Document Ev4YmR0okQEyB0m1QO4DGd1Lj

COHFIOSHMM, 'MEMORANDUM SUMMARY OF MEETINGS WITH MRMVILLE April 10-19, 1984 Gary Kero, Dermis DeAtley and the undersigned met with various Manville personnel on April 18 and 19i 1984 to review various outstanding issues and unresolved matters related to the ac quisition of assets agreements between J-M and Manville (here inafter the "Agreements"). The issues and matters reviewed ware: . 1. Retirement program, The Agreements provide, in part, that J-M is to provide its former Manville employees with a retirement program with benefits at lsa&t as generous as those provided by Manville, Further, the Agreements also provide that the benefits shall bo provided as soon os prac tical. upon a pian being qualified by the IRS, Manville is to transfer to J-41 money held in trust by it for Manville employees pursuant to an agreed-upon formula, J-M ha3 considered and approved, in principle, a refcirmont plan. However, thin plan differs from that of Manville in that the Manville plan is a defined benefit plan and the J-M plan la a defined contribution plan, Since the new J-M plan will be a terminatIon of the Manville plan for the Manville employees, we have been advised that the Manville emptoyeas will immediately have to have fully vested sights under the J-m plan, in any event, the adoption of a new plan 1b long overdue, Manville is anxious to turn over Lhe funds At presently holds Cor the Manville employees and approve a plan. Manville admits it would not bo appropriate o: them to dictate J-M policy and theywJll not likely unreasonably interfere but will insist on a review the J-M plan, white a failure to provide the plan is olnar breach of the Agreements, Manville1 e actual damages due to pucb a breach would be diffi cult to quantify, 'rhe Manville employees may claim they arc third party beneficiaries of the Agreements and then claim damages to the extent that the J-M plan is less generous than the Manville plan. 2. Vacation pay. a-M has paid accrued vacation pay to employees that was owed by Msnville in an amount of ap- I K I i DAWES002135 SC-JMM-2075 proximat&ly $1100,000, Kanvill* has refused to reimburse J-tf for this amount. ManvLlliS is Withholdiog payment because they believe there has been a breach of the htfreements in that the same vacation benefits extended < by HanvilJe have not been extended by j-k to Manville employees, we should obtain a statement of the Manvliie vacation policy end compare it to the J-H polioy to determine whether or not Manvi lie's view of this mat Lor in correct, ftqaln, MonvlUe emp) oyces may make a third party beneficiary claim. `. i. batajxClnt Manville lias nf.ated that it ab solutely needs Ene catapoint equipment in early Hay for loca tions which are expecting it. Since J-M has no intention of returning the equipment/ it Ls imperative that we examine all agreements with Mnnvllle related to Lhie equipment and press Manville for a definitive statement 96 to the damages/ if any, which will result from their not receiving the equipment so that we may determine the site of thS Manville claim for the failure to return the equipment. Since J-M has notified .'{anvilla that it will not be. returning the oqoiiHnent, they are under a tlnl-.y to mitigate damages. 4. asbestos Fiber. J-M agreed to purchase 75S of its requirements for asbestos Tiber for a period of 5 years from Mar.ville provided that Manvliie met any third-party price for such fiber. This is then a "meet or beat" supply contract, Mar.ville is not aware of 0-H having provided them with a statement of a third-party price in November of 1983 as called for by the supply contract. Furthermore, Manville is not aware of any inquiry, proper notice or negotiations related to this J-(4 contractual undertaking. it is unci ear as to whether or not j-M did, in fact, contact Manvliie and, if they did not, whet damage, if any, Manvillo has suffered, to maintain an action for breach of contract and ooileot actual damages, Manvliie would, in part, have to demonstrate that they would have been able to supply the asbestos fiber at the contract price obtained by J-K and then would have l:o show the loss of profit suffered due to a breach by J-M as damngoo. There is coma question as to whether or not Me-nvillo has the right to raise the ifi.iiiti in that they may have gold the equity, of the subsidiary or its assets to a third party. Certain minor discrepancies and disputes related to the amounts due Manville were reviewed and it was agreed that both parties would provide the appropriate documentation to resolve them. The disputes were that Manville claimed that (i) ss.-t* -2Jl DAWES002136 1900,1 short tons were purchased for n purchase price of $694 per ton while J-K's view is that the purchase price was $660 and (il) whether or not 355 short tons oi; 344.52 short tons were purchased at $625 per ton, 5. Rubber Rings. Manville agreed that it oould not meet the rubber ring price pursuant to the supply contract for rubber ring's but requested that J-M provide documentation to demonstrate that it was able to, in foot, acquire rubber rings at a lower price. Further, Manville is most anxious to have JM take possession of approximately $20,000 worth of rubber rings presently being heltl by Manville inventory. 6. Stockton Property. Manville recently requested a J-K board resolution approving the guitolaiot deed of the Stockton property inadvertently transferred to J-M with the factory property, 7. alb bock, (e) Manville, on behalf of Manville Canada, has agreed, despite its contention that it does not have to pay any royalty that /w,y be due for its use of the license for the rib lock process, to a 31 royalty for a rib lock license agreement with CT-M. J-M is responsible for a 2ft royalty to the licensor. The additional 1ft to be paid by Manville Canada would be.for technical- assistance required by Manville Canada Crow j-m, The proposal appears to be in principle reasonable end an agreement should be concluded as noon as possible. Manville has agreed to provide a draft agreement, (b) ag to the royalty payment made by J-M in 1983, an issue is whether or not Manville made any sales aub-jeot to royalty, and If so, how much do they owe or was merely the mini-won royalty paid for the right to maintain the license for the annual year o the license (August 1982 to August 1983) whereby there should be n split of the payment or was tf-H's payment made for royalties which it had to pay which exceeded the minimum royalty which then would result in a J-M obligtion as the minimum would not have boon applicable, Irt addition, it has to be determined whether or not the minimum paid in August 1983 was for fchtfe past year or the next year of the license agreement. 8. Accounts Receivable- Manville agreed to provide a detailed accounting of money received by Manville which was intended for J-M. Contrary to Manville's policy o extracting an unilateral setoff, to the extent that 3-M has received payments intended for Manville, J-H has reitabu rood such 6W9 immediately to the customer. 9. Contract Claims. For contract claims for which both Manville and J-M may be responsible for having supplied i -3- JC l DAWES002137 pipe, .HKnulUa designated Michael Kaluza and Kate JUchmond as the individuals t.o contact, In addition, Manville suggested that their expert, Ed Sprijnssick coordinate the technical and factual matters with J-M personnel. Presently, the major litigation relates to Shawnee construction In Kansas and Missouri for claims of defective pipe allegedly supplied by both Manvilie Hnd J-M. 10. Asbestos Claim. Manvjjio /'eguouted that we keep Lham advised any asbestos claims made by their employees against J-M as a successor in interest under emerging Califor nia law. 'Che legal issues related to suoh claims are of great importance to Nanviiie jn that it will not be able to sell flSSBts free and clear if the successor in interest doctrine pre vail?, certainly, an interesting legal issne is poaed because the Onr.kruptcy Court's approval or a transfer of assets free and clear of all claims will conflict with the California doctrine that J-M is a successor in interest and therefore subject to such claims, - >*> ur\.y 03;l DAWES002138