terms to be included in the registration rights agreements but there remain certain items relating to timing and procedures relating to registration of securities still to be agreed upon. Under the terms of the Senior Notes Registration Rights Agreement, Reorganized OCD will, as determined by Reorganized OCD and the Asbestos Personal Injury Trust, file with the SEC and cause to be effective registration statement(s) designed to afford the Asbestos Personal Injury Trust with liquidity for the Senior Notes issued to it and will be subject to such terms relating to timing of filing and effectiveness, underwriting and other matters as shall be agreed upon by Reorganized OCD and the Asbestos Personal Injury Trust. Within 90 days of the Effective Date, Reorganized OCD will file a registration statement, using such form or forms for which Reorganized OCD is eligible, and which is appropriate for the type of offering contemplated and shall use commercially reasonable efforts to cause such registration statement to become effective no later than 180 days after the Effective Date. If Reorganized OCD is not S-3 eligible within some period of time to be agreed upon by the parties, the parties will agree upon another registration arrangement. After such time as Reorganized OCD is eligible to use Form S-3, Reorganized OCD will file a shelf registration statement to permit sales from time to time by the Asbestos Personal Injury Trust and shall keep the shelf registration statement continuously effective for a period of three years from its initial effectiveness, or such shorter period ending when all Senior Notes have been sold or all Senior Notes can be sold pursuant to Rule 144 of the Act without restrictions as to volume limitation, subject to any extensions for any delay periods imposed. The Senior Notes Registration Rights Agreement will also contain provisions related to suspension periods and transferability of rights and customary provisions regarding registration rights relating to debt securities of a similar rating, including, but not limited to, payment of certain registration expenses by Reorganized OCD, cross indemnification, holdback agreements, withdrawal rights and underwriting arrangements, provided that in the event that the registration is for an underwritten offering, the underwriter(s) shall be selected by the Asbestos Personal Injury Trust and be reasonably acceptable to Reorganized OCD. The Equity Registration Rights Agreement will contain certain shelf, demand and piggyback registration rights for the benefit of the Asbestos Personal Injury Trust. Prior to nine months after the Effective Date, the Asbestos Personal Injury Trust will not have any "demand" registration rights relating to New OCD Common Stock. If, at the date that is 270 days after the Effective Date, it appears reasonably likely that Reorganized OCD will not be S-3 eligible by the date that is 450 days after the Effective Date, or if Reorganized OCD is not S-3 eligible 450 days after the Effective Date, then Reorganized OCD, if requested, will file one registration statement to register an agreed upon minimum amount of New OCD Common Stock. After Reorganized OCD becomes S-3 eligible, subject to the terms and conditions of the Equity Registration Rights Agreement, the Asbestos Personal Injury Trust shall have the following registration rights: (i) two "demand" rights each year until the fifth anniversary of the Effective Date, and one demand registration right each year thereafter until all shares of New OCD Common Stock can be sold without regard to the volume and manner of sale limitations imposed under Rule 144; provided, however, that Reorganized OCD shall not be required to effect a registration pursuant to a demand registration more than once in any six month period unless common stock having a value of at least $100 million or such lesser amount that the Asbestos Personal Injury Trust then holds is proposed to be sold; and (ii) piggyback registration rights subject to certain limitations if the piggyback registration is with respect to an offering of securities by Reorganized OCD for its own account. In any "demand" registration, the underwriter(s) shall be selected by the Asbestos Personal Injury Trust and be reasonably acceptable to Reorganized OCD. The Asbestos Personal Injury Trust may only transfer its registration rights to a transferee of a minimum specified amount of New OCD Common Stock issued to the Asbestos Personal Injury Trust under the Plan provided that such transferee agrees to be bound to the terms of the Equity Registration Rights Agreement. Registration rights will not be transferable to any purchaser under a registration statement or to any purchaser in sales made pursuant to Rule 144. The Equity Registration Rights Agreement shall also contain customary provisions regarding registration rights relating to equity securities, including, but not limited to, registration expenses, cross indemnification, holdback agreements, withdrawal rights, participation rights in other offerings, underwriting arrangements and the period of time in which any registration statement shall be kept effective (which period, subject to specified exceptions, shall be 180 days or such shorter period during which the distribution described in the registration statement shall have been completed). XII. APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS It is not currently expected that any registration statement will be filed under the Securities Act or any state securities laws with respect to the issuance or distribution of the New OCD Securities under the Plan or their subsequent transfer or resale. The Debtors believe that, subject to certain exceptions described below, various provisions of the Securities Act, the Bankruptcy Code and state securities laws exempt from federal and state securities registration requirements (a) the offer and the sale of such securities pursuant to the Plan and (b) subsequent transfers of such securities. A. Offer and Sale of New OCD Securities Pursuant to the Plan: Bankruptcy Code Exemption from Registration Requirements Holders of Allowed Claims in Classes 4, 5 and 6 and the Asbestos Personal Injury Trust will receive New OCD Securities pursuant to the Plan. Section 1145(a)(1) of the Bankruptcy Code provides that the registration requirements of federal and state securities laws do not apply to the offer or sale of securities under a plan of reorganization if three principal requirements are satisfied: (1) the securities must be issued "under a plan" of reorganization by the debtor or its successor under a plan or by an affiliate participating in a joint plan of reorganization with the debtor; (2) the recipients of the securities must hold a pre-petition or administrative expense claim against the debtor or an interest in the debtor; and (3) the securities must be issued entirely in exchange for the recipient's claim against or interest in the debtor, or "principally" in such exchange and "partly" for cash or property. In reliance upon this exemption, the Debtors believe that the offer and sale of the New OCD Securities under the Plan will be exempt from registration under the Securities Act and state securities laws. In addition, the Debtors will seek to obtain, as part of the Confirmation Order, a provision confirming such exemption. Accordingly, such securities may be resold without registration under the Securities Act or other federal securities laws pursuant to an exemption provided by Section 4(1) of the Securities Act, unless the holder is an "underwriter" (see discussion below) with respect to such securities, as that term is defined under the Bankruptcy Code. However, recipients of securities issued under the Plan are advised to consult with their own legal advisors as to the availability of any such exemption from registration under state law in any given instance and as to any applicable requirements or conditions to such availability. B. Subsequent Transfers of New OCD Securities Section 1145(b) of the Bankruptcy Code defines the term "underwriter" for purposes of the Securities Act as one who, except with respect to "ordinary trading transactions" of an entity that is not an "issuer," (1) purchases a claim against, interest in, or claim for an administrative expense in the case concerning, the debtor, if such purchase is with a view to distributing any security received in exchange for such a claim or interest; (2) offers to sell securities offered or sold under a plan for the holders of such securities; (3) offers to buy securities offered or sold under the plan from the holders of such securities, if the offer to buy is: (a) with a view to distribution of such securities; and (b) under an agreement made in connection with the plan, with the consummation of the plan, or with the offer or sale of securities under the plan; or (4) is an "issuer" with respect to the securities, as the term "issuer" is defined in Section 2(11) of the Securities Act. The term "issuer" is defined in Section 2(4) of the Securities Act; however, the reference contained in Section 1145(b)(1)(D) of the Bankruptcy Code to Section 2(11) of the Securities Act purports to include as statutory underwriters all persons who, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with, an issuer of securities. "Control" (as such term is defined in Rule 405 of Regulation C under the Securities Act) means the possession, direct or indirect, of the power to direct or cause the direction of the policies of a person, whether through the ownership of voting securities, by contract, or otherwise. Accordingly, an officer or director of a reorganized debtor (or its successor) under a plan of reorganization may be deemed to be a "control person," particularly if such management position is coupled with the ownership of a significant percentage of the debtor's (or successor's) voting securities. Moreover, the legislative history of Section 1145 of the Bankruptcy Code suggests that a creditor who owns at least 10% of the securities of a reorganized debtor may be presumed to be a "control person." To the extent that persons deemed to be "underwriters" receive New OCD Securities pursuant to the Plan, resales by such persons would not be exempted by Section 1145 of the Bankruptcy Code from registration under the Securities Act or other applicable law. Such persons would not be permitted to resell such New OCD Securities unless such securities were registered under the Securities Act or an exemption from such registration requirements were available. Entities deemed to be statutory underwriters for purposes of Section 1145 of the Bankruptcy Code may, however, be able, at a future time and under certain conditions described below, to sell securities without registration pursuant to the resale provisions of Rule 144 and Rule 144A under the Securities Act. Rule 144A provides a non-exclusive safe harbor exemption from the registration requirements of the Securities Act for resales to certain "qualified institutional buyers" of securities that are "restricted securities "within the meaning of the Securities Act, irrespective of whether the seller of such securities purchased his, her or its securities under the provisions of Rule 144A. Under Rule 144A, a "qualified institutional buyer" is defined to include, among other persons (e.g., "dealers" registered as such pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and "banks" as defined in Section 3(a)(2) of the Securities Act), any entity that purchases securities for its own account or for the account of another qualified institutional buyer and that (in the aggregate) owns and invests on a discretionary basis at least $100 million in the securities of unaffiliated issuers. Subject to certain qualifications, Rule 144A does not exempt the offer or sale of securities that, at the time of their issuance, were securities of the same class of securities then listed on a national securities exchange (registered under Section 6 of the Exchange Act) or quoted in a U.S. automated interdealer quotation system (e.g., NASDAQ). For so long as none of the New OCD Securities to be issued under the Plan are not also listed or quoted as described above, holders of New OCD Securities who are deemed to be "underwriters" within the meaning of Section 1145(b)(1) of the Bankruptcy Code or who may be otherwise deemed to be "affiliates" or "control persons" of Reorganized OCD within the meaning of Rule 405 of Regulation C under the Securities Act, and holders of securities whose securities will be "restricted securities" within the meaning of the Securities Act should, assuming that all other conditions of Rule 144A are met, be entitled to avail themselves of the safe harbor resale provisions thereof. To the extent that Rule 144A is unavailable, such holders may be entitled to resell their securities pursuant to the limited safe harbor resale provisions of Rule 144. Generally, Rule 144 provides that, if certain conditions are met (e.g., the availability of current public information with respect to the issuer, volume of sale limitations, and notice and manner of sale requirements), specified persons who resell "restricted securities" or who resell securities that are not restricted but such persons are "affiliates" of the issuer, will not be deemed to be "underwriters" as defined in Section 2(11) of the Securities Act. Pursuant to the Plan, certificates evidencing New OCD Securities received by a holder of 10% or more of the outstanding New OCD Common Stock (which will include the Asbestos Personal Injury Trust) will bear a legend substantially in the form below: THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED. Whether or not any particular person would be deemed to be an "underwriter" of New OCD Securities to be issued pursuant to the Plan, or an "affiliate" of Reorganized OCD, would depend upon various facts and circumstances applicable to that person. Accordingly, OCD expresses no view as to whether any such person would be such an "underwriter" or "affiliate." THE FOREGOING SUMMARY DISCUSSION IS GENERAL IN NATURE AND HAS BEEN INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR INFORMATIONAL PURPOSES. THE DEBTORS MAKE NO REPRESENTATIONS CONCERNING, AND DO NOT HEREBY PROVIDE ANY OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW MATTERS DESCRIBED ABOVE. IN LIGHT OF THE COMPLEX AND SUBJECTIVE INTERPRETIVE NATURE OF WHETHER A PARTICULAR RECIPIENT OF NEW DEBT SECURITIES OR NEW OCD COMMON STOCK MAY BE DEEMED TO BE AN "UNDERWRITER" WITHIN THE MEANING OF SECTION 1145(B)(1) OF THE BANKRUPTCY CODE AND/OR AN "AFFILIATE" OR "CONTROL PERSON" UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND, CONSEQUENTLY, THE UNCERTAINTY CONCERNING THE AVAILABILITY OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND EQUIVALENT STATE SECURITIES AND "BLUE SKY" LAWS, OCD ENCOURAGES EACH CLAIMANT TO CONSIDER CAREFULLY AND CONSULT WITH HIS, HER, OR ITS OWN LEGAL ADVISORS WITH RESPECT TO SUCH (AND ANY RELATED) MATTERS. XIII. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN The following discussion is a summary of certain United States federal income tax aspects of the Plan, for general information purposes only, and should not be relied upon for purposes of determining the specific tax consequences of the Plan with respect to a particular holder of a Claim. This discussion does not purport to be a complete analysis or listing of all potential tax considerations. This discussion is based on existing provisions of the IRC, existing and proposed Treasury Regulations promulgated thereunder, and current administrative rulings and court decisions. Legislative, judicial, or administrative changes or interpretations enacted or promulgated after the date hereof could alter or modify the analyses set forth below with respect to the United States federal income tax consequences of the Plan. Any such changes or interpretations may be retroactive and could significantly affect the United States federal income tax consequences of the Plan. Except as discussed in Sections A.1, A.2 and B.2 below, no ruling has been requested or obtained from the IRS with respect to any tax aspects of the Plan and no opinion of counsel has been sought or obtained with respect thereto. No representations or assurances are being made to the holders of Claims with respect to the United States federal income tax consequences described herein. Each holder of a Claim affected by the Plan is strongly urged to consult its tax advisor regarding the specific tax consequences of the transactions described herein and in the Plan. A. Federal Income Tax Consequences to the Debtors 1. Cancellation of Indebtedness Income Under the IRC, a taxpayer generally must recognize income from the cancellation of debt ("COD income") to the extent that its indebtedness is discharged during the taxable year. Section 108(a)(1)(A) of the IRC provides an exception to this rule where a taxpayer is in bankruptcy and where the discharge is granted, or is effected pursuant to a plan approved, by the bankruptcy court. This exception is subject to the conditions imposed by Section 108(b) of the IRC, which requires that the COD income be applied to reduce certain tax attributes of the taxpayer, in the following order: NOLs, general business and minimum tax credit carryforwards, capital loss carryforwards, the basis of the taxpayer's assets, and finally, foreign tax credit tax carryforwards (collectively, "Tax Attributes"). Section 108(b)(5) of the IRC permits a taxpayer to elect to first apply the reduction to the basis of the taxpayer's depreciable assets, with any remaining balance applied to the taxpayer's other Tax Attributes in the order stated above. Section 108(e)(2) of the IRC provides a further exception to the realization of COD income to the extent that the taxpayer's satisfaction of the debt would have given rise to a deduction for federal income tax purposes. The effect of Section 108(e)(2) of the IRC, where applicable, is to allow a taxpayer to discharge indebtedness without recognizing income and to avoid any reduction of its Tax Attributes. As a result of the application of Section 108(a)(1)(A) of the IRC, the Debtors generally will not recognize COD income from the discharge of indebtedness pursuant to the Plan; however, certain Tax Attributes of the Debtors may be reduced or eliminated. The Debtors have not yet determined whether they will make the election under Section 108(b)(5) of the IRC to apply any required attribute reduction first to the basis of the Debtors' depreciable property, with any excess next applied to reduce their NOLs, and then to reduce the Debtors' other Tax Attributes. To the extent that the discharge meets the criteria of Section 108(e)(2) of the IRC, no COD income will be recognized and no reduction of Tax Attributes will occur. The Debtors received a private letter ruling from the IRS on July 23, 2002 (the "PLR") that, among other rulings, confirms that the discharge of indebtedness arising from settlement of OC Asbestos Personal Injury Claims, other than OC Indirect Asbestos PI Trust Claims, will satisfy the requirements of Section 108(e)(2) of the IRC and, therefore, will not result in any reduction of the Debtors' Tax Attributes. It is also expected that the settlement of certain claims in Class 6 (on account of OC Asbestos Property Damage Claims) and claims in Class 7 (on account of OC Indirect Asbestos PI Trust Claims), Class 8 (FB Asbestos Personal Injury Claims) and Class 9 (FB Asbestos Property Damage Claims), all of which should give rise to deductions for federal income tax purposes, should satisfy the requirements of Section 108(e)(2) of the IRC. Although not free from doubt, based on existing authorities, the Debtors believe that any reduction in Tax Attributes other than NOLs generally will occur on a separate company basis even though the Debtors file a consolidated federal income tax return. The IRS has recently taken the position, however, that with respect to NOLs, a consolidated filing group's consolidated NOLs must be reduced, irrespective of the source of those losses. The current IRS position as to how the attribute reduction rules should operate in the case of other Tax Attributes of consolidated group members is unclear. Any required attribute reduction will take place after the Debtors have determined their taxable income, and any federal income tax liability, for the taxable year in which the Effective Date occurs. 2. Net Operating Losses and Other Attributes Following the Effective Date, the Debtors may have NOLs. The Debtors currently have approximately $630 million of NOLs as of January 1, 2003, and the Debtors will generate NOLs on the Effective Date to the extent that the Debtors have generated deductions for federal income tax purposes that are not offset by income and/or gain and are not eliminated by the attribute reduction rules of Section 108(b) of the IRC discussed above. In this regard, the IRS has confirmed in the PLR that, provided certain conditions are satisfied (which conditions the Debtors expect to satisfy), including the obtaining of a "Qualified Appraisal" as defined in Treasury Regulation ss.1.468B-3(b)(3), the Debtors will be entitled to a current deduction for all transfers of Cash, property other than indebtedness of the Debtors, and New OCD Common Stock to the OC Sub-Account of the Asbestos Personal Injury Trust for OC Asbestos Personal Injury Claims other than OC Indirect Asbestos PI Trust Claims. It is also expected that the Debtors will be entitled to a current deduction for transfers of Cash, property other than indebtedness of the Debtors, and New OCD Common Stock to the OC Sub-Account of the Asbestos Personal Injury Trust in respect of OC Indirect Asbestos PI Trust Claims and the FB Sub-Account of the Asbestos Personal Injury Trust for Class 7 Claims (on account of OC Indirect Asbestos PI Trust Claims) and Class 8 Claims (FB Asbestos Personal Injury Claims). The amount of the aggregate deduction to which the Debtors will be entitled will equal the sum of the Cash and the fair market value of the other property (excluding any indebtedness of the Debtors) and New OCD Common Stock transferred to the Asbestos Personal Injury Trust to satisfy such OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims. It should be noted, however, that no deduction for transfers to the Asbestos Personal Injury Trust will be allowed to the extent that the transferred amounts represent amounts received from the settlement of insurance claims, which amounts were not included in the Debtors' gross income. Accordingly, the Debtors will not be entitled to a deduction for transfers to the Asbestos Personal Injury Trust to satisfy claims in Class 8 (FB Asbestos Personal Injury Claims) to the extent such transfers are of insurance proceeds, including any transfer of Existing Fibreboard Insurance Settlement Trust Assets. After applying the foregoing deduction against the income and gain of the Debtors recognized during the taxable year in which the Effective Date occurs, the Debtors anticipate that their NOLs will increase. As explained above, however, the Debtors' NOLs and other Tax Attributes may be reduced or eliminated as of the beginning of the taxable year following the year in which the Effective Date occurs as a result of the COD income expected to be realized on implementation of the Plan. Accordingly, there can be no assurance that Reorganized OCD will have NOLs following the year in which the Plan is implemented. As a general rule, an NOL incurred by a taxpayer during a taxable year can be carried back and deducted from its taxable income generated within the two preceding taxable years and the remainder carried forward and deducted from the taxable income of the 20 succeeding taxable years. NOLs attributable to certain tort liability losses, however, may be carried back for ten years. Pursuant to the PLR, the transfer of Cash and other property (excluding any indebtedness of the Debtors) and the issuance of New OCD Common Stock to the OC Sub-Account of the Asbestos Personal Injury Trust with respect to OC Asbestos Personal Injury Claim will generate deductions that relate to a qualifying tort liability and, therefore, any resulting NOLs will be eligible to be carried back for ten years. In addition, any deductions generated from the transfer of Cash and other property (excluding any indebtedness of the Debtors) and the issuance of New OCD Common Stock to the FB Sub-Account of the Asbestos Personal Injury Trust for claims in Class 8 (FB Asbestos Personal Injury Claims) should also relate to a qualifying tort liability, and, therefore, any resulting NOLs should be eligible to be carried back for ten years. However, the Debtors have not realized significant amounts of taxable income during the previous ten year period, and, accordingly, there can be no certainty that Reorganized OCD would be entitled to material amounts of tax refunds in respect of that period. With respect to any NOLs of the Debtors remaining after confirmation of the Plan and any required attribute reduction, Section 382 of the IRC contains certain rules limiting the ability of corporate taxpayers to utilize NOLs when there has been an "ownership change" (the "Annual Section 382 Limitation"). An "ownership change" generally is defined as a more than 50 percentage point change in ownership of the value of the stock of a "loss corporation" (a corporation with NOLs) that takes place during the three year period ending on the date on which such change in ownership is tested. The Debtors will undergo an ownership change on the Effective Date. As a general rule, the Annual Section 382 Limitation equals the product of the value of the stock of the loss corporation (with certain adjustments) immediately before the ownership change and the applicable "long-term tax-exempt rate," a rate published monthly by the Treasury Department (4.35% for ownership changes that occur during August of 2003). Any unused portion of the Annual Section 382 Limitation generally is available for use in subsequent years. The Annual Section 382 Limitation is increased in the case of a corporation that has net unrealized built-in gains, i.e., gains economically accrued but unrecognized at the time of the ownership change, in excess of a threshold amount. Such a corporation can use NOLs in excess of its Annual Section 382 Limitation to the extent that it realizes those net unrealized built-in gains for United States federal income tax purposes in the five years following the ownership change. A correlative rule applies to a corporation that has net unrealized built in losses, i.e., losses economically accrued but unrecognized as of the date of the ownership change in excess of a threshold amount. Such a corporation's ability to deduct its built-in losses (in addition to its NOLs) following an ownership change is limited. If a loss corporation does not continue its historic business or use a significant portion of its assets in a new business for two years after the ownership change, the Annual Section 382 Limitation is zero. Section 382(l)(5) of the IRC provides an exception to the application of the Annual Section 382 Limitation when a corporation is under the jurisdiction of a court in a Title 11 case (the "Bankruptcy Exception"). The Bankruptcy Exception provides that where an ownership change occurs pursuant to a bankruptcy reorganization or similar proceeding, the Annual Section 382 Limitation will not apply if the pre-change shareholders and/or "qualified creditors" (as defined by applicable Treasury Regulations) own at least 50 percent of the stock of the reorganized corporation immediately after the ownership change. However, under the Bankruptcy Exception, a corporation's pre-change losses and excess credits that may be carried over to a post-change year must be reduced to the extent attributable to any interest paid or accrued on certain debt converted to stock in the reorganization. In addition, if the Bankruptcy Exception applies, a second ownership change of the corporation within a two-year period will cause the corporation to forfeit all of its unused NOLs that were incurred prior to the date of the second ownership change. If a corporation qualifies for the Bankruptcy Exception, the use of its NOLs will be governed by that exception unless the corporation affirmatively elects out. If a corporation that is eligible for the Bankruptcy Exception elects out of that provision, a special rule under Section 382 will apply in calculating the Annual Section 382 Limitation. Under this special rule, the limitation will be calculated by reference to the lesser of the value of the corporation's stock (with certain adjustments) immediately after the ownership change (as opposed to immediately before the ownership change, as discussed above) or the value of the Debtor's assets (determined without regard to liabilities) immediately before the ownership change. The PLR generally holds that Reorganized OCD's ability to use its NOLs following confirmation of the Plan will be governed by the Bankruptcy Exception. As noted above, if the Debtors rely upon the Bankruptcy Exception, a second ownership change within two years of the Effective Date will cause Reorganized OCD to forfeit any NOLs incurred prior to the date of the second ownership change. Although the Debtors currently intend to rely upon the Bankruptcy Exception, they do not intend to implement restrictions on the transfer of securities or claims. Accordingly, there can be no assurance that Reorganized OCD will not undergo a second ownership change within two years of the Effective Date, which would cause Reorganized OCD to forfeit any NOLs incurred prior to such second ownership change. If the Debtors choose to elect out of the Bankruptcy Exception, Reorganized OCD's use of its NOLs will be subject to the Annual Section 382 Limitation following confirmation of the Plan, calculated under the special bankruptcy rule described above. 3. Accrued Interest To the extent that the consideration issued to holders of Claims pursuant to the Plan is attributable to accrued but unpaid interest, the Debtors should be entitled to interest deductions in the amount of such accrued interest, but only to the extent the Debtors have not already deducted such amount. The Debtors should not have COD income from the discharge of any accrued but unpaid interest pursuant to the Plan to the extent that the payment of such interest would have given rise to a deduction pursuant to Section 108(e)(2) of the IRC discussed above. 4. Federal Alternative Minimum Tax A corporation may incur alternative minimum tax liability even where NOL carryovers and other tax attributes are sufficient to eliminate its taxable income as computed under the regular corporate income tax. It is possible that Reorganized OCD will be liable for the alternative minimum tax. B. Federal Income Tax Consequences to Claim Holders The United States federal income tax consequences to a Claim holder of the transactions contemplated by the Plan will depend upon a number of factors. For purposes of the following discussion, a "United States Person" is any person or entity (1) who is a citizen or resident of the United States, (2) that is a corporation or partnership created or organized in or under the laws of the United States or any state thereof, (3) that is an estate, the income of which is subject to United States federal income taxation regardless of its source or (4) that is a trust (a) the administration over which a United States person can exercise primary supervision and all of the substantial decisions of which one or more United States persons have the authority to control; or (b) that has elected to be treated as a United States Person for United States federal income tax purposes. In the case of a partnership, the tax treatment of its partners will depend on the status of the partner and the activities of the partnership. United States persons who are partners in a partnership should consult their tax advisors. A "Non-United States Person" is any person or entity that is not a United States Person. The general United States federal income tax consequences to Claim holders that are Non-United States Persons are discussed below under Section XIII.B.1(g) of this Disclosure Statement. The United States federal income tax consequences to holders of Claims that are United States Persons and the character and amount of income, gain or loss recognized as a consequence of the Plan and the distributions provided for thereby will depend upon, among other things, (1) the manner in which a holder acquired a Claim; (2) the length of time the Claim has been held; (3) whether the Claim was acquired at a discount; (4) whether the holder has taken a bad debt deduction with respect to the Claim (or any portion thereof) in the current or prior years; (5) whether the holder has previously included in income accrued but unpaid interest with respect to the Claim; (6) the method of tax accounting of the holder; (7) whether the Claim is an installment obligation for United States federal income tax purposes; and (8) whether the Claim constitutes a "security" for United States federal income tax purposes. The definition of the term "security" for United States federal income tax purposes is discussed under the heading "Definition of `Security'", below. Certain holders of Claims (such as foreign persons, S corporations, regulated investment companies, insurance companies, financial institutions, small business investment companies, broker-dealers and tax-exempt organizations) may be subject to special rules not addressed in this summary of United States federal income tax consequences. There also may be state, local, and/or foreign income or other tax considerations or United States federal estate and gift tax considerations applicable to holders of Claims, which are not addressed herein. Each holder of a Claim should consult its tax advisor for information that may be relevant to its particular situation and circumstances and for advice concerning the particular tax consequences to it of the transactions contemplated by the Plan. 1. United States Federal Income Tax Consequences (a) General A holder of a Claim who receives Cash or other consideration in satisfaction of its claims may recognize ordinary income or loss to the extent that any portion of such consideration is characterized as accrued interest. A holder of a Claim who did not previously include in income accrued but unpaid interest attributable to its Claim, and who surrenders its Claim pursuant to the Plan, will be treated as having received interest income to the extent that any consideration received is characterized for United States federal income tax purposes as interest, regardless of whether the holder of the Claim realizes an overall gain or loss as a result of surrendering its Claim. A holder of a Claim who previously included in its income accrued but unpaid interest attributable to its Claim should recognize an ordinary loss to the extent that such accrued but unpaid interest is not satisfied, regardless of whether the holder of the Claim realizes an overall gain or loss as a result of surrendering its Claim. Although the manner in which consideration is to be allocated between accrued interest and principal for these purposes is unclear under present law, the Debtors intend, consistent with the Plan, to allocate the consideration paid pursuant to the Plan with respect to a Claim, first to the principal amount of such Claim as determined for United States federal income tax purposes and then to accrued interest, if any, with respect to such Claim. Accordingly, in cases where a holder of a Claim receives less than the principal amount of its Claim, the Debtors intend to allocate the full amount of consideration transferred to such holder to the principal amount of such obligation and to take the position that no amount of the consideration to be received by such holder is attributable to accrued interest. There is no assurance that such allocation will be respected by the IRS for federal income tax purposes. A holder of a Claim that receives Senior Notes will generally be required to include interest on the Senior Notes in income in accordance with such holder's regular method of tax accounting. If, however, the Senior Notes are treated as issued with original issue discount for United States federal income tax purposes, a holder of Senior Notes will be required to include in income the amount of such original issue discount over the term of the Senior Notes based on the constant yield method. In such case, a holder will be required to include amounts in income before they are received. A holder's tax basis in a Senior Note will be increased by the amount of original issue discount included in income and reduced by the amount of cash (other than payments of stated interest) received with respect to the Senior Note. If not otherwise so required, a holder of a Claim that receives New OCD Common Stock in exchange for his Claim will be required to treat gain recognized on a subsequent sale or other taxable disposition of the New OCD Common Stock as ordinary income to the extent of (i) any bad debt deductions taken with respect to the Claim and any ordinary loss deductions incurred upon satisfaction of the Claim, less any income (other than interest income) recognized by the holder upon satisfaction of its Claim, and (ii) any amounts which would have been included in a holder's gross income if the holder's Claim had been satisfied in full, but which was not included in income because of the application of the cash method of accounting. (b) Holders of Class 4, Class 5 and Class 6 Claims (Bank Holders, Bondholders and General Unsecured Claims) The holders of the Class 4, Class 5 and Class 6 Claims will realize gain or loss for United States federal income tax purposes as a result of the consummation of the Plan equal to the difference between their adjusted tax bases in their Claims immediately prior to the Effective Date and the sum of (i) the amount of Cash, (ii) the "issue price" of the Senior Notes and (iii) the fair market value of the New OCD Common Stock they received. The "issue price" of the Senior Notes is generally expected to equal the principal amount thereof if they are not "publicly traded" or their fair market value on the Effective Date if they are "publicly traded." For these purposes, a debt instrument generally is treated as "publicly traded" if, at any time during the 60 day period ending 30 days after the issue date, (i) the debt is listed on a national securities exchange or quoted on an interdealer quotation system sponsored by a national securities association, (ii) it appears on a system of general circulation (including a computer listing disseminated to subscribing brokers, dealers or traders) that provides a reasonable basis to determine fair market value by disseminating either recent price quotations (including rates, yields or other pricing information) of one or more identified brokers, dealers or traders or actual prices (including rates, yields or other pricing information) of recent sales transactions or (iii) if, in certain circumstances, price quotations are readily available from dealers, brokers or traders. If the Class 4, Class 5 and/or Class 6 Claims do not constitute "securities" for United States federal income tax purposes, then the exchange of Class 4, Class 5 or Class 6 Claims, as the case may be, will be a taxable transaction, and holders of such Claims will be required to recognize the full amount of their gain or loss realized on the exchange. The initial tax basis of the holders of Class 4, Class 5 or Class 6 Claims in the property that they received in exchange for their Class 4, Class 5 or Class 6 Claims, respectively, should equal the fair market value of such property. Such tax basis would be allocated among the items of property received based on the relative fair market values of such items of property on the Effective Date. The holder's holding period in property received in the exchange would commence on the day after the Effective Date. If the Class 4, Class 5 and/or Class 6 Claims constitute "securities" for United States federal income tax purposes, then the exchange of Class 4, Class 5 or Class 6 Claims, respectively, will be treated as a "recapitalization" for United States federal income tax purposes. In such case, holders of Class 4, Class 5 or Class 6 Claims who realize a loss on the transaction will not be permitted to recognize such loss. If the exchange of Class 4, Class 5 and Class 6 Claims, respectively, is a recapitalization and the Senior Notes constitute "securities" for United States federal income tax purposes, Holders who realize gain on the exchange will be required to recognize the lesser of (i) the amount of gain realized, which will likely be determined by substituting the principal amount of the Senior Notes for their issue price, and (ii) the amount of Cash received. The initial tax basis of the holders of Class 4, Class 5 and Class 6 Claims in the property received by them in the exchange should equal the sum of (i) their adjusted tax bases in the Class 4, Class 5 and Class 6 Claims, respectively, and (ii) the amount of gain recognized by them on the exchange, reduced by the amount of Cash received by them in the exchange. Such basis will be allocated between the Senior Notes and the New OCD Common Stock received based on their relative fair market values. A holder's holding period in the New OCD Common Stock and Senior Notes will include the holding period in the Class 4, Class 5 or Class 6 Claim surrendered. If the exchange of Class 4, Class 5 and Class 6 Claims, respectively, is a recapitalization and the Senior Notes do not constitute "securities" for United States federal income tax purposes, Holders who realize gain on the exchange will be required to recognize the lesser of (i) the amount of gain realized and (ii) the sum of the fair market value of the Senior Notes and the amount of Cash received. The initial tax basis of the holders of Class 4, Class 5 and Class 6 Claims in the property received by them in the exchange should equal the sum of (i) their adjusted tax bases in the Class 4, Class 5 and Class 6 Claims, respectively, and (ii) the amount of gain recognized by them on the exchange, reduced by the amount of Cash received by them in the exchange. Such basis will be allocated first, to the Senior Notes, to the extent of their fair market value, and, thereafter, to the New OCD Common Stock. A holder's holding period in the New OCD Common Stock received will include the holding period in the Class 4, Class 5 or Class 6 Claim surrendered. A holder's holding period in the Senior Notes will commence on the day after the Effective Date. There is no authority that directly addresses the treatment of the receipt of the right to receive a portion of the Excess Available Cash, Excess Senior Notes Amount, Excess New OCD Common Stock and Excess Litigation Trust Recoveries (the "Excess Recoveries"). Holders of Class 4, Class 5 and Class 6 Claims that receive such rights may be permitted to claim that the fair market value of those rights is speculative as of the Effective Date and that the receipt of such rights should be subject to "open transaction" treatment and taken into account only when such amounts are actually determined. In such case, however, a holder of a Class 4, Class 5 or Class 6 Claim that realizes a loss may not be permitted to recognize such loss until the amount of the Excess Recoveries to be distributed to such holder is finally determined. For a discussion of the consequences of the receipt of an interest in the Litigation Trust, see Section B.3, below. The Debtors intend to treat the Disputed Distribution Reserve as a grantor trust for United States federal income tax purposes. Accordingly, it is intended that each holder of a Disputed Claim will be treated as if such holder had received a distribution of Cash and property in exchange for its Claim and then contributed such cash and property to the Disputed Distribution Reserve. If such treatment is respected, a holder of a Disputed Claim will be subject to United States federal income tax on its proportionate share of any income earned with regard to the assets in the Disputed Distribution Reserve. There can, however, be no assurance that the IRS will agree with such treatment. (c) Holders of Class 7 and Class 8 Claims (OC Asbestos Personal Injury and FB Asbestos Personal Injury Claims) To the extent that payments from the Asbestos Personal Injury Trust to holders of OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims represent damages on account of personal physical injuries of such holders, such holders should not recognize gross income under Section 104 of the IRC, except to the extent that such payments are attributable to medical expense deductions allowed under Section 213 of the IRC for a prior taxable year. (d) Holders of Class 9 Claims (FB Asbestos Property Damage Claims) The fair market value of any payments from the FB Asbestos Property Damage Trust to holders of FB Asbestos Property Damage Claims will be taxable to such holders to the extent of the excess of such fair market value over the amount, if any, of losses with regard to FB Asbestos Property Damage Claims not previously deducted for United States federal income tax purposes by the holder. Holders of FB Asbestos Property Damage Claims that have not previously deducted losses with regard to such Claims for United States federal income tax purposes will recognize losses equal to the difference between the amount of loss not previously deducted and the fair market value of any payments received. (e) Market Discount The market discount provisions of the IRC may apply to holders of certain Claims. In general, a debt obligation that is acquired by a holder in the secondary market is a "market discount bond" as to that holder if its stated redemption price at maturity (or, in the case of a debt obligation having original issue discount, its adjusted issue price) exceeds, by more than a statutory de minimis amount, the tax basis of the debt obligation in the holder's hands immediately after its acquisition. If a holder of a Claim has accrued market discount with respect to such Claims and such holder realizes gain upon the exchange of its Claims for property pursuant to the Plan, such holder may be required to include as ordinary income the amount of such holder's accrued market discount to the extent of such realized gain. A holder of a Claim who realizes loss on such exchange generally will not be required to include the amount of any such market discount in income. A holder of a Claim who receives Senior Notes in an exchange pursuant to the Plan that constitutes a "recapitalization" for United States federal income tax purposes may not be required immediately to include in income the accrued market discount to the extent such accrued market discount is allocable to the Senior Notes. In this event, such portion of the accrued market discount should carry over to the Senior Notes. Holders of Claims who have accrued market discount with respect to their claims should consult their tax advisors as to the application of the market discount rules to them in view of their particular circumstances. (f) Definition of "Security" Whether an instrument constitutes a "security" for United States federal income tax purposes is determined based on all of the facts and circumstances. Certain authorities have held that one factor to be considered is the length of the initial term of the debt instrument. These authorities have indicated that an initial term of less than five years is evidence that the instrument is not a security, whereas an initial term of ten years or more is evidence that it is a security. There are numerous other factors that could be taken into account in determining whether a debt instrument is a security, including, but not limited to, whether repayment is secured, the level of creditworthiness of the obligor, whether or not the instrument is subordinated, whether the holders have the right to vote or otherwise participate in the management of the obligor, whether the instrument is convertible into an equity interest, whether payments of interest are fixed, variable or contingent and whether such payments are made on a current basis or are accrued. (g) Non-United States Persons A holder of a Claim against a Debtor that is a Non-United States Person generally will not be subject to United States federal income tax with respect to property (including money) received in exchange for such Claim pursuant to the Plan, unless (i) such Claim holder is engaged in a trade or business in the United States to which income, gain or loss from the exchange is "effectively connected" for United States federal income tax purposes, or (ii) if such Claim holder is an individual, such Claim holder is present in the United States for 183 days or more during the taxable year of the exchange and certain other requirements are met. (h) Information Reporting and Backup Withholding Certain payments, including the payments with respect to Claims pursuant to the Plan, may be subject to information reporting by the payor (the relevant Debtor) to the IRS. Moreover, such reportable payments may be subject to backup withholding (currently at a rate of 28%) under certain circumstances. Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a holder's United States federal income tax liability, and a holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing an appropriate claim for refund with the IRS (generally, a United States federal income tax return). 2. Taxation of the Asbestos Personal Injury Trust The PLR that the Debtors received from the IRS holds that the trust formed pursuant to Section 524(g) of the Bankruptcy Code described therein will constitute a "qualified settlement fund" within the meaning of Section 468B of the IRC and the Treasury regulations promulgated thereunder. Fibreboard also received a private letter ruling from the IRS that the Fibreboard Insurance Settlement Trust constitutes a "qualified settlement fund" within the meaning of Treasury Regulations Section 1.468B-1, et seq., promulgated under Section 468B of the IRC. The receipt of property, including Cash, Senior Notes and New OCD Common Stock by the OC Sub-Account or the FB Sub-Account of the Asbestos Personal Injury Trust from the Debtors will not constitute taxable income to the Asbestos Personal Injury Trust, the adjusted tax basis of the assets transferred by the Debtors to the Asbestos Personal Injury Trust will be the fair market value of those assets at the time of receipt, and the Asbestos Personal Injury Trust will be taxed on modified gross income as defined within the Treasury regulations (generally at the highest rate applicable to estates and trusts). The transfer of Existing Fibreboard Insurance Settlement Trust Assets to the FB Sub-Account of the Asbestos Personal Injury Trust should not result in net taxable income to the Debtors or the Asbestos Personal Injury Trust. 3. The Litigation Trust For federal income tax purposes, it is intended that the Litigation Trust be classified as a liquidating trust under Section 301.7701-4 of the Treasury Regulations and that such trust be treated as owned by its beneficiaries. Accordingly, for federal income tax purposes, it is intended that the beneficiaries be treated as if they had received a taxable distribution of an undivided interest in the Litigation Trust Assets, including Cash, and then contributed such interests to the Litigation Trust. There can be no assurance that the IRS will respect the foregoing treatment. For example, the IRS may characterize the Litigation Trust as a grantor trust for the benefit of the Debtors or otherwise as owned by and taxable to the Debtors. Alternatively, the IRS could characterize the Litigation Trust as a so-called "complex trust" subject to a separate entity level tax on its earnings, except to the extent that such earnings are distributed during the taxable year. Moreover, because of the possibility that the amounts of consideration received by a holder of a Class 4, Class 5 or Class 6 Claim may increase or decrease, depending on whether the Litigation Trust is treated as a grantor trust, the holder could be prevented from recognizing a loss until the time at which all of the Litigation Trust Assets have been distributed. Beneficiaries of the Litigation Trust are urged to consult their tax advisors regarding the potential United States federal income tax treatment of the Litigation Trust and the consequences to them of such treatment (including the effect on the computation of a holder's gain or loss in respect of its Claim, the subsequent taxation of any distribution from the Litigation Trust, and the possibility of taxable income without a corresponding receipt of Cash or property with which to satisfy the tax liability). C. Importance of Obtaining Professional Tax Assistance THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN INCOME TAX CONSEQUENCES OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A CLAIM HOLDER'S PARTICULAR CIRCUMSTANCES. ACCORDINGLY, CLAIM HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE PLAN. XIV. FEASIBILITY OF THE PLAN AND BEST INTERESTS OF CREDITORS A. Feasibility of the Plan In connection with confirmation of the Plan, the Bankruptcy Court will have to determine that the Plan is feasible pursuant to Section 1129(a)(11) of the Bankruptcy Code, which means that the confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtors. To support their belief in the feasibility of the Plan, the Debtors have relied, among other things, upon the Financial Projections, which are annexed to this Disclosure Statement as Appendix B. The Financial Projections indicate that the Reorganized Debtors should have sufficient cash flow to pay and service their debt obligations, including the Exit Facility, and to fund their operations as contemplated by the Business Plan. Accordingly, the Debtors believe that the Plan complies with the financial feasibility standard of Section 1129(a)(11) of the Bankruptcy Code. The Financial Projections were not prepared with a view toward compliance with the published guidelines of the American Institute of Certified Public Accountants or any other regulatory or professional agency or body or generally accepted accounting principles. Furthermore, the Debtors' independent certified public accountants have not compiled or examined the Financial Projections and accordingly do not express any opinion or any other form of assurance with respect thereto and assume no responsibility for the Financial Projections. The Financial Projections assume that (1) the Plan will be confirmed and consummated in accordance with its terms, (2) there will be no material change in legislation or regulations, or the administration thereof, including environmental legislation or regulations, that will have an unexpected effect on the operations of the Reorganized Debtors, (3) there will be no change in United States generally accepted accounting principles that will have a material effect on the reported financial results of the Reorganized Debtors, and (4) there will be no material contingent or unliquidated litigation or indemnity claims applicable to the Reorganized Debtors. To the extent that the assumptions inherent in the Financial Projections are based upon future business decisions and objectives, they are subject to change. In addition, although they are presented with numerical specificity and are considered reasonable by the Debtors when taken as a whole, the assumptions and estimates underlying the Financial Projections are subject to significant business, economic and competitive uncertainties and contingencies, many of which will be beyond the control of the Reorganized Debtors. Accordingly, the Financial Projections are speculative in nature. It should be expected that some or all of the assumptions in the Financial Projections will not be realized and that actual results will vary from the Financial Projections, which variations may be material and may increase over time. The Financial Projections should therefore not be regarded as a representation by the Debtors or any other person that the results set forth in the Financial Projections will be achieved. In light of the foregoing, readers are cautioned not to place undue reliance on the Financial Projections. The Financial Projections should be read together with the information in Section VI of this Disclosure Statement entitled "Future Business of the Reorganized Debtors," which summarizes the Business Plan and certain assumptions underlying the Financial Projections, as well as Section XV of the Disclosure Statement entitled "Certain Risk Factors to be Considered," which sets forth important factors that could cause actual results to differ from those in the Financial Projections. OC is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files periodic reports and other information with the SEC relating to its business, financial statements and other matters. Such filings will not include projected financial information. The Debtors do not intend to update or otherwise revise the Financial Projections, including any revisions to reflect events or circumstances existing or arising after the date of this Disclosure Statement or to reflect the occurrence of unanticipated events, even if any or all of the underlying assumptions do not come to fruition. Furthermore, the Debtors do not intend to update or revise the Financial Projections to reflect changes in general economic or industry conditions. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: The Financial Projections contain statements which constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" in the Financial Projections include the intent, belief or current expectations of OC and members of its management team with respect to the timing, completion and scope of the current restructuring, reorganization plan, Business Plan, bank financing, and debt and equity market conditions and OC's future liquidity, as well as the assumptions up on which such statements are based. While OC believes that the expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, parties in interest are cautioned that any such forward-looking statements are not guarantees of future performance, and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those contemplated by the forward-looking statements in the Financial Projections include, but are not limited to, further adverse developments with respect to the liquidity position of OC or operations of the various businesses of OC, adverse developments in the bank financing or public or private markets for debt or equity securities of OCD, adverse developments in the timing or results of the implementation of the Business Plan (including the time line to emerge from Chapter 11), the difficulty in controlling industry costs and integrating new operations, the ability of the OC to realize the anticipated general and administrative expense savings and overhead reductions contemplated in the Financial Projections, the ability of OC to maintain profitability of their operations, the level and nature of any restructuring and other one-time charges, the difficulty in estimating costs relating to exiting certain markets and consolidating and closing certain operations, and the possible negative effects of a change in applicable legislation. B. Acceptance of the Plan As a condition to confirmation, the Bankruptcy Code requires that each Class of Impaired Claims vote to accept the Plan, except under certain circumstances. Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired claims as acceptance by holders of at least two thirds (2/3) in dollar amount and more than one half (50%) in number of claims in that class, but for that purpose counts only those who actually vote to accept or to reject the plan. Thus, each of Classes 3, 4, 5, 6, 7, 8 and 9 will have voted to accept the Plan only if two-thirds (2/3) in dollar amount and a majority in number actually voting in each Class cast their Ballots in favor of acceptance. Holders of Claims who fail to vote are not counted as either accepting or rejecting the Plan. In order to satisfy the requirements of Section 524(g)(2)(B)(II)(IV)(bb) of the Bankruptcy Code, seventy-five (75%) percent of each of Classes 7 and 8, covering the respective holders of the OC Asbestos Personal Injury Claims and FB Asbestos Personal Injury Claims actually voting must vote in favor of the Plan in order for the Reorganized Debtors to obtain the benefits of Section 524(g) of the Bankruptcy Code. The Voting Procedures provide certain special rules concerning the calculation of the amount of Claims voting in a Class of Claims (for further information regarding voting procedures see Section XVII of this Disclosure Statement entitled "The Solicitation; Voting Procedure.") The following special rules concerning calculation of the amount of Claims are for illustrative purposes. A Ballot will not be counted if a Claim has been disallowed or an objection is pending to the Claim as of the _____________, and the claimant has not obtained, on or before the Voting Deadline, a Bankruptcy Court order allowing such Claim, either in whole or in part, for all purposes or for voting purposes only. IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT MUST BE PROPERLY COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING PROCEDURES ON THE BALLOT AND RECEIVED NO LATER THAN THE VOTING DEADLINE BY THE VOTING AGENT. DO NOT RETURN ANY STOCK CERTIFICATES OR DEBT INSTRUMENTS WITH YOUR BALLOT. In addition, a vote may be disregarded if the Bankruptcy Court determines, after notice and a hearing, that such acceptance or rejection was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code. C. Best Interests Test As noted above, even if a plan is accepted by the holders of each class of claims and interests, the Bankruptcy Code requires a bankruptcy court to determine that the plan is in the best interests of all holders of claims or interests that are impaired by the plan and that have not accepted the plan. The "best interests" test, as set forth in Section 1129(a)(7) of the Bankruptcy Code, requires a bankruptcy court to find either that all members of an impaired class of claims or interests have accepted the plan or that the plan will provide a member who has not accepted the plan with a recovery of property of a value, as of the effective date of the plan, that is not less than the amount that such holder would recover if the debtor were liquidated under Chapter 7 of the Bankruptcy Code. To calculate the probable distribution to holders of each impaired class of claims and interests if the Debtors were liquidated under Chapter 7, a bankruptcy court must first determine the aggregate dollar amount that would be generated from a debtor's assets if its Chapter 11 cases were converted to Chapter 7 cases under the Bankruptcy Code. This "liquidation value" would consist primarily of the proceeds from a forced sale of the debtor's assets by a Chapter 7 trustee. The amount of liquidation value available to unsecured creditors would be reduced by, first, the claims of secured creditors to the extent of the value of their collateral, and, second, by the costs and expenses of liquidation, as well as by other administrative expenses and costs of both the Chapter 7 cases and the Chapter 11 cases. Costs of liquidation under Chapter 7 of the Bankruptcy Code would include the compensation of a trustee, as well as of counsel and other professionals retained by the trustee, asset disposition expenses, all unpaid expenses incurred by the debtor in its Chapter 11 cases (such as compensation of attorneys, financial advisors and accountants) that are allowed in the Chapter 7 cases, litigation costs, and claims arising from the operations of the debtor during the pendency of the Chapter 11 cases. The liquidation itself would trigger certain priority payments that otherwise would be due in the ordinary course of business. Those priority claims would be paid in full from the liquidation proceeds before the balance would be made available to pay general claims or to make any distribution in respect of equity interests. The liquidation would also prompt the rejection of a large number of executory contracts and unexpired leases and thereby significantly enlarge the total pool of unsecured claims by reason of resulting rejection claims. Once the court ascertains the recoveries in liquidation of secured creditors and priority claimants, it must determine the probable distribution to general unsecured creditors and equity security holders from the remaining available proceeds in liquidation. If such probable distribution has a value greater than the distributions to be received by such creditors and equity security holders under the plan, then the plan is not in the best interests of creditors and equity security holders. D. Liquidation Analysis In order to determine the amount of liquidation value available to creditors, the Debtors, with the assistance of their financial advisor, Lazard, prepared a liquidation analysis, annexed hereto as Appendix C (the "Liquidation Analysis"), which concludes that in a Chapter 7 liquidation, holders of Allowed Claims in Classes 3, 4, 5, 6, 7, 8 and 9 would receive less than under the Plan. This conclusion is premised upon the assumptions set forth in Appendix C hereto, which the Debtors and Lazard believe are reasonable. Notwithstanding the foregoing, the Debtors believe that any liquidation analysis with respect to the Debtors is inherently speculative. The liquidation analysis for the Debtors necessarily contains estimates of the net proceeds that would be received from a sale of assets and/or business units, as well as the amount of Claims that will ultimately become Allowed Claims. Claims estimates are based solely upon the Debtors' incomplete review of any Claims filed and the Debtors' books and records. No Order or finding has been entered by the Bankruptcy Court estimating or otherwise fixing the amount of Claims at the projected amounts of Allowed Claims set forth in the liquidation analysis. In preparing the liquidation analysis, the Debtors have projected an amount of Allowed Claims that is at the lowest end of a range of reasonableness such that, for purposes of the liquidation analysis, the largest possible Chapter 7 liquidation dividend to holders of Allowed Claims can be assessed. The estimate of the amount of Allowed Claims set forth in the liquidation analysis should not be relied on for any other purpose, including, without limitation, any determination of the value of any distribution to be made on account of Allowed Claims under the Plan. The estimate of Allowed Claims is based upon different assumptions and formula for different purposes than the estimates of Allowed Claims set forth in other sections of this Disclosure Statement. Because the Unsecured Creditors' Committee contends that the liquidation analysis is not permitted to assume any payment to future asbestos claimants in a Chapter 7 liquidation, and based on certain other assumptions, the Unsecured Creditors' Committee contends that creditors would receive more in a Chapter 7 liquidation than under the Plan. Therefore, the Unsecured Creditors' Committee contends that the Plan fails to satisfy the "best interests test" of Section 1129(a)(7).The Plan Proponents and Lazard disagree with this analysis. For a more detailed discussion of this dispute, see Appendix C to this Disclosure Statement. The Bankruptcy Court or the District Court will determine, in conjunction with confirmation, whether the Plan satisfies the "best interests test" of Section 1129(a)(7). E. Valuation of the Reorganized Debtors 1. Overview In conjunction with the Plan, the Debtors determined that it was necessary to estimate the post-confirmation enterprise value of the Reorganized Debtors (which consists of the aggregate enterprise value of Reorganized OCD and its direct and indirect Subsidiaries, including both Debtor and Non-Debtor Subsidiaries). The Debtors have been advised by Lazard, their financial advisor, with respect to the reorganization value of the Reorganized Debtors on a going concern basis. The estimated range of reorganization value of the Reorganized Debtors was assumed to be approximately $3.3 billion to $3.7 billion (with a mid-point estimate of $3.5 billion) as of an assumed Effective Date of December 31, 2003. This estimated reorganization value includes $100 million associated with the utilization of tax net operating loss carryforwards created as part of the Plan. Lazard's estimate of reorganization value does not constitute an opinion as to fairness from a financial point of view of the consideration to be received under the Plan or of the terms and provisions of the Plan. THE ASSUMED RANGE OF THE REORGANIZATION VALUE, AS OF AN ASSUMED EFFECTIVE DATE OF DECEMBER 31, 2003, REFLECTS WORK PERFORMED BY LAZARD ON THE BASIS OF INFORMATION IN RESPECT OF THE BUSINESS AND ASSETS OF THE DEBTORS AVAILABLE TO LAZARD AS OF JUNE 26, 2003. IT SHOULD BE UNDERSTOOD THAT, ALTHOUGH SUBSEQUENT DEVELOPMENTS MAY AFFECT LAZARD'S CONCLUSIONS, LAZARD DOES NOT HAVE ANY OBLIGATION TO UPDATE, REVISE OR REAFFIRM ITS ESTIMATE. Based upon the assumed range of the reorganization value of the Reorganized Debtors of between $3.3 billion and $3.7 billion, an assumed total debt of $1.5 billion (including approximately $100 million of existing debt, $1.4 billion of Senior Notes less the aggregate principal amount of the debt issued to the IRS for their Allowed Priority Tax Claim, Lazard imputed an estimated range of equity values for the Reorganized Debtors of between $1.8 billion and $2.2 billion, with a point estimate of $2.0 billion. Assuming a distribution of 80.0 million shares of New OCD Common Stock pursuant to the Plan, the imputed estimate of the range of equity values on a per share basis is between $22.50 and $27.50 per share (with a mid-point estimate of $25.00 per share). Pursuant to the Plan, it is contemplated that approximately 2.8 million shares will be set aside as restricted stock for issuance to employees as part of the employee incentive programs. The remaining 77.2 million shares will be distributed to creditors pursuant to the Plan. With respect to the Financial Projections prepared by the management of the Debtors and included as Appendix B to this Disclosure Statement, Lazard assumed that such Financial Projections have been reasonably prepared in good faith and on a basis reflecting the best currently available estimates and judgments of the Debtors as to the future operating and financial performance of the Reorganized Debtors. Lazard's estimate of a range of reorganization values assumes that operating results projected by the Debtors will be achieved by the Reorganized Debtors in all material respects, including revenue growth and improvements in operating margins, earnings and cash flow. Certain of the results forecast by the management of the Debtors are better than the recent historical results of operations of the Debtors. As a result, to the extent that the estimate of enterprise values is dependent upon the Reorganized Debtors performing at the levels set forth in the Financial Projections, such analysis must be considered speculative. If the business performs at levels below those set forth in the Financial Projections, such performance may have a material impact on the estimated range of values. In estimating the range of the reorganization value and equity value of the Reorganized Debtors, Lazard (a) reviewed certain historical financial information of OC for recent years and interim periods; (b) reviewed certain internal financial and operating data of OC, including the Financial Projections as described in Section VI.C.2 of this Disclosure Statement, which data was prepared and provided to Lazard by the management of OC and which relate to OC's business and its prospects; (c) met with certain members of senior management of OC to discuss OC's operations and future prospects; (d) reviewed publicly available financial data and considered the market value of public companies that Lazard deemed generally comparable to the operating business of OC; (e) considered relevant precedent transactions in the building products industry; (f) considered certain economic and industry information relevant to the operating business; and (g) conducted such other studies, analysis, inquiries, and investigations as it deemed appropriate. Although Lazard conducted a review and analysis of OC's business, operating assets and liabilities and the Reorganized Debtors' business plan, it assumed and relied on the accuracy and completeness of all financial and other information furnished to it by OC, as well as publicly available information. In addition, Lazard did not independently verify management's projections in connection with such estimates of the reorganization value and equity value, and no independent valuations or appraisals of OC were sought or obtained in connection herewith. In the case of the Reorganized Debtors, the estimates of the reorganization value prepared by Lazard represent the hypothetical reorganization value of the Reorganized Debtors. Such estimates were developed solely for purposes of the formulation and negotiation of the Plan and the analysis of implied relative recoveries to creditors thereunder. Such estimates reflect computations of the range of the estimated reorganization value of the Reorganized Debtors through the application of various valuation techniques and do not purport to reflect or constitute appraisals, liquidation values or estimates of the actual market value that may be realized through the sale of any securities to be issued pursuant to the Plan, which may be significantly different than the amounts set forth herein. The value of an operating business is subject to numerous uncertainties and contingencies which are difficult to predict and will fluctuate with changes in factors affecting the financial condition and prospects of such a business. As a result, the estimate of the range of the reorganization enterprise value of the Reorganized Debtors set forth herein is not necessarily indicative of actual outcomes, which may be significantly more or less favorable than those set forth herein. Because such estimates are inherently subject to uncertainties, neither OC, Lazard, nor any other person assumes responsibility for their accuracy. In addition, the valuation of newly issued securities is subject to additional uncertainties and contingencies, all of which are difficult to predict. Actual market prices of such securities at issuance will depend upon, among other things, prevailing interest rates, conditions in the financial markets, the anticipated initial securities holdings of pre-petition creditors, some of whom may prefer to liquidate their investment rather than hold it on a long-term basis, and other factors which generally influence the prices of securities. 2. Additional Assumptions Regarding the Reorganized Debtors With respect to the valuation of the Reorganized Debtors, in addition to the foregoing, Lazard has relied upon the following assumptions: o the Reorganized Debtors' enterprise valuation consists of the aggregate enterprise value of Reorganized OCD and its direct and indirect Subsidiaries, including the Non-Debtor Subsidiaries. o The reorganization value range indicated represents the "enterprise value" of the Reorganized Debtors, and assumes the pro forma debt levels (as set forth in the Financial Projections) adjusted for ownership percentages in order to calculate a range of equity value. o The Debtors will emerge from Chapter 11 on or about December 31, 2003. o The projections for the Reorganized Debtors are predicated upon the assumption that OC will be able to obtain all necessary financing, as described herein, and that no asset sales other than those contemplated to be consummated by the Company prior to the Effective Date, or assumed in the Financial Projections, will be required to meet the Reorganized Debtors' ongoing financial requirements. Lazard makes no representations as to whether the Company will obtain financing or consummate such asset sales or as to the terms upon which such financing may be obtained or such asset sales may be consummated. o The present senior management of OC will continue following consummation of the Plan, and general financial and market conditions as of the assumed Effective Date of the Plan will not differ materially from those conditions prevailing as of the date of this Disclosure Statement. Lazard's valuation represents a hypothetical value that reflects the estimated intrinsic value of the Company derived through the application of various valuation techniques. Such analysis does not purport to represent valuation levels which would be achieved in, or assigned by, the public markets for debt and equity securities or private markets for corporations. Estimates of enterprise value do not purport to be appraisals or necessarily reflect the values which may be realized if assets are sold as a going concern, in liquidation, or otherwise. 3. Valuation Methodology The following is a brief summary of certain financial analyses performed by Lazard to arrive at its estimation of the reorganization value of the Reorganized Debtors. Lazard performed certain procedures, including each of the financial analyses described below, and reviewed the assumptions with the management of OC on which such analyses were based and other factors, including the projected financial results of the Reorganized Debtors. Lazard's estimate of reorganization value must be considered as a whole and selecting just one methodology or portions of the analysis, without considering the analysis as a whole, could create a misleading or incomplete conclusion as to enterprise value. (a) Discounted Cash Flow Analysis The discounted cash flow ("DCF") valuation methodology relates the value of an asset or business to the present value of expected future cash flows to be generated by that asset or business. The DCF methodology is a "forward looking" approach that discounts the expected future cash flows by a theoretical or observed discount rate determined by calculating the average cost of debt and equity for publicly traded companies that are similar to the Debtors. This approach has two components: the present value of the projected un-levered after-tax free cash flows for a determined period and the present value of the terminal value of cash flows (representing firm value beyond the time horizon of the projections). As the estimated cash flows, estimated discount rate and expected capital structure of the Reorganized Debtors are used to derive a potential value, an analysis of the results of such an estimate is not purely mathematical, but instead involves complex considerations and judgments concerning potential variances in the projected financial and operating characteristics of the Reorganized Debtors, as well as other factors that could affect the future prospects and cost of capital considerations for the Reorganized Debtors. The DCF calculation was performed based on un-levered after-tax free cash flows for the projection period 2004 to 2012, discounted to the Effective Date of December 31, 2003. Lazard utilized management's detailed financial projections for the period 2004 and 2005 as the primary input. Management assisted Lazard with the development of projections for the extended period of 2006 to 2012. Beginning with earnings before interest and taxes ("EBIT"), the analysis taxes this figure at an assumed rate of 40% to calculate an un-levered net income figure. The analysis then adds back the non-cash operating expense of depreciation and amortization. In addition, other factors affecting free cash flow are taken into account, such as the change in working capital and capital expenditures, all of which do not affect the income statement and therefore require separate adjustments in the calculation. In performing the calculation, Lazard made assumptions for the weighted average cost of capital (the "Discount Rate"), which is used to value future cash flows based on the riskiness of the projections, and the EBITDA exit multiple, which is used to determine the future value of the enterprise after the end of the projected period. In determining the Discount Rate, Lazard estimated the cost of equity and the after-tax cost debt for the Debtors, and applied a weighting of 45% debt and 55% equity. The weighting was determined based upon target leverage ratios which Lazard believes would correlate to an investment grade credit rating of "BBB/Baa" by the independent rating agencies. Lazard estimated the cost of equity based on the Capital Asset Pricing Model which assumes that the required equity return is a function of the risk-free cost of capital and the correlation ("Beta") of a publicly traded stock's performance to the return on the broader market. Lazard used Betas from comparable companies on an un-levered basis to determine a composite un-levered Beta. Also included in the calculation of the cost of equity was an implementation risk premium of 1.5% to reflect the non-systemic risk associated with the changes in the business model which are being implemented as part of management's turnaround plan. In estimating the Debtors cost of debt, Lazard considered a number of factors including the likely interest associated with the Reorganized Debtors' post-emergence financing, the expected term of such financing, and the effective yield for publicly traded debt securities for comparable companies in the industry. Lazard's DCF valuation was based upon a range of Discount Rates between 9% and 11%, with a mid-point of 10%. In determining an EBITDA exit multiple, Lazard relied upon various analyses including a review of current and historical EBITDA trading multiples for the Debtor and comparable companies operating in the building products sector. Lazard's terminal value was based upon a range of EBITDA multiples between 5.0x and 6.0x, with a mid-point of 5.5x. Lazard believes that this range of EBITDA multiples is consistent with the observed multiples for companies similar to the debtor who operate in cyclical industry sectors and represents a mid-cycle multiple. (b) Publicly Traded Company Analysis A publicly traded company analysis estimates value based on a comparison of the target company's financial statistics with the financial statistics of public companies that are similar to the target company. The analysis establishes a benchmark for asset valuation by deriving the value of "comparable" assets, standardized using a common variable such as revenue, EBIT, and EBITDA. The analysis includes a detailed multi-year financial comparison of each company's income statement, balance sheet, and cash flow statement. In addition, each company's performance, profitability, margins, leverage and business trends are also examined. Based on these analyses, a number of financial multiples and ratios are calculated to gauge each company's relative performance and valuation. A key factor to this approach is the selection of companies with relatively similar business and operational characteristics to the target company. Criteria for selecting comparable companies for the analysis include, among other relevant characteristics, similar lines of businesses, business risks, growth prospects, maturity of businesses, market presence, size, and scale of operations. The selection of truly comparable companies is often difficult and subject to limitations due to sample size and the availability of meaningful market-based information. However, the underlying concept is to develop a premise for relative value, which, when coupled with other approaches, presents a foundation for determining firm value. In performing the Comparable Public Company Analysis, the following publicly traded companies ("Peer Group") deemed generally comparable to the Debtors in one or more of the factors described above, were selected: American Woodmark, Black & Decker, CRH, Elkcorp, Georgia-Pacific, Griffon, James Hardie, Masco, NCI Building Systems, Owens Illinois, PPG Industries, and Sherwin Williams. Lazard excluded several building products manufacturers that were deemed not comparable because of size, specific product comparability and/or status of comparable companies (e.g., currently in a chapter 11). Lazard primarily observed valuation ratios as a function of enterprise value of each company as indicated by the book value of debt less cash plus the equity market capitalization. While Lazard observed multiples according to revenue, EBIT and EBITDA, the most emphasis was placed on multiples of EBIT and EBITDA. These multiples were then applied to the Debtors' fiscal year end 2003 forecasted financial results to determine the range of reorganization values. Lazard's application of these multiples to the Debtors' financial results took into account a variety of factors, both quantitative and qualitative, in an effort to consider the relative valuation which the Debtors would command given the availability of alternative investments. It should be noted that these multiples are based upon historical profitability metrics which could generally be described as representing a "trough" of the business cycle. As a result, the observed multiples are generally higher than historical averages. (c) Precedent Transactions Analysis Precedent transactions analysis estimates value by examining public merger and acquisition transactions. An analysis of a company's transaction value as a multiple of various operating statistics provides industry-wide valuation multiples for companies in similar lines of businesses to the Debtors. These transaction multiples were calculated based on the purchase price (including any debt assumed) paid to acquire companies that are comparable to the Debtors. These multiples were then applied to the Reorganized Debtors' key operating statistics, to determine the total enterprise value or value to a potential strategic buyer. Lazard evaluated each of these multiples and made judgments as to their relative significance in determining the Reorganized Debtors range of reorganization value. Unlike the comparable public company analysis, the valuation in this methodology includes a "control" premium, representing the purchase of a majority or controlling position in a company's assets. Thus, this methodology generally produces higher valuations than the comparable public company analysis. Other aspects of value that manifest itself in a precedent transaction analysis include the following: (i) Circumstances surrounding a merger transaction may introduce "noise" into the analysis (e.g., an additional premium may be extracted from a buyer in the case of a competitive bidding contest); (ii) The market environment is not identical for transactions occurring at different periods of time; (iii) Circumstances pertaining to the financial position of a company may have an impact on the resulting purchase price (e.g., a company in financial distress may receive a lower price due to perceived weakness in its bargaining leverage). As with the comparable company analysis, because no acquisition used in any analysis is identical to a target transaction, valuation conclusions cannot be based solely on quantitative results. The reasons for and circumstances surrounding each acquisition transaction are specific to such transaction, and there are inherent differences between the businesses, operations and prospects of each. Therefore, qualitative judgments must be made concerning the differences between the characteristics of these transactions and other factors and issues that could affect the price an acquirer is willing to pay in an acquisition. The number of completed transactions over the prior two years for which public data is available also limits this analysis. Because the precedent transaction analysis explains other aspects of value besides the inherent value of a company, there are limitations as to its use in the Reorganized Debtors' valuation. The summary set forth above does not purport to be a complete description of the analyses performed by Lazard. The preparation of an estimate involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods in the particular circumstances and, therefore, such an estimate is not readily susceptible to summary description. In performing their analyses, Lazard and the Debtors made numerous assumptions with respect to industry performance, business and economic conditions and other matters. The analyses performed by Lazard are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. F. Application of the "Best Interests" of Creditors Test to the Liquidation Analysis and the Valuation It is impossible to determine with any specificity the value each creditor will receive as a percentage of its Allowed Claim. This difficulty in estimating the value of recoveries is due to, among other things, the lack of any public market for the New OCD Common Stock. Notwithstanding the difficulty in quantifying recoveries to holders of Allowed Claims with precision, the Debtors believe that the financial disclosures and projections contained herein imply a greater or equal recovery to holders of Claims in Impaired Classes than the recovery available in a Chapter 7 liquidation. As set forth below, the Debtors have set forth an estimate of the comparative distributions between a Chapter 7 liquidation and the Plan. Accordingly, the Debtors believe that the "best interests" test of Section 1129 of the Bankruptcy Code is satisfied. Because the Unsecured Creditors' Committee contends that the liquidation analysis is not permitted to assume any payment to future asbestos claimants in a Chapter 7 liquidation, and based on certain other assumptions, the Unsecured Creditors' Committee contends that creditors would receive more in a Chapter 7 liquidation than under the Plan. Therefore, the Unsecured Creditors' Committee contends that the Plan fails to satisfy the "best interests test" of Section 1129(a)(7).The Plan Proponents and Lazard disagree with this analysis. For a more detailed discussion of this dispute, see Appendix C to this Disclosure Statement. The Bankruptcy Court or the District Court will determine, in conjunction with confirmation, whether the Plan satisfies the "best interests test" of Section 1129(a)(7). G. Confirmation Without Acceptance of All Impaired Classes: "Cramdown" The Debtors will request confirmation of the Plan, as it may be modified from time to time, under Section 1129(a) of the Bankruptcy Code, and have reserved the right to modify the Plan to the extent, if any, that confirmation pursuant to Section 1129(b) of the Bankruptcy Code requires modification. Section 1129(b) of the Bankruptcy Code provides that a plan can be confirmed even if it is not accepted by all impaired classes of claims and interests, as long as at least one impaired class of claims has accepted the plan. The Bankruptcy Court may confirm a plan notwithstanding the rejection or deemed rejection of an impaired class of claims or interests if the plan "does not discriminate unfairly" and is "fair and equitable" as to each impaired class that has rejected, or is deemed to have rejected, the plan. A plan does not discriminate unfairly within the meaning of the Bankruptcy Code if a rejecting impaired class is treated equally with respect to other classes of equal rank. The Bankruptcy Code establishes different standards for what is "fair and equitable" for holders of unsecured claims, and equity interests. A plan is fair and equitable as to a class of unsecured claims that rejects the plan if, among other things, the plan provides (1) that each holder of a claim in the rejecting class will receive or retain on account of its claim property that has a value, as of the effective date of the Plan, equal to the allowed amount of the claim or (2) that no holder of a claim that is junior to the claims of the rejecting class will receive or retain under the plan any property on account of such junior claim. With respect to equity interests, a plan is fair and equitable as to a class of equity interests that rejects the plan if, among other things, the plan provides (1) that each holder of an equity interest in the rejecting class will receive or retain on account of such interest property that has a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; and (2) that the holder of any interest that is junior to the interest of such class will not receive under the plan any property on account of such junior interest. The Debtors believe that the Plan may be confirmed pursuant to the above-described "cramdown" provisions, over the dissent of certain Classes of Claims and Interests, including Class 11 and Class 12 (which are deemed to have rejected the Plan) in view of the treatment proposed for such Classes. The Debtors would seek confirmation of the Plan pursuant to the above-described "cramdown" provisions over the dissent of any Class other than Classes 7 and 8. In addition, the Debtors do not believe that the Plan unfairly discriminates against any Class who may vote to reject the Plan. XV. CERTAIN RISK FACTORS TO BE CONSIDERED A. Certain Factors Relating to the Chapter 11 Proceedings 1. There can be no assurance that the Plan will be consummated as proposed. The Plan sets forth a method, determined by negotiation between OC and certain of its creditor constituencies, for resolving Claims and reorganizing the Debtors. However, the Plan has not been approved by all of the Debtors' creditor constituencies and, as a result, there remains significant uncertainty as to whether the proposed resolution of Claims as described herein (including the amount and form of recoveries) will be effected. Although it is possible under applicable bankruptcy law to approve and confirm a plan of reorganization over the objection of various creditor groups, no assurance can be given that such a resolution will be achievable in this instance. Claimants who object to the terms of the Plan may be expected to challenge it in court proceedings and there can be no assurance that any such proceedings will be resolved favorably to the Debtors or that such proceedings, or further negotiations, will not result in significant changes to the terms of the Plan, including the amount and form of recoveries. The proposed relative amounts of recovery by holders of Claims and Interests is the result of negotiation among various of the constituencies of claimants with the Company, as well as the application of legal principles regarding ranking of Claims and Interests, and other matters. While the Company believes that the overall treatment of Claims and Interests under the Plan is fair and reasonable, not all Claims and Interests are treated equally, and certain Claims and Interests receive no distributions pursuant to the Plan. The ultimate recoveries under the Plan to holders of Claims (other than holders whose entire Distribution is paid in Cash under the Plan) depend upon the realizable value of the Senior Notes and the New OCD Common Stock, which are subject to a number of material risks, including, but not limited to, those specified below under the caption "Certain Factors Relating to Securities to be issued under the Plan." In addition, changes to the terms of the Plan, including to the form and amount of recoveries, may significantly affect the nature of recoveries, or may make further distinctions between the recoveries applicable to different classes of creditors. 2. Even if holders of Claims vote to approve the Plan, there can be no assurance that the Plan will be confirmed by the Bankruptcy Court and consummated. Even if all Impaired Classes entitled to vote in fact vote in favor of the Plan and, with respect to any Impaired Class deemed to have rejected the Plan, the requirements for "cramdown" are met, the Bankruptcy Court, which as a court of equity may exercise substantial discretion, may choose not to confirm the Plan. Section 1129 of the Bankruptcy Code requires, among other things, a showing that confirmation of the Plan will not be followed by liquidation or the need for further financial reorganization of the Debtors (see Section XII.A of this Disclosure Statement), and that the value of distributions to dissenting holders of Claims and Interests may not be less than the value such holders would receive if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. See Section XII.C of this Disclosure Statement. Although the Debtors believe that the Plan will meet such tests, there can be no assurance that the Bankruptcy Court will reach the same conclusion. See Appendix C annexed hereto for a liquidation analysis of the Debtors. Because the Unsecured Creditors' Committee contends that the liquidation analysis is not permitted to assume any payment to future asbestos claimants in a Chapter 7 liquidation, and based on certain other assumptions, the Unsecured Creditors' Committee contends that creditors would receive more in a Chapter 7 liquidation than under the Plan. Therefore, the Unsecured Creditors' Committee contends that the Plan fails to satisfy the "best interests test" of Section 1129(a)(7).The Plan Proponents and Lazard disagree with this analysis. For a more detailed discussion of this dispute, see Appendix C to this Disclosure Statement. The Bankruptcy Court or the District Court will determine, in conjunction with confirmation, whether the Plan satisfies the "best interests test" of Section 1129(a)(7). The Plan provides for certain conditions that must be fulfilled prior to confirmation of the Plan and the Effective Date. As of the date of this Disclosure Statement, there can be no assurance that any or all of the conditions in the Plan will be met (or waived), that other conditions to consummation, if any, will be satisfied, or that supervening factors will not prevent the Plan from being consummated. Accordingly, even if the Plan is confirmed by the Bankruptcy Court, there can be no assurance that the Plan will be consummated. If a liquidation or protracted reorganization were to occur, there is a substantial risk that the value of the Debtors' enterprise would be substantially eroded to the detriment of all stakeholders. B. Certain Factors Relating to Securities to be Issued Pursuant to the Plan The Senior Notes and the shares of New OCD Common Stock that will be issued pursuant to the Plan are securities for which there is currently no market. While the Debtors may apply to list the Senior Notes or the New OCD Common Stock, or both, on a securities exchange, or to have them included in an interdealer quotation system, no determination to do so has been made. Accordingly, there can be no assurance as to the development or liquidity of any market for the Senior Notes or the shares of New OCD Common Stock. If a trading market does not develop or is not maintained, holders of Senior Notes or shares of New OCD Common Stock may experience difficulty in reselling such securities or may be unable to sell them at all. Even if such market were to exist, such securities could trade at prices higher or lower than the value attributed to such securities in connection with their distribution under the Plan, depending upon many factors, including, without limitation, prevailing interest rates, markets for similar securities, industry conditions and the performance of, and investor expectations for, the Reorganized Debtors. In addition, some persons who receive Senior Notes and shares of New OCD Common Stock may prefer to liquidate their investment in the near term rather than hold such securities on a long-term basis. Accordingly, any market for such securities may be volatile, at least for an initial period following the Effective Date, and may be depressed until the market has had time to absorb any such sales and to observe the performance of the Reorganized Debtors. C. Certain Factors Relating to the Reorganized Debtors 1. The Asbestos Personal Injury Trust will own a majority of the outstanding shares of New OCD Common Stock and will thereby be able to control Reorganized OCD. The Asbestos Personal Injury Trust will beneficially own more than 50% of the issued and outstanding shares of New OCD Common Stock. Accordingly, the Asbestos Personal Injury Trust will have significant control over Reorganized OCD and have the power to elect the majority of the Reorganized OCD directors, and, by virtue of its ability to elect a majority of directors, to appoint new management and approve any action requiring the approval of the holders of New OCD Common Stock, including adopting amendments to the Amended and Restated Certificate of Incorporation and approving mergers or sales of all or substantially all of Reorganized OCD's assets. This concentration of ownership could also facilitate or hinder a negotiated change of control of Reorganized OCD, and, consequently, could have an impact upon the value of the New OCD Common Stock. There can be no assurance that the interests of the Asbestos Personal Injury Trust will not conflict with the interests of Reorganized OCD's other stakeholders. 2. The financial projections are inherently uncertain. The Financial Projections set forth in Appendix B hereto cover the Debtors' projected future operations through fiscal 2008. The Financial Projections contain statements which constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" in the Financial Projections include the intent, belief or current expectations of OC and members of its management team with respect to the timing and completion of the implementation of the Plan, the feasibility of the Business Plan, the availability of bank and other financing, the conditions of the debt and equity markets, the state of general business and economic conditions, and OC's future liquidity, as well as the assumptions upon which such statements are based. While OC believes that these expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, parties in interest are cautioned that any such forward-looking statements are not guaranties of future performance, and involve risks and uncertainties, and that actual results are likely to differ materially from those contemplated by such forward-looking statements. Important factors currently known to OC's management that could cause actual results to differ materially from those contemplated by the forward-looking statements in the Financial Projections include, but are not limited to, adverse developments with respect to the liquidity position of OC or operations of the various businesses of OC, adverse developments in the bank financing or public or private markets for debt or equity securities of OCD, adverse developments in the timing or results of the implementation of the Business Plan (including the time to emerge from Chapter 11), the difficulty in controlling industry costs and integrating new operations, the ability of the OC to realize the anticipated general and administrative expense savings and overhead reductions contemplated in the Financial Projections, the ability of OC to maintain profitability of their operations, the level and nature of any restructuring and other one-time charges, the difficulty in estimating costs relating to exiting certain markets and consolidating and closing certain operations, and the possible negative effects of a change in applicable legislation. See Section V.3 of this Disclosure Statement. 3. There can be no assurance that the Reorganized Debtors will be able to refinance certain indebtedness. Following the Effective Date of the Plan, the Debtors' working capital needs and letter of credit requirements are anticipated to be funded under the new Exit Facility. See Section VII.H of this Disclosure Statement. Obtaining the Exit Facility is a condition precedent to the Effective Date. There can be no assurance, however, that the Reorganized Debtors will be able to obtain replacement financing for such facility to fund future working capital needs and letters of credit, or that replacement financing, if obtained, would be on terms equally as favorable to the Reorganized Debtors. Furthermore, there can be no assurance that the Reorganized Debtors will be able to refinance the Senior Notes upon their maturity, should such a need arise. 4. Retention of key management and technical personnel may be important to the future performance of the Reorganized Debtors. Many aspects of the business of the Debtors require personnel with significant experience or technical expertise. In addition, the past business performance of the Debtors has been achieved, in part, by the skills of key management personnel who possess very particular knowledge and expertise relating to the Debtors' business. There can be no assurance that such personnel can be retained or, that if any such personnel do not continue in the employ of the Reorganized Debtors, that the Reorganized Debtors will be able to replace such key personnel. 5. There can be no assurance that Reorganized OCD will pay dividends. The Debtors cannot anticipate whether Reorganized OCD will pay any dividends on the New OCD Common Stock in the foreseeable future. In addition, restrictive covenants in certain debt instruments to which Reorganized OCD will be a party, including the Exit Facility, may limit the ability of Reorganized OCD to pay dividends. 6. The Reorganized Debtors are subject to environmental regulation and failure to comply with environmental regulation could harm its business. The Reorganized Debtors will remain subject to a variety of environmental laws and regulations governing, among other things, discharges to air and water, the handling, storage, and disposal of hazardous or solid waste materials, and may also be required to undertake the remediation of contamination associated with releases of hazardous substances. Such laws and regulations and the risk of attendant litigation can cause significant delays and add significantly to the cost of operations. Violations of these environmental laws and regulations could subject the Reorganized Debtors and their management to civil and criminal penalties and other liabilities based on their post-petition conduct. There can be no assurance that such laws and regulations will not become more stringent, or more stringently implemented, in the future. Various federal, state and local environmental laws and regulations, as well as common law, may impose liability for property damage and costs of investigation and cleanup of hazardous or toxic substances on property currently or previously owned by the Debtors or arising out of the Debtors' waste management activities. Such laws may impose responsibility and liability without regard to knowledge of or causation of the presence of the contaminants, and the liability under such laws is joint and several. The Debtors have potential liabilities associated with their past waste disposal activities and with their current and prior ownership of certain property. In general, the Debtors believe that the likely amount of such liabilities will not be material, because the Debtors may have a valid defense to liability with respect to a given site or the Debtors should only be responsible for a small percentage of the total cleanup costs with respect to a given site. However, because liability under such laws is joint and several, no assurances can be given that the Reorganized Debtors will not eventually be responsible for all or a substantial portion of the liabilities associated with one or more of these sites, which liabilities could be material either individually or in the aggregate. 7. The IRS may challenge OC, OC's tax reserves may be insufficient and any revision to these reserves may adversely affect OC's financial position. In accordance with generally accepted accounting principles, OC maintains tax reserves to cover audit issues. While OC believes that the existing reserves are appropriate in light of the audit issues involved, its defenses, its prior experience in resolving audit issues, and its ability to realize certain challenged deductions in subsequent tax returns if the IRS were successful, there can be no assurance that such reserves will be sufficient. OC will continue to review its tax reserves on a periodic basis and make such adjustments as may be appropriate. Any such revision could be material to OC's consolidated financial position and results of operations in any given period. 8. The performance of OC's business reflects the impact of business cycles. Sales of OC's products are correlated to business activity in the new construction and remodeling markets, which are highly sensitive to national and regional economic conditions. From time to time, the construction industry has been adversely affected in various parts of the country by unfavorable economic conditions, low use of manufacturing capacity, high vacancy rates, changes in tax laws affecting the real estate industry, high interest rates and the unavailability of financing. In addition, sales of OC's products may be adversely affected by weakness in demand within particular customer groups or a recession in the general construction industry or in particular geographic regions. OC cannot predict the timing or severity of future economic or industry downturns. Any economic downturn, particularly in states where many of OC's sales are made, could have a material adverse effect on its results of operations and financial condition. 9. Particular risks involving international operations may affect the performance of the Reorganized Debtors. OC pursues project opportunities throughout the world through foreign and domestic subsidiaries as well as agreements with foreign joint-venture partners. These foreign operations are subject to special risks, including: uncertain political and economic environments, potential incompatibility with foreign joint-venture partners, foreign currency controls and fluctuations, war and military operations, civil disturbances and labor strikes. XVI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN The Debtors believe that the Plan affords holders of Claims the potential for the greatest realization on the Debtors' assets and, therefore, is in the best interests of such holders. If, however, the requisite acceptances are not received, or the Plan is not subsequently confirmed and consummated, the theoretical alternatives include: (a) formulation of an alternative plan or plans of reorganization, or (b) liquidation of the Debtors under Chapter 7 or 11 of the Bankruptcy Code. A. Alternative Plan(s) of Reorganization or Liquidation If the requisite acceptances are not received by the Voting Deadline or if the Plan is not confirmed, the Debtors (or, if the Debtors' exclusive periods in which to file and solicit acceptances of a plan of reorganization have expired, any other party-in-interest) could attempt to formulate and propose a different plan or plans of reorganization. Such a plan or plan(s) might involve either a reorganization and continuation of the Debtors' businesses or an orderly liquidation of the Debtors' assets. With respect to an alternative plan, the Debtors have explored various alternatives in connection with the formulation and development of the Plan. The Debtors believe that the Plan enables the holders of Claims against the Debtors to realize the greatest possible value under the circumstances, and that, as compared to any alternative plan of reorganization, the Plan has the greatest chance to be confirmed and consummated. B. Liquidation Under Chapter 7 or Chapter 11 If no plan is confirmed, the Chapter 11 Cases may be converted to cases under Chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be elected or appointed to liquidate the Debtors' assets for distribution to claimants in accordance with the priorities established by the Bankruptcy Code. It is impossible to predict precisely how the proceeds of the liquidation would be distributed to the respective holders of Claims against or Interests in the Debtors. The Debtors believe that in a liquidation under Chapter 7, before claimants receive any distribution, additional administrative expenses arising from the appointment of a trustee or trustees and attorneys, accountants and other professionals to assist such trustees would cause a substantial diminution in the value of the Debtors' Estates. The assets available for distribution to claimants would be reduced by such additional expenses and by Claims, some of which would be entitled to priority, arising by reason of the liquidation and from the rejection of leases and other executory contracts in connection with the cessation of operations and the failure to realize the greater going concern value of the Debtors' Estates. The Debtors could also be liquidated pursuant to the provisions of a Chapter 11 plan of reorganization. In a liquidation under Chapter 11, the Debtors' assets could be sold in an orderly fashion over a more extended period of time than in a liquidation under Chapter 7. Thus, a Chapter 11 liquidation might result in larger recoveries than in a Chapter 7 liquidation, but the delay in distributions could result in lower present values received and higher administrative costs. Because a trustee is not required in a Chapter 11 case, expenses for professional fees could be lower than in a Chapter 7 case, in which a trustee must be appointed. Any distribution to the holders of Claims under a Chapter 11 liquidation plan probably would be delayed substantially. Moreover, without the support of the holders of Asbestos Personal Injury Claims, the purchaser or purchasers of assets from the Debtors would not be assured the protection from liability for asbestos-related claims available under Section 524(g) of the Bankruptcy Code, thus potentially diminishing the value of such assets in a sale under Chapter 11. The Debtors believe that any alternative liquidation under Chapter 11, if feasible at all, is a much less attractive alternative to creditors than the Plan. THE COMPANY BELIEVES THAT THE PLAN AFFORDS SUBSTANTIALLY GREATER BENEFITS TO CREDITORS THAN WOULD A LIQUIDATION UNDER CHAPTER 7 OR CHAPTER 11 OF THE BANKRUPTCY CODE. The Liquidation Analysis, prepared by the Debtors with the assistance of Lazard, is premised upon a liquidation in a Chapter 7 case. In the analysis, the Debtors have taken into account the nature, status, and underlying value of their assets, the ultimate realizable value of such assets, and the extent to which the assets are subject to liens and security interests. The likely form of any liquidation would be the sale of individual assets. Based on this analysis, it is likely that a liquidation of the Debtors' assets would produce less value for distribution to creditors than that recoverable in each instance under the Plan. In the Debtors' opinion, the recoveries projected to be available in liquidation are not likely to afford holders of Claims as great a realization potential as does the Plan. Because the Unsecured Creditors' Committee contends that the liquidation analysis is not permitted to assume any payment to future asbestos claimants in a Chapter 7 liquidation, and based on certain other assumptions, the Unsecured Creditors' Committee contends that creditors would receive more in a Chapter 7 liquidation than under the Plan. Therefore, the Unsecured Creditors' Committee contends that the Plan fails to satisfy the "best interests test" of Section 1129(a)(7).The Plan Proponents and Lazard disagree with this analysis. For a more detailed discussion of this dispute, see Appendix C to this Disclosure Statement. The Bankruptcy Court or the District Court will determine, in conjunction with confirmation, whether the Plan satisfies the "best interests test" of Section 1129(a)(7). XVII. THE SOLICITATION; VOTING PROCEDURE The Bankruptcy Court may confirm the Plan only if it determines that the Plan complies with the technical requirements of Chapter 11 of the Bankruptcy Code and that the disclosures by the Debtors concerning the Plan have been adequate and have included information concerning all payments made or to be made in connection with the Plan and the Chapter 11 Cases. In addition, the Bankruptcy Court must determine that the Plan has been proposed in good faith and not by any means forbidden by law and, under Rule 3020(b)(2) of the Bankruptcy Rules, it may do so without receiving evidence if no objection is timely filed. In particular, the Bankruptcy Code requires the Bankruptcy Court to find, among other things, that (a) the Plan has been accepted by the requisite votes of the Classes of Impaired Claims unless approval will be sought under Section 1129(b) of the Bankruptcy Code despite the dissent of one or more such classes, which will be the case under the Plan, (b) the Plan is "feasible," which means that there is a reasonable probability that confirmation of the Plan will not be followed by liquidation or the need for further financial reorganization, and (c) the Plan is in the "best interests" of all holders of Claims and Interests, which means that such holders will receive at least as much under the Plan as they would receive in a liquidation under Chapter 7 of the Bankruptcy Code. The Bankruptcy Court must find that all conditions mentioned above are met before it can confirm the Plan. Thus, even if all Classes of Impaired Claims and Interests accept the Plan by the requisite votes, the Bankruptcy Court must make an independent finding that the Plan conforms to the requirements of the Bankruptcy Code, that the Plan is feasible, and that the Plan is in the best interests of the holders of Claims against, and Interests in, the Debtors. These statutory conditions to confirmation are discussed above. By Order dated __________ (the "Voting Procedures Order") , the Court has approved certain Voting Procedures which govern, among other things, the manner in which votes on the Plan will be solicited and Ballots and Master Ballots on the Plan tabulated. A copy of the Voting Procedures is attached hereto as Appendix H. For further information regarding Voting Procedures and rules concerning the calculation of the amount of Claims voting in a Class of Claims, see Section XIV.B of this Disclosure Statement entitled "Feasibility of the Plan and Best Interests of Creditors-Acceptance of the Plan." A. Parties in Interest Entitled to Vote Under Section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be impaired under a Plan unless (1) the Plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof or (2) notwithstanding any legal right to an accelerated payment of such claim or interest, the plan cures all existing defaults (other than defaults resulting from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before the default. In general, a holder of a claim or interest may vote to accept or to reject a plan if (1) the claim or interest is allowed, which means generally that no party in interest has objected to such claim or interest, and (2) the claim or interest is impaired by the plan. If the holder of an impaired claim or interest will not receive or retain any distribution under the plan in respect of such claim or interest, the Bankruptcy Code deems such holder to have rejected the plan. If the claim or interest is not impaired, the Bankruptcy Code deems that the holder of such claim or interest has accepted the plan and the plan proponent need not solicit such holder's vote. The holder of a Claim against a Debtor that is Impaired under the Plan is entitled to vote to accept or reject the Plan if (i) the Plan provides a distribution in respect to such Claim and (ii) (a) the Claim has been Scheduled by the Debtors (and such claim is not Scheduled at zero or as disputed, contingent, or unliquidated) or (b) it has filed a Proof of Claim on or before the bar date applicable to such holder, pursuant to Sections 502(a) and 1126(a) of the Bankruptcy Code and Bankruptcy Rules 3003 and 3018. Any Claim as to which an objection has been timely filed and has not been withdrawn or dismissed or denied by Final Order is not entitled to vote unless the Bankruptcy Court, pursuant to Federal Rule of Bankruptcy Procedure 3018(a), upon application of the holder of the Claim with respect to which there has been objection, temporarily allows the Claim in an amount that the Bankruptcy Court deems proper for the purpose of accepting or rejecting the Plan. A vote may be disregarded if the Bankruptcy Court determines, pursuant to Section 1126(e) of the Bankruptcy Code, that it was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code. The Voting Procedures Order also sets forth assumptions and procedures for tabulating Ballots that are not completed fully or correctly. B. Classes Impaired under the Plan Classes 3, 4, 5, 6, 7, 8, and 9 are entitled to vote to accept or reject the Plan. By operation of law, each Unimpaired Class of Claims is deemed to have accepted the Plan and, therefore, is not entitled to vote to accept or reject the Plan. The Plan provides that the holders of Intercompany Claims in Class 10, Subordinated Claims in Class 11, and OCD Interests in Class 12 will not receive any distributions of property or retain any interest in the Debtors. By operation of law, Classes 10, 11 and 12, therefore, are deemed to have rejected the Plan and therefore are not entitled to vote to accept or reject the Plan. C. Waivers of Defects, Irregularities, etc. Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, and revocation or withdrawal of Ballots or Master Ballots will be determined by the Voting Agent or the Special Voting Agent, as applicable, and the Debtors in accordance with the Voting Procedures in their sole discretion, which determination will be final and binding. The Debtors also reserve the right to reject any and all Ballots and Master Ballots not in proper form, the acceptance of which would, in the opinion of the Debtors or their counsel, be unlawful. The Debtors further reserve the right to waive any defects or irregularities or conditions of delivery as to any particular Ballot or Master Ballot. D. Withdrawal of Ballots; Revocation Any party who has delivered a valid Ballot or Master Ballot for the acceptance or rejection of the Plan may withdraw such acceptance or rejection by delivering a written notice of withdrawal to the Voting Agent or Special Voting Agent, as applicable, at any time prior to the Voting Deadline in accordance with the Voting Procedures. The Debtors intend to consult with the Voting Agent or Special Voting Agent to determine whether any withdrawals of Ballots or Master Ballots were received and whether the requisite acceptances of the Plan have been received. As stated above, the Debtors expressly reserve the absolute right to contest the validity of any such withdrawals of Ballots and Master Ballots. E. Further Information; Additional Copies If you have any questions about (1) the Voting Procedures for voting your Claim or Interest or with respect to the packet of materials that you have received or (2) the amount of your Claim, or if you wish to obtain, at your own expense, unless otherwise specifically required by Federal Rule of Bankruptcy Procedure 3017(d), an additional copy of the Plan, this Disclosure Statement or any appendices or Exhibits to such documents, please contact: OWENS CORNING c/o Robert L. Berger & Associates, L.L.C. 16501 Ventura Blvd., Suite 440 Encino, CA 91436 818-906-8300 (phone) 818-783-2737 (fax) XVIII. RECOMMENDATION AND CONCLUSION For all of the reasons set forth in this Disclosure Statement, the Plan Proponents believe that confirmation and consummation of the Plan is preferable to all other alternatives. Consequently, the Plan Proponents urge all holders of Classes 3, 4, 5, 6, 7, 8, and 9 Allowed Claims to vote to ACCEPT the Plan, and to complete and return their Ballots or Master Ballots so that they will be actually RECEIVED by the Voting Agent or Special Voting Agent, as applicable, on or before 4:00 p.m. prevailing Eastern Time on the Voting Deadline. Dated: August 8, 2003 OWENS CORNING, et al. (for itself and on behalf of the Subsidiary Debtors) By: /s/ Stephen Krull _______________________________ Name: Stephen Krull Title: Senior Vice President and General Counsel
SAUL EWING LLP SKADDEN, ARPS, SLATE, MEAGHER Norman L. Pernick (I.D. # 2290) & FLOM LLP J. Kate Stickles (I.D. #2917) Ralph Arditi 222 Delaware Avenue D.J. Baker P.O. Box 1266 Four Times Square Wilmington, DE 19899-1266 New York, NY 10036-6522 (302) 421-6800 (212) 735-3000 Charles O. Monk, II Special Counsel to Debtors Jay A. Shulman and Debtors-in-Possession Edith K. Altice 100 South Charles Street Baltimore, MD 21201-2773 (410) 332-8600 Adam H. Isenberg COVINGTON & BURLING MaryJo Bellew 1201 Pennsylvania Avenue, N.W. Centre Square West Mitchell F. Dolin 1500 Market Street, 38th Floor Anna P. Engh Philadelphia, PA 19102-2186 Washington, D.C. 20004-2401 (215) 972-7777 (202) 662-6000 Attorneys for the Debtors and Special Insurance Counsel to Debtors Debtors-in-Possession and Debtors-in-Possession KAYE SCHOLER LLP CAPLIN & DRYSDALE, CHARTERED Michael J. Crames Elihu Inselbuch Jane W. Parver 399 Park Avenue Andrew A. Kress New York, NY 10022 Edmund M. Emrich (212) 319-7125 425 Park Avenue New York, NY 10022 Peter Van N. Lockwood (212) 836-8000 Julie W. Davis One Thomas Circle, N.W. YOUNG, CONAWAY, Washington, D.C. 20005 STARGATT & TAYLOR LLP (202) 862-5000 James L. Patton, Jr. (I.D. # 2202) Edwin J. Harron (I.D. # 3396) CAMPBELL & LEVINE, LLC The Brandywine Building Marla Eskin (I.D. # 2989) 1000 West Street, 17th Floor Mark T. Hurford (I.D. # 3299) Wilmington, DE 19899-0391 800 King Street (302) 571-6600 Wilmington, DE 19801 (302) 426-1900 Attorneys for James J. McMonagle, Attorneys for the Official Legal Representative for Future Claimants Committee of Asbestos Claimants
TABLE OF APPENDICES APPENDIX NAME Appendix A Third Amended Joint Plan of Reorganization of Owens Corning and its Affiliated Debtors and Debtors-in-Possession, dated as of August 8, 2003 Appendix A-1 Glossary of Additional Terms Appendix B Pro Forma Financial Projections and Reorganization Balance Sheet Appendix C Liquidation Analysis Appendix D Owens Corning Annual Report on Form 10-K for the period ending December 31,2002. NOTE: THIS DOCUMENT IS AVAILABLE, FREE OF CHARGE,THROUGH OC'S WEBSITE AT WWW.OWENSCORNING.COM. COPIES MAY ALSO BE OBTAINED BY WRITTEN REQUEST. SEE THE DIRECTIONS SET FORTH AT APPENDIX D. Appendix E Principal Terms and Conditions of Senior Notes Appendix F Current Corporate Structure of Company Appendix G Proposed Corporate Structure of the Reorganized Debtors Appendix H Voting Procedures [THIS DOCUMENT WILL BE INSERTED UPON APPROVAL OF VOTING PROCEDURES] APPENDIX A THIRD AMENDED JOINT PLAN OF REORGANIZATION OF OWENS CORNING AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION, DATED AS OF AUGUST 8, 2003 (See Exhibit 2 to the Current Report on Form 8-K, filed by Owens Corning on August 8, 2003.) APPENDIX A-1 GLOSSARY OF ADDITIONAL TERMS GLOSSARY OF ADDITIONAL TERMS "ADDITIONAL SITES" means, in connection with the draft Environmental Settlement Agreement between the Debtors and the EPA, those waste disposal sites used by the Debtors before the Petition Date that are not discovered until after confirmation of the Plan or where the Debtors' use of the site has been confirmed but an allocable share of liability cannot yet be determined. "ADMINISTRATIVE DEPOSITS" means those amounts deposited by OCD and Fibreboard prior to the Petition date in settlement accounts to facilitate claims processing under the NSP. "ANNUAL SECTION 382 LIMITATION" means certain rules under Section 382 of the IRC limiting the ability of corporate taxpayers to utilize NOLs when there has been an "ownership change." "ARMSTRONG" means Armstrong World Industries, Inc. "B&B" means Baron & Budd, P.C., a law firm which was a participant in the NSP. "BANKRUPTCY EXCEPTION" means the exception to the application of the Annual Section 382 Limitation provided for in Section 382(l)(5) of the IRC when a corporation is under the jurisdiction of a court in a Title 11 case. "CASH MANAGEMENT MOTION" means the motion filed by the Debtors on October 6, 2000 for interim and final orders (1) authorizing (a) the maintenance of certain existing bank accounts, (b) the continued use of existing business forms, (c) the use of a modified cash management system and (d) the transfer of funds to Non-Debtor Subsidiaries and (2) waiving certain investment and deposit requirements of Section 345(b) of the Bankruptcy Code. "CASE MANAGEMENT ORDER" means the order of the Honorable Alfred M. Wolin of the United States District Court for the District of New Jersey (sitting by designation), dated December 23, 2002, which, among other things, withdrew the reference with respect to the Bank Holders Action and the Substantive Consolidation Motion. "CHINA LENDERS" means KBC Bank, N.V., Standard Chartered Bank and Societe Generale. "CHINA STANDSTILL AGREEMENT" means the Standstill and Amendment Agreement entered into between OCD, Owens-Corning (Guangzhou) Fiberglas Co., Ltd., Owens-Corning (Shanghai) Fiberglas Co., Ltd. and the China Lenders, of which the Bankruptcy Court authorized execution on December 9, 2002. "CLAIMS AGENT" means Robert L. Berger & Associates, L.L.C., appointed by the Bankruptcy Court pursuant to 28 U.S.C. ss. 156(c). "CLEAN WATER ACT" means The Federal Water Pollution Control Act, 33 U.S.C.S. ss.ss. 1251 et seq. "COMPANY" means OCD and its Subsidiaries. "CONSULTANTS ORDER" means the order of the District Court, dated December 28, 2001, appointing the Court Appointed Consultants. "CONTINENTAL" means Continental Casualty Company. "COURT APPOINTED CONSULTANTS" means William A. Drier, Esq., David R. Gross, Esq., C. Judson Hamlin, Esq., John E. Keefe, Esq., and Professor Francis E. McGovern, being the consultants appointed by the District Court to advise the District Court and to undertake certain duties in connection with the Chapter 11 cases of the Debtors and the cases of Armstrong World Industries, Inc., W.R. Grace & Co., Federal-Mogul Global, Inc. and USG Corporation. "CRITICAL VENDOR ORDER" means the order of the Bankruptcy Court, dated October 6, 2000, which authorized, but did not require, the Debtors to pay the pre-petition claims of certain critical suppliers of raw and processed materials, goods and services with whom the Debtors continued to do business and whose material, goods and services were essential to the Debtors' business operations. "CURRENTLY DISPUTED CLAIMS" means those Proofs of Claim that the Debtors have identified which they believe should be disallowed by the Bankruptcy Court, primarily because such claims appear to be duplicate or amended claims or claims that are not related to any of the Debtors' cases. "DESIGNATED MEMBERS" means the Bondholders and trade creditor members of the Unsecured Creditors' Committee. "DIP ORDER" means the Final Order Authorizing Post-Petition Financing on a Superpriority Administrative Claim Basis Pursuant to 11 U.S.C. ss. 364(c)(1) and Granting Relief from the Automatic Stay Pursuant to 11 U.S.C. ss. 362, approved by the Bankruptcy Court on November 17, 2000, which, among other things, authorized the Debtors to obtain the DIP Facility from the DIP Lenders. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ss.ss. 1301-1462. "EXCESS RECOVERIES" means Excess Available Cash, Excess Senior Notes Amount, Excess New OCD Common Stock and Excess Litigation Trust Recoveries. "EXCLUSIVE PERIOD" means the period during which the Debtors have the exclusive right to file a plan of reorganization under Section 1121(b) of the Bankruptcy Code. "FEE AUDITOR" means Warren H. Smith & Associates, P.C., appointed by the Bankruptcy Court to act as a special consultant to the Court for professional fee and expense review and analysis. "FINAL CMO" means the final cash management order approved by the Bankruptcy Court, which became effective on February 25, 2002 and is to continue in effect until confirmation of the Plan. "FINAL NSP SETTLEMENTS" means the approximately 150,000 Initial Claims which, as of the Petition Date, had satisfied all conditions to final settlement, including receipt of executed releases, or other resolution. "FINANCIAL PROJECTIONS" means certain financial information with respect to the projected future operations of OC, attached as Appendix B to the Disclosure Statement. "FUTURE CLAIMANTS' MOTION" means the motion filed by the Future Claimants' Representative on September 6, 2002, for an order authorizing the Future Claimants' Representative (either alone or in combination with other creditor constituencies) to commence certain avoidance actions on behalf of the Debtors' Estates under Sections 544, 545, 547, 548 and/or 553 of the Bankruptcy Code. "GENERAL BAR DATE" means April 15, 2002, as the date set by the Bankruptcy Court as the last date by which holders of certain pre-petition Claims against the Debtors were required to file Proofs of Claim. "GENERAL CLAIMS" means the approximately 5,500 claims, totaling approximately $5.6 billion, alleging rights to payment for financial, environmental, trade and other matters. "HANCOCK LITIGATION" means the securities-related class action lawsuit pending in the United States District Court for the District of Massachusetts, commenced on or about April 30, 2001, on behalf of purchasers of certain securities against certain of OCD's current and former directors and officers, as well as certain underwriters, and captioned John Hancock Life Insurance Company, et al. v. Goldman, Sachs & Co., et al., CA No. 01-10729-RWZ. "INITIAL CLAIMS" means those claims relating to existing asbestos claims, including unfiled claims pending with the law firm participating in the NSP at the time it entered into an NSP Agreement, which claims were resolved pursuant to the NSP Agreement. "INFORMATION DEPOSITORY" means the information and document depository established by the Debtors at the offices of Skadden, Arps, Slate, Meagher & Flom LLP in New York City in connection with the Inter-creditor Project. "INSURANCE SETTLEMENT" means the insurance settlement entered into in 1993 by Fibreboard, Continental Casualty Company and Pacific Indemnity Company, which became effective in 1999. "INTEGREX" means Integrex, a Delaware corporation, which is a Debtor and a Subsidiary Guarantor. "INTER-CREDITOR ISSUES" means potential inter-creditor issues, including any and all claims, objections, motions, contested matters, adversary proceedings or any other proceedings involving, related to or affecting issues of the amount, validity, enforceability or priority of Claims by the Bank Holders against any of the Debtors or any Non-Debtor Subsidiary (to the extent the Bankruptcy Court has jurisdiction to affect the Claims against Non-Debtor Subsidiaries) which is a Subsidiary Guarantor of the Debtors' obligations to the Bank Holders, including without limitation: (1) any claims relating to substantive consolidation of the Debtors; (2) any claims relating to the validity, enforcement or priority of the Pre-petition Bonds; (3) any claims relating to the validity or enforceability of a License Agreement, dated as October 1, 1991, by and between OCD and OCFT (as amended) and a License Agreement, dated as of April 27, 1999, by and between OCFT and Amerimark Building Products, Inc.; (4) any claims regarding the amount, validity, enforceability or priority of the Subsidiary Guarantees; (5) any claims against any direct or indirect Subsidiary of OCD in respect of OCD's asbestos liability; and (6) any claims as to the amount, validity, enforceability, priority or avoidability of any intercompany transfers. "INTER-CREDITOR ISSUES ORDER" means the order of the Bankruptcy Court, dated March 18, 2002, which established a schedule for addressing the resolution of Inter-Creditor Issues. "INTER-CREDITOR PROJECT" means the Debtors' voluntary production of a documentary record designed to be a compilation of relevant documents that would be useful in reviewing and investigating each Debtor or Subsidiary Guarantor's corporate history, major creditor relationships, and significant cash and value transfers in connection with the analysis of the Inter-Creditor Issues. "INVESTMENT PROCEEDS" means any investment income from the funds in settlement accounts maintained by B&B pursuant to a certain settlement agreement between OCD, Fibreboard and B&B which required OCD and Fibreboard to pay Administrative Deposits into such settlement accounts. "LAZARD" means Lazard Freres & Co. LLC, the investment banker and financial advisor to the Debtors. "LIQUIDATED SITES" means the existing known sites at which waste materials of the Debtors were disposed before the Petition Date, for which the draft Environmental Settlement Agreement between the Debtors and the EPA quantifies liability as Pre-petition Claims, with respect to some of which the EPA would have an Allowed Class 6 Claim. "LIQUIDATION ANALYSIS" means the analysis prepared by Lazard and attached to the Disclosure Statement as Appendix C, subject in all respects to the assumptions set forth in Appendix D attached to the Disclosure Statement, describing the value that would be received by holders of Allowed Claims in Classes 3, 4, 5, 6, 7, 8 and 9 if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code as of the Effective Date. "MEDIATOR" means Professor Francis E. McGovern, appointed as mediator for certain purposes by the Bankruptcy Court, effective May 1, 2002, and appointed as mediator pursuant to the Case Management Order for the Bank Holders Action and Substantive Consolidation Motion. "MERGED PLAN" means the Owens Corning Merged Retirement Plan. "NOLS" means net operating losses. "NON-NSP AGREEMENT" means an agreement, other than an NSP Agreement, between one or more of the Debtors and one or more holders or representatives of Asbestos Personal Injury Claims. "NON-UNITED STATES PERSON" is any person or entity that is not a United States Person. "OC AND FIBREBOARD RESIDUAL BALANCE" means the principal balance remaining in the B&B settlement account, after deducting the Qualifying OC and Fibreboard Balance. "OCFT" means Owens-Corning Fiberglas Technology Inc. "OCIL" means Owens-Corning (India) Limited. "PACIFIC" means Pacific Indemnity Company. "PARTICIPATING LENDERS" means those Bank Holders that executed the Standstill Agreement. "PARTICIPATING PARTIES" means those parties who, having entered into a confidentiality agreement with the Company to assure the protection of privileged and confidential material included in the production of documents to the Information Depository, were provided access to the materials in the Information Depository. "PBGC" means the Pension Benefit Guaranty Corporation, an agency of the United States. "PLANT" means Plant Insulation Company. "PLANT MOTION" means the motion, filed by Plant on September 28, 2001, for an order appointing a disinterested examiner to conduct an examination of Fibreboard, including an investigation as to whether Fibreboard assets were diverted to pay OCD debts. "PRE-PETITION AGENT" means Credit Suisse First Boston, the agent for the Bank Holders under the 1997 Credit Agreement. "PROFESSIONAL FEE CLAIMS" means those final requests for compensation or reimbursement of the fees of any professional employed in the Chapter 11 Cases pursuant to Sections 327 or 1103 of the Bankruptcy Code or otherwise, as described in Section VII.K.5 of the Disclosure Statement and Section 14.1 of the Plan. "PRP" means a Potentially Responsible Party, as such term is defined in the Superfund. "QUALIFYING OC AND FIBREBOARD BALANCE" means the principal balance of the settlement payments made by OCD and Fibreboard to B&B, representing amounts due to the Qualifying OC and Fibreboard Plaintiffs under a certain settlement agreement between OCD, Fibreboard and B&B. "QUALIFYING OC AND FIBREBOARD PLAINTIFFS" means those plaintiffs under the NSP who received written notice of approval for payment from OCD or Fibreboard prior to the Petition Date pursuant to a certain settlement agreement between OCD, Fibreboard and B&B, and who received payment of the first installment of their settlement prior to the Petition Date. "REVOLVING LOAN FACILITY" means the Loan Facility Agreement, dated March 12, 1998, among the China Lenders, Owens Corning (China) Investment Company, Ltd., Owens-Corning (Guangzhou) Fiberglas Co., Ltd., Owens-Corning (Shanghai) Fiberglas Co., Ltd., as borrowers, and OCD as guarantor. "SCB" means Standard Chartered Bank, the agent and coordinating arranger for the Revolving Loan Facility. "SEC" means the United States Securities and Exchange Commission. "SETOFF MOTION" means the motion filed in the Bankruptcy Court by the Bank Holders on February 15, 2002, entitled Motion of Credit Suisse First Boston, as Agent, for an Order Modifying the Automatic Stay to Permit Setoff of Frozen Funds, whereby the Bank Holders requested relief from the automatic stay to exercise setoff rights against 22 frozen bank accounts of certain Debtors and Non-Debtor Subsidiaries, totaling approximately $35 million. "SITE PARTICIPATION AGREEMENT" means the pre-petition agreement pursuant to which the Debtors were obligated for a percentage of the environmental clean-up costs incurred by the Holliday Remediation Task Force at the Doepke-Holliday disposal site in Johnson County, Kansas. "SOLICITATION PERIOD" means the period during which the Debtors have the exclusive right to solicit and obtain acceptances of a plan of reorganization filed by the Debtors during the Exclusive Period under Section 1121(c) of the Bankruptcy Code. "SPECIAL VOTING AGENT" means Innisfree M&A Incorporated, whom the Debtors have sought to retain to address notice issues related to securities. "STANDSTILL ADVERSARY PROCEEDING" means the adversary proceeding commenced by the Debtors on the Petition Date in the Bankruptcy Court against the Bank Holders (entitled Owens Corning, et al. v. Credit Suisse First Boston, et al., Adv. Proc. No. A-00-1575) to enjoin the Bank Holders from, among other things, exercising certain rights and remedies under the 1997 Credit Agreement. "STANDSTILL AGREEMENT" means that certain Standstill and Waiver Agreement entered into among the Debtors, certain Non-Debtor Subsidiaries and the Bank Holders party to the 1997 Credit Agreement. "STANDSTILL AMENDMENT" means the Stipulation and Order to Amend the Standstill and Waiver Agreement, approved by the Bankruptcy Court on November 25, 2002, which amended the Standstill Agreement. "STANDSTILL ORDER" means the order of the Bankruptcy Court, dated June 19, 2001, which, among other things, authorized the Debtors to enter into the Standstill Agreement and dismissed, without prejudice, the Standstill Adversary Proceeding. "SUBSIDIARY GUARANTEES" means the obligations that were incurred by the Subsidiary Guarantors under the 1997 Credit Agreement. "SUBSIDIARY GUARANTORS" means the Subsidiaries of OCD that guaranteed the obligations under the 1997 Credit Agreement. "SUBSTANTIVE CONSOLIDATION MOTION" means the Debtors' Motion for Approval of Substantive Consolidation as Part of Proposed Chapter 11 Plan of Reorganization, which was filed on January 17, 2003. "SUPERFUND" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, commonly referred to as the Superfund Act, 42 U.S.C. ss. 9601 et seq. "TAX ATTRIBUTES" means, collectively, NOLs, general business and minimum tax credit carryforwards, capital loss carryforwards, the basis of the taxpayer's assets and foreign tax credit tax carryforwards. "TREASURY REGULATIONS" means those certain proposed, temporary and final regulations promulgated by the U.S. Treasury Department under the IRC. "UNSECURED COMMITTEE MOTION" means the motion filed by the Unsecured Creditors' Committee on September 10, 2002, for an order authorizing it to commence certain avoidance actions on behalf of the Debtors' Estates. "UNITED STATES PERSON" means, for purposes of federal income tax consequences to Claim holders, any person or entity (1) who is a citizen or resident of the United States, (2) that is a corporation or partnership created or organized in or under the laws of the United States or any state thereof, (3) that is an estate, the income of which is subject to United States federal income taxation regardless of its source or (4) that is a trust (a) the administration over which a United States person can exercise primary supervision and all of the substantial decisions of which one or more United States persons have the authority to control; or (b) that has elected to be treated as a United States Person for United States federal income tax purposes. "VOTING AGENT" means Robert L. Berger & Associates, L.L.C., appointed by the Bankruptcy Court pursuant to 28 U.S.C. ss. 156(c). "W&K" means Waters & Kraus, LLP, a law firm participating in the NSP, which filed a response in opposition to the Unsecured Committee Motion. APPENDIX B PRO FORMA FINANCIAL PROJECTIONS AND REORGANIZATION BALANCE SHEET APPENDIX B PROJECTED FINANCIAL INFORMATION(1) OWENS CORNING, ET. AL. The Debtors believe that the Plan meets the Bankruptcy Code's feasibility requirement that Plan confirmation is not likely to be followed by liquidation, or the need for further financial reorganization of the Debtors or any successor under the Plan. In connection with the development of the Plan, and for the purposes of determining whether the Plan satisfies this feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources. Management, with Lazard's assistance, developed and refined a business plan and prepared financial projections (the "Projections") for the calendar years ending December 31, 2003 through 2005 (the "Projection Period"). The Debtors do not, as a matter of course, publish their business plans and strategies or projections, anticipated financial position or results of operations. Accordingly, the Debtors do not anticipate that they will, and disclaim any obligation to, furnish updated business plans or projections to holders of Claims or Interests after the Confirmation Date, or to include such information in documents required to be filed with the SEC or otherwise make such information public. In connection with the planning and development of the Plan, the Projections were prepared by the Debtors, with Lazard's assistance, to present the anticipated impact of the Plan. The Projections assume that the Plan will be implemented in accordance with its stated terms. The Projections are based on forecasts of key economic variables and may be significantly affected by changes in the competitive environment, the Company's ability to create the efficiency gains it is forecasting, and a variety of other factors. Accordingly, the estimates and assumptions underlying the Projections are inherently uncertain and are subject to significant business, economic and competitive uncertainties. Therefore, such Projections, estimates and assumptions are not necessarily indicative of current values or future performance, which may be significantly less favorable or more favorable than as set forth. The Projections included herein were prepared in June 2003. The projections should be read in conjunction with the significant assumptions, qualifications and notes set forth below and with the audited consolidated financial statements for the fiscal year ended December 31, 2002, contained in the 2002 Form 10-K, and with Owens Corning's first quarter 2003 Form 10-Q. The Forms 10-K and 10-Q are available free of charge from Owens Corning's website, www.owenscorning.com. ALTHOUGH EVERY REASONABLE EFFORT WAS MADE TO BE ACCURATE, THE PROJECTIONS ARE ONLY AN ESTIMATE, AND ACTUAL RESULTS MAY VARY CONSIDERABLY FROM THE PROJECTIONS. IN ADDITION, THE UNCERTAINTIES WHICH ARE INHERENT IN THE PROJECTIONS INCREASE FOR LATER YEARS IN THE PROJECTION PERIOD, DUE TO INCREASED DIFFICULTY ASSOCIATED WITH FORECASTING LEVELS OF ECONOMIC ACTIVITY AND PERFORMANCE AT MORE DISTANT POINTS IN THE FUTURE. CONSEQUENTLY, THE PROJECTED INFORMATION INCLUDED HEREIN SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE DEBTORS, THE DEBTORS' ADVISORS, OR ANY OTHER PERSON THAT THE DEBTORS WILL ACHIEVE THE PROJECTED RESULTS. ALTHOUGH EVERY EFFORT WAS MADE TO PREPARE THE PROJECTIONS IN COMPLIANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, THE PROJECTIONS HAVE NOT BEEN AUDITED OR REVIEWED BY THE DEBTORS' INDEPENDENT CERTIFIED ACCOUNTANTS. CREDITORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FOLLOWING PROJECTIONS IN DETERMINING WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN. - ----------------- 1 Any capitalized term used but not defined in this Exhibit "B" will have the meaning ascribed to such term in the Plan.
1. Pro Forma Projected Balance Sheet (Unaudited) (a) (As of December 31, 2003) OWENS CORNING AND SUBSIDIARIES REORGANIZATION ADJUSTMENTS ------------------------------ ($ in millions) ESTIMATED PRO FORMA PRE-REORG "FRESH REORGANIZED BALANCE REORG START" BALANCE SHEET ADJ. ADJ. SHEET --------------- -------------- -------------- --------------- ASSETS: Cash and equivalents.............................. $ 792 $ (412) (b) - $ 380 Accounts receivable, net.......................... 487 - - 487 Inventories....................................... 358 - 150 (l) 508 Other current assets.............................. 23 - - 23 --------------- -------------- -------------- --------------- TOTAL CURRENT ASSETS 1,660 (412) 150 1,398 Property, plant and equipment, net................ 1,986 - 250 (m) 2,236 Goodwill.......................................... 133 - (133) (n) - Intangible assets................................. 16 - - (n) 16 Excess reorganization value....................... - - 914 (n) 914 Debt issuance costs............................... 1 5 (c) - 6 Fibreboard trust and restricted cash.............. 1,399 (1,399) (d) - - OC restricted cash and insurance escrow........... 170 (170) (e) - - Deferred tax assets............................... 1,291 - (984) (o) 307 Other non-current assets.......................... 266 - (28) (p) 238 --------------- -------------- -------------- --------------- TOTAL ASSETS $ 6,922 $ (1,976) $ 170 $ 5,116 =============== ============== ============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY: Accounts payable.................................. $ 294 - - $ 294 Accrued liabilities............................... 352 - - 352 New debt - current portion........................ - 23 (f) - 23 Existing debt - short term and current portion.... 95 (74) (g) - 21 Chapter 11 liabilities............................ 63 (63) (h) - - --------------- -------------- -------------- --------------- TOTAL CURRENT LIABILITIES 804 (114) - 690 New debt.......................................... - 1,374 (f) - 1,374 Existing debt..................................... 82 - (g) - 82 Liabilities subject to compromise................. 9,272 (9,272) (i) - - --------------- -------------- -------------- --------------- TOTAL LONG TERM DEBT 9,354 (7,898) - 1,456 Pension plan liabilities.......................... 306 - - 306 Post-retirement benefit liabilities............... 398 - 135 (q) 533 Other non-current liabilities..................... 131 - - 131 --------------- -------------- -------------- --------------- TOTAL LIABILITIES 10,993 (8,013) 135 3,116 Monthly income preferred securities (MIPS)........ 200 (200) (j) - - Shareholders' equity.............................. (4,271) 6,236 (k) 35 (k) 2,000 --------------- -------------- -------------- --------------- TOTAL LIAB. AND SHAREHOLDERS' EQUITY $ 6,922 $ (1,976) $ 170 $ 5,116 =============== ============== ============== ===============
NOTES TO PRO FORMA PROJECTED BALANCE SHEET a. The pro forma balance sheet adjustments contained herein account for (i) the reorganization and related transactions pursuant to the Plan of Reorganization, and (ii) the implementation of "fresh start" accounting pursuant to Statement of Position 90-7 ("SOP 90-7") as issued by the American Institute of Certified Public Accountants (the "AICPA"). The fresh start adjustments are based on an estimated Reorganized Owens Corning equity value of $2.0 billion as more fully described in the Disclosure Statement (see Section XIV.E - Valuation of the Reorganized Debtors). Under SOP 90-7, reorganization value is generally allocated first to tangible assets, then to identifiable intangible assets, and lastly to excess reorganization value. Please note that although management has followed the principles of fresh start accounting, the actual adjustments will be determined at a later date and may be materially different from those presented herein upon completion of the required asset appraisals. b. The Company's cash and cash equivalents reflects the use of $412 million to implement the Plan of Reorganization. This amount includes (i) $372 million to be distributed pursuant to the Plan, (ii) an estimated $5 million for the Exit Facility fees, and (iii) $35 million for employee retention and emergence payments previously approved by the Court. The balance of $380 million at the Effective Date will be used to fund working capital requirements (estimated to be up to $200 million during the first and second quarters, consistent with historical requirements) and to fund an anticipated $177 million pension plan payment in September 2004. c. The Company is projected to incur estimated debt issuance costs of $5 million related to the Exit Facility which will replace the existing debtor-in-possession financing. d. The Fibreboard Insurance Settlement Trust and Fibreboard Restricted Cash will be transferred to the Asbestos Personal Injury Trust or otherwise distributed pursuant to the Plan. e. The OCD Restricted Cash and the OCD Insurance Escrow will be transferred to the Asbestos Personal Injury Trust or otherwise distributed pursuant to the Plan. f. Approximately $1.4 billion of new debt will be issued pursuant to the Plan. It is anticipated that new debt will include Senior Notes (in one or more series - to be determined) less the aggregate principal amount of the debt issued to the IRS for their Allowed Priority Tax Claim. In addition, it is anticipated that the Debtors will obtain an Exit Facility as of the Effective Date (no amounts are projected to be outstanding at emergence or at year-end during the projection period other than letters of credit). g. Existing debt includes debt owed primarily by Non-Debtor Foreign Subsidiaries including consolidated joint ventures. A portion of the existing debt will be discharged pursuant to the Plan. h. This adjustment reflects payment of Chapter 11 related accrued expenses pursuant to the Plan, including professional fees ($28 million) and employee retention and emergence bonuses ($35 million) previously approved by the Court. i. The Debtors liabilities subject to compromise, including the asbestos related liabilities, will be eliminated at emergence pursuant to the Plan's discharge, channeling injunction, and other injunction provisions. For purposes of these projections, the liabilities subject to compromise related to asbestos liabilities reflects the Debtors current reserve amount of $5.874 billion (for both Owens Corning and Fibreboard). It is currently anticipated that the asbestos liability will be determined as a result of negotiations involving the various asbestos and creditor constituencies or, if necessary, the Bankruptcy Court or District Court. At this time, it is not possible to predict the outcome of these negotiations. Given the nature of the Chapter 11 proceedings, the asbestos liability ultimately established in the Chapter 11 proceedings may be higher or lower than the Company's reserve (see Section IV.D.1 and 2 for additional information on the asbestos liability and related reserve). j. The Debtors' Monthly Income Preferred Securities (MIPS) will be discharged at emergence pursuant to the Plan. k. The increase in shareholders' equity reflects the gain from the cancellation of indebtedness pursuant to the Plan. New Common Stock of Reorganized Owens Corning will be issued with an estimated value of $2.0 billion, prior to dilution for any options issued to management. The existing Owens Corning Common Stock will be cancelled pursuant to the Plan. l. In adjusting the balance sheet accounts to fair market value in accordance with SOP 90-7, the Company's preliminary estimate indicates that Inventories should be increased by $150 million to approximate fair market value. m. In adjusting the balance sheet accounts to fair market value in accordance with SOP 90-7, the Company's preliminary estimate indicates that PP&E should be increased by $250 million to approximate fair market value. The Company estimates that this adjustment will result in a $20 million annual increase in depreciation expense. The actual fresh start adjustment to PP&E will be determined at a later date following the completion of asset appraisals. n. In accordance with SOP 90-7, existing goodwill is eliminated and excess reorganization value is recorded for amounts in excess of value allocable to identifiable assets. It is likely that a portion of excess reorganization value will be allocated to intangible assets following an appraisal of the Company's intangible assets. o. As described more fully in Section XIII entitled "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN," it is expected that Reorganized OC will receive tax deductions for cash and the value of stock distributed to the Asbestos Personal Injury Trust upon such distribution. With respect to debt securities distributed to the Asbestos Personal Injury Trust, tax deductions are taken as the debt securities are repaid. These tax deductions may result in tax net operating loss carryovers ("NOLs"). The NOL carryovers may be reduced by the amount of debt cancellation (excluding asbestos liabilities) including certain other pre-petition liabilities cancelled in the reorganization. Based upon numerous assumptions, the Debtors estimate that Reorganized OC will have deferred tax assets of approximately $307 million at emergence. p. Based on a fiscal year-end 2002 actuarial valuation, a $135 million adjustment is required to record post-retirement benefits liability at fair value, in accordance with SOP 90-7.
2. Projected Statements of Operations (Unaudited) OWENS CORNING AND SUBSIDIARIES PROJECTED FISCAL YEAR ENDED DECEMBER 31, -------------------------------------------------- ($ in millions) 2003 2004 2005 ------------- -------------- --------------- Net sales................................................... $ 5,051 $ 5,123 $ 5,461 Cost of sales............................................... 4,139 4,159 4,384 Other cost of sales......................................... 27 44 - ------------- -------------- --------------- GROSS PROFIT 885 920 1,077 Marketing and administrative expenses....................... 473 461 492 Science and technology expenses............................. 44 43 44 Chapter 11 reorganization items............................. 103 15 - Restructuring costs ........................................ 2 - - Provision for asbestos claims............................... - - - Other expenses.............................................. 5 10 10 ------------- -------------- --------------- INCOME FROM OPERATIONS 258 391 530 Cost of borrowed funds, net................................. 17 90 85 ------------- -------------- --------------- INCOME BEFORE TAXES 241 301 445 Income tax expense ......................................... 103 121 178 ------------- -------------- --------------- INCOME AFTER TAXES 138 180 267 Minority interest .......................................... (6) (3) (3) Equity in net income (loss) of affiliates................... (2) (2) (2) ------------- -------------- --------------- NET INCOME (A) $ 130 $ 176 $ 263 ------------- -------------- --------------- MEMO: INCOME FROM OPERATIONS 258 391 530 Plus: Other cost of sales................................... 27 44 - Plus: Chapter 11 reorganization items....................... 103 15 - Plus: Restructuring costs................................... 2 - - ------------- -------------- --------------- ADJUSTED INCOME FROM OPERATIONS (b) 390 450 530 Plus: Depreciation and amortization......................... 209 241 249 ------------- -------------- --------------- ADJUSTED EBITDA (c) $ 599 $ 691 $ 779 ------------- -------------- --------------- (a) Net income for 2003 before gain on debt discharge (b) Adjusted to exclude non-recurring items (see attached assumptions) (c) Earnings before interest, taxes, depreciation and amortization
3. Projected Balance Sheets (Unaudited) OWENS CORNING AND SUBSIDIARIES PROJECTED FISCAL YEAR ENDED DECEMBER 31 ---------------------------------------------------- ($ in millions) 2003* 2004 2005 ASSETS: Cash and equivalents.............................. $ 380 $ 470 $ 704 Accounts receivable, net.......................... 487 478 509 Inventories....................................... 508 489 521 Other current assets.............................. 23 23 23 ---------------- --------------- ---------------- TOTAL CURRENT ASSETS 1,398 1,461 1,757 Property, plant and equipment, net................ 2,236 2,218 2,198 Intangible assets................................. 16 16 16 Excess reorganization value....................... 914 914 914 Debt issuance costs............................... 6 5 3 Deferred tax assets............................... 307 306 295 Other non-current assets.......................... 238 241 257 ---------------- --------------- ---------------- TOTAL ASSETS $ 5,116 $ 5,161 $ 5,441 ================ =============== ================ LIABILITIES AND SHAREHOLDERS' EQUITY: Accounts payable.................................. $ 294 $ 292 $ 310 Accrued liabilities............................... 352 344 336 New debt - current portion........................ 23 23 23 Existing debt - current portion................... 21 33 16 ---------------- --------------- ---------------- TOTAL CURRENT LIABILITIES 690 692 685 New debt.......................................... 1,374 1,351 1,328 Existing debt..................................... 82 56 55 ---------------- --------------- ---------------- TOTAL DEBT 1,456 1,407 1,383 Pension plan liabilities.......................... 306 189 198 Post-retirement benefit liabilities............... 533 565 597 Other non-current liabilities..................... 131 133 141 ---------------- --------------- ---------------- TOTAL LIABILITIES 3,116 2,985 3,003 Shareholders' equity.............................. 2,000 2,176 2,438 ---------------- --------------- ---------------- TOTAL LIAB. AND SHAREHOLDERS' EQUITY $ 5,116 $ 5,161 $ 5,441 ================ =============== ================ * Estimated post-reorganization balance sheet
4. Projected Statements of Cash Flow (Unaudited) OWENS CORNING AND SUBSIDIARIES PROJECTED FISCAL YEAR ENDED DECEMBER 31, ($ in millions) 2004 2005 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income............................................ $ 176 $ 263 Depreciation and amortization ........................ 241 249 Deferred income taxes ................................ 1 11 (Increase) decrease in receivables.................... 9 (31) (Increase) decrease in inventories.................... 19 (31) Increase (decrease) in accounts payable............... (2) 18 Increase (decrease) in accrued liabilities............ (8) (8) (Increase) decrease in other non-current assets....... (3) (16) Increase (decrease) in other non-current liabilities.. 2 9 Pension fund contribution............................. (177) (51) Increase in pension plan liabilities.................. 60 60 Increase (decrease) in post-retirement benefit liabilities 32 32 Other................................................. 1 1 --------------- ---------------- NET CASH FLOW PROVIDED (USED BY) OPERATING ACTIVITIES 350 505 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures.................................. (222) (230) --------------- ---------------- NET CASH FLOW PROVIDED (USED BY) INVESTING ACTIVITIES (222) (230) CASH FLOWS FROM FINANCING ACTIVITIES New debt.............................................. (23) (23) Existing debt......................................... (14) (18) --------------- ---------------- NET CASH FLOW PROVIDED (USED BY) FINANCING ACTIVITIES (37) (41) BEGINNING CASH AND CASH EQUIVALENTS BALANCE 380 470 Net increase in cash.................................. 90 234 --------------- ---------------- ENDING CASH AND EQUIVALENTS BALANCE $ 470 $ 704 --------------- ----------------
ASSUMPTIONS TO FINANCIAL PROJECTIONS PROJECTIONS The Debtors, with Lazard's assistance, prepared the attached projected consolidated financial results (the "Projections") for the three years ending December 31, 2003, December 31, 2004 and December 31, 2005. The Projections are based on a number of assumptions made by management with respect to the future performance of the Company's various lines of business. The Projections should be reviewed in conjunction with a review of these assumptions, including the qualifications and footnotes, set forth herein. While management has prepared the Projections in good faith and believes the assumptions to be reasonable, it is important to note that the Debtors can provide no assurance that such assumptions will be realized. As outlined in Section XV, a variety of risk factors could affect the Company's financial results and must be considered. The following summarizes the underlying assumptions behind the Projections. KEY ASSUMPTIONS A. GENERAL 1. Methodology. The Projections were prepared using a "bottoms-up" methodology. Management prepared operating forecasts for each of 23 distinct operating segments, which were then combined into four primary business lines (Insulating Systems, Composite Solutions, Exterior Systems, and Siding Solutions). 2. Plan Consummation. The operating assumptions assume the Plan will be confirmed and consummated by the end of 2003. The "fresh start" accounting adjustments are more specifically based on an emergence as of December 31, 2003. 3. Macroeconomic and Industry Environment. The Projections reflect a cyclical improvement in the overall economic environment over the projected period on a basis consistent with historical ranges in the building products and composites business cycles. B. PROJECTED STATEMENTS OF OPERATIONS 1. Revenues. Consolidated revenues are projected to increase by 1.4% to $5.123 billion in 2004, and increase by 6.6% to $5.461 billion in 2005. The solid revenue growth in 2005 reflects improvement in business conditions for both building products and composites. o Composite Solutions revenues are forecasted to increase by 0.4% in 2004 and increase by 6.9% in 2005. o Exterior Systems revenues are projected to decrease by 1.9% in 2004 and increase by 7.1% in 2005 o Insulating Systems revenues are projected to increase by 0.6% in 2004 and increase by 5.0% in 2005. o Siding Solutions revenues are projected to increase by 13.7% in 2004 and 4.8% in 2005. 2. Other Cost of Sales. During 2003, the Company recorded a $27 million charge to cost of sales related to the write-down of two groups of assets in the Building Materials segment to net realizable value. As part of the fresh start adjustments, manufacturing profit in finished goods inventory will be adjusted to fair value. During fiscal 2004, disposal of this inventory is projected to increase cost of sales by approximately $44 million. For purposes of these financial projections, these expenses have been described as other cost of sales to highlight the one-time nature of the expense 3. Gross Margin. Gross margin is projected to improve from 17.5% in 2003, to 18.0% in 2004 and to 19.7% in 2005. Excluding the non-recurring items in "Other Cost of Sales", gross margin would be projected to improve from 18.1% in 2003, to 18.8% in 2004 and to 19.7% in 2005. Gross margin improvement is driven by efficiency improvements throughout the Company, particularly in the Composite Solutions business. Technology transfers among Company plants and the shifting of production to low cost locations are the primary drivers of this projected improvement in efficiency. 4. Depreciation. Depreciation is projected based on estimates of useful life of the Company's PP&E. In adjusting the balance sheet accounts to fair market value in accordance with SOP 90-7, the Company's preliminary analysis indicates that PP&E should be increased by $250 million. The Company estimates that this adjustment will result in a $20 million annual increase in depreciation expense which is included in the 2004 and 2005 depreciation expense. 5. Marketing and Administrative Expenses. Marketing and administration expenses are projected to decline from 9.4% of revenues in 2003 to 9.0% in 2004 and 2005. This improvement reflects continued cost-cutting initiatives and efficiency improvements. 6. Chapter 11 Reorganization Items. Restructuring costs of $103 million in 2003 consist primarily of costs relating to professional fees and employee retention programs. An estimated $15 million of restructuring costs are forecast during 2004. 7. Provision for Asbestos Claims. For purposes of these projections, the liabilities subject to compromise related to asbestos liabilities reflects the Debtors current reserve amount of $5.874 billion (for both Owens Corning and Fibreboard). It is currently anticipated that the asbestos liability will be determined as a result of negotiations involving the various asbestos and creditor constituencies or, if necessary, the Bankruptcy Court. At this time, it is not possible to predict the outcome of these negotiations. Given the nature of the Chapter 11 proceedings, the asbestos liability ultimately established in the Chapter 11 proceedings may be higher or lower than the Company's reserve. In the event that the asbestos liability were to be determined to be larger than the reserve amount, the Debtors would be required to record a charge in the amount by which the asbestos liability exceeds the reserve (see Section IV.D.1 and 2 for additional information on the asbestos liability and related reserve). 8. Cost of Borrowed Funds, Net. Reflects interest expense on (i) the Company's New Senior Notes assuming a blended rate of 6.5% per annum, and (ii) on the existing indebtedness of non-debtor subsidiaries and joint ventures at a blended rate of 7.5% per annum. Cost of borrowed funds is shown net of interest income assuming a rate of 1.5% per annum. 9. Income Tax Expense. Income tax expense assumes a 40% effective rate and includes a statutory federal income tax rate of 35% and an additional 5% due primarily to foreign and state income taxes. C. PROJECTED BALANCE SHEETS 1. Cash. For purposes of these projections, increases in cash are not used to prepay Reorganized Owens Corning's indebtedness. 2. Property, Plant and Equipment. Capital expenditures during 2003 included approximately $84 million related to the restructuring of the Company's leases with respect to its corporate headquarters. Capital expenditures are projected to remain relatively constant at $222 million in 2004 and $230 million in 2005. 3. Deferred Tax Assets. As described more fully in Section XIII of the Disclosure Statement, entitled "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN," it is expected that Reorganized OC will receive tax deductions for cash and the value of stock distributed to the Asbestos Personal Injury Trust upon such distribution. With respect to debt securities distributed to the Asbestos Personal Injury Trust, tax deductions are taken as the debt securities are repaid. These tax deductions may result in tax net operating loss carryovers ("NOLs"). The NOL carryovers may be reduced by the amount of debt cancellation (excluding asbestos liabilities) including certain other pre-petition liabilities cancelled in the reorganization. Based upon numerous assumptions (including the ultimate asbestos related claims, the ultimate recovery of unsecured creditors, the form of consideration received by the Asbestos Personal Injury Trust, etc.), the Debtors estimate that Reorganized OC will have NOL carryovers between $200 million and $500 million available following the year after emergence (after reduction for cancellation of indebtedness). For purposes of these financial projections, the Debtors have assumed that Reorganized OC's NOLs will be subject to the limitations imposed by Section 382 of the Internal Revenue Code (see Section XIII). Accordingly, the Debtors have assumed that $87 million of NOLs are available annually through expiration to reduce taxable income. Based upon a 40% income tax rate, the usage of NOLs result in a decrease in deferred tax assets of approximately $35 million in 2004 and 2005. 4. New Debt. Approximately $1.4 billion of new debt will be issued pursuant to the Plan. It is anticipated that new debt will include Senior Notes (in one or more series - to be determined) less the aggregate principal amount of the debt issued to the IRS for their Allowed Priority Tax Claim. The Tax Notes will be repaid in annual installments over a six-year period. 5. Pension Plan Liabilities. Pension plan liabilities are projected to decrease from $500 million in 2002 to $306 million in 2003, to $189 million in 2004, and to increase to $198 million in 2005. The decrease in pension plan liability is related to the Company's expected pension plan contributions of $250 million in 2003, $177 million in 2004 and $51 million in 2005. Offsetting these contributions are projected annual pension expenses of $56 million in 2003, $60 million in 2004 and $60 million in 2005. 6. Post-Retirement Benefit Liabilities. Post-retirement liabilities are projected to increase by approximately $32 million annually from 2003 through 2005. APPENDIX C LIQUIDATION ANALYSIS APPENDIX C LIQUIDATION ANALYSIS Pursuant to section 1129(a)(7) of the Bankruptcy Code (often called the "Best Interests Test"), each holder of an impaired Claim or Interest must either (a) accept the Plan or (b) receive or retain under the Plan property of a value, as of the Plan's Effective Date, that is not less than the value such non-accepting holder would receive or retain if the Debtors were to be liquidated under chapter 7 of the Bankruptcy Code on the Effective Date. In determining whether the Best Interests Test has been met, the first step is to determine the dollar amount that would be generated from a hypothetical liquidation of the Debtors' assets in chapter 7. For purposes of this liquidation analysis, the value of the Non-Debtor Subsidiaries is included in the value of the operating businesses, as described below. The gross amount of cash available would be the sum of the proceeds from the disposition of the Debtors' assets and the cash held by the Debtors at the commencement of their chapter 7 cases. Such amount then would be reduced by the costs and expenses of the liquidation. Prior to determining whether the Best Interests Test has been met, further reductions would be required to reflect amounts to satisfy secured, Administrative, Tax, and Priority Claims that are senior to General Unsecured Claims, including any incremental Administrative Claims that may result from the termination of the Debtors' business and the liquidation of their assets. Any remaining cash would be available for distribution to general unsecured creditors and shareholders in accordance with the distribution hierarchy established by section 726 of the Bankruptcy Code. The Liquidation Analysis below reflects the estimated cash proceeds, net of liquidation-related costs that would be available to the Debtors' creditors if they were to be liquidated in chapter 7 cases. Underlying the Liquidation Analysis are a number of estimates and assumptions regarding liquidation proceeds that, although developed and considered reasonable by management and Lazard, are inherently subject to significant business, economic and competitive uncertainties and contingencies beyond the control of the Company and its management. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF THE DEBTORS (TOGETHER WITH THE NON-DEBTOR SUBSIDIARIES) WERE, IN FACT, TO UNDERGO SUCH A LIQUIDATION, AND ACTUAL RESULTS WOULD BE LIKELY TO VARY MATERIALLY FROM THOSE SHOWN HERE. The Liquidation Analysis was prepared by Lazard with the assistance of management and the Debtors' other advisors, and assumes that the Debtors cases would convert to chapter 7 as of December 31, 2003. The Liquidation Analysis also assumes that the liquidation of the Debtors would commence under the direction of a Court-appointed chapter 7 trustee and continue for 24 months, during which time all of the Company's major assets would be sold and the cash proceeds, net of liquidation-related costs, would be distributed to creditors. The following Liquidation Analysis should be read in conjunction with the accompanying notes. IMPORTANT CONSIDERATIONS AND ASSUMPTIONS 1. Substantive consolidation of the Debtors. For purposes of the Plan (See Section VII (B) of the Disclosure Statement), the Liquidation Analysis has been prepared assuming the substantive consolidation of the various Debtors. The assets and liabilities of each of the Debtors (but not the Fibreboard Insurance Settlement Trust) are treated for this analysis as if they were merged. 2. Treatment of the Non-Debtor Subsidiaries. For purposes of the Plan, the Liquidation Analysis has been prepared assuming that certain of the Non-Debtor Subsidiaries (IPM, Vytec Corp., and Owens-Corning Fiberglas Sweden Inc.) file for relief under chapter 11 of the Bankruptcy Code, and their cases are converted to chapter 7. Accordingly, the assets and liabilities of each of these Non-Debtor Subsidiaries are treated for this analysis as if they were merged with the Debtors. More specifically, IPM is a Delaware holding company that owns the common stock of a substantial portion of the foreign Non-Debtor Subsidiaries with manufacturing operations. For purposes of this Liquidation Analysis, the value attributable to the foreign Non-Debtor Subsidiaries was assumed to reside with the Debtors. 3. Distressed sale of the Debtors as a bulk sale. Unlike the typical company in chapter 7, the Debtors are profitable enterprises with significant liquidity resources. For the year ended December 31, 2002, the Debtors (collectively, excluding the Non-Debtors) generated $226 million of EBITDA (earnings before interest, taxes, depreciation and amortization - also excludes restructuring expenses and asbestos charges) and had unrestricted cash of approximately $622 million. A traditional liquidation of the Debtors, assuming a cessation of operations, would be unprecedented and would destroy value that would otherwise be available to creditors. For purposes of the Liquidation Analysis, Lazard assumed that the chapter 7 trustee would seek to maximize the liquidation value of the Debtors' estates through one or more bulk sales of the Debtors' assets. Under this assumption, operations would continue and the chapter 7 Trustee would likely capture some "going-concern" value in excess of the liquidation value of the Debtors' assets on a stand-alone basis. Lazard assumed that the assets would be marketed and sold within a period of six months. The conversion of these cases to chapter 7 and the forced sale of the Debtors' assets in one or more bulk sales by the chapter 7 trustee would likely result in the Debtors' and Non-Debtors' businesses being sold at a significant discount to their inherent value absent the bankruptcy proceedings. It is probable that the sudden pendency of these bulk sales would have adverse effects on employee morale, customer willingness to order goods, and vendor willingness to ship supplies and extend trade credit. The likely result would be a deterioration in near-term financial performance of the Debtors and a corresponding decline in value. In addition, although it is assumed that the Bankruptcy Court would enter an order that the assets would be sold "free and clear" of all asbestos liabilities, a Section 524(g) channeling injunction is only available in chapter 11 cases and there is no certainty that the purchaser(s) could be insulated from future claims. The risk of continued asbestos liabilities would be of particular concern to likely strategic purchasers who could not easily insulate themselves from future asbestos liabilities. As a result, many likely purchasers would either avoid bidding or do so at a reduced level. Consequently, it is unclear whether a chapter 7 trustee could successfully accomplish sales in the manner assumed in this liquidation analysis, which is premised on proceeds being set aside for pro rata participation to both present and future asbestos claims and an attempt by the Bankruptcy Court to impose a commensurate restriction on the right of any such claimants to pursue the purchaser(s). 4. Execution risk of a liquidation. A liquidation of the Debtors would be unprecedented in scale and scope. The assets of the Debtors include billions of dollars worth of manufacturing assets which utilize proprietary technology and are strategically placed worldwide to create an integrated product sourcing matrix. The assets are located throughout the world, cross many national borders, and would be subject to the laws of numerous states within the United States and numerous foreign jurisdictions. Given the complexity of such an undertaking, the Debtors believe significant execution risk exists if a liquidation were actually pursued. The Debtors are not aware of any successful liquidation of similar magnitude or complexity. 5. Wind-down costs and length of liquidation process. The Debtors have assumed that the bulk sales would be concluded within a six month period. The Debtors have also assumed that the chapter 7 Trustee would need an additional eighteen months to complete the liquidation process, resolve litigation and determine a mechanism for distributing liquidation proceeds to thousands of asbestos plaintiffs, both known and unknown. There can be no assurances that all assets would be completely liquidated during this time period.
OWENS CORNING HYPOTHETICAL LIQUIDATION PROCEEDS LIQUIDATION ________VALUE________ ($ IN MILLIONS) ASSETS Low High Note Operating Businesses Before Distressed Sale Discount $ 3,200 $ 3,600 A Less: Distressed Sale Discount (33%) (1,056) (1,188) B Operating Businesses, Net 2,144 2,412 Plus: Unrestricted Cash 742 742 C Less: Debt Obligations at Non-Debtor Subsidiaries (100) (100) D Liquidation Value of Assets 2,786 3,054 CLAIMS AND EXPENSES PRIOR TO UNSECURED CLAIMS Chapter 7 Trustee Fee 21 24 E Chapter 7 Trustee Professional Expenses 51 54 F Administrative Claims 96 96 G Priority Tax Claims 135 135 H Secured Claims 11 11 I -------- ------ Total Claims and Expenses 315 320 -------- ------ Proceeds Available to Unsecured Creditors $ 2,471 $ 2,734 ============== ============ RECOVERIES UNDER CHAPTER 7 LIQUIDATION UNSECURED CLAIMS Convenience Claims $ - $ - J Bank Claims 1,480 1,480 K Bond Claims 1,335 1,335 L General Unsecured Claims 943 943 M OC Asbestos Personal Injury Claims 10,532 10,532 N FB Asbestos Personal Injury Claims 3,908 3,908 O ---------- ---------- Total Unsecured Claims $ 18,198 $ 18,198 %Recovery to Unsecured Creditors 14% 15% EQUITY INTERESTS Proceeds Available to Equity Interests $ 0 $ 0 P %Recovery to Equity Interests 0% 0%
NOTES TO LIQUIDATION ANALYSIS A. Operating Businesses Before Distressed Sale Discount "Operating Businesses" is defined to include all assets of the Debtors and the Non-Debtor Subsidiaries required to operate in the normal course. The value of the Operating Businesses includes the net working capital associated with the businesses. Net working capital would include the receivables, inventories, post-petition accrued expenses, and post-petition accounts payable of the Debtors and Non-Debtor Subsidiaries. It is assumed that $50 million of post-petition liabilities would not be assumed by the buyer(s) and would be treated as Administrative Claims. It is assumed that a buyer would be responsible for providing seasonal working capital financing. The value of the Operating Businesses was determined by Lazard in conjunction with the formulation of the Plan (See Section XIV.E entitled "Valuation of the Reorganized Debtors"). Lazard determined that the likely reorganization value of the Reorganized Debtors was between $3.2 billion and $3.6 billion (excluding value attributable to NOLs which would have no value in a liquidation). Accordingly, these values have been utilized as the low and high range of "Value of Operating Businesses Before Distressed Sale Discount". B. Distressed Sale Discount As discussed above, the conversion of these cases to chapter 7 and the forced sale of the Debtors' assets in one or more bulk sales by the chapter 7 trustee would adversely affect the value of the Debtors' businesses. Factors adversely affecting value could include: o Companies sold out of bankruptcy are often sold at a discount. Buyers who would otherwise be interested in acquiring a business are often reluctant to purchase assets out of a bankruptcy estate due to a perceived taint of bankruptcy, as well as the constraints likely to be imposed by a court-supervised auction (for example, limited or no exclusivity, limitations on breakup fees and expense reimbursements, etc.). The result would be lower demand and lower prices for the Debtors' assets. o The conversion of these cases to chapter 7 and the pressure to convert the businesses to cash would likely necessitate a shorter marketing and due diligence period than is customary. The forced nature of the sale and expedited sale process could be expected to adversely impact value. o The sudden pendency of these bulk sales would have adverse effects on employee morale, customer willingness to order goods, and vendor willingness to ship supplies and extend trade credit. The likely result would be a deterioration in near-term financial performance of the Debtors and a corresponding decline in value. o Although it is assumed that the Bankruptcy Court would enter an order that the assets would be sold "free and clear" of all asbestos liabilities, a Section 524(g) channeling injunction is only available in chapter 11 cases and there is no certainty that the purchaser(s) could be insulated from future claims, many likely purchasers would either avoid bidding or do so at a reduced level. The risk of continued asbestos liabilities would be of particular concern to likely strategic purchasers who could not easily insulate themselves from future asbestos liabilities. Accordingly, for purposes of computing the hypothetical liquidation proceeds, Lazard assumed that the realized liquidation values would reflect a discount of 33% from the values that would exist in the absence of a forced sale pursuant to chapter 7. The precise discount factor to attribute to the factors described above represents Lazard's best judgment in the face of complex uncertainties and in the absence of comparables. For purposes of this analysis, Lazard assumed that the asset sale(s) would provide for proceeds to be paid to both present and future asbestos claimants and that the Bankruptcy Court would, as a result, attempt to to impose a commensurate restriction on the right of any such claimants to pursue the purchaser(s). The discounts that would result if the sales were actually made in chapter 7 would vary from business to business and, in the aggregate, could result in a discount percentage which could be larger or smaller than 33%. In Lazard's judgment, any liquidation which neither provided for payments to future claimants nor attempted to restrict future claimant's right to sue the purchaser for successor liability would render such sale(s) extremely more difficult and result in a much larger discount than 33%. In fact, such sale asset sale(s) would not likely generate proceeds in sufficient amount to provide a recovery for unsecured creditors approaching the recovery projected under this liquidation analysis or the Plan. C. Unrestricted Cash Unrestricted cash is assumed to total $742 million at December 31, 2003, of which $200 million represents cash from Non-Debtor Subsidiaries. Cash held at the Non-Debtor Subsidiaries of approximately $250 million less a $50 million allowance is assumed to be distributed upstream to OC. A 20% allowance has been made for potential offsets, limitations or taxes related to the repatriation of cash held outside of the United States. It is assumed that during the six month liquidation period, the Debtors' operations break-even on a cash flow basis. The adverse impact of the conversion to chapter 7 and the resulting deterioration in employee morale and customer support lead to a deterioration in profitability. Administrative Deposits of $110 million held by law firms on behalf of Owens Corning asbestos plaintiffs are assumed to be not recoverable by the chapter 7 Trustee and reduces Class 7 claims. Administrative Deposits of $130 million held by law firms on behalf of Fibreboard asbestos plaintiffs are assumed to be not recoverable by the chapter 7 Trustee and reduces Class 8 claims. The Fibreboard Insurance Settlement Trust with funds totaling $1.262 billion is assumed to be not an asset of the Debtors' estates and is used to reduce Class 8 claims. D. Debt Obligations at Non-Debtor Subsidiaries Approximately $100 million of debt obligations owed by foreign Non-Debtor Subsidiaries are assumed to be repaid in full prior to the sale of the assets held by these Non-Debtor Subsidiaries. Accordingly, the liquidation proceeds from the Operating Business are reduced by the $100 million of debt obligations. It is assumed that third party trade payables will be assumed by the buyer(s). E. Chapter 7 Trustee Fees Compensation for the chapter 7 Trustee will be limited to fee guidelines in section 326 of the Bankruptcy Code. For purposes of this analysis, management has assumed trustee fees of 1.0% of the proceeds recovered from non-cash assets in the liquidation. F. Chapter 7 Trustee Professional Expenses Compensation for the chapter 7 Trustee's counsel and other legal, accounting, and professional advice during the chapter 7 proceedings is estimated to be approximately $30 million ($3 million a month for six months, $1 million a month for six months, and $0.5 million for twelve months). In addition, it is assumed that the chapter 7 Trustee will retain investment bankers to assist with the disposition of the operating businesses. Compensation would be expected to total 1.0% of the proceeds recovered from non-cash assets. G. Administrative Claims Administrative Claims are assumed to include (i) an estimated $46 million of professional fees and cure costs as detailed in the Plan, and (ii) an estimated $50 million of claims related to post-petition liabilities that buyer(s) might be expected to not assume pursuant to an acquisition. H. Priority Tax Claims Priority Tax Claims are assumed to be $135 million, equal to the amount included in the Plan. I. Secured Tax and Other Claims Secured Claims are assumed to be $11 million, equal to the amount included in the Plan. J. Convenience Claims There are assumed to be no Convenience Claims in the chapter 7 liquidation. The $18 million of convenience claims in the Plan are assumed to be General Unsecured Claims in the event of a chapter 7 liquidation. K. Bank Claims Bank holders are assumed to have an allowed claim of $1.480 billion in a chapter 7 liquidation, with no recovery related to their guarantees or post-petition accrued interest. L. Bond Claims Bond holders are assumed to have an allowed claim of $1.335 billion, equal to the amount included in the Plan. M. General Unsecured Claims General Unsecured Claimants are assumed to have an allowed claim of $943 million, including (i) $375 million of General Unsecured Claims in the chapter 11 cases, (ii) $18 million of Convenience Claims, (iii) an additional claim from the PBGC estimated at $450 million (similar to the proof of claim filed in these cases) in connection with the assumed termination of the Debtors' pension plans, and (iv) an additional claim estimated at $100 million related to the rejection of certain executory contracts and operating leases that a buyer(s) would likely be expected to not assume pursuant to an acquisition. N. OC Asbestos Personal Injury Claims For the purpose of this liquidation analysis, the OC Asbestos Personal Injury Claimants are assumed to assert a claim of $10.7 billion. As these claimants are assumed to receive Restricted Cash of $110 million and the OCD Insurance Escrow and the OC Asbestos Personal Injury Liability Insurance Assets of $58 million, the net claim asserted in a chapter 7 proceeding would be $10.532 billion. O. FB Asbestos Personal Injury Claims For the purpose of this liquidation analysis, the FB Asbestos Personal Injury Claimants are assumed to assert a claim of $5.3 billion and to receive the entire Fibreboard Insurance Settlement Trust (assumed to be $1.262 billion) and the $130 million of FB Restricted Cash. The remaining claim of $3.908 billion is assumed to be asserted as a general unsecured deficiency claim. Position of the Unsecured Creditors' Committee and Plan Proponents' Response The Unsecured Creditors' Committee contends that the liquidation analysis is not permitted to assume any payment to future asbestos claimants in a chapter 7 liquidation. According to the Unsecured Creditors' Committee, future asbestos claims are not claims under the Bankruptcy Code according to its interpretation of In re Frenville, 744 F.2d 332 (3d Cir. 1984). Under the Unsecured Creditors' Committee view, a chapter 11 trustee can only distribute to holders of "claims" and a proper liquidation analysis for purposes of Section 1129(a)(7) of the Bankruptcy Code must proceed on the assumption that future asbestos claimants would receive no distribution or proceeds from the Debtors' liquidation. The Unsecured Creditors' Committee makes certain assumptions as to what percent of the Debtors' asbestos liabilities constitute future claims and asserts that if such claims are excluded, the recoveries to all unsecured creditors, using Lazard's assumed 33% discount upon liquidation, would exceed the payments under the Plan. Thus, the Committee asserts, the Plan fails to satisfy the "best interests test" of Section 1129(a)(7). The Plan Proponents and Lazard disagree with this analysis. The Frenville decision itself acknowledged that its analysis, which has been criticized outside the Third Circuit, might require an exception for mass tort cases. These issues are unsettled. Additionally, the Plan Proponents and Lazard do not understand the Unsecured Creditors' Committee's methodology for computing present and future asbestos claims. Most importantly, the Plan Proponents and Lazard do not believe that such asset sale(s) would likely generate proceeds equal to 67% of reorganization value if no provision was made to pay future claimants and restrict the right of future claimants to sue any purchaser for successor liability. In fact, the Plan Proponents and Lazard believe such asset sale(s) would not likely generate proceeds in sufficient amount to provide a recovery for unsecured creditors approaching the recovery projected under the liquidation analysis prepared by Lazard or the Plan. Under the Plan, providing there are sufficient acceptances by asbestos claimants, all present and future asbestos claims will be subject to Asbestos Personal Injury Permanent Channeling Injunction, thus preserving the enterprise value of the Debtors for the creditors. The Court will determine, in conjunction with confirmation, whether the Plan satisfies the "best interests test" of Section 1129(a)(7). APPENDIX D OWENS CORNING ANNUAL REPORT ON FORM 10-K FOR THE PERIOD ENDING DECEMBER 31,2002 ALTHOUGH THIS DOCUMENT IS INCORPORATED BY REFERENCE AS PART OF THE DISCLOSURE STATEMENT, THE PLAN PROPONENTS WILL NOT ATTACH THIS DOCUMENT TO THE COPIES OF THE DISCLOSURE STATEMENT THAT WILL BE MAILED TO CREDITORS ALONG WITH THEIR BALLOTS. COPIES OF THIS DOCUMENT MAY BE OBTAINED, FREE OF CHARGE, THROUGH OC'S WEBSITE AT WWW.OWENSCORNING.COM OR BY SENDING A WRITTEN REQUEST, INCLUDING BY TELECOPY OR E-MAIL TO: OWENS CORNING C/O ROBERT L. BERGER & ASSOCIATES, L.L.C. 16501 VENTURA BLVD., SUITE 440 ENCINO, CA 91436 818-783-2737 (FAX) alex@bergerassociates.com THIS DOCUMENT MAY ALSO BE OBTAINED AT THE SECURITIES AND EXCHANGE COMMISSION'S "EDGAR" WEBSITE AT WWW.SEC.GOV/EDGAR.SHTML. APPENDIX E PRINCIPAL TERMS AND CONDITIONS OF SENIOR NOTES APPENDIX E PRINCIPAL TERMS OF SENIOR NOTES The following is a general description of the principal terms of the Senior Notes that would be issued by Reorganized OC. These are indicative terms only, and the actual terms of the Senior Notes will depend upon the credit rating assigned to the Senior Notes, prevailing market conditions at the time of issuance, and other factors. The definitive terms of the Senior Notes will not be determined until shortly before the confirmation of the Plan. AMOUNT: $1.4 billion in aggregate, subject to adjustment in accordance with the Plan. SECURITIES: Senior unsecured notes of Reorganized OC, issued in up to three (3) series, with maturities to be determined by the Company prior to the Effective Date. The Company anticipates that the maturities will be no less than five and no more than ten years, with the actual maturities depending upon market conditions for securities of this type and rating prevailing at the time of issuance. INDENTURE TRUSTEE: To be designated by the Company. INTEREST RATE: Interest rates to be determined (the rates will be set prior to the Effective Date so that the securities trade at or near par). Interest will be payable in cash semi-annually in arrears on the basis of a 360 day year. SECURITY/PRIORITY: The Senior Notes will be unsecured senior obligations of Reorganized OC. The Company anticipates that the Senior Notes will rank pari passu with a new revolving credit facility and any refinancing thereof. MANDATORY REDEMPTION: Upon a change of control, to be defined, Reorganized OC will be obligated to offer to repurchase the Senior Notes at 101% of principal amount plus accrued and unpaid interest to the date of repurchase. OPTIONAL REDEMPTION: The Senior Notes will be redeemable by Reorganized OC on terms and at prices determined at the time of issuance in accordance with prevailing market conditions for securities of this type and rating. In addition, at any time prior to the third anniversary of the issuance date, Reorganized OC may redeem up to 35% of the aggregate principal amount of the Senior Notes at a fixed redemption price with the net cash proceeds of an equity offering. SINKING FUND: None. RATING: The Senior Notes will be rated by a nationally recognized rating agency prior to issuance. The Company anticipates that the Senior Notes will be rated "investment grade" by the rating agencies. COVENANTS; REPRESENTATIONS: The Senior Notes will contain customary covenants in accordance with market convention for similarly rated securities. CLOSING DATE: The Effective Date of the Plan. APPENDIX F CURRENT CORPORATE STRUCTURE OF COMPANY APPENDIX G PROPOSED CORPORATE STRUCTURE OF THE REORGANIZED DEBTORS APPENDIX G PROPOSED RESTRUCTURING TRANSACTIONS OVERVIEW OC has determined to effect an internal restructuring in order to adopt a holding company structure. The restructuring will be implemented at the Effective Date and so will become effective only upon OC's emergence from bankruptcy. The internal restructuring is designed to implement a corporate legal structure that is expected to facilitate improved management reporting and information systems as well as budgeting and operating plan processes that will enhance OC's ability to develop and implement its business plans for its various businesses. As a result of the internal restructuring, OCD will become a holding company which will own, directly or indirectly, subsidiaries representing OC's different businesses. OCD will also own substantially all the intellectual property rights used by OCD's businesses, including the intellectual property rights which have historically been held by OCFT. IMPLEMENTATION OF THE RESTRUCTURING In order to implement the restructuring, OCD will transfer to existing or newly organized subsidiaries the stock or assets and liabilities relating to different businesses. Certain assets, such as intellectual property, that are used in more than one business, will be shared. At present, substantially all of the United States domestic intellectual property owned by OCD is held by its wholly-owned subsidiary, Owens-Corning Fiberglas Technology, Inc. ("OCFT"), which in turn grants licenses to OCD for use of such intellectual property by OCD and other members of the OC group. In the restructuring, OCFT will be merged into (or its assets and liabilities transferred to) OCD and intellectual property assets of other subsidiaries will be transferred to OCD with the result that most of the intellectual property will be held by the parent company. Appropriate arrangements will then be made to permit the use of such intellectual property by the various business units that use it. Central ownership by the parent company is expected to permit more flexibility in structuring future licensing rights or dispositions, and may permit OCD to take advantage of international treaties designed to minimize administrative and filing fees. The internal restructuring will also affect the structure of OCD's foreign operations. Substantially all of OCD's non-U.S. subsidiaries and affiliates are presently consolidated under IPM, Inc. ("IPM"), which is responsible for the maintenance and administration of such foreign entities. The foreign operations presently owned by IPM will be transferred in the restructuring to holding companies for the applicable business lines in which those foreign entities operate. Section 1123 of the Bankruptcy Code provides that a plan must contain adequate means for its implementation and include appropriate provisions that are not inconsistent with the Bankruptcy Code. The Debtors may transfer any or all of the property of their estates to one or more entities, whether organized before or after confirmation, merge or consolidate the Debtors with one or more Persons and effect the amendment and modifications of the Debtors' charters. With respect to the actions of the Debtors necessary to effectuate Restructuring Transactions, including transactions necessary to effect the internal restructuring. Section 5.6 of the Plan expressly authorizes the Debtors to enter into Restructuring Transactions and to take such actions as may be necessary or appropriate to effect such Restructuring Transactions. Pursuant to this provision, the Debtors will file a summary of the corporate actions necessary to accomplish the Restructuring Transactions at least ten (10) Business Days prior to the Objection Deadline. The Confirmation Order will constitute authorization of the Bankruptcy Court or District Court for the Debtors to execute any necessary corporate documents and implement the Restructuring Transactions. To the extent that Non-Debtor Subsidiaries must similarly take steps to effectuate the Restructuring Transactions, such actions will be implemented in accordance with the procedures of applicable non-bankruptcy law. To the extent that it involves transactions affecting the Debtors, the internal restructuring will be part of the Plan and, thus, subject to review by holders of Claims entitled to vote on the Plan. In this regard, OCD does not expect the internal restructuring to have a significant financial impact upon the respective rights of the holders of Claims in any Class to recoveries in accordance with the Plan. In addition, OCD does not expect that there will be any material U.S. federal income tax costs in connection with implementation of the internal restructuring, and OCD does not currently anticipate that there will be any material ongoing tax costs associated with the internal restructuring relative to the structure that is currently in place. The internal restructuring described above is expected to be refined further as steps are taken to implement it. Subject to Bankruptcy Court approval and confirmation of the Plan, OCD does not believe that the internal restructuring will require a shareholder vote. APPENDIX H VOTING PROCEDURES [THIS DOCUMENT WILL BE INSERTED WHEN THE VOTING PROCEDURES ARE APPROVED BY THE COURT] -----END PRIVACY-ENHANCED MESSAGE-----