INCURRED AFTER
DECEMBER 31, 2000 RELATING TO ASBESTOS-RELATED LIABILITIES, (C) NET AFTER-TAX
GAINS OR LOSSES IN RESPECT OF DISPOSITIONS OF ASSETS BY THE CORPORATION OTHER
THAN IN THE ORDINARY COURSE OF BUSINESS, (D) ANY CHARGES RELATING TO
AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES ARISING FROM THE MANAGEMENT
BUY-OUT OF GAF CORPORATION IN MARCH 1989, AND (E) SUCH OTHER ITEMS AS THE BOARD
OF DIRECTORS MAY DETERMINE TO BE EXTRAORDINARY OR UNUSUAL AND THE IMPACT OF
WHICH SHOULD NOT BE INCLUDED IN CONSOLIDATED NET INCOME OR LOSS, AS THE CASE MAY
BE, FOR THE PURPOSES OF COMPUTING BOOK VALUE. THERE SHALL BE DEDUCTED FROM BOOK
VALUE AN AMOUNT EQUAL TO A 15% PER ANNUM CHARGE ON THE AGGREGATE CAPITAL
CONTRIBUTIONS MADE TO THE CORPORATION BY ITS STOCKHOLDERS DURING THE PERIOD
COMMENCING JANUARY 1, 2001 AND ENDING WITH THE DATE OF DETERMINATION (THE
"PERIOD"), AMOUNTS ACTUALLY RECEIVED BY THE CORPORATION DURING THE PERIOD FOR
SHARES OF ITS CAPITAL STOCK AND, TO THE EXTENT NOT ACTUALLY CHARGED AGAINST THE
NET INCOME OF THE CORPORATION, ON THE OUTSTANDING PRINCIPAL AMOUNT OF LOANS AND
OTHER ADVANCES MADE TO THE CORPORATION BY AFFILIATES (EXCLUDING SUBSIDIARIES OF
THE CORPORATION) DURING THE PERIOD. THERE SHALL BE ADDED TO BOOK VALUE A 15% PER
ANNUM CREDIT ON THE AGGREGATE DIVIDENDS OR DISTRIBUTIONS (INCLUDING REDEMPTION
OF SHARES OF ITS CAPITAL STOCK) MADE BY THE CORPORATION TO ITS STOCKHOLDERS
DURING THE PERIOD AND, TO THE EXTENT INTEREST IS NOT ACTUALLY IMPUTED TO THE
CORPORATION IN RESPECT OF SUCH AMOUNTS, ON THE OUTSTANDING PRINCIPAL AMOUNT OF
LOANS AND OTHER ADVANCES MADE BY THE CORPORATION TO AFFILIATES (EXCLUDING
SUBSIDIARIES OF THE CORPORATION) DURING THE PERIOD. ANY ADJUSTMENTS TO BOOK
VALUE (INCLUDING THE 15% CHARGE AND CREDIT REFERRED TO IN THE PRECEDING TWO
SENTENCES) SHALL TAKE INTO ACCOUNT THE TAX EFFECT, IF ANY, ASSOCIATED THEREWITH.
IF THE CORPORATION'S COMMON STOCK IS CONVERTED INTO OR EXCHANGED FOR OTHER
SECURITIES OR PROPERTY PURSUANT TO A RECAPITALIZATION, STOCK SPLIT, COMBINATION,
REORGANIZATION, MERGER, EXCHANGE OR SIMILAR TRANSACTION, OR IF A SALE OF ALL OR
SUBSTANTIALLY ALL OF, THE COMMON STOCK OF THE CORPORATION SHALL OCCUR OR BE
PENDING, BOOK VALUE, THE INCENTIVE UNITS AND THE TERMS HEREOF SHALL BE MODIFIED
BY THE BOARD OF DIRECTORS IN SUCH MANNER AS IS REASONABLE UNDER THE
CIRCUMSTANCES. ALL DETERMINATIONS BY THE BOARD OF DIRECTORS HEREUNDER SHALL BE
MADE IN GOOD FAITH AND SHALL BE BINDING AND CONCLUSIVE.
(E)
"CHANGE IN CONTROL OF THE CORPORATION" SHALL MEAN (I) THE SALE OR
DISPOSITION, IN ONE OR A SERIES OF RELATED TRANSACTIONS DURING A TWELVE-MONTH
PERIOD ENDING ON THE DATE OF THE MOST RECENT TRANSACTION, OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE CORPORATION (WITH ASSETS SOLD OR DISPOSED
HAVING A TOTAL GROSS FAIR MARKET VALUE EQUAL TO OR MORE THAN 75% OF THE TOTAL
GROSS FAIR MARKET VALUE OF ALL ASSETS OWNED DIRECTLY AND INDIRECTLY BY SUCH
ENTITY IMMEDIATELY PRIOR TO SUCH ACQUISITION OR ACQUISITIONS), TO ANY "PERSON"
OR "GROUP" (AS SUCH TERMS ARE DEFINED IN SECTIONS 13(D)(3) AND 14(D)(2) OF