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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON D. C.  20549
                                       
                                       
                                   FORM 10-Q
                                       

  X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
 ---    EXCHANGE ACT OF 1934

For the quarterly period ended                  June 30, 1994
                               ---------------------------------------------

Commission file number                              1-71
                       -----------------------------------------------------


                                 BORDEN, INC.


                New Jersey                                  13-0511250
- - -------------------------------------------           -----------------------
      (State or other jurisdiction of                     (I.R.S. Employer
       incorporation or organization)                    Identification No.)

                  180 East Broad Street, Columbus, OH  43215
        ---------------------------------------------------------------
                   (Address of principal executive offices)


                                (614) 225-4000
        ---------------------------------------------------------------
             (Registrant's telephone number, including area code)

                                Not Applicable
        ---------------------------------------------------------------

             (Former name, former address and former fiscal year,
                        if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes  X   No 
    ---     ---
Number of shares of common stock, $0.625 par value, outstanding as of the close
of business on July 22, 1994: 141,424,181





                                                                    Page 1 of 13
   2


- - -----------------------------------------------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

BORDEN, INC

Three Months Ended June 30 -------------------------------------- (In millions except per share data) 1994 1993 - - ----------------------------------------------------------------------------------------------------------------------- REVENUE Net sales $1,369.3 $1,352.5 - - ----------------------------------------------------------------------------------------------------------------------- COSTS AND Cost of goods sold 1,043.3 997.4 EXPENSES Marketing, general and administrative expenses 268.4 259.4 Interest expense 29.8 31.8 Equity in income of affiliates (2.6) (2.5) Minority interest 10.0 10.0 Other (income) and expense, net 1.9 9.6 Income taxes 7.4 16.3 -------- -------- 1,358.2 1,322.0 -------- -------- - - ----------------------------------------------------------------------------------------------------------------------- EARNINGS Income from continuing operations 11.1 30.5 Loss from discontinued operations (12.0) -------- -------- Net income $ 11.1 $ 18.5 ======== ======== - - ----------------------------------------------------------------------------------------------------------------------- SHARE DATA Income from continuing operations $ 0.08 $ 0.22 Loss from discontinued operations (0.09) -------- -------- Net income per common share $ 0.08 $ 0.13 ======== ======== Cash dividends paid per common share $ 0.075 $ 0.300 Average number of common shares outstanding during the period 141.5 140.9 - - -----------------------------------------------------------------------------------------------------------------------
Page 2 of 13 3 - - -------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
BORDEN, INC. Six Months Ended June 30 ----------------------------------- (In millions except per share data) 1994 1993 - - -------------------------------------------------------------------------------------------------------------------- REVENUE Net sales $2,642.0 $2,650.1 - - -------------------------------------------------------------------------------------------------------------------- COSTS AND Cost of goods sold 1,998.0 1,943.9 EXPENSES Marketing, general and administrative expenses 525.7 499.3 Interest expense 57.6 62.3 Equity in income of affiliates (4.9) (6.3) Minority interest 19.2 20.2 Other (income) and expense, net 18.2 18.2 Income taxes 11.3 38.3 -------- -------- 2,625.1 2,575.9 -------- -------- - - -------------------------------------------------------------------------------------------------------------------- EARNINGS Income from continuing operations 16.9 74.2 Loss from discontinued operations (28.5) -------- -------- Income before cumulative effect of accounting changes 16.9 45.7 Cumulative effect of change in accounting for postemployment benefits (18.0) -------- -------- Net income $ 16.9 $ 27.7 ======== ======== - - -------------------------------------------------------------------------------------------------------------------- SHARE DATA Income from continuing operations $ 0.12 $ 0.53 Loss from discontinued operations (0.20) -------- -------- Income before cumulative effect of accounting changes 0.12 0.33 Cumulative effect of change in accounting for postemployment benefits (0.13) -------- -------- Net income per common share $ 0.12 $ 0.20 ======== ======== Cash dividends paid per common share $ 0.150 $ 0.600 Average number of common shares outstanding during the period 141.5 140.8 - - --------------------------------------------------------------------------------------------------------------------
Page 3 of 13 4 - - ------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
BORDEN, INC. Six Months Ended June 30 ------------------------------ (In millions) 1994 1993 - - ------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING Cash flows from operations $ 19.1 $ (30.4) ACTIVITIES ------- ------- - - ------------------------------------------------------------------------------------------------------------------- CASH FLOWS Capital expenditures (60.5) (79.0) FROM Divestiture of businesses 87.3 16.7 INVESTING ------- ------- ACTIVITIES 26.8 (62.3) ------- ------- - - ------------------------------------------------------------------------------------------------------------------- CASH FLOWS Increase (decrease) in short-term debt 203.1 (130.7) FROM Reduction in long-term debt (77.2) (41.4) FINANCING Long-term debt financing 18.2 262.5 ACTIVITIES Repurchase of receivables (150.0) Dividends paid (21.2) (84.4) Other .9 6.6 ------- ------- (26.2) 12.6 ------- ------- - - ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and equivalents 19.7 (80.1) Cash and equivalents at beginning of period 100.3 186.0 ------- ------- Cash and equivalents at end of period $ 120.0 $ 105.9 ======= ======= - - ------------------------------------------------------------------------------------------------------------------- SUPPLEMENTAL Interest paid $ 39.7 $ 51.8 DISCLOSURES Income taxes paid (11.3) 16.6 OF CASH FLOW INFORMATION - - -------------------------------------------------------------------------------------------------------------------
Page 4 of 13 5 - - ------------------------------------------------------------------------------------------------------------------------ CONSOLIDATED BALANCE SHEETS (UNAUDITED) BORDEN, INC. (In millions)
June 30 December 31 ----------- ----------- ASSETS 1994 1993 - - ------------------------------------------------------------------------------------------------------------------------ CURRENT Cash and equivalents $ 120.0 $ 100.3 ASSETS Accounts receivable (less allowance for doubtful accounts of $12.5 and $8.9 respectively) 460.6 334.7 Inventories: Finished and in-process goods 372.4 319.4 Raw materials and supplies 168.8 171.0 Other current assets 155.0 142.6 Net assets of discontinued operations 192.2 222.2 -------- -------- 1,469.0 1,290.2 -------- -------- - - ------------------------------------------------------------------------------------------------------------------------ INVESTMENTS Investments in and advances to AND OTHER affiliated companies 94.1 91.3 ASSETS Deferred income taxes 236.8 225.4 Other assets 128.1 126.6 -------- -------- 459.0 443.3 -------- -------- - - ------------------------------------------------------------------------------------------------------------------------ PROPERTY Land 104.7 105.5 AND Buildings 606.5 609.6 EQUIPMENT Machinery and equipment 1,955.3 1,949.3 -------- -------- 2,666.5 2,664.4 Less accumulated depreciation (1,328.6) (1,327.7) -------- ---------- 1,337.9 1,336.7 -------- ---------- - - ------------------------------------------------------------------------------------------------------------------------ INTANGIBLES Intangibles resulting from business acquisitions 790.0 801.5 -------- -------- - - ------------------------------------------------------------------------------------------------------------------------ $4,055.9 $3,871.7 ======== ========
Page 5 of 13 6 CONSOLIDATED BALANCE SHEETS (UNAUDITED) BORDEN, INC. (In millions except share and per share data)
June 30 December 31 ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993 - - ----------------------------------------------------------------------------------------------------------------- CURRENT Debt payable within one year $ 558.9 $ 410.6 LIABILITIES Accounts and drafts payable 466.2 433.3 Restructuring reserve 110.7 145.9 Income taxes 30.9 56.5 Other current liabilities 361.6 325.2 -------- -------- 1,528.3 1,371.5 -------- -------- - - ----------------------------------------------------------------------------------------------------------------- OTHER Long-term debt 1,243.8 1,240.8 Deferred income taxes 60.4 47.1 Postretirement benefit obligations 353.4 353.8 Other long-term liabilities 103.9 103.8 Minority interest 508.6 508.8 -------- -------- 2,270.1 2,254.3 -------- -------- - - ----------------------------------------------------------------------------------------------------------------- SHAREHOLDERS' Common stock - $0.625 par value EQUITY Authorized 480,000,000 shares Issued 194,983,374 shares 121.9 121.9 Paid in capital 88.3 88.1 Accumulated translation adjustment (156.1) (171.1) Minimum pension liability (95.5) (95.5) Retained earnings 830.8 835.1 -------- -------- 789.4 778.5 Less common stock in treasury (at cost) - 53,561,979 shares and 53,625,339 shares, respectively (531.9) (532.6) -------- -------- 257.5 245.9 -------- -------- - - ----------------------------------------------------------------------------------------------------------------- $4,055.9 $3,871.7 ======== ========
Page 6 of 13 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (dollars in millions except per share amounts) 1. INTERIM FINANCIAL STATEMENTS The accompanying unaudited interim consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary for a fair statement of the results for the interim periods. Results for the interim periods are not necessarily indicative of results for the full years. 2. DISCONTINUED OPERATIONS In December 1993 the Company recorded a pretax charge of $637.4, $490.0 after tax, to accrue the estimated cost of a business divestiture program. The program involves the divestment of North American snacks, seafood, jams and jellies, foodservice, and other businesses. The estimated cost of the program includes loss on disposals, operating losses from December 31, 1993 to date of disposal, severance and other costs directly associated with the program. Businesses divested as of June 30, 1994, which include seafood and foodservice, generated proceeds of $87.3. Pretax losses on disposal of $284.8 and pretax operating losses, severance and other costs of $53.0 have been charged to the reserve as of June 30, 1994. Total program costs incurred through June 30, 1994 are in line with the original estimates. Management believes that the sale or closure of the discontinued operations will be substantially complete by the end of 1994 or early 1995. Page 7 of 13 8 PART I FINANCIAL INFORMATION ---------------------------- Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS QUARTER ENDED JUNE 30, 1994 VERSUS QUARTER ENDED JUNE 30, 1993 Net sales from continuing operations for the quarter ended June 30, 1994 increased 1.3% to $1.37 billion from $1.35 billion in 1993. The 1994 second quarter net income of $11.1 million, or $0.08 per share, which includes only continuing operations, compares with restated income from continuing operations of $30.5 million, or $0.22 per share, in 1993. Restated net income for the second quarter of 1993 was $18.5 million, or $0.13 per share, which includes a $12.0 million loss from discontinued operations. Division operating income in second quarter 1994 decreased 34.1% to $64.0 million from $97.1 million in 1993. North American Foods sales decreased 0.9% to $622.6 million from $628.2 million in 1993 primarily as a result of 1993 divestitures and a slight decline in niche grocery sales, partially offset by a slight increase in pasta product sales. The division recorded an operating loss of $0.6 million compared to operating income of $26.1 million in 1993. Margins on dairy and pasta product sales were adversely affected by high commodity costs for raw milk and durum wheat and from competitive pressures that inhibited increases in product selling prices. International Foods sales increased 6.4% to $241.1 million from $226.6 million in 1993. The increase reflects improvements by the KLIM milk powder export business, milk powder and cheese in Colombia, and food operations in Puerto Rico. Operating income was $19.4 million in 1994, unchanged from 1993. Income improvements in Puerto Rican operations and European grocery and pasta were offset by declines in the European bakery business and Latin American operations. Packaging and Industrial Products sales increased 1.6% to $505.7 million from $497.6 million in 1993. Increases in worldwide resins and domestic wallcoverings and plastic operations were substantially offset by declines in Latin American operations and the 1993 divestiture of a European packaging operation. Operating income decreased 12.4% to $45.1 million from $51.5 million in 1993. A decline in European packaging results and a $6.0 million provision for anticipated environmental liabilities were partially offset by improvements in worldwide resins and income contribution from Borden Chemicals and Plastics Limited Partnership. Net sales of discontinued operations decreased 14.0% to $262.0 million from $304.6 million in 1993 primarily as a result of the sale of the foodservice operation and declines in North American snacks. The net loss from discontinued operations was $10.9 million in 1994 compared to a net loss of $12.0 million in 1993. The net loss has been charged against the reserve for loss on discontinued operations. The 1994 loss is in line with the estimates made to establish the reserve. Page 8 of 13 9 SIX MONTHS ENDED JUNE 30, 1994 VERSUS SIX MONTHS ENDED JUNE 30, 1993 Net sales from continuing operations for the six months ended June 30, 1994 decreased 0.3% to $2.64 billion from $2.65 billion in 1993. Net income of $16.9 million, or $0.12 per share, which includes only continuing operations, compares with restated income from continuing operations of $74.2 million, or $0.53 per share, in 1993. Restated net income for the first six months of 1993 was $27.7 million which includes a $28.5 million loss from discontinued operations and an $18.0 million charge for the cumulative effect of an accounting change. Division operating income decreased 42.9% to $119.9 million from $210.0 million in 1993. Generally the explanations previously discussed for the quarter ended June 30, 1994 also apply to the six month period ended June 30, 1994. OUTLOOK FOR THE REMAINDER OF 1994 Margins in the second half of the year are expected to benefit from recent downturns in commodity costs, seasonal increases in niche grocery and other businesses, and the effects of cost reduction programs. However, based on results through June, which include a considerable loss in Dairy, earlier expectations of earnings for the year will not be realized. The Company's progress on the plan to date is being reviewed and any changes to the plan that are deemed necessary will be made promptly. LIQUIDITY AND CAPITAL RESOURCES Cash provided from operating activities during the first six months of 1994 was $19.1 million compared to cash used in operating activities of $30.4 million for the first six months of 1993. The increase in operating cash flows reflects income tax refunds in 1994 and reduced working capital requirements. Capital expenditures for new facilities and improvements to existing facilities were $60.5 million in 1994 compared to $79.0 million in 1993. Capital spending in 1994 reflects tight cash conservation and the effect of discontinued operations. Cash provided by the divestiture of businesses was $87.3 million in 1994 and $16.7 million in 1993. The 1994 proceeds reflect sale of the foodservice and seafood businesses which were divested under the Company's previously announced divestiture program. Subsequent to June 30, 1994 the Company has generated additional proceeds of $77.3 million primarily from sale of jams and jellies and the ice cream business in Japan. Divestitures in 1993 consisted of Laura Scudder Snacks, Southwest Snacks, and Deran Candy Products. Short term debt increased $203.1 million in 1994 compared to a decrease of $130.7 million in 1993. A portion of the 1994 increase is due to lower sales of accounts receivable. The decrease in 1993 reflects repayment of commercial paper with proceeds of long-term debt financing discussed below. The 1993 long-term debt financing includes proceeds from a $250.0 million issuance of 30-year, 7 7/8% debentures. In July the Company accepted a commitment from Citibank and Credit Suisse for a $1.4 billion, 2-1/2 year credit facility. The facility will be used as back up for commercial paper borrowings and will replace a revolving facility that expires in September and other backup credit facilities, as well as to enable consolidation of other financings in place and provide for the normal financial requirements of the business. Page 9 of 13 10 PART II OTHER INFORMATION ------------------------- Item 3: LEGAL PROCEEDINGS ENVIRONMENTAL PROCEEDINGS - - ------------------------- The Company has been notified that it is or may be a potentially responsible party with respect to the cleanup of certain waste sites (currently approximately 47 in number) in proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") or similar state environmental laws. While the Company cannot predict with certainty the total cost of such cleanup, the Company's ultimate liability will depend on many factors including its volumetric share of waste, the financial viability of other responsible parties, the remediation methods and technology used, the amount of time necessary to accomplish remediation, and the availability of insurance coverage. The Corporation has established reserves for environmental remediation costs for these and other sites in amounts which it believes are probable and reasonably estimable. Based on currently available information and analysis, the Company believes that it is reasonably possible that costs associated with such sites may exceed current reserves by amounts that may prove insignificant or by amounts, in the aggregate, up to approximately $40 million. This estimate of the range of reasonably possible additional costs is less certain than the estimates upon which reserves are based, and in order to establish the upper limit of such range, assumptions least favorable to the Company among the range of reasonably possible outcomes were used. In estimating both its current reserves for environmental remediation and the possible range of additional costs, the Company has not assumed that it will bear the entire cost of remediation of every site to the exclusion of other known potentially responsible parties who may be jointly and severally liable. The ability of other potentially responsible parties to participate has been taken into account, based generally on the parties' probable contribution on a per site basis. No attempt has been made to discount the estimated amounts to net present value, and no amounts have been recorded for potential recoveries from insurance carriers. Based upon previous experience and the information presently available, however, management believes that, as of the date hereof, future costs incurred will not have a material adverse effect on the financial condition of the Company. Private actions against the Company and numerous other defendants are currently pending in U.S. District Court in Baton Rouge, Louisiana alleging personal injuries and property damage in connection with a waste disposal site in Louisiana. Similar actions are pending in state court in Camden, New Jersey in connection with a waste disposal site in New Jersey. The U.S. Environmental Protection Agency ("EPA") has issued a notice of violation alleging the violation of air pollution regulations by a plant in Massachusetts (September 1988). A notice of violation has been issued by the Maine Department of Environmental Protection (April 1991) alleging the violation of certain solid waste and wetlands regulations at a Scarborough, Maine facility. Page 10 of 13 11 A notice of violation has been issued by the Puerto Rican sewer and water authority (July 1994) alleging violations of wastewater regulations by an ice cream plant in Mantecados Nevada, Puerto Rico. In 1987, the Company's basic chemical and PVC resin businesses located at Geismar, Louisiana and Illiopolis, Illinois were acquired by the Borden Chemicals and Plastics Limited Partnership ("BCP"). Under an Environmental Indemnity Agreement, the Company has agreed, subject to certain conditions and limitations, to indemnify BCP from certain environmental liabilities that predate the formation of BCP and share on an equitable basis those arising from facts or circumstances existing and requirements in effect both prior to and after such date. No claim can be made by BCP under the Agreement after 15 years from November 30, 1987. Accordingly, certain BCP legal proceedings are discussed herein. In February 1993, an EPA Administrative Law Judge held that the Illiopolis, Illinois facility violated CERCLA and the Emergency Planning and Community Right to Know Act ("EPCRA") by failing to report certain relief valve releases that BCP and the Company believe are exempt from CERCLA and EPCRA reporting. BCP's petition for reconsideration was denied, a penalty hearing has been scheduled and further appeals are possible if the parties cannot reach an agreement. In January 1994, the Louisiana Department of Environmental Quality determined that a production unit at BCP's Geismar facility should be subject to regulation under Louisiana's hazardous waste statutes and regulations. That decision has been appealed to the state courts. In April 1994, the U.S. Department of Justice, at the request of the U.S. EPA, notified BCP that it intends to bring an action in federal court against BCP seeking, among other things, corrective action and penalties for alleged violations of the Resource Conservation and Recovery Act ("RCRA") at the Geismar facility. BCP believes that it has meritorious defenses to these allegations and in May 1994, filed a Complaint for Declaratory Judgement in U.S. Distric Court in Baton Rouge seeking a determination that certain materials and facilities are not subject to regulation under RCRA. OTHER LEGAL PROCEEDINGS - - ----------------------- Allegations by the State of North Carolina, of antitrust violations in connection with the sale of milk to two school districts in North Carolina, were settled in May 1994 by an agreement to pay $165,000 in restitution. Similar allegations against the Company by the Department of Justice in the Indiana Investigation were resolved in April 1994 by the Company entering a plea and agreeing to pay a fine of $100,000. The States of West Virginia and Ohio have also filed suits (12/93 and 8/93) alleging antitrust violations in connection with the sale of milk to schools in certain of their school districts. A private antitrust suit was filed in Federal Court in Oklahoma (4/93) on behalf of four school districts and seeks class action certification. Federal Grand Jury investigations are pending in Oklahoma (8/92), Ohio (2/93) and the Plains States (9/93). Private antitrust suits alleging price fixing of wholesale/retail accounts have been filed in Florida (7/93) and W. Virginia (9/93). The Company is a defendant in litigation in Montreal, Canada involving allegations of personal injury or property damage arising from the misapplication of, or defects in, a urea-formaldehyde foam insulation product which the Company manufactured from 1973 through 1980. The litigation, which was tried from Page 11 of 13 12 September 1983 through December 1989, was dismissed by the trial court in December 1991. An Appeal filed by plaintiffs will be heard in 1995. The Company and its Directors have been sued in Federal District Court in New York (December 1993) for alleged violations of the Securities Exchange Act of 1934 in connection with certain 1993 financial projections. In addition, the Company is involved in other litigation throughout the United States which is considered to be in the ordinary course of the Company's business. The Company believes, based upon the information it presently possesses, and taking into account its established reserves for estimated liability and its insurance coverage, that the foregoing proceedings and actions are unlikely to have a materially adverse effect on the Company's financial position or operating results. Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS The 1994 Annual Meeting of Shareholders of the Registrant was held on May 20. The shareholders elected eight directors to hold office for the next year by the following votes: F.E. Hennig-118,084,030; W.J. LeMelle-117,988,777; R.P. Luciano-118,135,518; H.B. Morley-118,381,463; J.E. Sexton-118,383,413; E.R. Shames-118,516,716; P.C. Stewart-117,959,251; and F.J. Tasco-118,170,658. Votes withheld or cast for other persons against the nominees were 5,180,094. The Board of Directors' proposal for ratification of the selection of Price Waterhouse as the Registrant's independent auditors was approved by a vote of 119,927,591 for the proposal, 1,755,332 against the proposal, and 786,762 abstentions. The 1994 Stock Option Plan was approved by a vote of 107,506,637 for the Plan, 12,908,366 against the Plan, and 2,054,682 abstentions. The 1994 Management Incentive Plan was approved by a vote of 109,893,899 for the Plan, 10,398,769 against the Plan, and 2,177,017 abstentions. There were no broker non-votes on matters submitted to shareholders. Item 6: EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits Exhibit 10(i) Description of Amendment to Agreement with Mr. E.R. Shames. Exhibit 10(ii) Agreement with Mr. L.O. Doza dated June 2, 1994. Exhibit 10(iii) Supplement to Agreement with Mr. G.J. Waydo dated May 4, 1994. Exhibit 10(iv) Supplement to Agreement with Mr. G.J. Waydo dated June 20, 1994. b. Reports on Form 8-K None Page 12 of 13 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BORDEN, INC. Date: August 12, 1994 By /s/ James C. Van Meter -------------------------------- James C. Van Meter Executive Vice President and Chief Financial Officer (Principal Financial Officer and duly authorized signing officer) Page 13 of 13
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Exhibit 10 (i)
          ------




Description of Amendment to Agreement with Mr. E. R. Shames
- - -----------------------------------------------------------

                The Agreement with Mr. Shames dated June 24, 1993 was amended
April 22, 1994 to provide that in the event he is terminated by the Company
other than for cause on or before May 31, 1996, the Company will (1) either
purchase his Columbus, Ohio residence or provide him with the difference
between his cost of the residence and the fair market value thereof, if less,
plus the applicable commission on his resale, not exceeding 6 percent of the
sale price, and (2) pay his moving expenses, per Company policy, for his
relocation to the East Coast (subject to reduction by amounts which any
subsequent employer might pay).





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                                                        Exhibit 10(ii)




                                 June 2, 1994





Lawrence O. Doza
Borden, Inc.
180 East Broad Street
Columbus, Ohio

Dear Larry:

This letter will confirm our discussion concerning your decision to resign your
position with the Company, by mutual agreement.  It will also serve to cover
various related matters so there will be no future confusion regarding them.

1.              Your official retirement date is March 1, 1994.  Commencing
                March 1, 1994 and continuing through August 31, 1995, you will
                be paid termination pay totaling $526,500, in semi-monthly
                installments of $14,625, less statutory deductions and
                deductions for any monies due Borden, Inc.  These payments
                include any and all vacation due you.  In the event of your
                death before payment of the full $526,500 is paid, any unpaid
                balance will be paid to your estate.

2.              You agree to promptly resign as an officer of Borden, Inc. and
                to resign from any companies/subsidiaries of Borden, Inc. in
                which you are an officer or director.

3.              You understand that you will not participate in the annual
                Management Incentive Plan, the 1992-94, the 1993-95 nor the
                1994-96 long-term cycles.  However, the stock options which you
                now hold will continue to be in effect until five (5) years
                from February 28, 1994, or until such earlier time that your
                stock options expire under their provisions.

4.              The Company will extend your Company-paid county club and
                luncheon club dues, (but not for non-Borden related items)
                until August 31, 1994.  Your financial counseling and home-auto
                insurance reimbursement will be extended through



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Lawrence O. Doza
June 2, 1994
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                December 31, 1994.  We will also reimburse you for any 1993
                expenditures in this category not yet reimbursed.  Your Core
                medical accumulation, and your Survivor Income Capital Account
                and survivor benefits cease February 28, 1994.  Your parking
                privileges were extended through April 30, 1994.  Your umbrella
                insurance benefit will continue through December 31, 1994.  The
                Company will reimburse you for an annual physical in 1994 of
                the kind you have regularly been provided in past years.

                The Company will commit to a matching gift or donation during
                1994 in the amount of $2,500 to the University of Missouri.

5.              Your other regular employee benefits (medical, life, pension
                and savings plan) were continued through February 28, 1994.
                You will not be eligible for salary continuance, long-term or
                short-term disability after February 28, 1994.  You may, if you
                wish, extend your medical/dental coverage at normal
                contributions through August 31, 1994.

6.              As special consideration to assist you in locating a new
                position, and to defray the expenses you will incur for office,
                telephone and secretarial assistance, the Company will pay you
                up to $10,000.  In addition, you will be permitted $19,471 for
                personal travel expenses, medical benefits and social/business
                clubs, or outplacement counseling in connection with a job
                search.  Requests for reimbursement for these items are
                accountable and should be submitted on a regular expense form
                with accompanying receipts.

7.              You will pay off any loans or reimburse the Company for any
                loans or equity interest in your country club and golf
                memberships, if any, as soon as practicable, but no later than
                August 31, 1994.

8.              Deferred awards under the Management Incentive Plan, if any,
                will be paid to you consistent with the provisions of the Plan.

9.              You acknowledge executing a Security and Invention Agreement
                and you agree to comply with the terms and conditions of that
                Agreement.  You acknowledge that your responsibilities with the
                Company were worldwide.  In addition, you agree that until
                August 31, 1995, you will not engage, without the prior written
                consent of the Chief Executive Officer of Borden, Inc. directly
                or indirectly on your own account, or as agent, employer,
                employee, partner, major stockholder or otherwise in services
                of the kind in which you were engaged by Borden, Inc., its
                subsidiaries or affiliates (hereinafter "the Company") during
                the past two (2) years for any entity or business which
                competes with the Company in any geographical area in the
                United States in which the Company now engages in business.
                You agree that you will not, either during the period of this
                agreement, nor


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Lawrence O. Doza
June 2, 1994
3

                thereafter, disclose to any third party or use for your own 
                benefit without our express authorization, any confidential 
                information provided by us or our representatives relative to 
                our business or that of our affiliated corporations, nor 
                information developed for Borden by you during the performance 
                of your service on our behalf during your employment.

10.             Because of the arrangement being provided to you, we will
                expect, and you agree, that you will conduct yourself in a
                manner which does not disparage Borden, Inc., its current or
                past employees, current or past officers, subsidiaries, and
                affiliates, and which is not contrary to the best interest of
                these organizations.

                The Company, through its executive officers, including its
                former Chief Executive Officer Anthony S. D'Amato, or directors
                will not disparage you.  This obligation will not be construed
                to prohibit the Company from making truthful statements about
                its business; nor shall it prohibit you or other former
                officers or directors of the Company from making truthful
                statements responsive to any statements made by the Company,
                its former officers or directors or in response to legal
                process.

11.             You agree to be available, as reasonably necessary and upon
                reasonable notice, with no expense to yourself (expenses
                include transportation, meals and lodging) for legal
                proceedings, whether administrative, civil, or criminal, if
                any, with respect to events which occurred during your
                employment with Borden, Inc.  You further agree to assist and
                cooperate with Borden, Inc. in any such proceedings.

12.             This agreement is personal and not assignable by you.  In the
                event of your death during the term hereof, this agreement
                shall terminate as of the last day of the month during which
                your death occurred and your designated beneficiary, which may
                be a trust, or if none is so designated, your estate will be
                paid all monies due up through the month of your death and, in
                addition, the balance of the termination pay noted above.

13.             In the event of a material breach of your obligation not to
                compete under this agreement you understand and agree to pay to
                Borden, Inc., any monies received under this agreement up to
                $351,000, and acknowledge that no further sums would be due
                hereunder.  This remedy is in addition to any remedy Borden,
                Inc. has to specifically enforce your agreement and is not to
                be construed as a limitation on its right to recover any
                greater amount of damage Borden can prove.

14.             To the full extent allowed under New Jersey law, the Company
                will indemnify and defend you with regard to any and all claims
                which may arise relating to matters which occurred prior to
                February 28, 1994, and which arose as a result of your
                employment as long as your acts:

   4
Lawrence O. Doza
June 2, 1994
16


                o       were not in breach of your duty of loyalty to the
                        Corporation or its shareholders; 
                o       were in good faith; 
                o       did not involve a knowing violation of law; or 
                o       did not result in receipt of an improper personal 
                        benefit; and

                it shall undertake and direct the defense of such proceeding,
                holding you harmless against expenses, as they are incurred.

15.             Citibank will write a letter to Erv Shames detailing the
                positive accomplishments you made in Borden's efforts to manage
                and finance its debt.  We provided you a copy of the draft of
                that letter for comments.  In addition, at our annual
                shareholders meeting when presented with the opportunity in
                response to questions, Mr. Shames  noted the contributions in
                this area in a positive manner.

16.             We agree that this agreement supersedes any and all other
                agreements relating to your employment with the Company
                including, but not limited to, your Core Arrangement.  This
                agreement shall be governed by the laws of the State of Ohio
                and shall inure to the benefit of the successors and assigns of
                Borden, Inc.   Any provision of the agreement deemed by a court
                to be too broad to be legally enforced shall be modified but
                only to the extent required to be so legally enforceable.

17.             In consideration of these foregoing benefits provided to you,
                you hereby release and discharge Borden, Inc., its subsidiaries
                and affiliates, their current directors, former directors,
                officers, former officers, employees, former employees, and
                agents from any and all current liabilities, claims for money,
                employment, re-employment, reinstatement and for any and all
                causes of action whatsoever which you may now have against them
                including those arising out of your employment, the termination
                thereof, or discrimination based on age, disability, race, sex
                or other reasons, except any vested pension rights which you
                may have acquired or as specifically noted herein; provided,
                however, that this release shall not be construed to prevent
                you from pursuing any rights you may have under the terms of
                any employee benefit plan to which you are a party and under
                ERISA; any rights you have to COBRA benefits; any rights you
                may have to unemployment compensation; and any rights you have
                to enforce the terms of this letter.

18.             You affirm that you are entering into this agreement and
                release voluntarily in order to receive payments and other
                benefits described above.  You understand that the Company
                would not make these payments or extend these benefits to you
                without your voluntary consent to this agreement.

19.             In making your decision, you recognize that you have the right
                to seek advice and

   5
Lawrence O. Doza
June 2, 1994
5

                counsel from others, including that of an attorney if you so 
                choose.  You acknowledge that you have 45 days within which to 
                consider this offer.

20.             You have seven calendar days from the date you sign this
                Agreement to cancel it in writing.   You also understand that
                this Agreement will not bind you or the Company until after the
                seven-day period you have to cancel.  No payments will be made
                under this Agreement until it becomes binding.   You may cancel
                this Agreement by signing the cancellation notice below (or by
                any other written signed notice) and delivering it to Borden,
                Inc., within seven days of your signing this Agreement.

I believe that this completely and accurately describes our understanding and
ask that you indicate your agreement by signing the original of this letter and
returning it to me.  I wish you every success in your future endeavors.

                                For:    Borden, Inc.


                                By:     s/ Ervin R. Shames 
                                    ----------------------------
                                          Ervin R. Shames

Attachment

READ, UNDERSTOOD AND AGREED T0:

s/Lawrence O. Doza                                      s/ 6/ 21/ 94
- - ------------------                                      ------------
Lawrence O. Doza                                        Date


                             Cancellation Notice

                  (To cancel this Agreement, sign below and
                  deliver this copy of the Agreement to the
                  Company within seven (7) days of the date you
                  signed this Agreement.)

                  I hereby cancel this Agreement.


                  ________________              __________________________
                  (Date)                        (Signature)

   1
                                                                Exhibit 10(iii)


May 4, 1994




George J. Waydo
Borden, Inc.
180 East Broad Street
Columbus, Ohio  43215


Dear George:

This letter will supplement our letter agreement of December 23, 1993 ("herein
"Separation Agreement") and as indicated modify the terms of that agreement.
All other terms will remain in effect.

        1.      Your employment under paragraph 2 of the Separation Agreement 
                is extended through July 31, 1994.

        2.      The amount in paragraph 7 of the Separation Agreement is 
                changed to $65,345 but will include expenses for your office 
                and secretary during the extension of your employment period.

        3.      Commencing not later than May 15, 1994 you will vacate your 
                office and relocate it to an office for which you will be 
                financially responsible.  You will also provide your own 
                secretarial and office services commencing May 4, 1994.  Borden 
                will reimburse you for long distance communication expenses made
                on its behalf.  Your existing Borden phone number, 225-4693 
                will be maintained for you through October 31, 1994 with voice 
                mail and with a recording giving your new office number.  Your 
                parking privileges in the Borden Building will end on July 31, 
                1994.  Borden will remove the office furniture on the attached
                list from your present office and arrange to have it delivered 
                to your new office in the Columbus, Ohio area as soon as it is 
                available and at Borden's expense.   You will pay Borden the 
                present book value of this furniture, namely $2798.42.
   2
George J. Waydo
Page 2


        4.      Should you obtain fully executed agreements for the sale of our 
                business in Japan and Puerto Rico upon which you have been 
                working and should those sales be completed or if not completed 
                that fact not be as a result of a defect in the sales agreement 
                or in the negotiation thereof as determined in the sole 
                discretion of Borden's Chief Executive Officer, the amount in 
                paragraph 7 of the Separation Agreement shall be increased to 
                $115,345.

        5.      In the event that prior to August 15, 1994 you elect in writing 
                not to convert to the Metropolitan Medical Conversion Plan 
                provided under paragraph 6 of the Separation Agreement and you 
                and each of your currently covered family members decline in 
                writing further participation in the Borden Medical and Dental 
                Plan including continued coverage under COBRA, the amount 
                provided under paragraph 7 of the Separation Agreement shall be 
                increased by $30,000 and no monies will be available for the 
                Metropolitan Conversion Policy under paragraph 6 of the 
                Separation Agreement.

        6.      Upon termination of your employment Borden will issue a 
                customary  employee announcement and a press release announcing 
                your decision to separate from Borden's employment and making 
                clear that you have been out of the operation of the snacks 
                businesses since June of 1992 and that you managed the Company's
                International Foods business during the period of its greatest 
                growth, from 1985 to December, 1993.  The Company will review 
                this announcement with you prior to its release.

        7.      Both parties waive any breaches of your Separation Agreement 
                through the date of this Supplemental Agreement.  The Company's 
                obligation under paragraph 11 of the Separation Agreement shall 
                be limited to its officers.  However, in the event that 
                disparaging remarks by other employees are brought to its 
                attention it shall direct such employees to cease and desist.  
                In the event that untruthful disparaging remarks are made by 
                employees or present or former members of the Core Management 
                Group, the Company shall, on request, issue a statement 
                correcting such untruthful statements.
   3
George J. Waydo
Page 3



        George, i believe this represents our understanding.  Please indicate 
your agreement by signing below.


                                Borden, Inc.



                                By       /s/     Allan L. Miller               
                                  ------------------------------------------
                                        Allan L. Miller


Agreed:



/s/  George J. Waydo              
- - ----------------------------
George J. Waydo





e:\et\george.5l4
   1
                                                                Exhibit 10(iv)






June 20, 1994


Mr. George J. Waydo
2703 Fairfax Drive
Upper Arlington, OH  43220

Dear George:

        This letter will amend and supplement your earlier agreements with
Borden, Inc. dated December 23, 1993 (herein, "Separation Agreement") and May
4, 1994 (herein, "Supplemental Agreement").

        1.      Your employment under paragraph 2 of the Separation Agreement
                is extended through September 30, 1994 so that you may assist
                in the sale of our Humpty-Dumpty snack unit;

        2.      The date in paragraph 5 of your Supplemental Agreement is
                changed from August 15, 1994 to September 30, 1994.

        3.      The amount in paragraph 2 of the Supplemental Agreement is
                increased to $75,575.

        4.      The amount in paragraph 3 of the Supplemental Agreement is
                decreased to $2,362.30.

        5.      The amount in paragraph 4 of the Supplemental Agreement is
                increased to $125,575.

        George, I believe this represents our understanding.  Please indicate
your agreement by signing below.


                                        Borden, Inc.


                                        By: /s/ Allan L. Miller
                                            -------------------------------
                                              Allan L. Miller



Agreed:


/s/ George J. Waydo
- - -------------------------------
George J. Waydo