Document QXXwY2pQV4mk0YXDV7D4L5q8L

FILE NAME: Lone Star Industries (LS) DATE: 19: DOC#: LS OCUMENT DESCRIPTION:DD>ZZZ DZ:ZD  'I t 1 A REGULAR MEETIKG OF THE BOARD OF DIRECTORS OF JOHNS- MANVILLE CORPORATION was held in the offices of the Corporation on the 11th floor at No. 22 East 40th Street, Now York City, on Wednesday, the 15th day of January, 1969, at 9:00 in the fore noon. quorum; The following Directors were present, constituting a C.B. Burnett F. Dutcher Joseph A. Grazier K. V,. Lindell George P. MacNichol. Jr. 'I F. H. May, Jr. William F May John P. Schroeder 1 A.C. Smith William C. Stolk .-*..3 C. B, Burnett, President of the Corporation, acted as Chairman of the meeting and presided thereat and Herbert Morton m Ball, Secretary of the Corporation, acted as Secretary of the ' meeting and kept the ninutes thereof* . II A notice of the meeting and affidavit of mailing the same to all the Directors of the Corporation were presented to the meeting and, on motion,- duly made, seconded, and unanimously* . carried, were ordered filed with the minutes of the meeting. The members of the Board of Directors had been furnished in advance of the meeting with most of the material which would be I of value in aiding, their consideration of the matters appearing in the agenda book. In his Monthly Report, the President reminded the Board that at the October meeting, Holophane Company, Inc. was suggested as beihg an interesting acquisition candidate. He informed the meeting'' that several substantial stockholders of Holophane Company, 'H Inc. had indicated through a third party their interest in merging with a larger company of national reputation. They sought (1) taxfree exchange; (2) equal or better dividend rate; (3) premium over market price; and (4) continuation of the Holophane name. The re port noted that Holophane made lighting equipment for industrial plants, commercial applicationsy schools, streets, and other out door lighting such as for shopping centers. In the V. S., there were three plants in Ohio (Hewark, Springfield and Columbus) and one in Edison, New Jersey. Plants were also located in Toronto, Canada; London, England; and Mexico City (95% interest). The t Company tpade many components for lighting purposes, including in- \ : jection molded prismatic plastics, pressed prismatic glass, alum ! inum parts9 sand and die castings, and extrusions and spinnings. o JI CRMC-Asb&Health-BODMin-000118  -* [1 g-i . | ; \ Li I Complete fixtures were sold through electrical wholesalers through- ' out the U. S.. and accounted for 65% of U. S. sales* . The balance was sales of components to other fixture manufacturers. The light ing equipment industry was at about a billion-dollar level, with a 10% growth rate. There were over 1,000 producers, but Holophane was one of the largest and one of the best-rounded of the Independ i ents. The Company's growth rate had been faster than the industry's and nianagement believed it would continue that way* With Holophane, i J-M would be 'in position to integrate lighting systems with ceilings and would also expect' to find additional uses for their glass-making .and molded plastic'facilities* J-M could be instrumental in widen' ing their scope into residential lighting. The Company's capitali zation consisted of 1|600,000. shares outstanding, with no debt* The President advised that from 1964 to 1968 (fiscal year ended June 30) sales rose from $17 million to $303 million, and net earnings from $2,229,000 to $29953,000* The $2,953,000 net ^earnings in 1968 were down from $3,344,000 in the year before* . This was explained in the 1968 Annual Report which had been dis tributed to the Directors as being due to devaluation of the English pound, the 10% surtax, adverse conditions in the building industry, a write-off of start-up expenses in England, and a needed management change in Canada, which had been done* Also considerable expense was incurred in adding to their sales staff* In the latest year, earnings as a percent of sales were Just under 10%, and of . not worth, 18%. For the first quarter of the current fiscal year, sales were up 19% and earnings were up 4*5% over the year before* i Earnings for the first six months were expected to be the best for the period. The stock WAS selling around 37, or about 20 times earnings for the year ended June 30, 1968, of $1.86* A tabulation "Earnings Per Share - J-M and Holophane*' was distributed to the meeting )3y the President. . The Board advised the President to continue his investi gation and negotiation in order to determine if the future growth of Holophane would make the acquisition worth-while. The President's Report also contained, for the informa tion of the Board, a status report of some of the major capital expenditures approved by the Board in 1967 and 1968* The President reported that the Icelandic diatomite venture was not making the progress expected, it would require a doubling of plant capacity with attendant higher costs. The Kaiser Engineering estimate of $350^000 to increase drying capacity was only 25% of what the eventual cost would amount to* He informec the Board that for the long pull the venture would work out if the inadequacy of the drier capacity was corrected. The Board was informed by the President's Report that at the 'January 17, 1968 meeting a report had been presented. CRMC-Asb&Health-BODMin-000119 1 giving the status of the asbestos/health situation. For informa tion purposes, an updated report (blue folder) reflecting develop ments since that time was included in the agenda book and also had been sent to the Directors in advance of the meeting. Included in the President's Report were a summary on the status of appropriations expenditures, January 1, 1969, for plants and properties in the United States and Canada (with supporting .data to be presented quarterly); status of expenditures, January 1, 1969, for investments in other companies showing the amounts . ' approved, the amounts advanced by J-M and the amounts expended locally; and .the January 1 report of projects completed in Kovem- ber 1968. . * Under the heading of "Other Matters", the President's . Report noted that securements in the month of December were sub- stantially higher than in November or in December 1967. Shipments of fiber glass textiles from Waterville in December established a new record of 2,493,000 pounds, including 959,000 pounds of chopped strand mat, -which was also a new record. . . i . ' ; The report also noted that at Corona a three-year con tract was negotiated to expire December 1, 1971, providing for wage Increases of 20$ (7.2%) now, 18$ (6%) in the second year, and.16$ (5%) in the third year. Shift differentials were in creased from 10$ and 14$ to 11$ and 16$ now, and to 12$ and 18$ in the second year* In the third year vacations would be improved to three weeks for years' service. eight years* service.and, four weeks for* eight.eenI The report also informed the meeting that as of December 31, 1968, 170,162 shares had been purchased under the Incentive Stock Option Plan by 139 participants at prices ranging from $27.82 to $57.00. As of December 31, 1968, 3,077 employees had subscribed to 323,546 shares of stock under the Employees' Stock Purchase Plans, of which 313,255 shares had been paid for in full . and delivered. On the stock remaining under pledge, subscribers had paid $133,010 and owed $355,629. The average subscription ' price was $40.85. * pr. Fred L. Pundsack, Director, Division and Corporate Research and Development, made a presentation to the meeting on . "Research Activities". . . There was then presented to the meeting a report showing changes in gelling'prices percentagewise by Divisions. The attention of the meeting was called to a report en li titled "Forecast of Earnings, 1969", which formed part of the agenda. This, forecast was based on the premise that overall business activity in 1969 would be slightly higher than in 1968. Gross National Product was expected to increase about 6.7%, of CRMC-Asb&Health-BODMin-000120 which 3j% was price. Housing starts were expected to increase about 7%p totaling 1,650,000 starts .versus 1,540,000 in 1968. . Prospects for non-residential construction were for about,a 9% improvement, including a cost increase of 4.3%. Company net sales for the calendar year 1969 were forecast at $575 million or 3.6% higher than the estimate of $555 million for 1968. The forecast assumed a slight (0.6%) improvement in selling prices, principally in the Asbestos Fibre and Industrial Insulations . Divisions. Selling prices in the Pipe Division were expected to be a little lower in 1969. Net earnings forecast for 1969 of $42.2 million would be $5.06 per share compared with the 1968 estimate o'f $40.2 million or $4.82 per share, assuming continua tion of 10% surtax. The attention of the meeting was also called to the Treasurers Report of Cash and Securities as of December 31, 1968, ^ which formed part of the agenda in the possession of the Directors. ' The Chairman reminded the Board that at the last meeting it had authorized the presentation to the stockholders at the " Annual Meeting on March 13, 1969, of a proposal to split the Common Stock of the Corporation on a two-for-one basis. He called the Board's attention to the copy of the "Monthly Report of Presi dent to the Board of Directors, 'July 17, 1968" contained in the Agenda book, in which the President suggested ten steps to be con- j sidercd as ways of avoiding a takeover. Step number 2 - "Author L i ize an issue of preferred convertible stock and announce that this step is being taken for acquisition purposes." - was approved by the Board at the July 17 meeting. i j . ' Morgan, Stanley & Co., financial advisers to the Corpo- ' ration, had recommended a new capital structure for presentation to the stockholders in March: . . * 1. The authorized Common Stock of the Corporation be increased to 50,000,000 shares from the present 25,000,000 shares authorized and the $5*00 par value be reduced to $2.50. 2. The stockholders at the Annual Meeting be requested to authorize a new preferred stock * which in terms of liquidating value would not . exceed $250,000,000 and in terms .of shares would be 10,000,000 shares. * The agenda book contained a copy of a letter dated January 6, 1969, from Morgan Stanley & Co. to Francis H. May, Jr., Vice President for Finance, enclosing a brief study illus trating preferred stock authorized by stockholders of a selected ' number of corporations, as well as pro forma effects upon the Johns-Manvllle Corporation, assuming the issuance of various amounts of preferred stock* : * I ; ' ! J CRMC-Asb&Health-BODMin-000121 S Li There was also presented a proof of the Certificate of Amendment of Certificate of Incorporation of johns-Manville Corporation. Thereupon, on motion, duly made' and seconded, the following resolutions were unanimously adopted: * - .RESOLVED that the Board of Directors of the Corporation 1 proposes and recommends and hereby declares it advisable that the Corporation (a) change its authorized shares of Common Stock from a par value of $5a00 each to shares of a par value of $2.50 each, (b) increase the authorized number of shares of Common Stock (par value $2.50 per share) of the Corporation from 25,000,000 to 50,000,000 shares, and (c). add 10,000,000 shares of Cumulative Preferred Stock (without par value) to the authorized capital stock of the Corporation; 'SJ and RESOLVED that the form of "Certificate of Amendment of the Certificate of incorporation of Johns-Manville Corporation under Section 805 of the New York I m Business Corporation Law*' to effect the changes I - recommended in the foregoing Resolution, a proof of which was presented to this meeting, be, and IS the same hereby is, approved and that said Certificate, in substantially such form, with such changes, as might be approved by counsel, as may be necessary to carry out the intent of these j Resolutions, be presented to the Annual Meeting J of Stockholders to be held on March 13, 1969j and f jII RESOLVED that, subject to approval at said Annual Meeting . of .said Certificate by affirmative vote of the holders of a majority of the Corporation's Common 1 Stock and the due filing of the same in the office! . of * the Secretary of State of the State of- New York the proper officers of the Corporation be, and they hereby are, authorized to mail certificates for one share of Common Stock ($2*50 par value) to Stockholders for each share of Common Stock held by them of record at the close of business on March 13, 1969* Proofs of the proposed Proxy, Notice of Annual Meeting; to Stockholders, and Proxy statement for use in connection with \ the 1969 Annual Meeting of Stockholders were presented to the ; Directors, each of whom was requested particularly to examine that portion relating to his nomination as a Director, CRMC-Asb&Health-BODMin-000122 i ''::M Thereupon, on motion, duly made and seconded, the A s - following resolution was unanimously adopted: M RESOLVED that the form of Proxy, Notice of Annual Meeting of Stockholders and Proxy Statement for use' in connection with the 1969 Annual Meeting of Stockholdersy proofs of which * were presented to the meeting be, and the same hereby are, approved for transmittal to'the Stockholders, subject to such changes as might be approved by counsel or required by the Securities and Exchange Commission under its Proxy Rules* There was then presented to the meeting for its approval a new form of stock certificate, for less than 1,000 shares and without any par value shown, bearing the facsimile ; signatures of C. B* Burnett, President, and Herbert Morton Ball, Secretary. Thereupon, on motion, duly made and seconded, the following resolution was unanimously adopted: .s L RESOLVED ^ that the certificate for the Common Stock of the Corporation for less than 1,000 shares and without any par value shown, in the form presented to this meeting, bearing the facsimile signatures of C. B Burnett, President, and Herbert Morton Ballt Secretary, be approved and adopted as the -certificate to represent said Common Stock. I .vl The meeting was advised by the Chairman it was con sidered desirable., that an additional Assistant Secretary be appointed and he suggested the name of G.* Earl. Parker, an Attorney in the office of the Vice President, General Counsel and Secretary. Thereupon, on.motion, duly made and seconded| the following resolution was unanimously adopted: RESOLVED that G. Earl Parker be, and he hereby is, appointed an Assistant Secretary of the Corporation, to hold office from January 15, 1969, until the First Meeting of the Board of Directors after the next Annual Meeting of Stockholders and until his successor shall have been duly appointed and shall have qualified. Messrs. Du-tcher, Lindell, P. H. May, Jr., and A; C. mJ Smith left.the meeting* CRMC-Asb&Health-BODMin-000123 There was next presented a report of the Compensation Committeei dated January 15, 1969, containing the recommendation of the Committee that the Directors approve the Committee's action in adopting resolutions in the form attached to the report, changing the options granted under the Incentive Stock Option Plan, subject to approval by the Stockholders at the 1969 Annual Meeting of the two-for-one stock split. . " , After discussion, and on motion, duly made and seconded, the Board approved the adoption by the Committee of the following resolutions (C. B. Burnett not voting): . WHEREAS, the Incentive Stock Option Plan approved by the Stockholders on May 14, 1954, provides in Section 5 thereof "In the event (i) there are any changes in the Common Stock of the Company through stock split-ups then in any such case the Committee may, subject to the . approval of the Board of Directors, make such adjustments in the Plan and in options hereunder as it may deem equit- . able to prevent substantial dilution or enlargement of the rights granted to, or available for, participants here under . WHEREAS the Directors on December 18, 1968, approved r atottwoh-efaopr-pornoevaslploifttohef tShteocCkohomlpdaenrys^aCtomtmhoen1S9t6o9cAknnsuuablject LJ Meeting: NOW THEREFORE, the Committee DOES HEREBY RESOLVEj subject to approval by the Board of Directors and subject - to approval of the two-for-one stock split by the Stock holders of the Company, that the second sentence of Article 2 of the Incentive Stock Option Plan as hereto fore amended be, and the same hereby is further amende'd to read as follows:' "The aggregate number of shares which may be optioned to any one individual may not . exceed 16,000 shares at any one time and 48,000 shares in the aggregateand that Article 3 of the Incentive Stock Option Plan as heretofore amended be, and the same hereby is, further amended to read as follows: "The number of shares of Common Stock to be reserved for option from time to time pursuant to the Plan is limited l taon'y50o0p,t0i0o0n-sghraarnetse;d purnodveirdetdhetPhlatananwyhischharreesmaiconveurnepdurbcyhased I upon expiration of the time permitted for exercise, of the option may be used for further options within the limits - set forth in Article 2.11 y . ' * WHEREAS, on March 31, 1959 the Committee, as author ized by the Board of Directors on March 18, 1959, did . * grant to 46 key employees options to purchase shares of the Company at the last sale price of the Common Stock of CRMC-Asb&Health-BODMin-000124 1 e the Company at the close of the Mew York Stock Exchange on March 31, 1959 (which price was $53,00 per share); - WHEREAS, on January 3t 1962 the Committee, as author ized by the Board of Directors on December 20, 1961f did grant to 67 key employees options to purchase shares of the Company at the last sale price' of the Common Stock of the Company at the close of the New York Stock Exchange on .January 3, 1962 (which price was $57.00 per share); WHEREAS, on December 16, 1964, the Committee, as authorized by the Board of Directors on November 18, 1964, did grant to 48 key employees options to purchase shares of the Company at the last sale price of the Common Stock of the Company at the close of the New York Stock Exchange on December 16, 1964 (which price was $53*875 per share); I NOW THEREFORE, the Committee DOES HEREBY RESOLVE, subject to approval by the Board of Directors and subject to approval of the two-for-one stock split by the Stock holders of the Company at the 1969 Annual Meeting, that the number of shares mentioned in each of the above described options is hereby doubled and that the.price at which said shares nay be purchased is hereby divided in half, and that in all other respects the said options shall remain unchanged* The Chairman presented to the meeting a report of the Compensation Committee, dated January 15, 1969, containing the .. Committee's recommendation with respect to the granting of Deferred Awards for the year 1969 under the "Johns-Manville ' 1968 Deferred Compensation Plan", After discussion, and on motion, duly made and seconded, the following resolutions were unanimously adopted (C* B. Burnett not voting): RESOLVED that this Board approves the determination and designation of those key employees to whom Deferred Awards shall be granted for the year 1969 in accordance with the terms of the "Johns-Manville 1968 Deferred Com pensation Plan", all as set forth in Exhibit A attached to the recommendation of the Compensation Committee to this Board; RESOLVED that the foregoing resolution, together with I the recommendation of the said Committee, be filed with the Secretary as Confidential Minute No* 67. CRMC-Asb&Health-BODMin-000125 L The Chairman also presented to the meetine & report of .the Compensation 'Committee, dated January 15, 1969, containing the recommendation of the Committee with respect to reducing the Board of Directors profit sharing limitation from 8% to 7}% for - the year 1969 and amending Paragraph 4 of Section I of Confiden tial Minute No. 55. - After discussion, and on *motion, d ul*y made* and seconded, [I the resolution adopted by the Board on November 20, 1968, establish ing a Profit Sharing Fund for 1969, wherein the limitation set by j the Board was 8% of net earnings as reported to stockholders, after, deduction of Profit.Sharing Fund and after income taxes, was j amended so that, as amended, it shall read as follows (C B. Burnetf not voting): RESOLVED that, pursuant and subject, to Confidential Minute No. 55, if and when the net ?earnings after taxes of the Corporation exceed an amount equivalent to $2*20 per share on the outstanding Common Stock, a Profit Sharing Fund for 1969 be, and the same hereby is, established by appropriating 4% of profits before taxes as a Profit Sharing Fund, but subject to the limitation set by the Board of 7|% of net earnings as reported to stockholders, after deduction of Profit l Sharing Fund and after income taxes; and Thereupon, on motion, duly made and seconded, the following resolution was unanimously adopted (C* B. Burnett not voting): RESOLVED that Paragraph 4 of Section 1 of Confidential Minute No* 55 be, and the same hereby lst 'amended so that| as amended, it shall read as follows: - 4. The aggregate amount of any Fund established for any year shall not 'exceed 7j% of net profits after taxes for such year. (The limitation in the Stockholder-approved Plan is o7f% tofaxneest.)profits before deduction t The Chairman stated that he would entertain a motion with respect to the minutes of the regular Board meeting and of the Executive Committee meeting; both held December 18, 1968, copies of which had be$n provided each of the Directors at the commencement of the meeting. jj v\ CRMC-Asb&Health-BODMin-000126 [' % Thereupon, minutes as submitted . Whereupon, unanimously resolved on. motion, duly made and seconded, the were unanimously approved as recorded* ' on motion, duly made and seconded, it was that the meeting adjourn. Secretary CRMC-Asb&Health-BODMin-000127 REPORT TO THE BOARD OF DIRECTORS ON ASBESTOS AND HEALTH JANUARY 15, 1969 FORM 36-2 Ml JOHNS-MANVILLE PR.ODU CTS CRMC-Asb&Health-BODMin-000128 ASBESTOS/HEALTH At the January 17, 1968 meeting of the Board a report was presented, giving the status of the asbestos/health situation. An updated report reflecting developments since that time will be discussed. This report (b^u^ folder) is attached. CRMC-Asb&Health-BODMin-000129 REPORT TO THE BOARD OF DIRECTORS ON ASBESTOS AND HEALTH JANUARY 15, 1969 FACTS WHAT J-M HAS DONE IN THE PAST YEAR Dust Reduction at Operating Locations Sales Restrictions Working with Others in the Industry RESEARCH WORKMEN'S COMPENSATION PUBLIC RELATIONS PLANNED FUTURE ACTION CRMC-Asb&Health-BODMin-000130 1. FACTS (Note: Information in this "Facts" section of the report that has been ^clmrrged or" since Januarys 1968' ~is unclerTlned) Asbestos is a recognized toxic mineral -- a health hazard. Asbestos is recognized as causing Asbestosis, a fibrosis of the lung. Asbestos fiber is not known to be a carcinogen (cancer causing agent) but is probably a co-carcinogen (co-cancer causing agent) among people industrially exposed to it. To date, the principal medical study of asbestos insulation workers has shown not a single case of lung cancer among non-smokers. Asbestos does not affect, to the same degree, all those who are exposed to it. The effects of asbestos are both time-related and dose-related. The amounts of asbestos dust that can be fully tolerated by the human are presently unknown. It has been shown that all so-called "asbestos bodies" found in human lungs do not contain asbestos. (The term "asbestos body" has for years been applied loosely to describe a tiny body of tissue in the lung containing a core of some inhaled particle -- asbestos. talc, man-made fibers or other common substances. Because the CRMC-Asb&Health-BODMin-000131 2. over-growth tissue contains some iron, a better term - being used by many specialists today - is "ferruginous body.") The effect of asbestos on human health is probably limited to those who mine, mill. fabricate and apply asbestos or asbestoscontaining products. There still is no evidence of any risk to the general public from the use of finished asbestos products, though there has been. in the past year, much more "scare" publicity on this subject. The effect on the public living in asbestos or asbestos product areas is not totally known but is probably remote. Crocidolite asbestos fiber appears to be more hazardous to humans than either Chrysotile or Amosite asbestos fiber. New British regulations governing the handling of asbestos impose stricter controls on crocidolite than on other forms of asbestos. The threshold limit value, or standard of allowable dust in asbestos mining, milling and manufacturing operations in the United States has been reviewed in the past year and is being reduced from 5 million particles per cubic foot to 2 million particles per cubic foot or 12 fibers (over 5 microns in length) per mililiter (cubic centimeter). WHAT J-M HAS DONE IN THE PAST YEAR Dust Reduction at Operating Locations Additional advances are being made in the control of asbestos fiber dust in J-M plants. An example is the partially completed CRMC-Asb&Health-BODMin-000132 3. program at the Manville asbestos textile operation that has resulted in a substantial reduction in dust levels. To date, this program feas Goa^-etbout $275,000. Another example--- the erincj st' now underway on dust control systems in the pipe plants. to determine if they are operating with maximum effectiveness. Jeffrey Mine is undertaking a project to improve dust collection at their screens. To assure that asbestos fiber dust levels will meet the proposed new threshold limit value will require new sampling and analysis techniques. To adopt the procedures developed for this new threshold limit value additional equipment and manpower are being provided at J-M's industrial hygiene laboratories. Sales Restrictions A policy of refusing to sell asbestos fiber for non-essential uses that might unduly expose the general public to the inhalation of asbestos dust, has been established. For example, during the year. Johns-Manville ceased selling fiber to manufacturers of modeling compounds used in grade schools -- and terminated development work. with another company, on a fire-fighting "air drop bomb" that would have released asbestos into the air in substantial quantities. Working with Others in the Industry During the year Johns-Manville has taken the following steps to orient other asbestos producers, processors and customers to the potential hazards of asbestos dust and to encourage the adoption of packaging, handling and fabricating practices that will minimize exposure on the part of all who work with asbestos: CRMC-Asb&Health-BODMin-000133 4. 1. Johns-Manville took the lead in developing codes of practice which were printed and issued by the National Insulation Manufacturers Association, to cover thermal insulation products containing asbestos and/or mineral fibers. 2. Two presentations were made to the Asbestos-Cement Products Association to urge the group to develop a code of practices for the protection of workmen using siding, and other materials that contain asbestos. 3. A presentation of the asbestos/health subject was made at an Environmental Health Seminar sponsored by the Asbestos Textile Institute. 4. Johns-Manville held an orientation program for the other manufacturers of asbestos-cement pipe and gave them copies of the J-M background paper on "Asbestos Cement Pipe and Human Health." 5. All asbestos fiber bags shipped in the United States and Canada will carry, shortly, a caution label that urges careful handling of the fiber to avoid unnecessary exposure to asbestos dust. 6. Advice on the best industrial hygiene practices to follow in handling asbestos was given to numerous customers who inquired on this subject during the year. CRMC-Asb&Health-BODMin-000134 7. 5. Liaison was maintained with Raybestos-Manhattan and with the British asbestos manufacturers who are members of the Asbestos Information Committee. This involved periodic exchange of medical papers and press clippings as well as personal visits to asbestos plants in the United Kingdom. RESEARCH As indicated in last year's report, Johns-Manville is co-sponsoring and co-financing a number of scientific research studies in the asbestos/health area. The current status of these studies is summarized in "Appendix A." Johns-Manville took the lead, through the Quebec Asbestos Mining Association, in organizing the second "Antiqua Seminar," which brought together leading medical scientists from around the world to discuss the asbestos health problem and plan further research on it. Dr. George W. Wright, Director of Medical Research at St. Luke's Hospital, Cleveland, and a leading authority in the field of pulmonary diseases, has agreed to devote the majority of his time to counseling Johns-Manville on the asbestos/health problem. WORKMEN'S COMPENSATION The company's experience to date in this area and anticipated liability is summarized in "Appendix B." CRMC-Asb&Health-BODMin-000135 6. PUBLIC RELATIONS The Fall of 1958 saw a sharp escalation of publicity about and public awareness of the asbestos/health problem. Much of this stemmed from a ten-page highly sensationalized article in the influential "New Yorker" magazine (October 12, 1958) and a front page story in the "Wall Street Journal" (November 7, 1958). These articles sparked editorial attention from such other publications as "The Washington Post," IIMan's" magazine and the Manville area press. Most of this publicity was sensational and highly negative in nature. "Good Housekeeping" magazine. "Forbes" magazine and the "New York Daily News" presently are preparing articles on the asbestos/ health subject. Johns-Manville is working with them in the hope of persuading them to take a more positive approach to the subject. Coincident to and, in some instances, related to the increased publicity on the asbestos/health problem has been a growing atten tion on the part of officials at various levels of government. The City of New York and the City of San Francisco have expressed concern that the use of asbestos building materials may pose an air pollution "threat." Officials of the Department of Health, Education and Welfare and the Food and Drug Administration have indicated an increasing interest in asbestos as a possible health hazard. There are strong indications that the present session of Congress may hold public hearings on the asbestos/health problem- CRMC-Asb&Health-BODMin-000136 The Muskie Subcoramittee in the U. S. Senate has expressed interest in it, and there is the possibility that testimony will be sought in connection with any successor to the Occupational Health & Safety Act that failed to receive approval in Congress last year. An active J-M Public Relations program in 1968 sought to counter this unfavorable publicity through such steps as: 1. Informing employees and stockholders of the facts concerning the asbestos/health situation via the Management Information Meeting program, the Annual Meeting of Stockholders and the 1968 Annual Report. 2. Preparing and distributing new background papers that supplement the basic paper prepared early in 1968 and included with the January, 1968 report to the Board, These background papers have covered the following subjects: Asbestos and the General Public Asbestos -- A Family of Minerals Asbestos-Cement Water Pipe and Human Health 3. Publicizing the nation's first joint health research program, inaugurated late last year by Johns- Manville, the International Association of Heat and Frost Insulators and Asbestos Workers and the Mt. Sinai School of Medicine. A press conference was held to announce this unique industrial hygiene program that CRMC-Asb&Health-BODMin-000137 brings together industry, labor, science and the 8. Federal Government, on a voluntary basis. Work was begun on a quarterly newsletter that will report progress on the program. PLANNED FUTURE ACTION In 1969 J-M plans to; 1. Prepare for possible Congressional hearings. 2. Take the initiative in contacting science writers. both to present positive information about progress being made on the asbestos/health problem and to refute erroneous exaggerated statements on this subject. 3. Take the initiative in contacting medical researchers who give papers or make public statements on the asbestos/health subject that are exaggerated or contain errors. 4. Take steps towards establishing a North American "Asbestos Information Committee" that could serve as the spokesman for the asbestos industry in such matters as contact with press or testimony before government bodies. Maintain liaison with the Asbestos Information Committee in the United Kingdom. 5. Prepare a background paper on the ingestion of asbestos. This would be of use in dealing with possible sensational CRMC-Asb&Health-BODMin-000138 9. publicity arising from the fact that asbestos is used as a filtering agent for beer, wine and pharmaceuticals. Such publicity has already appeared in Great Britain. 6. Seek to arrange for positive articles in mass circulation publications, that will stress the steps that are being taken by industry, labor and science to control and overcome this health problem. 7. Prepare a booklet to be mailed annually to every overseas customer for asbestos fiber, that will caution on the need to avoid excessive inhalation of asbestos dust and will detail recommended industrial hygiene practices to minimize exposure of workmen to the dust. 8. Arrange exchange visits among the various U. S. asbestos manufacturers to observe effective dust control practices and thus accelerate the industry's progress in minimizing exposure of its workers to asbestos dust. 9. Continue to monitor medical meetings and medical papers and distribute transcripts and summaries to those concerned with this problem. 10. Establish "task forces" to personally visit doctors, public officials or others who indicate alarm or concern over the asbestos/health problem. CRMC-Asb&Health-BODMin-000139 10. 11. Take measurements of the amount of asbestos fiber in the ambient air of major cities, commencing with New York City. Such measurements, hopefully, will help refute the unproved assertions by some writers that asbestos is a significant pollutant in the urban air. # # # CRMC-Asb&Health-BODMin-000140 ENVIRONMENTAL HEALTH RESEARCH APPENDIX A FIBROUS DUST STUDY INDUSTRIAL HYGIENE FOUNDATION OF AMERICA This study involves the investigation of the health hazards of four various types of asbestos: chrysotile, amosite, crocidolite and synthetic. In addition, fibrous glass, mineral wool and some organic fibers will be studied. Continued progress is being made with the investigation, E x t e n - sive animal studies are required prior to reaching any firm conclusions. BRAKE LINING DUST STUDY INDUSTRIAL HYGIENE FOUNDATION OF AMERICA This study is checking the pathogenicity of brake lining dust by animal injection screening tests. A short-range test involving 24 animals was recently completed. Results indicate that the brake lining dust reactions are those of an inert dust. A proposal for a more extensive study is currently being reviewed. The U. S. Public Health Service has recommended, based on their studies and this short-range study, that further research to deter mine the possible carcinogenic effects of the fiber modified by brake wear be undertaken by Johns-Manville. EPIDEMIOLOGICAL STUDY OF THE CANADIAN GENERAL POPULATION INSTITUTE OF OCCUPATIONAL AND ENVIRONMENTAL HEALTH This study proposes to relate the health status of asbestos-exposed population to the non-exposed population. CRMC-Asb&Health-BODMin-000141 APPENDIX A 2 EPIDEMIOLOGICAL STUDY OF THE CANADIAN GENERAL POPULATION INSTITUTE OF OCCUPATIONAL AND ENVIRONMENTAL HEALTH - (continued) The IOEH Scientific Advisory Comirittee has indicated that the work is proceeding satisfactorily and on schedule. ESTABLISH INSTITUTE LIBRARY OF WORLD-WIDE ASBESTOS RESEARCH AND OF ENVIRONMENTAL AND OCCUPATIONAL HEALTH HEALTH STUDIES This project is designed to assemble information on world-wide asbestos research and health studies for future reference and distribution upon request. The Institute is continuing to gather and codify pertinent informa tion on world-wide asbestos research. ASBESTOS INDUSTRY STUDY UNITED STATES PUBLIC HEALTH SERVICE This is a 7- to 10-year environmental, clinical and epidemiological study of workers exposed to asbestos. This study was initiated in January 1963, Environmental studies and work history data gatherings have been completed in our Manville and Marshville plants, along with Asbestos Textile plants of other companies, Medical studies will be under way in the near future. INSULATION WORKERS HEALTH MOUNT SINAI HOSPITAL STUDIES The Insulation Industry Hygiene Research Program has been launched. The Advisory Committee consists of Dr. Selikoff, Dr. Wright, Dr. Hammond, F. L. Pundsack, A. Hutchison and J. B. Jobe. CRMC-Asb&Health-BODMin-000142 APPENDIX A 3 INSULATION WORKERS HEALTH STUDIES MOUNT SINAI HOSPITAL (continued) Pr totral erf $362,5(JO has been pledged to this program by Johns- Manville and the Asbestos Workers Union. R. D. Hindmarch, J-M Industrial Hygiene Supervisor, has been loaned to Mount Sinai in the interest of this program. FIBROUS GLASS UNITED STATES AND MINERAL WOOL INDUSTRY PUBLIC HEALTH SERVICE STUDY ' i 3 is a 7- to 10-year environmental, clinical and epidemiological study of workers exposed to fibrous glass and mineral wool, This study was initiated in March 1968. The U. S. Public Health Service is continuing to gather statistical data concerning fibrous glass and mineral fiber dust exposures. . * C O F .FFECTS INDUSTRIAL OF FIBROUS GLASS STUDY HYGIENE FOUNDATION OF AMERICA The purpose of this study is to provide current and definitive knowledge of the bioeffects of fibrous glass on pulmonary function, emphysema, and surface skin tissue. It is sponsored by PPG Indus tries, Owens-Corning Fiberglas Corporation, Certain-teed St. Gobain, and Johns-Manville. The project is under way and progressing satisfactorily. COOPERATIVE MOUNT SINAI ASBESTOS HOSPITAL ENVIRONMENTAL HEALTH PROJECT Biological Activity of Asbestos The hemolytic activity of asbestos increased with fiber openness, with chrysotile being more active than either crocidolite or CRMC-Asb&Health-BODMin-000143 APPENDIX A 4 Biolocrical Activity of Asbestos - (continued) amosite. "Ottrejr_f xn-E!"-gran-^minerals wirth-pD'sxtive-surf"arcs-chaxges (AI2O3 or MgO surface) also caused hemolysis. There was some evidence that chrysotile prevented growth of specific bacteria. The hemolysis studies are continuing with chrysotiles having special surface treatment. Dust Mask Program Prototypes of the newly developed throw-away dust masks were exhibited to personnel from Mount Sinai Hospital, Harvard University, U. S. Public Health Service, and the Bureau of Mines. The proto types were well received. Preliminary tests at the Bureau of Mines indicated that a protection factor of 100 can probably be achieved; specifications for present half-masks require a protec- tion factor of only 10. Further work will be concentrated on developing the filter element for the mask. EPIDEMIOLOGICAL STUDY OF SCHOOL OF PUBLIC HEALTH J-M RETIRED UNIVERSITY EMPLOYEES OF PITTSBURGH This is an epidemiological study to determine and analyze the life span, causes of death, and possible causal relationship to work exposures of J-M retired employees, Comparisons will be made between this group and similar age groups in the general population. Data required by Dr. P. E. Enterline, School of Public Health, .j-.i.iA/ersity of Pittsburgh, are being submitted from all J-M loca- tions. This requires a detailed review of employment, medical and industrial hygiene records of each of the 3,500 retired employees. CRMC-Asb&Health-BODMin-000144 APPENDIX A 5 X-RAY STUDY SARAUAC INSTITUTE Serial X-rays for employees at all mining and manufacturing loca tions will be read and interpreted by Dr. L. J. Bristol, inter nationally recognized roentgenologist. This expert, uniform interpretation, both in terms of the traditional criteria and the new UICC criteria, will provide an accurate assessment of the pulmonary involvement at each location and therefore more valid appraisal of future Workmen's Compensation liability. The program is progressing satisfactorily and will be completed in approximately 20 months. ASBESTOS AND TRACE INDUSTRIAL HYGIENE METALS FOUNDATION OF AMERICA A proposal to study the carcinogenic potential of trace metals (nickel, etc.) attached to asbestos fiber has been referred to Dr. George W. Wright for evaluation and comment, Preliminary findings in the Fibrous Dust Study (above) suggest that chrysotile fiber (uncontaminated) does not produce pulmonary cancer. This investigation would be undertaken to establish the causative agent. CRMC-Asb&Health-BODMin-000145 APPENDIX B OCCUPATIONAL DISEASE - WORKMEN'S COMPENSATION BACKGROUND In the mid-lSSO's, with Dr. A. J. Lanza as consultant, Johns- Manville sponsored both animal and human research on the effects of asbestos at Saranac Laboratory, New York, under the direction of Dr. LeRoy Gardner. The results obtained in the mid-1940's established that prolonged and heavy exposure to asbestos I did produce a unique and identifiable pulmonary fibrosis. fiber Subsequent to Dr. Gardner's death. Dr. Arthur Vorwald completed the investigation, and it was his opinion that the "long" fibers (5-50 microns in length) were responsible for the production of fibrosis. He suggested that a threshold limit of 1.0 million fibers per cubic foot of air would be appropriate, Accordingly, this standard has been used to evaluate Johns-Manville work environments, in addition to the ACGIH threshold limit of 5.0 million particles per cubic foot. The relationship of bronchogenic cancer to asbestosis was reported from British experience in the mid-1950's. The association has been accepted as statistically substantiated, even though the precise physiological and pathological mechanics involved are as yet unknown (this is also the status of the relationship of smoking). In 1965, at the American Academy of Sciences Symposium on Asbestos, concern regarding the possible relationship of asbestos fiber (not asbestosis) to mesothelioma was brought into focus. CRMC-Asb&Health-BODMin-000146 APPENDIX B 2 BACKGROUND (continued) ,It is obvious that although in the mid-1940,s it was thought that a good deal was known about the biological effects of asbestos, subsequent developments have created a totally new spectrum of questions, the answers to which must be established through further and extensive research. WORKMEN'S COMPENSATION Oilr I claims and costs for occupational disease cases have increased from 94 and $500,000 in 1965 to 141 and $810,000 in 1967. The increase has resulted from additional valid disability claims, "mass" filing at the Manville location, and increases in Workmen's Compensation rates. In the period 9/1/67 to 8/31/68, the cost of adjudicated occupa tional disease claims was; Plant Manville Jeffrey Asbestos Waukegan Billerica Long Beach Cases 138 9 3 4 2 3 $ Cost 294,343 104,452 36,782 46,928 28,861 70,477 $ Avg./Case 2,200* 11,000 12,000 11,500 14,500 23,000 * The low average cost per case is due to the fact that 17% of the claims were dismissed with no award. and 54% of the claims were awarded 2-10% disabilities (nuisance awards). CRMC-Asb&Health-BODMin-000147 APPENDIX B 3 WORKMEN'S COMPENSATION (continued) At current 1958 compensation law rates and provisions, costs for total disability cases occurring now could reach $60,000 in New Jersey; in California, $75,000. Increased compensation rates can certainly be anticipated in the future. Iri addition to Workmen's Compensation claim cases, Johns-Manville plant physicians have identified by X-ray various stages of pulmonary involvement. Some represent the very earliest of X-ray abnormalities. others are more advanced. These numbers represent potential claims over a number of future years. Location No. of Cases Long Beach Manville Marshville Marrero 3 168 22 3 Pittsburg 13 Waukegan 64 Zelienople Billerica Total 4 18 295 To obtain a current expert evaluation of pulmonary involvement at all locations. Dr. L. J. Bristol, Saranac Institute, has been engaged to interpret serial X-rays of all our plant personnel, The study of the Manville data will be completed in approximately four months and will enable us to estimate more accurately future Work- men's Compensation potential, as will the studies at each plant. CRMC-Asb&Health-BODMin-000148 1 t' APPENDIX B 4 WORKMEN'S COMPENSATION (continued) -B-&.--Bristol isa ^ e o m m i - t t e e -- o f -- t h e -- I n - t e - r a a -tieH-ai-- Ga-nee-r^ Commission (UICC) that has recently established new standard criteria for the interpretation of X-rays. LOMPOC Iri 1952, an intensified, extensive environmental dust control program was undertaken at Lompoc. The effectiveness of this continuing effort is indicated by the fact that no new cases of occupational disease (diatomaceous earth pneumoconiosis) have developed at that location since that date. This observation has been substantiated not only by Johns-Manville medical data, but by U. S. Public Health studies as well. HEARING LOSS Hearing loss is another area of occupational disease that will have impact on future costs. At Manville in the last year, there were fifteen claims filed, three adjudicated at an average cost of $1,300 for partial loss (maximum for total loss of hearing is $8,000 at present), and one in California for $1,700. There is a growing trend to hold industry responsible for hearing loss. regardless of exposure, Collaboration with New Jersey industry associations has been initiated to get reasonable legislation enacted. similar to that of West Virginia and New York, which adjust for loss due to aging and require proof of industrial exposure. CRMC-Asb&Health-BODMin-000149