Date: Fri, 16 Jun 2000 13:56:25 +1200

-----Original Message-----

From: USSW

Date: Tuesday, 26 August 1997 06:07

Subject: Fwd: Dow Settlement Proposal

Corning Announces New Plan of Reorganization to Resolve Chapter 11 Filing;

$2.4 Billion Directed to Breast Implant

09:35 a.m. Aug 25, 1997 Eastern MIDLAND, Mich., Aug. 25 PRNewswire Dow Corning today announced a new $3.7 billion Plan of Reorganization to resolve all claims in its Chapter 11 bankruptcy case. The plan provides $2.4 billion for resolving breast implant and other product liability claims through several flexible settlement options. Distribution of funds in the plan is linked to the number of people voting to accept it. As more people vote for the plan, payment for individual settlements increases because less money is required for the trial process. $1.3 billion of the total $3.7 billion plan will be used to satisfy commercial claims. Women with breast implants can be reassured by the overwhelming research showing that while implants can cause local complications, they pose no substantially increased risk of disease, said Gary E. Anderson, president. However, some women with implants have rejected the findings of that research. This new plan provides them with settlement options and offers closure.

The settlement breaks new ground, with individual payments for breast implant claims ranging from up to $1,000 for expedited payments to up to $200,000 for medical conditions. The exact amount depends both on the settlement option and the percentage of women voting for the plan.

Women voting to accept the plan can choose among four settlement options ranging from an expedited payment designed for fast processing and requiring less documentation to higher payments for defined medical conditions requiring more documentation and a detailed evaluation. The options also include a medical procedure program that compensates any woman who chooses to have her Dow Corning implants removed for any reason and offers a range of surgical procedures should they be medically required. This unique option was developed directly in response to requests from women with implants. Additionally, the plan will accommodate foreign claimants.

The plan guarantees that anyone qualifying for the expedited payment, rupture, or medical procedure options will receive 100 percent of the payment level that results from the voting, said Anderson.

Women can choose to go through the trial process rather than settling their claims by voting against the plan. However, as more people vote for the plan, more dollars are devoted to, settlement. For those voting against the plan, a binding common issue causation trial to resolve whether sufficient scientific evidence supports claims that implants cause disease will occur before any individual trials can take place. Women voting for the plan will not be affected by the causation trial.

The growing body of comprehensive and respected medical studies along with numerous court decisions support the view that implants do not cause disease, Anderson said. However, this plan is an effort to conclude the breast implant controversy and offer women , settlement/, options while also preserving the right for both sides to vigorously argue the merits of the scientific evidence in court.

Dow Corning Corporation, a global leader in silicon-based materials, is a Michigan corporation with shares equally owned by The Dow Chemical Company (NYSE:

DOW and Corning Incorporated (NYSE:

GLW). More than half of Dow corning's sales are outside the U.S. settlement Grid approved by 92%

Domestic breast implant claims approved by 80%

Settlement Option Approved by 66 2/3% 

Base Enhanced Extra

Enhanced

Grid Grid Grid 

Expedited Payment 650 800 1,000 

Rupture 5,000 6,000 8,000 

Medical Procedures Program Approved Procedures Covered, plus

$1,000 for reasonable expenses 

Symptoms/Medical Conditions*

Level One - MDL Qualification 2,500 3,500 4,500

Level Two 10,000 15,000 20,000

Level Three 30,000 40,000 50,000

Level Four 70,000 90,000 110,000

Level Five 150,000 175,000 200,000

Rupture add-on payment 5,000 6,000 8,000

Multi-Manufacturer Adjustment 50% 50% 50% all amounts in U.S. $)

* The payments listed above are for those processing current claims and compensates them for the delay they have experienced in settling their claims. Those who may qualify for the Symptoms/Medical Conditions option in the future would be paid at 20 percent of the listed amounts.

FREQUENTLY ASKED QUESTIONS AND ANSWERS/

PLAN OF REORGANIZATION/

Q. I filed a claim in this case. Must I take any action now to qualify?

A. No.

Q. How can those who filed claims vote for this plan?

A. The Court must first have hearings and approve documents related to the plan. Once approved, those who filed claims will receive a complete package of information, including very specific voting procedures.

Q. How does the vote from those filing breast implant claims impact the approval of the plan?

A. Basically, among those with breast implants who vote, 2/3 must vote for the plan. However, if 80% vote for the plan, they will receive an increased payment, and if 92% vote for it, they will receive even greater increased payment.

Q. Why is Dow Corning filing a new Plan of Reorganization?

A. We want to bring closure to this long-running controversy. The best way to do that is to settle. This new plan directs the majority of funds toward flexible settlement options.

Q. By compensating women for Qualified Medical Conditions, does this mean that Dow Corning believes breast implants cause disease?

A. No. We know that breast implants can cause local complications and in some cases, rupture can occur. This plan compensates women for those conditions, just as we have in the past. Women can be reassured by the overwhelming evidence that silicone breast implants do not cause disease. However, we have a responsibility to bring closure to this long-running controversy and we believe our plan does that. It offers women flexible choices in how they can settle their claim. In addition, people voting for the plan can influence how much they are paid. The more women who vote for the plan, the greater their individual settlements.

Q. How many breast implant claims have been filed in Dow Corning's case?

A. Based upon Dow Corning's current analysis, there are approximately 150,000 U.S. claims for Dow Corning breast implants and 50,000 non-U.S. claims for Dow Corning breast implants.

Q. If a person has not filed a proof of claim form with the court, is it too late to be included?

A. Since the deadline for filing claims has passed, the only way to file a claim now is by filing a motion with Judge Arthur Spector in the U.S. Bankruptcy Court in Bay City, MI.

Q. Is there likely to be enough money in the , settlement so that women will receive the scheduled amount of compensation?

A. Dow Corning believes the funding is adequate. This is unlike the previous Global settlement where more claims were filed than anticipated. In this case, all of the claims were filed before the plan was calculated. The settlement payments are based on already filed claims, and no additional claims can be filed without court approval. The plan also guarantees that anyone qualifying for the expedited payment, rupture, or medical procedure options will receive 100% of the payment level resulting from the voting.

Q. How will commercial claims be paid under this plan?

A. Commercial claims will be paid in full, with interest, under the plan. 30% will be paid in cash and 70% in Senior Notes that will mature on the seventh anniversary of the effective date, with interest payable in semi-annual installments at the Plan Interest Rate.

Backgrounder: Choices for Women

Dow Corning Plan of Reorganization

Dow Corning's new plan of Reorganization provides women with silicone breast implants, as well as people with Dow Corning medical devices, a variety of options to settle their claims. A unique feature of the plan is that people with claims can influence the amount of money they receive by voting for the plan in greater numbers. Most of the funds in the plan are designated for settlement although the option remains of pursuing claims in court. The plan calls for establishing two trusts: the Settlement Trust will administer claims filed by those voting for the plan, while the Litigation Trust will allow those voting against the plan to go through the trial process.

Settlement Trust Those voting for the plan, who have allowed breast implant or other product claims, will be paid through a , Settlement Trust managed by independent trustees. Women with current claims, as well as those who may have a claim to process in the future, can choose options to suit their individual circumstances. However, women who have current claims will be eligible for higher payments to compensate them for the delay they have experienced in resolving their claims.

Women with Dow Corning breast implants who vote for the plan will have four settlement options:

Option One

Expedited Settlement Women with Dow Corning breast implants as well as claims involving other Dow Corning medical devices, can choose this option to receive compensation quickly. 

Option Two

Medical Procedure Settlement Women with Dow Corning breast implants who wish to have their implants removed can choose this option to pay for explantation, as well as additional surgical procedures, should they be medically required. Women qualifying for this option can use it at any time until the year 2010 when the program ends. 

Option Three

Rupture Settlement This option is available to women who have already undergone surgery to remove a ruptured Dow Corning breast implant. 

Option Four

Qualified Medical

Condition , Settlement This option is available to Women with Dow Corning breast implants who also have specific symptoms medical conditions. Qualifying for this option

requires a higher level of proof and more detailed evaluation by the Settlement Trust according to set guidelines and criteria. The types of symptoms, medical conditions and the degree of disability determines the amount of compensation.

Payments for breast implant claims under all of the above options increase based on the percentage voting for the plan, from a Base Amount (if 67% vote yes)to an Enhanced Amount (80% vote Yes) or Extra Enhanced Amount (92% vote Yes).

Litigation Trust

Women with breast implants, as well as others with Dow Corning medical devices, who are not satisfied with any of the above options, can vote against the new plan and, instead of settling, sue the Litigation Trust. For those voting against the plan, claims that breast implants cause disease will first be subject to the binding verdict of a common issue causation trial to resolve whether the claims are sufficiently supported by the scientific evidence. Claims that remain after that trial will first undergo individual claims review and mediation before resorting to individual jury trials.

Number of Claims

The number of estimated claims in each option is based on actual claims filed in Dow Corning's case. No additional claims can now be filed without individual court approval. In addition, claims filed in the previous Global Settlement have provided additional data in estimating the number of claims likely to fall in each option.

Based on this data Dow Corning's best estimate of the number of claims is the following:

U.S. claims for Dow Corning breast implants: 150,000

U.S. raw material breast implant claims*: 139,000

U.S. claims involving other Dow Corning medical

Devices or products:

15,500

products: 2,500.

*Denotes claims in which Dow Corning provided silicone gel to other breast implant manufacturers.

WHAT'S NEXT

The next steps regarding this plan include: 

-- A hearing before U.S. Bankruptcy Judge Arthur Spector to review and approve the Disclosure Statement, which describes the plan in detail.

-- Mailing of the plan and Disclosure Statement to all claimants.

-- A solicitation period for voting on the plan.

-- A hearing to approve the plan.

-- A common issue causation trial to resolve the dispute regarding whether breast implants cause disease. Only those women voting against the plan will be subject to the finding of this trial. The trial will not affect those voting for the plan.

Dow Corning estimates that the confirmation hearing could be concluded by Judge Spector by the middle of 1998. Anyone who intends to appeal confirmation of the plan will have 10 days to do so following entry of the confirmation order. The confirmation order becomes final after this 10-day period if no appeals are filed, or after appeals are resolved. Once the confirmation order becomes final, the plan will be implemented. SOURCE Dow Corning Corporation 

Copyright 1997,