[Federal Register Volume 60, Number 18 (Friday, January 27, 1995)]
[Notices]
[Pages 5414-5428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2061]
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 941-0043]
Montedison S.p.A., et al.; Proposed Consent Agreement With
Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
-----------------------------------------------------------------------
SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
require, among other things, the Royal Dutch Petroleum Company and the
Shell Group of Companies to divest all of Shell Oil's polypropylene
assets to Union Carbide Corporation, or to another Commission approved
acquirer, within six months; would require Montedison to relinquish
revenues under the profit sharing agreement from future U.S. licenses
by Mitsui Petrochemical Industries Ltd.; and would prohibit the company
from entering into similar agreements.
DATES: Comments must be received on or before March 28, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th Street and Pennsylvania Avenue NW., Washington, D.C.
20580.
FOR FURTHER INFORMATION CONTACT:
Howard Morse or Rhett Krulla, FTC/S-3627, Washington, D.C. 20580. (202)
326-6320 or 326-2608.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii).
In the matter of Montedison S.p.A., a corporation, HIMONT
Incorporated, a corporation, Royal Dutch Petroleum Company, a
corporation, The ``Shell'' Transport and Trading Company, p.l.c., a
corporation, and Shell Oil Company, a corporation, File No. 941-
0043.
Agreement Containing Consent Order
The Federal Trade Commission (``the Commission''), having initiated
an investigation of the proposed formation of a joint venture between
Montedison S.p.A. and HIMONT Incorporated (collectively ``Montedison'')
and Shell Petroleum N.V., a holding company of the Royal Dutch/Shell
Group of Companies (``the Shell Group'') controlled by N.V. Koninklijke
Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company)
(``Royal Dutch'') and The ``Shell'' Transport and Trading Company,
p.l.c. (``Shell T&T''), that would merge certain assets and businesses
of Montedison and of companies of the Shell Group and it now appearing
that Royal Dutch, Shell T&T, and Shell Oil Company (``Shell Oil''), a
company of the Shell Group, (collectively ``Shell'') and Montedison,
all collectively hereinafter sometimes referred to as ``proposed
respondents,'' are willing to enter into an agreement containing an
order to exclude certain assets and businesses from the joint venture,
to divest certain assets and businesses, and to cease and desist from
making certain acquisitions, and providing for other relief:
It is hereby agreed by and between proposed respondents, by their
duly authorized officers and attorneys, and counsel for the Commission
that:
1. Proposed respondent Montedison S.p.A. is a corporation
organized, existing and doing business under and by virtue of the laws
of Italy with its principal executive offices located at Foro
Buonaparte, 31, 20121 Milan, Italy.
2. Proposed respondent HIMONT Incorporated is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of [[Page 5415]] Delaware with its principal executive
offices located at Three Little Falls Centre, 2801 Centerville Road,
Wilmington, Delaware 19850-5439. HIMONT Incorporated is a wholly-owned,
indirect subsidiary of Montedison S.p.A.
3. Proposed respondent Royal Dutch is a corporation organized,
existing and doing business under and by virtue of the laws of the
Netherlands with its principal executive offices located at Carel van
Bylandtlaan 30, The Hague, The Netherlands. Royal Dutch is a holding
company which, together with Shell T&T, controls the Shell Group.
4. Proposed respondent Shell T&T is a corporation organized,
existing and doing business under and by virtue of the laws of England
with its principal executive offices located at Shell Centre, London
SE1 7NA, England. Shell T&T is a holding company which, together with
Royal Dutch, controls the Shell Group.
5. Proposed respondent Shell Oil is a corporation organized,
existing and doing business under and by virtue of the laws of Delaware
with its principal executive offices located at One Shell Plaza,
Houston, Texas 77002. Shell Oil is a member company of the Shell Group,
and all of its shares are directly or indirectly owned by Royal Dutch
and Shell T&T.
6. Proposed respondents admit, for purposes of this Agreement and
Order and any related enforcement action, all the jurisdictional facts
set forth in the draft of complaint.
7. Proposed respondents waive:
(a) any further procedural steps;
(b) the requirement that the Commission's decision contains a
statement of findings of fact and conclusions of law;
(c) all rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this Agreement;
and
(d) any claim under the Equal Access to Justice Act.
8. This Agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
Agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto
released. The Commission thereafter may either withdraw its acceptance
of this Agreement and so notify the proposed respondents, in which
event it will take such action as it may consider appropriate, or issue
and serve its complaint (in such forms as the circumstances may
require) and decision, in disposition of the proceeding.
9. This Agreement is for settlement purposes only and does not
constitute an admission by proposed respondents that the law has been
violated as alleged in the draft of complaint, or that the facts as
alleged in the draft of complaint, other than jurisdictional facts
admitted as specified above, are true.
10. This Agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section 2.34 of the
Commission's Rules, the Commission may, without further notice to the
proposed respondents, (1) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following Order to divest and to cease and desist in disposition of the
proceeding, and (2) make information public with respect thereto. When
so entered, the Order shall have the same force and effect and may be
altered, modified, or set aside in the same manner and within the same
time provided by statute for other orders. The Order shall become final
upon service. Delivery by the U.S. Postal Service of the complaint and
decision containing the agreed-to Order to proposed respondents'
attorneys of record, William C. Pelster, Esq., Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, NY 10022, for Montedison;
Robert D. Joffe, Esq., Cravath, Swaine & Moore, 825 Eighth Avenue, New
York, NY 10019, for Royal Dutch and Shell T&T; and S. Allen Lackey,
Esq., Shell Oil Company, One Shell Plaza, Houston, Texas 77252, for
Shell Oil, shall constitute service. Proposed respondents waive any
right they may have to any other manner of service. The complaint may
be used in construing the terms of the Order, and no agreement,
understanding, representation or interpretation not contained in the
Order or this Agreement may be used to vary or contradict the terms of
the Order.
11. Proposed respondents have read the proposed complaint and Order
contemplated hereby. Proposed respondents understand that once the
Order has been issued, they will be required to file one or more
compliance reports showing they have fully complied with the Order.
Proposed respondents further understand that they may be liable for
civil penalties in the amount provided by law for each violation of the
Order after it becomes final.
Order
I
It is ordered that, as used in this Order, the following
definitions shall apply:
A. The following terms shall mean the following entities:
1. ``Montedison'' means Montedison S.p.A. and its wholly owned
subsidiary Montedison (Nederland) N.V., a holding company that owns
Montecatini Nederland B.V., which in turn owns, directly or indirectly,
through its subsidiaries HIMONT Incorporated, Spherilene S.r.l.,
Moplefan S.p.A. and Montepolmieri Sud, S.p.A., all of the polyolefins
interests of Montedison S.p.A. ``Montedison'' includes all
subsidiaries, divisions, and groups and affiliates controlled by
Montedison S.p.A., their respective successors and assigns, and their
respective directors, officers, employees, agents and representatives.
Unless otherwise indicated, ``Montedison'' does not include Montell.
2. ``HIMONT'' means HIMONT Incorporated. ``HIMON'' includes all
subsidiaries, divisions, and groups and affiliates controlled by
HIMONT, their respective successors and assigns, and their respective
directors, officers, employees, agents and representatives.
3. ``Shell'' means N.V. Koninklijke Nederlandsche Petroleum
Maatschappij (Royal Dutch Petroleum Company) (``Royal Dutch''), The
``Shell'' Transport and Trading Company, p.l.c. (``Shell T&T''), and
the Shell Group.
4. ``The Shell Group'' means all companies controlled by Royal
Dutch and/or Shell T&T, including Shell Oil and Shell Petroleum N.V.
``The Shell Group'' includes all subsidiaries, divisions, and groups
and affiliates controlled by companies of the Shell Group, Royal Dutch
or Shell T&T, their respective successors and assigns, and their
respective directors, officers, and agents and representatives. Unless
otherwise indicated, ``the Shell Group'' does not include Montell.
5. ``Shell Oil'' means Shell Oil Company. ``Shell Oil'' includes
all subsidiaries, divisions, and groups controlled by Shell Oil, their
respective successors and assigns, and their respective directors,
officers, agents and representatives. Unless otherwise indicated,
``Shell Oil'' does not include Polyco.
6. ``Montell'' means Montell Polyolefins, the corporation to be
formed, pursuant to the Agreement to Merge Polyolefins Businesses, to
hold the majority of the polyolefins businesses of Montedison and of
Shell and to be owned, directly or indirectly, [[Page 5416]] by
Montedison and companies of the Shell Group. ``Montell'' includes all
subsidiaries, divisions, and groups controlled by Montell, their
respective successors and assigns, and their respective directors,
officers, agents and representatives.
7. ``Montell Affiliates'' means companies that Montell controls as
that term is defined in 16 C.F.R. Sec. 801.1(b), except that this term
shall also include (i) any entity other than Montell in which Shell or
Montedison has an ownership interest of 25% or more as of December 1,
1994 and which interest is contributed to Montell, and (ii) companies
in which Montell has an ownership interest of 35% or more and would
have control as defined in 16 CFR 801.1(b) if ownership interests held
directly or indirectly by a government were excluded.
8. ``Technipol'' means a company to be formed and held separate by
Montedison under the terms and conditions of the attached Agreement to
Hold Separate. ``Technipol'' includes all subsidiaries, divisions, and
groups controlled by Technipol, their respective successors and
assigns, and their respective directors, officers, agents and
representatives.
9. ``Polyco'' means a company to be formed by Shell Oil to succeed
to and conduct, under the terms and conditions of this Order, the
Properties to Be Divested. ``Polyco'' includes all subsidiaries,
divisions, and groups controlled by Polyco, their respective successors
and assigns, and their respective directors, officers, agents and
representatives.
10. ``Akzo Nobel'' means Akzo Nobel N.V., Akzo Nobel Inc., Akzo
Chemicals BV and Akzo Chemicals Inc.
11. ``Mitsui'' means Mitsui Petrochemical Industries Ltd.
12. ``Union Carbide'' or ``UCC'' means Union Carbide Corporation.
B. ``Commission'' means the Federal Trade Commission.
C. ``Agreement to Merge Polyolefins Businesses'' means the
agreement between Montedison and Shell Petroleum N.V. (a company of the
Shell Group) dated December 30, 1993, and amendments thereto, to merger
the majority of the worldwide polyolefins businesses of Montedison and
of Shell into a new entity to be owned by Montedison and companies of
the Shell Group.
D. ``Propylene Polymers'' or ``PP'' means homopolymers of propylene
and copolymers or polyolefinic alloys of propylene with less than 50%
by mol of other monoolefins and having a flexural moduls (measured
according to ASTM D 790-71) higher than 4,000 Kg/cm2.
E. ``PP Catalyst'' means supported catalyst components including
compounds of transition metals of Groups IV-VIII of the Periodic Table,
at least in part supported on a carrier, the essential component of
which is a halogen-containing compound of magnesium, for use in
production of Propylene Polymers.
F. ``Catalyst Support'' means preformed catalyst supports or
support carriers which may be titanated, i.e., combined with titanium
or with a titanium containing compound, to produce PP Catalyst.
G. ``Catalyst Systems'' means specified combinations of PP Catalyst
and other components designed, developed, used, or suitable for use for
the production of Propylene Polymers.
H. ``PP Technology'' means technology relating to Propylene
Polymers and the production thereof, and to the preparation and use of
Catalyst Systems.
I. ``Catalyst Technology'' means technology relating to PP Catalyst
and to the production, preparation and use of PP Catalyst, Catalyst
Support and Catalyst Systems.
J. ``Shell Catalyst Technology'' means Catalyst Technology,
including Know-How and patent rights, developed, under development,
used, offered for license or licensed to any person by companies of the
Shell Group at any time prior to the date of transfer to Polyco of the
Properties to Be Divested.
K. ``Shell Oil Catalyst Technology'' means Catalyst Technology,
including Know-How and patent rights, developed, under development,
used, offered for license or licensed to any person by Union Carbide or
Shell Oil at any time prior to that date of transfer to Polyco of the
Properties to Be Divested.
L. ``Unipol PP Technology'' means PP Technology and Catalyst
Technology, including Know-How and patent rights, developed, under
development, offered for license, or licensed to any person by UCC and/
or Shell Oil in accordance with their Cooperative Undertaking Agreement
dated December 22, 1983, or used by UCC and Shell Oil in their
partnership PP facility at Seadrift, Texas at any time prior to the
date this Order becomes final.
M. ``Unipol/SHAC Technology Business'' means the research and
development, promotion, and licensing of Unipol PP Technology and Shell
Oil Catalyst Technology; the research and development of PP Catalyst,
Catalyst Support and Catalyst Systems utilizing Unipol PP Technology
and Shell Oil Catalyst Technology; rights and obligations under, and
activities conducted pursuant to, the Cooperative Undertaking Agreement
between UCC and Shell Oil dated December 22, 1983, and the
Polypropylene Catalyst Research and Development Agreement among Shell
Oil, UCC and Shell Internationale Research Maatschappij B.V. (``The
Tripartite Catalyst Research Agreement''); and the research and
development, production and sale of Propylene Polymers, and the
demonstration of Unipol PP Technology and Shell Oil Catalyst
Technology, pursuant to the Seadrift Polypropylene Company partnership
agreement between UCC and Shell Oil.
N. ``LIPP Process'' means PP Technology developed and used by Shell
for the production of Propylene Polymers through a bulk liquid
polymerization process.
O. ``Know-How'' means all relevant information, including
knowledge, experience and specifications.
P. ``Material Confidential Information'' means competitively
sensitive or proprietary information, not in the public domain,
concerning the PP Technology, Catalyst Technology, PP Catalyst,
Catalyst Support, or Propylene Polymers businesses.
Q. ``Properties to Be Divested'' means
1. All assets, tangible and intangible, of Shell Oil relating to PP
Technology, Catalyst Technology, Propylene Polymers and PP Catalyst,
including without limitation:
a. Shell Oil's Propylene Polymers plant and assets at Norco,
Louisiana, and Shell Oil's associated facilities at Norco, Louisiana
for splitting and separating polymer-grade propylene and propane from
chemical-grade propylene;
b. Shell Oil's PP Catalyst plant and assets at Norco, Louisiana;
c. Shell Oil's interest in the Seadrift Polypropylene Company and
the Propylene Polymers plant at Seadrift, Texas;
d. Shell Oil's PP Catalyst pilot plant;
e. Shell Oil's facilities and equipment (other than real property
and general, chemical analytical equipment) at the Westhollow
Technology Center at Houston, Texas, primarily utilized during the year
prior to the transfer to Polyco of the Properties to Be Divested in
research, development and technical support with respect to Shell Oil's
Propylene Polymers, PP Catalyst and Catalyst Technology businesses;
f. A rent-free lease, until five years from the date of divestiture
of the Properties to Be Divested or until such earlier date as the
acquirer may elect, to offices and research and development space at
the Westhollow Technology Center at Houston, Texas, associated with the
Properties to Be Divested; [[Page 5417]]
g. All owned or leased distribution facilities, rail cars and other
assets used in sales or technical service of Propylene Polymers or PP
Catalyst, other than real property at the headquarters offices, general
sales offices, and research center of Shell Oil;
h. All intellectual property, including patent rights, trade
secrets, technology and Know-How, relating to Catalyst Technology, PP
Catalyst, Catalyst Systems, and Propylene Polymers;
i. All customer lists, vendor lists, catalogs, sales promotion
literature, advertising materials, research materials, technical
information, management information systems, software, inventions,
specifications, designs, drawings, processes and quality control data;
j. All interest in and to the contracts entered into in the
ordinary course of business with customers (together with associated
bid and performance bonds), suppliers, sales representatives,
distributors, agents, personal property lessors, personal property
lessees, licensors, licensees, consignors and consignees, including
without limitation agreements with Shell Canada and Pecten, and rights
under warranties and guarantees, express or implied;
k. All books, records, and files;
l. Shell Oil's interest in owned or leased real property associated
with the Norco, Louisiana, and Seadrift, Texas, Propylene Polymers
plants, together with appurtenances, licenses and permits;
m. Shell Oil's interest in owned or leased improvements to real
property associated with the Norco, Louisiana, PP Catalyst plant,
together with appurtenances, licenses and permits, and a rent-free
lease to the land associated with the PP Catalyst plant for the life of
the plant;
n. Shell Oil's interest in the Unipol/SHAC Technology Business and
in the Cooperative Undertaking Agreement dated December 22, 1983,
including but not limited to all future revenue of Shell Oil from
Unipol PP Technology and Shell Catalyst Technology developed, under
development, offered for license, or licensed to any person by UCC or
Shell Oil at any time prior to the date of transfer to Polyco;
o. Exclusive world-wide rights to all Shell Oil trademarks and
trade names relating to Propylene Polymers other than Shell Oil
trademarks used by Shell Oil for its products generally, such as the
``SHELL'' mark and the Pecten emblem;
p. All licenses relating to the manufacture and sale of Propylene
Polymers and PP Catalyst or the licensing of PP Technology or Catalyst
Technology, including but not limited to Shell Oil's rights under the
following patents:
(1) All applicable patents of Shell;
(2) All patents of Montedison and Mitsui covered by the July 30,
1985 Agreement of Himont Incorporated, Mitsui, Union Carbide
Corporation, and Shell Chemical Company; any patent license agreements
between Montedison and Shell; and any patent license agreements between
Mitsui and Shell;
(3) Phillips U.S. Patent 4,376,851 ``crystalline polypropylene'';
(4) Studiengesellschaft Kohle U.S. Patent 4,125,698 covering
production of PP with a titanium chloride/DEAC catalyst; and
(5) Amoco Chemical Company patents covering ``PP Catalyst''
identified in the patent license agreement between Amoco and Shell Oil,
including Amoco U.S. Patent 4,540,679; Japan Patent Application 59350/
85 and European Patent Application 159,150; and
q. Shell Oil's rights under he Tripartite Catalyst Research
Agreement; the Polypropylene Agreement between Shell Research Limited
and Shell Oil Company; the PP Catalyst Patent Settlement Agreement
between Shell Internationale Research Maatschappij B.V. and Shell Oil
Company; and the July 30, 1985 Agreement of Himont Incorporated,
Mitsui, Union Carbide Corporation, and Shell Chemical Company, subject
to any necessary approval of parties not subject to this Order; and
2. All Shell's worldwide rights to the ``SHAC'' trademark; all
customer lists, records and files, all catalogs, and all sales
promotion literature relating to sales by Shell outside the United
States of PP Catalyst and Propylene Polymers manufactured by Shell Oil;
and all interest in and to contracts entered into by Shell in the
ordinary course of business with customers, sales representatives,
distributors and agents relating to the sale, outside the United
States, of PP Catalyst or Propylene Polymers manufactured by Shell Oil
(together with associated bid and performance bonds).
R. ``Viability and competitiveness'' means having the capability
and incentive to operate independently at annual levels of research and
development, licensing, production, and sales of PP Technology,
Catalyst Technology, PP Catalyst, Catalyst Support and Propylene
Polymers at least equal to levels experienced during each of the two
(2) calendar years immediately preceding the date of transfer to Polyco
of the Properties to Be Divested, and capable through its own resources
of functioning independently and competitively in the PP Technology,
Catalyst Technology, PP Catalyst, and Propylene Polymers businesses.
II
It is further ordered that:
A. Shell and Shell oil, as applicable, shall divest the Properties
to Be Divested, absolutely and in good faith, within six (6) months of
the date this Order becomes final, and shall also divest such
additional, ancillary assets and businesses and effect such
arrangements as are necessary to assure the marketability and the
Viability and Competitiveness of the Properties to Be Divested.
B. The period of six (6) months as specified in Paragraph II.A
shall be extended to March 31, 1997, if either of the following
conditions is satisfied:
1. Union Carbide declines, within thirty (30) days following
receipt by Union Carbide of the report of the independent appraiser, to
acquire the Properties to Be Divested for the fair market value of the
Properties to Be Divested as an operating business as determined by an
independent appraisal prepared in accordance with the following
procedure, or as otherwise agreed, or at such price as agreed, by Shell
Oil and Union Carbide:
a. Prior to the expiration of fifteen (15) days from the date this
Order becomes final shell Oil will notify Union Carbide of Shell Oil's
selection of an independent appraiser;
b. The independent appraiser selected by Shell Oil will perform the
appraisal unless within fifteen (15) days from notification of Shell
Oil's selected independent appraiser, Union Carbide objects to Shell
Oil's selected independent appraiser and notifies Shell Oil of its
selection of an independent appraiser;
c. Within fifteen (15) days from the date the name of Union
Carbide's selected independent appraiser is received by Shell Oil,
Shell Oil will either agree to Union Carbide's selected independent
appraiser or request that the two selected independent appraisers
jointly select, within ten (10) days of such request, another
independent appraiser;
d. The compensation paid to the independent appraiser shall be paid
by shell Oil or as otherwise agreed by Shell Oil and Union Carbide, and
the amount of compensation shall be independent of the amount of the
fair market value of the properties to Be Divested as determined by the
appraisal;
e. The independent appraiser shall be authorized by Shell to
question [[Page 5418]] personnel and examine all relevant books and
records, including personnel and books and records of the Unipol/SHAC
Technology Business, in connection with the appraisal under appropriate
confidentiality provisions;
f. The independent appraisal shall be completed and presented by
the appraiser to Union Carbide and Shell Oil within forty-five (45)
days of the selection of the appraiser as set forth in this Paragraph
II.B.1 of this Order; or
2. Union Carbide, within (30) days of receiving notice from Shell
Oil that Shell proposes to divest Polyco to a named acquirer approved
by the Commission, does not consent to the transfer of Polyco's
interest in the Cooperative Undertaking Agreement dated December 22,
1983, to such Commission approved acquirer.
C. In the event that, prior to the expiration of the six (6) months
specified in Paragraph II.A of this Order, the Commission has neither
approved nor disapproved, within sixty (60) days of receipt of the
application, an application for approval of a divestiture to a proposed
acquirer submitted in accordance with Paragraphs II.A and II.F of this
Order, the time period specified in Paragraph II.A of this Order may be
extended by the Commission by the number of days in excess of sixty
(60) required by the Commission to rule on the divestiture application
and, if the Commission approves divestiture to a person other than
Union Carbide, the Commission may further extend such period, if
necessary, by thirty (30) days in order to provide Shell Oil time to
comply with the requirements of Paragraph II.B.2 of this Order.
D. Provided further, if at the instance of Union Carbide over the
opposition of Shell, Shell is enjoined or otherwise prohibited by court
order from divesting the Properties to Be Divested, Shell shall
promptly give written notice of such order to the Commission, whereupon
the period within which Shell shall divest the Properties to Be
Divested under Paragraphs II.A, II.B or II.C of this Order shall be
extended to the earlier of (1) one year from the expiration of the time
specified in Paragraph II.A of this Order and such additional time as
may be allowed in Paragraphs II.B or II.C of this Order; or (2) ninety
(90) days after the injunction or other order expires.
E. Respondents shall comply with all terms of the Agreement to Hold
Separate, attached to this order and made a part hereof as Appendix I.
Said Agreement shall continue in effect until such time as Shell and
Shell Oil, as applicable, have divested all the Properties to Be
Divested or until such other time as the Agreement to Hold Separate
provides. Profits accumulated by Technipol during the period the
Agreement to Hold Separate is in effect shall be retained by Montedison
upon expiration of the Agreement to Hold Separate and shall in no event
be transferred to Montell or Shell.
F. Shell and Shell Oil, as applicable, shall divest the Properties
to Be Divested as an incorporated, ongoing business, identified herein
as ``Polyco'' and established in accordance with the attached Agreement
to Hold Separate, and shall divest the Properties to Be Divested only
to Union Carbide or to another acquirer or acquirers that receive the
prior approval of the Commission, and only in a manner that receives
the prior approval of the Commission. The purpose of the divestiture is
to ensure the continuation of Polyco as an ongoing and viable business
engaged in the research, development, manufacture and sale of PP
Catalyst and Propylene Polymers and in the research, development, and
licensing of PP Technology and Catalyst Technology, and to remedy the
lessening of competition resulting from the proposed acquisition as
alleged in the Commission's complaint.
G. The Properties to Be Divested shall be divested free and clear
of (1) all royalties, mortgages, encumbrances and liens to Shell or
Montell; and (2) any contractual commitments or obligations to Shell or
Montell existing as of the date of divestiture.
H. Should any transfer of an agreement, contract or license
required by Paragraph II.A of this Order not be possible after
reasonable effort by Shell and Shell Oil due to a person other than a
party to this Order withholding its consent to the transfer, Shell Oil
shall enter into an agreement with Polyco or the acquirer thereof the
purpose of which agreement is to realize the same effect as such
transfer. Shell Oil shall submit a copy of each such agreement with its
compliance reports to the Commission pursuant to Paragraphs VIII.A and
VIII.B of this Order. Further, Shell Oil shall secure, at its expense,
patent licenses, or assignments of patent licenses, extending to Polyco
and the acquirer thereof rights and royalty rates with respect to the
manufacture and sale of Propylene Polymers and PP Catalyst from the
Properties to Be Divested, and rights to expand production and sale, no
less favorable than those held by Shell Oil as of the date of transfer
to Polyco of the Properties to Be Divested.
III
It is further ordered that:
A. Prior to transfer of any assets or businesses from Shell into
Montell or merger of any part of Shell and Montell or Montedison, Shell
shall
1. Extend to Polyco, without royalty to Shell or Montell, Shell's
rights under agreements relating to the research and development,
manufacture and sale of PP Catalyst, Catalyst Support, and Catalyst
Systems by any person, including but not limited to nonexclusive rights
to sell, and to contract with Akzo Nobel for the production of, PP
Catalyst and Catalyst Support;
2. Disclose to Polyco all Shell Catalyst Technology in its
possession or to which it has rights;
3. Grant Polyco, without royalty to Shell or Montell, the
perpetual, non-exclusive right (1) to license, subject to the rights of
Union Carbide, Shell Catalyst Technology to any person worldwide; (2)
to sell worldwide to any person PP Catalyst and Catalyst Systems based
on Shell Catalyst Technology; and (3) to enforce intellectual property
rights with respect to Shell Catalyst Technology worldwide, including
without exclusion the right to sue any person who by the manufacture,
use or sale of any PP Catalyst or Catalyst System infringes any Shell
patent which has been applied for in any country in the world before
the date this Order becomes final. All costs of any such suit by Polyco
shall be borne by Polyco and all damages recovered shall be retained by
Polyco; and
4. Gant Polyco, without royalty to Shell or Montell, the exclusive
right, until seven years from the date of divestiture of the Properties
to Be Divested, (1) to license, subject to the rights of Union Carbide,
Shell Catalyst Technology to persons other than Montell and Montell
Affiliates; and (2) to sell to persons other than Montell and Montell
Affiliates (or LIPP Process licensees for use in their LIPP Process
plants) such PP Catalyst formulations or their equivalent as were
manufactured or sold by Shell, or manufactured for Shell by Akzo Nobel,
prior to the date this Order becomes final; and
B. Shell and Montell shall grant to Polyco and licensees of Unipol
PP Technology immunity under patents relating to PP Technology,
Catalyst Technology, PP Catalyst, Catalyst Support, Catalyst Systems or
Propylene Polymers, based on work conducted prior to December 31, 1997,
or prior to one year after divestiture of the Properties to Be
Divested, whichever is later, by persons who, as Shell personnel within
one (1) year prior to the date of the formation of Montell, had access
to Unipol PP Technology other [[Page 5419]] than in the public domain
and other than Catalyst Technology received by Shell Oil from other
companies of the Shell Group.
C. Until one (1) year after divestiture of the Properties to Be
Divested no Shell research personnel who, within one (1) year prior to
the date of the formation of Montell, had access to Unipol PP
Technology (other than Catalyst Technology received by Shell Oil from
other companies of the Shell Group) shall engage in research at
facilities of Montell on PP Technology, Shell Catalyst Technology or
Montedison Catalyst Tchnology. Provided, however, nothing in this Order
shall require Shell to conduct any research and development for any
person or to refrain from conducting research and development for, and
at the expense of, any person, including Montell and communicating
with, or receiving communications from, such person regarding such
research and development work. The results of any research and
development conducted by Shell prior to December 31, 1997, or one year
after divestiture of the Properties to Be Divested, whichever is later,
on Shell Catalyst Technology, including but not limited to research or
development conducted for, or at the expense of, Montell, shall be
provided to Polyco without payment for use in the Unipol/SHAC
Technology Business.
D. Shell (including former employees of Shell transferred to
Montell) shall not provide, disclose or otherwise make available to
Montedison, Technipol, Montell or Montell Affiliates any Material
Confidential Information relating to Unipol PP Technology or the
Unipol/SHAC Technology Business (other than Catalyst Technology
received by Shell Oil from other companies of the Shell Group),
provided however nothing in this Paragraph III.D of this Order shall
prohibit (1) Montell Affiliates who are licensees of Unipol PP
Technology from receiving information, in accordance with such license,
for use in their Unipol PP Technology licensed production facilities,
including information obtained by Shell, prior to the formation of
Montell, under The Tripartite Catalyst Research Agreement; and (2) any
communication between Shell and Montell necessary to ensure that
Montell and its employees make no unauthorized use or disclosure of any
Material Confidential Information.
E. Until two (2) years after divestiture of the Properties to Be
Divested, Shell, Montell and Technipol shall not employ, or make offers
of employment to, any person employed by Shall Oil whose principal
duties, during the year prior to the date of transfer to Polyco of the
Properties to Be Divested, related to the management, development or
operation of the Properties to Be Divested. This provision, however,
does not apply to employment by Shell Oil of any employee who is
terminated by Polyco or by the acquirer of the Properties to Be
Divested or who is not offered employment by Polyco or by the acquirer
of the Properties to Be Divested at a base salary that is at least
equivalent, and incentives and benefits that are comparable, to those
held by the employee prior to the divestiture of the Properties to Be
Divested. Provided, however, Shell Oil shall not be required to, but
may, terminate employment of any employee who refuses to accept
employment with Polyco; Shell Oil shall substitute alternative
personnel or equivalent qualifications, education and experience for
any persons declining to accept employment with Polyco who are not
terminated by Shell. Shell Oil shall encourage and facilitate
employment by Polyco or by the acquirer of the Properties to Be
Divested of employees whose principal duties, during the year prior to
the date of transfer to Polyco of the Properties to Be Divested,
related to the management, development or operation of the Properties
to Be Divested; shall not offer any incentive to such employees to
decline employment with Polyco or with the acquired or the Properties
to Be Divested or to accept other employment in Shell; and shall remove
any impediments that exist which may deter such employees from
accepting employment with Polyco or with the acquirer of the Properties
to Be Divested, including but not limited to the payment for the
benefit of the employees of all accrued bonuses, pensions and other
accrued benefits to which such employees are entitled as of the date of
the divestiture. Shall Oil shall not impose any loss of pension
benefits on employees to which such employees are entitled under the
Shell Oil pension plan as administered under ERISA.
IV
It is further ordered that from the date this Order becomes final
and continuing until three (3) years following the date of the
divestiture required by this Order, Shell shall, at Polyco's request or
at the request of the acquirer of the Properties to Be Divested,
contract with Polyco or the acquirer of the Properties to Be Divested
to supply to Polyco or the acquirer propylene monomer, in such
quantities and product grade as Polyco or the acquirer may request for
use in the Properties to Be Divested subject only to the capacity and
grade constraints of Shell's propylene monomer production facilities in
the United States and preexisting contractual obligations to persons
other than Shell, Montedison, and Montell. The price, terms, and
conditions at which Shell shall supply any grade of propylene monomer
to Polyco and to the acquirer of the Properties to Be Divested shall be
no less favorable to Polyco and the acquirer of the Properties to Be
Divested than the price, terms, and conditions at which Shell supplies
such grade of propylene monomer, directly or indirectly, to Montell in
North America, through exchange or otherwise.
V
It is further ordered that:
A. If Shell or Shell Oil, as applicable, has not divested,
absolutely and in good faith and with the Commission's prior approval,
the Properties to Be Divested within the time required by Paragraph
II.A of this Order or within such additional time as may be allowed in
Paragraphs II.B, II.C or II.D of this Order, the Commission may appoint
a trustee to divest the Properties to Be Divested. In the event that
the Commission or the Attorney General brings an action pursuant to
Sec. 5(l) of the Federal Trade Commission Act, 15 U.S.C. 45(l), or any
other statute enforced by the Commission, Shell shall consent to the
appointment of a trustee in such action. Neither the appointment of a
trustee nor a decision not to appoint a trustee under this Paragraph
shall preclude the Commission or the Attorney General from seeking
civil penalties or any other relief available to it, including a court-
appointed trustee, pursuant to 5(l) of the Federal Trade Commission
Act, or any other statute enforced by the Commission, for any failure
by Shell to comply with this Order.
B. If a trustee is appointed by the Commission or a court pursuant
to Paragraph V.A of this Order, Shell shall consent to the following
terms and conditions regarding the trustee's powers, duties, authority,
and responsibilities:
1. The Commission shall select the trustee, subject to the consent
of Shell, which consent shall not be unreasonably withheld. The trustee
shall be a person with experience and expertise in acquisitions and
divestitures. If Shell has not opposed, in writing, including the
reasons for opposing, the selection of any proposed trustee within ten
(10) days after notice by the staff of the Commission to Shell of the
identity of any proposed trustee, [[Page 5420]] Shell shall be deemed
to have consented to the selection of the proposed trustee.
2. Subject to the prior approval of the Commission, the trustee
shall have the exclusive power and authority to divest the Properties
to Be Divested.
3. Within ten (10) days after appointment of the trustee, Shell
shall execute a trust agreement that, subject to the prior approval of
the Commission and, in the case of a court-appointed trustee, of the
court, transfers to the trustee all rights and powers necessary to
permit the trustee to effect the divestiture required by this Order.
4. The trustee shall have twelve (12) months from the date the
Commission approves the trust agreement described in Paragraph V.B.3 to
accomplish the divestiture, which shall be subject to the prior
approval of the Commission. If, however, at the end of the twelve-month
period, the trustee has submitted a plan of divestiture or believes
that divestiture can be achieved within a reasonable time, the
divestiture period may be extended by the Commission, or, in the case
of a court-appointed trustee, by the court; provided, however, the
Commission may extend this period only two (2) times.
5. The trustee shall have full and complete access to the
personnel, books, records and facilities related to the Properties to
Be Divested or to any other relevant information, as the trustee may
request. Shell and Polyco shall develop such financial or other
information as such trustee may request and shall cooperate with the
trustee. Shell and Polyco shall take no action to interfere with or
impede the trustee's accomplishment of the divestitures. Any delays in
divestiture caused by Shell or Polyco shall extend the time for
divestiture under this Paragraph in an amount equal to the delay, as
determined by the Commission or, in the case of a court-appointed
trustee, by the court.
6. The trustee shall use his or her best efforts to negotiate the
most favorable price and terms available in each contract that is
submitted to the Commission, subject to Shell's absolute and
unconditional obligation to divest at no minimum price. The divestiture
shall be made in the manner and to the acquirer or acquirers as set out
in Paragraph II.A of this Order; provided, however, if the trustee
receives bona fide offers from more than one acquiring entity, and if
the Commission determines to approve more than one such acquiring
entity, the trustee shall divest to the acquiring entity or entities
selected by Shell from among those approved by the Commission.
7. The trustee shall serve, without bond or other security, at the
cost and expense of Shell, on such reasonable and customary terms and
conditions as the Commission or a court may set. The trustee shall have
the authority to employ, at the cost and expense of Shell, such
consultants, accountants, attorneys, investment bankers, business
brokers, appraisers, and other representatives and assistants as are
necessary to carry out the trustee's duties and responsibilities. The
trustee shall account for all monies derived from the divestiture and
all expenses incurred. After approval by the Commission or, in the case
of a court-appointed trustee, by the court, of the account of the
trustee, including fees for his or her services, all remaining monies
shall be paid at the direction of Shell and the trustee's power shall
be terminated. The trustee's compensation shall be based at least in
significant part on a commission arrangement contingent on the
trustee's divesting the Properties to Be Divested.
8. Shell shall indemnify the trustee and hold the trustee harmless
against any liabilities, losses, claims, damages, or expenses arising
out of, or in connection with, the performance of the trustee's duties,
including all reasonable fees of counsel and other expenses incurred in
connection with the preparation for, or defense of any claim, whether
or not resulting in any liability, except to the extent that such
liabilities, losses, claims, damages, or expenses result from
misfeasance, gross negligence, willful or wanton acts, or bad faith by
the trustee.
9. If the trustee ceases to act or fails to act diligently, a
substitute trustee shall be appointed in the same manner as provided in
Paragraph V.A. of this Order.
10. The Commission or, in the case of a court-appointed trustee,
the court, may on its own initiative or at the request of the trustee
issue such additional orders or directions as may be necessary or
appropriate to accomplish the divestiture required by this Order.
11. The trustee shall have no obligation or authority to operate or
maintain the Properties to Be Divested pending completion of the
divestiture.
12. The trustee shall report in writing to Shell Oil and the
Commission every sixty (60) days concerning the trustee's efforts to
accomplish divestiture.
VI
It is further ordered that:
A. Royal Dutch, Shell T&T and Montedison shall obligate Montell,
Montedison shall obligate Technipol, and Shell Oil shall obligate
Polyco, to be bound by this Order and insure compliance with this Order
by Montell, Technipol and Polyco, respectively.
B. Shell, Montedison and Montell shall not restrict any Montell
Affiliate from licensing PP Technology or Catalyst Technology from the
Unipol/SHAC Technology Business or Technipol or from purchasing PP
Catalyst or Catalyst Systems from Polyco or Technipol.
C. Polyco shall not withhold its consent, except for good cause, to
Union Carbide to grant or negotiate license fees and royalty rates
below those minimums specified in the Cooperative Undertaking Agreement
dated December 22, 1983, and attachments thereto.
D. Shell, Montedison, Montell and Technipol shall not enter into or
renew any agreement or understanding with any developer or licensor of
PP Technology or Catalyst Technology or any manufacturer, or seller of
PP Catalyst, Catalyst Support, or Catalyst Systems limiting the
geographic area within which, or limiting the persons to whom, such
person may license PP Technology or Catalyst Technology or may
manufacture and sell PP Catalyst, Catalyst Support, or Catalyst
Systems, unless such agreement or understanding relates exclusively to
markets other than the United States and has no effect on United States
commerce, including but not limited to export commerce. Nothing in this
Paragraph VI.D shall prohibit Shell, Montedison, Montell or Technipol
from legitimately designating a sales agent for the sale of, or
contract manufacturer for the production of, PP Catalyst or Propylene
Polymers in any geographic area, or from limiting the persons,
geographic area or uses for which they respectively grant legitimate
licenses of their PP Technology or Catalyst Technology.
E. Montedison, Montell and Technipol shall not (1) enforce any
provision in any agreement with Mitsui providing for sharing of
royalties with respect to licenses granted by Mitsui after the date
this Order becomes final for use of PP Technology and Catalyst
Technology in the United States in Propylene Polymers plants and in the
production of Propylene Polymers; or (2) enter into or renew any
agreement with Mitsui providing for sharing of royalties with respect
to licensing of PP Technology or Catalyst Technology in the United
States for use in Propylene Polymers plants and in the production of
Propylene Polymers.
VII
It is further ordered that, for a period of ten (10) years from the
date this Order [[Page 5421]] becomes final, Shell, Montedison and
Montell shall not, without the prior approval of the Commission,
directly or indirectly, through subsidiaries, partnerships, or
otherwise:
A. Acquire any stock, share capital, equity, or other interest in
any concern, corporate or non-corporate, other than the acquisition by
Shell or Montedison of additional shares of Montell, engaged in at the
time of such acquisition, or within two (2) years preceding such
acquisition engaged in,
1. the research and development (other than only implementation of
technology licensed from others), or sale or licensing to any person,
of PP Technology or Catalyst Technology anywhere in the world;
2. the research and development, sale, or manufacture for sale of
PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the
world; or
3. the manufacture or sale of Propylene Polymers in the United
States or Canada; or
B. Acquire any assets used for or previously used for (and still
suitable for use for)
1. the research and development (other than only implementation of
technology licensed from others), or sale or licensing to any person,
of PP Technology or Catalyst Technology anywhere in the world;
2. the research and development, sale, or manufacture for sale of
PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the
world; or
3. the manufacture or sale of Propylene polymers in the United
States or Canada.
Provided, however, these prohibitions shall not relate to the
construction of new facilities or the acquisition of new or used
equipment in the ordinary course of business from a person other than
the persons referred to in Paragraph VII.A of this Order. Provided,
further that this Paragraph VII of this Order shall not apply to the
acquisition of Technipol by Montell following completion of the
divestiture of the Properties to Be Divested and expiration of the
attached Hold Separate Agreement.
VIII
It is further ordered that:
A. Within sixty (60) days from the date this Order becomes final
and every sixty (60) days thereafter until Shell has fully complied
witht he provisions of Paragraphs II and V of this Order, Shell Oil
shall submit to the Commission a verified written report setting forth
in detail the manner and form in which it intends to comply, is
complying, and has complied with Paragraphs II and V of this Order.
Shell Oil shall include in its compliance reports, among other things
that are required from time to time, a full description of the efforts
being made to comply with Paragraphs II and V of the Order, including a
description of all substantive contacts or negotiations for the
divestitute and the identity of all parties contacted. Shell Oil shall
include in its compliance reports copies of all written communications
to and from such parties, all internal memoranda, and all reports and
recommendations concerning divestiture.
B. One (1) year from the date this Order becomes final, annually
for the next nine (9) years on the anniversary of the date this Order
becomes final, and at other times as the Commission may require, Royal
Dutch, Shell Oil, Montendison and Montell shall each file a verified
written report with the Commission setting forth in detail the manner
and form in which it has complied and is complying with this Order.
IX
It is further ordered that Royal Dutch, Shell T&T, Shell Oil,
Montedison and Montell shall each notify the Commission at least thirty
(30) days perior to any proposed change in such company, such as
dissolution, assignment, sale resulting in the emergence of a successor
corporation, or the creation or dissolution of subsidiaries or any
other change in such company that may affect compliance obligations
arising out of this Order.
X
It is further ordered that, for the purpose of determining or
securing compliance with this Order, and subject to any legally
recognized privilege, upon written request, and on reasonable notice,
Shell, Montedison and Montell shall each permit any duly authorized
representative of the Commission:
A. Access, during office hours and in the presence of counsel, to
inspect and copy all books, ledgers, accounts, correspondence,
momoranda, and other records and documents in the possession or under
the control of Shell, Montendison or Montell, as applicable, relating
to any matters contained in this Order; and
B. Upon five (5) days notice to Shell, Montedison or Montell and
without restraint or interference from it, to interview its officers,
directors or employees, who may have counsel present, regarding such
matters.
XI
It is further ordered that this Order shall terminate twenty (20)
years from the date this Order becomes final.
Attachment I
In the Matter of: Montedison S.p.A., a corporation, HIMONT
Incorporated, a corporation, Royal Dutch Petroleum Company, a
corporation, The ``Shell'' Transport and Trading Company, p.l.c., a
corporation, and Shell Oil Company, a corporation, File No. 941-
0043.
Agreement to Hold Separate
This Agreement to Hold Separate (``Agreement'') is by and among
Montedison S.p.A., a corporation organized, existing and doing business
under the laws of Italy with its principal executive offices located at
Foro Buonaparte, 31, 20121 Milan, Italy, and its wholly-owned
subsidiary, HIMONT Incorporated, a corporation organized, existing and
doing business under the laws of the State of Delaware with its
principal executive offices located at Three Little Falls Centre, 2801
Centerville Road, Wilmington, Delaware 19850-5439 (collectively
``Montedison''); Royal Dutch Petroleum Company, a corporation
organized, existing and doing business under the laws of the
Netherlands with its principal executive offices located at Carel van
Bylandtlaan 30, The Hague, The Netherlands, and The ``Shell'' Transport
and Trading Company, p.l.c., a corporation organized, existing and
doing business under the laws of England with its principal executive
offices located at Shell Centre, London SE1 7NA, England, and their
wholly-owned subsidiary, Shell Oil Company, a corporation organized,
existing and doing business under the laws of the State of Delaware
with its principal executive offices located at One Shell Plaza,
Houston, Texas 77002 (collectively ``Shell''); and the Federal Trade
Commission (the ``Commission''), an independent agency of the United
States Government, established under the Federal Trade Commission Act
of 1914, 15 U.S.C. Sec. 41, et seq. (collectively, the ``Parties'').
Premises
Whereas, on or about December 30, 1993, Montedison and Shell
Petroleum N.V., a holding company of the Shell Group, entered into an
agreement providing for the merger (hereinafter the ``Acquisition'') of
the majority of the polyolefin assets and businesses of Montedison
(hereinafter the ``Montedison Merged Assets'') and the majority of the
polyolefin assets and [[Page 5422]] businesses of Shell (hereinafter
the ``Shell Merged Assets''); and
Whereas, Montedison and Shell each develop a license PP Technology
and Catalyst Technology and each develop, manufacture and sell PP
Catalyst and Propylene Polymers; and
Whereas, Montedison will establish Technipol and hold Technipol
separate from Montell in accordance with the Decision of the Commission
of the European Communities in Case No. IV/M. 269-SHELL/MONTECATINI;
and
Whereas, the Commission is now investigating the Acquisition to
determine if it would violate any of the statutes enforced by the
Commission; and
Whereas, if the Commission accepts the attached Agreement
Containing Consent Order (``Consent Order''), which would require the
divestiture of certain assets, the Commission must place the Consent
Order on the public record for a period of at least sixty (60) days and
may subsequently withdraw such acceptance pursuant to the provisions of
Section 2.34 of the Commission's Rules; and
Whereas, the Commission is concerned that if an understanding is
not reached, preserving the status quo ante of the Montedison Merged
Assets and the Shell Merged Assets, respectively, during the period
specified in Paragraph 4 of this Agreement, divestiture resulting from
any proceeding challenging the legality of the Acquisition might not be
possible, or might be less than an effective remedy; and
Whereas, the Commission is concerned that if the Acquisition is
consummated, it will be necessary to preserve the Commission's ability
to require the divestiture of the Properties to Be Divested as
described in Paragraph I.Q of the Consent Order and the Commission's
right to have the Properties to Be Divested continue as a separate,
viable and independent entity; and
Whereas, the purpose of this Agreement and the Consent Order is to:
(i) Ppreserve the Properties to Be Divested, also referred to
herein as ``Polyco,'' as a viable business independent from Montedison,
pending the divestiture of the Properties to Be Divested as a viable
and ongoing enterprise;
(ii) Preserve Technipol as a viable business independent from
Shell, pending the divestiture of the Properties to Be Divested as a
viable and ongoing enterprise; and
(iii) Remedy any anticompetitive effects of the Acquisition; and
Whereas, Montedison's and Shell's entering into this Agreement
shall in no way be construed as an admission by Montedison and Shell
that the Acquisition is illegal, and this Agreement shall in no way be
construed as limiting in any way the obligations of Montedison and
Shell pursuant to the Decision of the Commission of the European
Communities in Case No. IV/M. 269-SHELL/MONTECATINI; and
Whereas, Montedison and Shell understand that no act or transaction
contemplated by this Agreement shall be deemed immune or exempt from
the provisions of the antitrust laws or the Federal Trade Commission
Act by reason of anything contained in this Agreement.
Now, therefore, upon understanding that the Commission has not yet
determined whether the Acquisition will be challenged, and in
consideration of the Commission's agreement that, unless the Commission
determines to reject the Consent Order, the Commission will not seek a
temporary restraining order, preliminary injunction, or permanent
injunction with respect to the Acquisition, and in recognition that the
Commission may exercise any and all rights to enforce this Agreement
and the Consent Order to which it is annexed and made a part thereof,
and, in the event the required divestiture is not accomplished, to seek
divestiture of the Properties to Be Divested and such other relief as
the Commission may consider appropriate, the Parties agree as follows:
1. Montedison and Shell agree that from the date this Agreement is
signed by Shell and Montedison until the earliest of the dates listed
in Paragraphs 1.a or 1.b, they each will comply with the provisions of
this Agreement:
a. Ten days after the Commission withdraws its acceptance of the
Consent Order pursuant to the provisions of Section 2.34 of the
Commission's Rules; or
b. The day after the divestiture required by the Consent Order has
been completed.
2. Montedison, Royal Dutch, Shell T&T and Shell Oil agree to
execute and be bound by the attached Agreement Containing Consent Order
and to comply, from the date this Agreement is accepted, with the
provisions of the Consent Order as if it were final.
3. The terms capitalized herein shall have the same definitions as
in the Consent Order. In addition, the following terms used herein
shall have the following definitions:
a. ``Montedison PP Technology'' means PP Technology and Catalyst
Technology, including Know-How and patent rights, developed, under
research and development, used, offered for license, or licensed to any
person by Montedison at any time prior to the date of transfer to
Technipol of the Montedison Properties to Be Transferred. For purposes
of this Agreement Catalloy process and related catalyst technology and
technology concerning the production of PP Catalyst or the production
of any other component of Catalyst Systems shall be excluded from
``Montedison PP Technology.''
b. ``Montedison Properties to Be Transferred'' means the
businesses, rights and interests, and other assets, tangible and
intangible, required to be transferred from Montedison to Technipol
pursuant to Paragraph 8 of this Agreement.
c. ``Existing Montedison Licenses'' means licenses of Montedison PP
Technology to persons other than Montell Affiliates in effect as of the
date of transfer to Technipol of the Montedison Properties to Be
Transferred and includes so-called ``catalyst use know-how licenses,''
``process know-how licenses'' and ``patent licenses.''
d. ``Improvements'' means all refinements, optimizations, or new
technical developments, patentable or unpatentable, of Know-How, PP
Technology and Catalyst Technology, with commercial application, other
than Major Advances.
e. ``Major Advances'' means all new technical developments of and
changes, patentable or unpatentable, to existing Know-How, PP
Technology and Catalyst Technology with commercial application, of the
type generally recognized in the industry as revolutionary or of major
consequence and would, upon commercial implementation, (a) reduce
production costs of Propylene Polymers by at least one (1) cent per
pound; (b) significantly increase the quality, productivity or selling
potential of the PP Catalyst, Catalyst Support or Catalyst System, or
the quality or selling potential of the Propylene Polymers; or (c)
enable production of new Propylene Polymers commercially competitive
primarily in end-uses for which Propylene Polymers produced and sold
commercially have not been previously suitable for technological
reasons. Major Advances include, for example:
i. In the case of PP Technology, elimination of a unit operation,
addition of a unit operation, or introduction of a new comonomer or
additive;
ii. In the case of PP Catalyst, a change in the major type of
Catalyst Support;
iii. In the case of Catalyst Systems, a change in the major type of
components [[Page 5423]] or elimination of one component together with
a type change in another component; and
iv. In the case of Propylene Polymers, new compositions or types
that display chemical and physical properties not previously achievable
by the relevant technology.
4. Montedison and Shell agree that from the date this Agreement is
signed by Montedison and Shell until March 1, 1995, Montedison will
hold the Montedison Merged Assets separate and apart from Shell and
from Montell, and Shell will hold the Shell Merged Assets separate and
apart from Montedison and from Montell.
5. Commencing prior to, or concurrently with, transfer to Montell
of the Shell Merged Assets, Shell will hold the Properties to Be
Divested as they are presently constituted (hereafter ``Polyco'')
separate and apart on the following terms and conditions:
a. Shell and Shell Oil, as applicable, shall transfer to Polyco all
ownership and control of the Properties to Be Divested. Polyco shall be
held separate and apart and shall be operated independently of Shell
(meaning here and hereinafter, Shell excluding Polyco and excluding all
personnel connected with Polyco as of the date this Agreement is
signed) except to the extent that Shell Oil must exercise direction and
control over Polyco to assure compliance with this Agreement or with
the Consent Order.
b. Shell Oil shall separately incorporate Polyco and cause Polyco
to adopt new Articles of Incorporation and By-laws and any other
required documents for Polyco that are not inconsistent with other
provisions of this Agreement. Shall Oil shall also elect a new six-
person board of directors of Polyco (``New Board'') prior to, or
concurrently with, transfer of any assets or businesses from Shell into
Montell or merger of any part of Shell and Montell or Montedison.
Questions before the New Board shall be approved by a simple majority
of the directors voting on the matter, provided that Polyco shall
engage in no transaction that is precluded by this Agreement or by the
Consent Order. Shell Oil may elect the directors to the New Board;
provided, however, that such New Board shall consist of at least three
outside directors neither previously nor currently employed by Shell or
Montedison; two officers of Polyco; and a maximum of one Shell Oil (but
not Royal Dutch, Shell T&T or Montell) director, officer, employee, or
agent; provided, further, that such Shell Oil director, officer,
employee or agent shall enter into a confidentiality agreement in
accordance with the provisions of Paragraph 5.h hereof and shall not be
a person involved in Shell or Montell's Propylene Polymers or PP
Catalyst businesses, as defined in Paragraph I. of the Consent Order.
Such director who is also a Shell Oil director, officer, employee or
agent shall participate in matters that come before the New Board only
for the limited purpose of carrying out Shell Oil's and Polyco's
responsibilities under this Agreement or under the Consent Order. Shell
Oil will take no action to delay or limit expansion of production
capacity by Polyco. Except as permitted by this Agreement, the Shell
Oil director shall not participate in any matter, or attempt to
influence the votes of the other directors with respect to matters,
including but not limited to expansion of capacity, that would involve
a conflict of interest if Shell Oil and Polyco were separate and
independent entities. In the case of deadlock by the New Board on any
question in which the Shell Oil director participates, a second vote
shall be taken on the question and the Shell Oil director shall not
vote. The New Board shall include a chairman who is independent of
Shell and is competent to assure the continual Viability and
Competitiveness of Polyco. Shell Oil shall notify the Commission in its
next compliance report submitted pursuant to Paragraph VIII.A of the
Consent Order of the identity and relevant qualifications and
experience of any person whom Shell Oil has appointed as an original or
subsequent director of Polyco.
c. Except for the single Shell Oil director, officer, employee, or
agent serving on the ``New Board'' (as defined in Paragraph 5.b), Shell
shall not permit any director, officer, employee or agent of Shell to
also be a director, officer, employee or agent of Polyco. In the event
any members of management of the Properties to Be Divested should
choose not to accept employment with Polyco, or should retire or
otherwise leave their management positions, the non-Shell (as Shell is
defined in Paragraph 5.a hereof) directors serving on the New Board (as
defined in Paragraph 5.b hereof) shall have the exclusive power to
replace such members of management.
d. Polyco shall be staffed with sufficient employees to maintain
the Viability and Competitiveness of the Properties to Be Divested.
Shell, Montell and Technipol shall not employ, or make offers of
employment to, any person employed by Shell Oil whose principal duties,
during the year prior to the date of transfer to Polyco of the
Properties to Be Divested, related to the management, development or
operation of the Properties to Be Divested. This provision, however,
does not apply to employment by Shell Oil of any employee who is
terminated by Polyco or who is not offered employment by Polyco at a
level of compensation and benefits at least equivalent to those held by
the employee prior to the date of transfer to Polyco of the Properties
to Be Divested. Shell Oil shall encourage and facilitate employment by
Polyco of Shell Oil employees who had line responsibility with respect
to the Properties to Be Divested in the year prior to the transfer to
Polyco of the Properties to Be Divested; shall not offer any incentive
to such employees to decline employment with Polyco or accept other
employment in Shell; and shall remove any impediments that exist which
may deter such employees from accepting employment with Polyco,
including but not limited to the payment, or transfer for the account
of the employee, of all accrued bonuses, pensions and other accrued
benefits to which such employees would otherwise have been entitled had
they remained in the employment of Shell Oil.
e. Shell shall not exercise direction or control over, or influence
directly or indirectly, Polyco; provided, however, that Shell Oil may
exercise only such direction and control over Polyco as is necessary to
assure compliance with this Agreement or with the Consent Order,
including dissolution, merger, consolidation, bankruptcy, sale of
substantially all assets, major acquisitions, issuance of equity
securities or any change in the legal status of Polyco.
f. Shell shall not cause or permit any destruction, removal,
wasting, deterioration or impairment of Polyco, except for ordinary
wear and tear. Shell Oil shall maintain the marketability and the
Viability and Competitiveness of Polyco and shall not sell, transfer,
encumber (other than in the normal course of business) or otherwise
impair its marketability or Viability and Competitiveness. Shell Oil
shall provide Polyco with sufficient working capital to operate at
current rates of operation, to perform all necessary routine
maintenance to, and replacement of, plant and equipment of the
Properties to Be Divested, and to maintain the Viability and
Competitiveness of the Properties to Be Divested.
g. Shell shall not change the composition of the management of
Polyco except that the non-Shell (as Shell is defined in Paragraph 5.a
hereof) directors or members serving on the New Board (as defined in
Paragraph 5.b hereof) shall have the power to remove [[Page 5424]] any
employee. With the exception of the single Shell Oil director, Shell
Oil shall not remove directors of the New Board except for cause.
h. Except as permitted by this Agreement, the Shell Oil New Board
member shall not in his or her capacity as a New Board member receive
Material Confidential Information and shall not disclose any such
information received under this Agreement to Shell, Montedison or
Montell or use it to obtain any advantage for Shell, Montedison or
Montell. Any Shell Oil director, officer, employee or agent who obtains
or may obtain confidential information under this Agreement shall enter
a confidentiality agreement prohibiting disclosure of confidential
information until the day after the divestitures required by the
Consent Order have been completed.
i. Except as required by law and except to the extent that
necessary information is exchange in the course of defending
investigations or litigation, obtaining legal advice, acting to assure
compliance with this Agreement or the Consent Order (including
accomplishing the divestitures), or negotiating agreements to dispose
of assets, Shell, Montedison and Montell shall not receive or have
access to, or the use of, any Material Confidential Information of
Polyco, except as such information would be available to Montedison in
the normal course of business if the Acquisition had not taken place.
Any such information that is obtained by Shell Oil pursuant to this
Paragraph shall only be used for the purposes set out in this
Paragraph. Provided, however, until divestiture of Polyco, hourly
personnel assigned to Polyco plant operations may continue to be
covered by existing contracts between Shell Oil and any unions
representing such employees; and Shell Oil may assign Shell Oil
personnel to perform the accounting, analytical chemistry, human
resources, information systems, transportation services and tax
functions for Polyco provided that such Shell Oil personnel shall enter
into confidentiality agreements in accordance with the provisions in
Paragraph 5.h hereof and provided further that those Shell Oil
personnel working with Material Confidential Information of Polyco
shall not be involved in Montell's PP Technology, Catalyst Technology,
PP Catalyst or Propylene Polymers business, as defined in Paragraph I.
of the Consent Order for the period that Shell must comply with
Paragraph 5 hereof. Provided further that the New Board (as defined in
subparagraph 5.b hereof) may designate and contract with Shell Oil as a
nonexclusive sales agent for sales of PP Catalyst or Propylene Polymers
by Polyco outside the United States, provided that all Shell Oil
personnel with access to Material Confidential Information of Polyco in
connection with such contract or agency shall, prior to gaining such
access, enter into confidentiality agreements in accordance with the
provisions of Paragraph 5.h hereof.
j. All earnings and profits of Polyco shall be retained separately
in Polyco.
k. Should any transfer to Polyco of an agreement, contract or
license required to be included in the Properties to Be Divested not be
possible after reasonable effort by Shell Oil due to another party
withholding its consent to the transfer, Shell Oil shall enter into an
agreement with Polyco the purpose of which agreement is to realize the
same effect as such transfer. Further, Shell Oil shall secure, at its
expense, patent licenses, or assignments of patent licenses, extending
to Polyco rights and royalty rates with respect to the manufacture and
sale of Propylene Polymers and PP Catalyst, and rights to expand
production and sale, no less favorable than those held by Shell Oil as
of the date of transfer to Polyco of the Properties to Be Divested.
6. Prior to, or concurrently with, transfer to Montell of the Shell
Merged Assets, Royal Dutch and Shell T&T shall ensure that companies of
the Shell Group shall:
a. Take such actions as are necessary to establish and maintain
separate and apart from Montell the Koninklijke/Shell Laboratorium
Amsterdam (``KSLA'') research and development laboratory of Shell
Research B.V., a company of the Shell Group; and
b. Take such actions as are necessary to ensure that no Shell
research personnel who have had access to Unipol PP Technology (other
than Catalyst Technology received by Shell Oil from other companies of
the Shell Group) within one (1) year prior to the date of the formation
of Montell engage in research at facilities of Montell.
7. Shell Oil's Pecten international marketing organization shall
not market or distribute products of Montell but may, as requested by
Polyco, market and distribute products produced by Polyco.
8. Prior to, or concurrently with, transfer to Montell of the
Montedison Merged Assets, Montedison shall
a. transfer to Technipol as an ongoing business:
i. PP research and development facilities in the Giulio Natta
Research Center in Ferrara, Italy, by outright transfer or lease,
including transfer of its PO3 pilot plant, equipment, rights-of-way,
easements, and other rights and assets appropriate and sufficient to
preserve the Viability and Competitiveness of the Montedison PP
Technology business.
ii. The irrevocable worldwide right, for a period not to expire
prior to the divestiture of the Properties to be Divested, to grant to
any person perpetual Montedison PP Technology licenses subject to any
lawful rights previously granted to persons not parties to this
Agreement. This right shall be exclusive subject to the right of
Montell to license Montell Affiliates.
iii. Existing Montedison Licenses and Montedison's PP Catalyst
supply contracts with persons other than Montell Affiliates. Should any
such transfer not be possible after reasonable effort by Montedison due
to the other party withholding its consent to the transfer, Montedison
or Montell shall enter into an agreement with Technipol to service the
licenses not transferred to Technipol and account for revenues from
such licenses strictly for the benefit and account of Technipol, the
purpose of which agreement is to realize to the extent possible the
same effect of a transfer of such licenses.
iv. Montedison's PP Catalyst sales business.
v. Personnel who possess the specific skills and experience
required by Technipol sufficient to support, conduct and preserve the
Viability and Competitiveness of the Montedison Properties to Be
Transferred. Montedison shall appoint Technipol's managers on the basis
of demonstrated ability and specific experience in the Montedison PP
Technology field.
vi. Such other assets (including cash and working capital) and
personnel as may be required to effectuate the remedial purpose of this
Order and to assure that Technipol will be capable of operating
independently at the same level of research, development and licensing
of PP Technology, and sale of PP Catalyst as existed in the Montedison
Properties to Be Transferred on average during the two (2) years prior
to the Transfer Date.
b. Physically separate, to the extent feasible, the assets,
personnel, offices and facilities transferred or leased to Technipol
from those retained in Montedison and from those transferred to Montell
so as to assure the independence of Technipol from Montell and to
assure that Material Confidential Information that is not to be made
available to another person pursuant to the Consent Order and this
Agreement is not accessible to such person. [[Page 5425]]
c. Assign to Technipol all other agreements in which Montedison
grants to a person other than Montell or a Montell Affiliate the right
to practice Montedison PP Technology. Should any such assignment not be
possible after reasonable effort by Montedison due to the other party
withholding its consent to the assignment, Montedison or Montell shall
enter into an agreement with Technipol the purpose of which is to
realize the effect of such assignment.
d. Take such actions as necessary to ensure an ongoing agreement
between Montell and Technipol pursuant to which Montell will provide to
Technipol, at Montell's cost, services (such as building security, fire
protection, trash removal, shipping and receiving, accounting and
cleaning services), utilities and common maintenance for the Montedison
Properties to Be Transferred, as may be requested by Technipol.
Provided, however, that Montedison shall retain for Montell
ownership of, and free right to practice and use, and sell product
resulting from the practice or use of, all Montedison PP Technology and
PP Catalyst production assets.
9. Commencing prior to, or concurrently with, transfer to Montell
of the Montedison Merged Assets, Montedison will hold Technipol as
constituted in accordance with Paragraph 8 of this Agreement separate
and apart on the following terms and conditions:
a. Montedison shall separately incorporate Technipol and adopt
Articles of Incorporation and By-laws for Technipol that are not
inconsistent with other provisions of this Agreement. Montedison shall
also elect a board of directors of Technipol prior to, or concurrently
with, transfer to Montell of the Montedison Merged Assets.
b. Technipol shall be operated independently of Montell and Shell,
and neither Shell nor Montell shall have any ownership or other
financial interest in Technipol or exercise direction or control over,
or influence directly or indirectly, Technipol, except as specifically
authorized by this Agreement.
c. Montedison shall not permit any director, officer, employee or
agent of Montell, or any director, officer, employee or agent of
Montedison involved in management or oversight of Montell, to also be a
director, officer, employee or agent of Technipol.
d. Any Montedison director, officer, employee or agent who obtains
or may obtain Material Confidential Information of Technipol under this
Agreement shall not disclose to Shell or Montell such Material
Confidential Information until the day after divestiture of the
Properties to Be Divested has been completed.
e. Montedison shall not cause or permit any destruction, removal,
wasting, deterioration or impairment of Technipol, except for ordinary
wear and tear. Montedison shall also maintain the Viability and
Competitiveness of Technipol and shall not sell, transfer, encumber
(other than in the normal course of business) or otherwise impair its
Viability and Competitiveness.
f. The purpose of the formation of Technipol and the transfer to it
of the Montedison Properties to Be Transferred is to ensure the
continuation of a separate, full-functioning entity to conduct the
business of the Montedison Properties to Be Transferred and to preserve
the Viability and Competitiveness of that business until the Properties
to Be Divested are divested.
g. Montell shall provide Technipol and its licensees and
prospective licensees access to any and all of Montell's commercial
scale PP plants using Montedison PP Technology for demonstrating the PP
Technology and Catalyst Technology used in the plant to prospective
licensees and shall provide technical assistance and training for
personnel of Technipol's licensees. In consideration for providing such
services and assistance to Technipol, Montell may charge no more than
its actual hourly cost of pay and benefits for the services of Montell
personnel providing technical assistance and training and, in the case
of technical assistance or training by Montell personnel at a
licensee's or prospective licensee's facilities, reasonable and
customary travel and per diem subsistence costs of such personnel.
h. With respect to future Improvements or Major Advances in
Montedison PP Technology by Technipol or Montell:
i. Technipol and Montell shall each own any Improvements or Major
Advances it develops at its own cost or finances.
ii. Technipol shall have the right to license to any person any
results obtained from research and development in the field of PP
Technology performed by Technipol under contract for Montell.
iii. Technipol may grant Montell a paid-up, royalty-free, perpetual
and non-exclusive right to use any Improvements owned by Technipol or
received by Technipol from its licensees.
iv. Technipol may grant Montell a non-exclusive license to use any
Major Advances owned by Technipol or received by Technipol from its
licensees on a non-discriminatory basis on terms available to other
persons.
v. Montell shall grant Technipol a paid-up, royalty-free, perpetual
and non-exclusive right to license persons other than Montell
Affiliates to use any Improvements owned by Montell.
vi. Montell shall grant Technipol the right to license third
parties to use any Major Advances owned by Montell, unless Montell is
contractually prohibited, by contract with any person other than a
Montell Affiliate or a respondent, from sharing such Major Advances
with Technipol. Such grant to Technipol shall be on reasonable terms
and conditions which shall, in any event, be no less favorable to
Technipol than those offered by Montell to any person other than a
Montell Affiliate.
i. Technipol shall have the exclusive right, subject to any lawful
rights previously granted to persons not parties to this Agreement, to
enforce intellectual property rights with respect to Montedison PP
Technology, and to sell PP Catalyst to persons other than Montell and
Montell Affiliates.
j. Except as expressly provided in this Agreement, all sales,
licensing and other business relationships between Technipol and either
Montedison, Shell or Montell shall be conducted on a non-discriminatory
basis on terms available to other persons.
k. Pursuant to a PP Catalyst supply agreement between Montell and
Technipol, Montell shall produce PP Catalyst, including Improvements
thereto, for Technipol for use by Technipol's licensees and PP Catalyst
customers, subject to the rights of Akzo Nobel. To this end, Montell
shall dedicate such portion of its PP Catalyst production capacity as
is required to supply Technipol's licensees and PP Catalyst customers.
The price for PP Catalyst supplied by Montell to Technipol shall be
negotiated between Montell and Technipol, but in no event shall be more
than the lowest contract price, in terms of the price per pound of
Propylene Polymers produced per pound of PP Catalyst, for PP Catalyst
available to a licensee other than a Montell Affiliate or government
controlled licensee, as of December 31, 1993, recalculated in
accordance with the pricing formula in the PP Catalyst supply contract
for that licensee, less eight percent (8%).
l. Pursuant to a Catalyst Support supply agreement between Montell
and Technipol, Montell shall produce Catalyst Support, including
Improvements thereto, for Technipol for sale to Akzo Nobel. The price
for Catalyst Support supplied by Montell to [[Page 5426]] Technipol
shall be negotiated between Montell and Technipol, but in no event
shall be more than the price charged to Akzo Nobel as of December 31,
1993, recalculated in accordance with the pricing formula in the
Catalyst Support supply contract between Akzo Nobel and Himont, less
eight percent (8%).
m. Notwithstanding any agreement entered into by Montell and
Technipol pursuant to Paragraphs 9.k and 9.l of this Agreement,
Technipol may acquire PP Catalyst and Catalyst Support from any other
person.
n. Technipol shall provide to Montell, on the date of transfer to
Technipol of the Montedison Properties to Be Transferred and on the
first day of every calendar quarter thereafter, an estimate of its
requirements for PP Catalyst and Catalyst Support for the following
twelve (12) months. Montell shall supply PP Catalyst and Catalyst
Support in quantities sufficient to maintain an inventory of PP
Catalyst and Catalyst Support equivalent to Technipol's requirements
for PP Catalyst and Catalyst Support for a period of six (6) months. In
the event that Montell is unable to maintain an inventory of PP
Catalyst and Catalyst Support sufficient to supply Technipol's
requirements for PP Catalyst and Catalyst Support for a period of six
(6) months, Montell will grant to Technipol the right and Know-How
necessary to produce, or have produced on its behalf, PP Catalyst and
Catalyst Support.
o. In the case of any shortage of PP Catalyst or Catalyst Support
production Montell shall continue to supply Technipol with its
requirements except that in the case of shortages that are not the
result of Montell's actions Montell may allocate PP Catalyst and
Catalyst Support to Technipol and Montell and Montell Affiliates on a
pro rata basis based on the previous twelve (12) months. In the case of
any shortage of PP Catalyst or Catalyst Support to Technipol, Technipol
may request that Montell expand the production facilities, at Montell's
expense, in order to meet the requirements of Technipol.
p. Technipol shall have the sole right to determine, subject to PP
Catalyst supply contracts with persons other than Montell or Montell
Affiliates existing as of the date the Montedison Properties to Be
Transferred are transferred to Technipol and the existing Akzo
agreement, the sales price, quantity and type of PP Catalyst and
Catalyst Support sold by Technipol to any person.
q. Montell and Shell shall not interfere in, or attempt to
influence, any decisions or activities of Technipol.
r. Shell, Montedison, Montell, Technipol and Polyco shall not
exchange or discuss between each other, directly or indirectly, current
or future intentions, plans or forecasts for pricing, production or
capacity for PP Catalyst, Catalyst Support, Catalyst Systems or
Propylene Polymers, or royalty rates for licensing PP Technology or
Catalyst Technology to others, except as required between Montell and
Technipol in accordance with Paragraphs 9.k and 9.l of this Agreement.
10. Except as otherwise provided in the Consent Order or this
Agreement, as required for the purpose of tax return preparation,
compliance with any law or request from a revenue authority, or to the
extent that necessary information is exchanged in the course of
evaluating and consummating the formation of Montell, Technipol or
Polyco, defending government investigations or litigation, or
negotiating to dispose of assets:
a. Neither Montedison, Montell, Technipol nor Polyco shall provide,
disclose or otherwise make available to Shell any Material Confidential
Information.
b. Neither Montedison nor Technipol shall provide, disclose or
otherwise make available to Montell any Material Confidential
Information of Technipol.
c. Shell shall not provide, disclose or otherwise make available to
Montedison, Montell or Technipol any Material Confidential Information
of Polyco or the Unipol/SHAC Technology Business (other that Catalyst
Technology received by Shell Oil from other companies of the Shell
Group), provided however, nothing in this Paragraph 10.c of this
Agreement shall prohibit (a) Montell Affiliates who are licensees of
Unipol PP Technology from receiving information, in accordance with
such license, for use in their Unipol PP Technology licensed production
facilities, including information obtained by Shell, prior to the
formation of Montell, under The Tripartite Catalyst Research Agreement;
and (b) any communication between Shell and Montell necessary to ensure
that Montell and its employees make no unauthorized use or disclosure
of any Material Confidential Information.
d. Neither Montell nor Shell shall provide, disclose or otherwise
make available to Montedison or Technipol any Material Confidential
Information.
Provided, however, that nothing in this Agreement shall limit or
prohibit (a) Montell, Technipol or Polyco from licensing or otherwise
doing business on a nondiscriminatory basis with each other or with any
entity in which Montedison or a Shell Group company has an interest; or
(b) persons elected by Shell or Montedison to the Montell board of
directors from participating in decisions relating to Montell if they
do not also participate in decisions relating to similar businesses of
Technipol or Polyco.
11. To the extent that this Agreement or the Consent Order requires
Shell or Montedison to take, or prohibits Shell or Montedison from
taking, certain actions that otherwise may be required or prohibited by
contract, Shell and Montedison shall abide by the terms of this
Agreement and the Consent Order and shall not assert as a defense such
contract rights in a civil penalty action brought by the Commission to
enforce the terms of this Agreement or the Consent Order.
12. Should the Federal Trade Commission seek in any proceeding to
compel Shell (meaning here and hereinafter Shell including Polyco) to
divest itself of the Montedison Merged Assets, to compel Shell to
divest any assets of businesses of the Shell Merged Assets or the
Montedison Merged Assets that it may hold, to compel Montedison to
divest itself of the Shell Merged Assets, to compel Montedison to
divest any assets or businesses of the Montedison Merged Assets or the
Shell Merged Assets that it may hold, or to seek any other injunctive
or equitable relief for any failure to comply with the Consent Order of
this Agreement, or in any way relating to the Acquisition, Shell and
Montedison shall not raise any objection based upon the expiration of
the applicable Hart-Scott-Rodino Antitrust Improvements Act waiting
period or the fact that the Commission has permitted the Acquisition.
Shell and Montedison also waive all rights to contest the validity of
this Agreement.
13. For the purpose of determining or securing compliance with this
Agreement, subject to any legally recognized privilege, and upon
written request with reasonable notice to Montedison, Shell, Polyco or
Montell made to its principal office, Montedison, Shell, Polyco and
Montell shall permit any duly authorized representative or
representatives of the Commission:
a. Access during the office hours of Montedison or Shell and in the
presence of counsel to inspect and copy all books, ledgers, accounts,
correspondence, memoranda, and other records and documents in the
possession or under the control of Montedison, Shell, Polyco or Montell
relating to compliance with this Agreement; and
b. Upon ten (10) days notice to Montedison, Shell, Polyco or
Montell and without restraint or interference from it, to interview
officers or [[Page 5427]] employees of Montedison, Shell, Polyco or
Montell who may have counsel present, regarding any such matters.
14. This Agreement shall not be binding on the Commission until it
is approved by the Commission.
Analysis To Aid Public Comment on the Provisionally Accepted Consent
Order
The Federal Trade Commission (``the Commission'') has accepted, for
public comment, an agreement containing a proposed Consent Order from
Montedison S.p.A. and Himont Incorporated (collectively ``Montedison'')
and Royal Dutch Petroleum Company, The ``Shell'' Transport and Trading
Company, p.l.c., and Shell Oil Company (collectively ``Shell''). The
proposed Consent Order has been placed on the public record for sixty
(60) days for reception of comments from interested persons. Comments
received during this period will become part of the public record.
After sixty (60) days, the Commission will again review the agreement
and the comments received and will decide whether it should withdraw
from the agreement or make final the agreement's proposed Order.
The Commission's proposed complaint alleges that on or about
December 30, 1993, Montedison and Shell entered into an agreement to
form and acquire equal interests in a joint venture, designated by
Montedison and Shell as ``Montell'' and valued at over six billion
dollars, that would merge the majority of Shell's and Montedison's
worldwide polyolefins businesses. Shell would retain outside the
proposed joint venture polypropylene assets of Shell Oil Company
(``Shell Oil''), including Shell Oil's polypropylene catalyst and
polypropylene resin production facilities, Shell Oil's rights and
obligations under a 1983 Cooperative Undertaking Agreement with Union
Carbide Corporation (``Union Carbide''), pursuant to which Shell Oil
and Union Carbide research, develop and license polypropylene
technology and polypropylene catalyst worldwide, and Shell Oil's
interest in the Seadrift Polypropylene Company, a partnership with
Union Carbide which produces polypropylene resin. According to the
complaint, Shell would nonetheless control Shell Oil as well as
Montell.
The proposed complaint further states that Montedison coordinates
with Mitsui Petrochemical Industries Ltd. (``Mitsui'') in licensing of
polypropylene technology and in the sale of polypropylene catalysts and
shares with Mitsui royalties from licensing of polypropylene technology
and catalyst technology and profits from the sale of polypropylene
catalysts manufactured in the United States for sale to licensees in
the Western Hemisphere.
The proposed complaint alleges that the joint venture agreement
between Montedison and Shell violates Section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C. 45; the proposed joint venture
between Montedison and Shell, would, if consummated, violate Section 7
of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the
Federal Trade Commission Act in the world markets for polypropylene
technology, licensing of polypropylene technology and the licensing,
production and sale of polypropylene catalysts, and in the United
States and Canada markets for the production and sale of polypropylene
impact copolymer resin; the proposed joint venture would have an
adverse effect on U.S. export trade in violation of Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. 45; and the
agreement between Montedison and Mitsui violates Section 5 of the
Federal Trade Commission Act.
According to the proposed complaint, polypropylene technology and
catalyst technology are essential for entry into the production of
polypropylene resin, and polypropylene catalysts are essential inputs
in the production of polypropylene resin. Polypropylene resin is a
thermoplastic with distinct price/performance characteristics and
physical properties and relatively low cost and low density.
Polypropylene impact copolymer resin is a type of polypropylene resin
with high impact strength suitable for low temperature applications and
produced through copolymerization, in a second reactor, of
polypropylene and ethylene or other olefin monomers.
As alleged in the proposed complaint, Montedison, through Himont,
is the leading competitor in each of the relevant markets. Shell is the
second largest producer of polypropylene catalyst, polypropylene resin
and impact copolymer polypropylene resin in the world, is a leader in
catalyst technology, and is a significant competitor in the manufacture
and sale of polypropylene resin and polypropylene impact copolymer
resin in the United States and Canada. Shell Oil and Union Carbide
under the Cooperative Undertaking Agreement are the principal
competitor to Montedison in research, development and licensing of
polypropylene technology and catalyst technology. Other technologies
are not a significant competitive constraint according to the
complaint.
The purpose of the divestiture is to ensure continuation of the
divested assets as an ongoing, viable business engaged, in competition
with Montedison and Montell and with other companies, in the research,
development and licensing of polypropylene technology and catalyst
technology and in the manufacture and sale of polypropylene catalysts
and polypropylene resin including polypropylene impact copolymer resin,
and to remedy any lessening of competition in the relevant markets
resulting from the joint venture. The proposed Consent Order provides
for accelerated divestiture. However, if Union Carbide declines to
acquire the assets to be divested by Shell Oil, at fair market value as
determined by an independent appraisal or as otherwise agreed by Shell
Oil and Union Carbide, or Union Carbide objects to another acquirer
approved by the Commission, the divestiture period may be extended to
March 31, 1997. If Shell Oil fails to complete the required
divestitures within the required period, the Commission may appoint a
trustee to divest the assets required to be divested together with
ancillary assets and businesses and arrangements necessary to assure
the marketability of the divested assets and to assure that they are
viable and competitive in the relevant markets. Any proposed
divestiture pursuant to the Order must be approved by the Commission
after the divestiture proposal has been placed on the public record for
reception of comments from interested persons.
In addition, the proposed Consent Order would prohibit Montedison
and Montell from sharing in royalties from licenses granted by Mitsui
after the Order becomes final for use of polypropylene technology and
catalyst technology in the United States or from entering into
agreements with Mitsui for sharing of licensing royalties in the United
States and would prohibit Montedison, Shell and Montell from entering
into agreements to allocate markets for licensing of polypropylene
technology and catalyst technology or for manufacture and sale of
polypropylene catalysts.
A hold separate agreement executed as part of the Consent prohibits
Shell and Montedison from transferring assets to Montell until March 1,
1995, and until Shell has completed the required divestiture, requires
Shell to preserve and hold separate from Shell and Montell the assets
required to be divested and requires Montedison to preserve, and hold
separate from Shell and Montell, assets related to Montedison's
polypropylene technology and polypropylene catalyst
businesses. [[Page 5428]]
For a period of ten years from its effective date, the Order would
also prohibit Shell, Montedison and Montell from acquiring, without
prior Commission approval, stock or other interest in any company
engaged in, or assets used for, the research and development,
manufacture for sale, or sale or licensing of polypropylene technology,
catalyst technology or polypropylene catalyst anywhere in the world or
the manufacture or sale of polypropylene polymers in the United States
or Canada.
The purpose of this analysis is to invite public comment concerning
the Consent Order and any other aspect of the joint venture or
Montedison license agreements. This analysis is not intended to
constitute an official interpretation of the Consent Agreement and
Order or to modify its terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 95-2061 Filed 1-26-95; 8:45 am]
BILLING CODE 6750-01-M
