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Owens Corning was well within its rights to offer its top executives bonuses to keep them from leaving the bankrupt corporation, a judge said Wednesday. Creditors challenged the proposed $2.3 million in bonuses for top executives at the Toledo, Ohio-based building-materials company, which was granted bankruptcy protection in October 2000 as it struggled with the substantial costs of asbestos litigation. With Owens Corning’s stock value wiped out, the retention program was intended to keep executives from fleeing the company as it tries to emerge from bankruptcy. Nearly 300 managers are eligible for some type of bonus, though debt-holders had challenged bonuses for only top tier executives. U.S. Bankruptcy Chief Judge Judith Fitzgerald said there was evidence that the five top executives at Owens Corning have turned the troubled company around and that it is vulnerable to headhunters who could steal away Michael Thaman, chairman and chief financial officer, or others. “The banks are benefiting just like everyone else,” Fitzgerald told attorneys for Credit Suisse First Boston, which is serving as the agent for banks trying to block the payments. The bonuses were approved for 2004 and 2005. During testimony Wednesday, the chairman of the company’s compensation committee, which authorized bonuses that would double the base compensation for the top five executives, said he never asked David Brown, president and chief executive, or any other top executive, whether they would leave the company without the bonuses. “I asked if he thought we were vulnerable from competition from other companies and he said ‘yes,’” said Landon Hilliard, head of the committee. Brown is integral to every decision made at the company, but had no vote on compensation packages, Hilliard said. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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