Exhibit 10.1

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

 

COMMISSIONERS:    Edith Ramirez, Chairwoman    Julie Brill    Maureen K.
Ohlhausen    Joshua D. Wright    Terrell McSweeny

 

    )   In the Matter of   )     )   GRACO INC.,   )  

a corporation,

  )  

Docket No. 9350

  )   ILLINOIS TOOL WORKS INC.,   )  

PUBLIC

a corporation, and

  )     )   ITW FINISHING LLC,   )  

a limited liability company.

  )       )  

DECISION AND ORDER

[Redacted Public Version]

The Federal Trade Commission (“Commission”), having heretofore issued its
administrative Complaint charging Respondents Graco Inc. (“Graco”), Illinois
Tool Works Inc., and ITW Finishing LLC (“ITW”), hereinafter referred to as the
Respondents, with violations of Section 7 of the Clayton Act, as amended, 15
U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15
U.S.C. § 45, and the Respondents having been served with a copy of the
Complaint, together with a notice of contemplated relief, and the Respondents
having answered the Complaint denying said charges; and

The Respondents, their attorneys, and counsel for the Commission having
thereafter executed an Agreement Containing Consent Orders (“Consent
Agreement”), containing an admission by the Respondents of all the
jurisdictional facts set forth in the aforesaid Complaint, a statement that the
signing of said Consent Agreement is for settlement purposes only and does not
constitute an admission by the Respondents that the law has been violated as
alleged in such Complaint, or that the facts as alleged in such Complaint, other
than jurisdictional facts, are true, and waivers and other provisions as
required by the Commission’s Rules; and

The Secretary of the Commission having thereafter withdrawn the matter from
adjudication in accordance with § 3.25(c) of its Rules; and

 

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The Commission having thereafter considered the matter and the executed Consent
Agreement, and thereupon issued its Order to Hold Separate and Maintain Assets,
and having accepted the executed Consent Agreement and placed such agreement on
the public record for a period of thirty (30) days, and having duly considered
the comments filed by interested persons pursuant to Commission Rule 2.34, 16
C.F.R. § 2.34, and having modified the Decision and Order in certain respects,
now in further conformity with the procedure prescribed in § 3.25(f) of its
Rules, the Commission hereby makes the following jurisdictional findings and
issues the following Decision and Order (“Order”):

 

1. Respondent Graco Inc. is a corporation organized, existing, and doing
business under, and by virtue of, the laws of the State of Minnesota, with its
office and principal place of business located at 88-11th Avenue Northeast,
Minneapolis, Minnesota 55413.

 

2. Respondent Illinois Tool Works Inc. is a corporation organized, existing, and
doing business under, and by virtue of, the laws of the State of Delaware, with
its office and principal place of business located at 3600 West Lake Avenue,
Glenview, Illinois 60026.

 

3. Respondent ITW Finishing LLC is a limited liability company organized,
existing, and doing business under and by virtue of the laws of the State of
Delaware, with its office and principal place of business located at 3600 West
Lake Avenue, Glenview, Illinois 60026. ITW Finishing LLC is indirectly wholly
owned by Illinois Tool Works Inc.

 

4. The Federal Trade Commission has jurisdiction of the subject matter of this
proceeding and of the Respondents, and the proceeding is in the public interest.

ORDER

I.

IT IS HEREBY ORDERED that, as used in this Order, the following definitions
shall apply:

 

A. “Graco” means Graco Inc., its directors, officers, employees, agents,
representatives, successors, and assigns; and its subsidiaries, divisions,
groups and affiliates in each case controlled by Graco, and the respective
directors, officers, employees, agents, representatives, successors, and assigns
of each. After the Acquisition Date, Graco includes the Liquid Finishing
Business Assets. After the Divestiture Date, Graco excludes the Liquid Finishing
Business Assets and any subsidiaries that are divested in connection with the
divestiture of the Liquid Finishing Business Assets.

 

B. “ITW” means Illinois Tool Works Inc., its directors, officers, employees,
agents, representatives, successors, and assigns; and its subsidiaries,
divisions, groups and affiliates in each case controlled by ITW (including, but
not limited to, Respondent ITW Finishing LLC), and the respective directors,
officers, employees, agents, representatives, successors, and assigns of each.

 

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C. “Commission” means the Federal Trade Commission.

 

D.

“3M” means 3M Company, a corporation organized, existing and doing business
under and by virtue of the laws of the State of Delaware, with its headquarters
address located at 3M Center, St. Paul, Minnesota 55144-1000. The term “3M”
includes 3M Innovative Properties Company.

 

E.

“3M Agreements” means the 3M Settlement Agreement and the 3M Supply and License
Agreement. The 3M Agreements are attached as Appendix 1, Confidential Exhibit 1,
to this Order.

 

F. “3M Settlement Agreement” means the Settlement Agreement, dated October 23,
2008, by and among 3M Company, 3M Innovative Properties Company, Illinois Tool
Works Inc. and ITW Finishing LLC.

 

G. “3M Supply and License Agreement” means the Supply and License Agreement,
dated October 23, 2008, by and among 3M Company, 3M Innovative Properties
Company, Illinois Tool Works Inc. and ITW Finishing LLC.

 

H. “3M-ITW Settlement-Related Agreements” means all agreements and releases by
and between Graco and ITW related to the settlement between 3M and ITW of the
lawsuit filed by 3M against ITW on March 8, 2013, in the United States District
Court for the District of Minnesota, 3M Company and 3M Innovative Properties
Company v. Illinois Tool Works, Inc. and ITW Finishing L.L.C., Case No.
0:13-CV-00553 (“3M-ITW Settlement”), pursuant to which Respondents have agreed,
among other things, to transfer and convey the 3M Agreements and the DeKups IP
and Tooling to, and for use in connection with, the Liquid Finishing Business.
The 3M-ITW Settlement-Related Agreements are attached as Appendix 1,
Confidential Exhibit 2, to this Order.

 

I. “Acquisition” means the acquisition described in the Asset Purchase
Agreement, by and among Graco Inc., Graco Holdings Inc., Graco Minnesota Inc.,
Illinois Tool Works Inc., and ITW Finishing LLC, dated April 14, 2011 (the
“Asset Purchase Agreement”), including the First Amendment to the agreement,
dated April 2, 2012.

 

J. “Acquisition Date” means April 2, 2012, the date the Acquisition was
consummated.

 

K. “Business Records” means all originals and all copies of any operating,
financial or other information, documents, data, computer files (including files
stored on a computer’s hard drive or other storage media), electronic files,
books, records, ledgers, papers, instruments, and other materials, whether
located, stored or maintained in traditional paper format or by means of
electronic, optical, or magnetic media or devices, photographic or video images,
or any other format or media, including, without limitation: distributor files
and records; customer files and records, customer lists, customer product
specifications, customer purchasing histories, customer service and support
materials, customer approvals and other information; credit records and
information; correspondence; referral sources; supplier and vendor files and
lists;

 

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advertising, promotional and marketing materials, including website content;
sales materials; research and development data, files, and reports; technical
information; data bases; studies; drawings, specifications and creative
materials; production records and reports; service and warranty records;
equipment logs; operating guides and manuals; employee and personnel records;
educational materials; tax returns; financial and accounting records; and other
documents, information, and files of any kind.

 

L. “Commission-approved Acquirer” means any Person that receives the prior
approval of the Commission to acquire the Liquid Finishing Business Assets
pursuant to Paragraph II. (or Paragraph V.) of this Order.

 

M. “Confidential Business Information” means competitively sensitive,
proprietary and all other business information of any kind, except for any
information that Respondents demonstrate (i) was or becomes generally available
to the public other than as a result of a disclosure by Respondents, or (ii) was
available, or becomes available, to Respondents on a non-confidential basis, but
only if, to the knowledge of Respondents, the source of such information is not
in breach of a contractual, legal, fiduciary, or other obligation to maintain
the confidentiality of the information.

 

N. “DeKups Products” means all “Supplied Products” within the meaning of the 3M
Supply and License Agreement as identified and described on Exhibit A to the 3M
Supply and License Agreement, which is attached as part of Appendix 1,
Confidential Exhibit 1, to this Order.

 

O. “DeKups IP and Tooling” means the DeKups Intellectual Property identified and
described on Appendix 1, Exhibit 3, to this Order, and all tooling, molds, dies,
and other equipment relating to the DeKups Products to which ITW has or had any
rights or interests (including reversionary) pursuant to the 3M Agreements or
otherwise. The DeKups IP and Tooling are included in the Liquid Finishing
Business Intellectual Property and are required to be divested to the
Commission-approved Acquirer pursuant to this Order.

 

P. “DeVilbiss Powder Finishing Intellectual Property” means all Intellectual
Property that is necessary for making, having made, using, offering for sale,
selling, importing or exporting DeVilbiss Powder Finishing Products, which are
specifically identified and described on Appendix 2, Exhibit 1, to this Order.
The DeVilbiss Powder Finishing Intellectual Property is included in the LFB
Powder Finishing Intellectual Property and is required to be divested to the
Commission-approved Acquirer pursuant to this Order.

 

Q.

“DeVilbiss Powder Finishing Products” means the powder finishing products and
systems manufactured, sold or serviced under the DeVilbiss® trademarks or brand
names prior to the Acquisition by Respondent ITW, and are specifically
identified and described on Appendix 2, Exhibit 1, to this Order.

 

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R. “Direct Cost” means an amount not to exceed the cost of labor (inclusive of
benefits), material, travel, and other expenditures to the extent such costs are
directly incurred to provide the relevant assistance, support, or service. In
the case of Respondent’s hourly employees who provide labor, the cost of labor
shall not exceed the hourly wage rate, together with the prorated cost of
benefits, for any such employees. In the case of Respondent’s salaried employees
who provide labor, the cost of labor shall not exceed the prorated base salary,
together with the prorated cost of benefits, for any such employees.

 

S. “Divested Ransburg Powder Finishing Intellectual Property” means the Ransburg
Powder Finishing Intellectual Property including, but not limited to (but
specifically excluding the Retained Ransburg Powder Finishing Intellectual
Property), the Intellectual Property identified and described on Appendix 3,
Exhibit 2, to this Order. The Divested Ransburg Powder Finishing Intellectual
Property is included in the LFB Powder Finishing Intellectual Property and is
required to be divested by Graco to the Commission-approved Acquirer pursuant to
this Order.

 

T. “Divestiture Agreement(s)” means any agreement(s) that receive the prior
approval of the Commission between Respondent Graco (or between a Divestiture
Trustee appointed pursuant to Paragraph V. of this Order) and a
Commission-approved Acquirer to purchase the Liquid Finishing Business Assets
(including any related agreements, including but not limited to, a Graco
License, an LFB License-Back, and any Transitional Services agreement), and all
amendments, exhibits, attachments, agreements, and schedules thereto that have
been approved by the Commission.

 

U. “Divestiture Date” means the date on which Respondent Graco (or the
Divestiture Trustee) and a Commission-approved Acquirer consummate a transaction
to divest, license, assign, grant, transfer, deliver, and otherwise convey the
Liquid Finishing Business Assets completely and as required by Paragraph II. (or
Paragraph V.) of this Order.

 

V. “Gema Powder Finishing Business” means the worldwide business of developing,
assembling, manufacturing, distributing, selling, or servicing Gema Powder
Finishing Products conducted prior to the Acquisition by Respondent ITW, and as
it has been operated by Respondent Graco since the Acquisition, including all
business activities relating thereto, but only if and to the extent that such
operations and activities are consistent with Graco’s obligations pursuant to
this Order and the Hold Separate. For the avoidance of doubt, the Gema Powder
Finishing Business does not include the Liquid Finishing Business or the LFB
Powder Finishing Business. For the further avoidance of doubt, the Gema Powder
Finishing Business was acquired by Respondent Graco in the Acquisition and is
not required to be divested pursuant to this Order.

 

W. “Gema Powder Finishing Products” means the powder finishing products and
systems manufactured, sold, or serviced prior to the Acquisition by Respondent
ITW, including, but not limited to, powder finishing products and systems
manufactured, sold, or serviced

 

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under the Gema® trademark or brand name and any improvements or additions
thereto specifically directed to developing, assembling, manufacturing,
distributing, selling, or servicing powder finishing systems and products;
provided, however, that the Gema Powder Finishing Products do not include the
Liquid Finishing Products or the LFB Powder Finishing Products.

 

X. “Graco License” means: (i) a worldwide, fully paid-up, royalty-free,
perpetual, irrevocable, transferrable license by Respondent Graco to the
Commission-approved Acquirer under the Graco Retained Intellectual Property, and
(ii) such tangible embodiments of the licensed rights (including but not limited
to physical and electronic copies) as may be necessary to enable the
Commission-approved Acquirer to utilize the licensed rights. The purpose of the
Graco License is to assure the continued and unimpeded research, development,
manufacture, use, import, export, distribution, offer to sell, and sale of the
Liquid Finishing Products and the LFB Powder Finishing Products. The Graco
License for the Category 1 - Graco Retained Intellectual Property shall be sub-
licensable, and on an exclusive basis (except as to Respondent Graco and except
as to Graco’s right to have products made on its behalf by another under the
Graco Retained Intellectual Property), and shall convey the right to the
Commission-approved Acquirer to enforce all rights in the Category 1 - Graco
Retained Intellectual Property. The Graco License for the Category 2- Graco
Retained Intellectual Property shall include the Commission-approved Acquirer’s
right to have products made on its behalf by another, and shall be on such
further terms and conditions as receive the prior approval of the Commission.
The Commission-approved Acquirer shall not have the right to assign or transfer
the Graco License without Graco’s prior written consent, which consent shall not
be unreasonably withheld, except (i) if such assignment or transfer occurs in
connection with a merger or the sale or other disposition of all or
substantially all of the assets or stock of the Liquid Finishing Business and/or
the LFB Powder Finishing Business, and (ii) the assignee agrees in writing to be
bound by all of the Commission-approved Acquirer’s obligations under the Graco
License.

 

Y. “Graco Retained Intellectual Property” means (i) Category 1: the Retained
Ransburg Powder Finishing Intellectual Property, which is specifically
identified and described on Appendix 3, Exhibit 3 to this Order, and
(ii) Category 2: Intellectual Property included as an asset of the Gema Powder
Finishing Business for which a license to the Commission- approved Acquirer is
necessary to assure the continued and unimpeded operations of the Liquid
Finishing Business and the LFB Powder Finishing Business after the Divestiture
Date. The Graco Retained Intellectual Property that must be licensed to the
Commission- approved Acquirer pursuant to a Graco License is specifically
identified and described on Appendix 4 to this Order. Respondent Graco shall
maintain the Category 1 - Graco Retained Intellectual Property in force, which
includes paying maintenance fees for issued patents, diligently prosecuting any
pending patent applications, and maintaining the confidentiality of trade
secrets; provided, however, that Respondent Graco may be relieved of the duty to
maintain any portion of the Category 1 - Graco Retained Intellectual Property in
force by transferring the ownership of such portion of the Graco Retained
Intellectual Property to the Commission-approved Acquirer.

 

 

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Z. “Hold Separate” means the Order to Hold Separate and Maintain Assets issued
by the Commission in this matter.

 

AA. “Hold Separate Business” means the (i) Liquid Finishing Business Assets,
(ii) Liquid Finishing Business, and (iii) LFB Powder Finishing Business.

 

BB. “Intellectual Property” means all intellectual property and all associated
rights thereto, including all of the following in any jurisdiction throughout
the world: (i) all brand names, commercial names, trade names, “doing business
as” (d/b/a) names, registered and unregistered trademarks, trade dress, logos,
slogans, service marks, internet domain names, internet website content
(together with all translations, adaptions, derivations, and combinations
thereof), including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (ii) all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, divisionals, revisions, extensions, and
reexaminations thereof, and all inventions and discoveries (whether patentable
or unpatentable and whether or not reduced to practice), and all improvements
thereto, and all rights to obtain and file for patents and registrations
thereof; (iii) all copyrightable works, all registered and unregistered
copyrights in both published works and unpublished works, and all applications,
registrations, and renewals in connection therewith; (iv) all mask works and all
applications, registrations, and renewals in connection therewith; (v) all
know-how, trade secrets, and confidential or proprietary information (including
ideas, research and development, formulas, compositions, manufacturing and
production processes and techniques, tooling, molds, dies, equipment,
engineering, technical data and information, blue prints, designs, drawings,
specifications, protocols, quality control information, customer and supplier
lists, pricing and cost information, business and marketing plans and proposals,
and all other data, technology, and plans); (vi) all computer software
(including source code, executable code, data, databases, and related
documentation); (vii) all advertising and promotional materials; (viii) all
other proprietary rights; (ix) all copies and tangible embodiments thereof (in
whatever form or medium); and (x) all rights to sue and recover damages or
obtain injunctive relief for infringement, dilution, misappropriation,
violation, or breach of any of the foregoing.

 

CC. “LFB License-Back” means: (i) a fully paid-up, royalty-free, perpetual,
irrevocable, transferable license by the Commission-approved Acquirer to
Respondent Graco under the Licensed-Back Powder Finishing Intellectual Property,
and (ii) such tangible embodiments of the licensed rights (including but not
limited to physical and electronic copies) as may be necessary to enable
Respondent Graco to utilize the licensed rights. The LFB License-Back shall be
on such further terms and conditions as receive the prior approval of the
Commission; provided, however, that the LFB License-Back shall be limited to the
following field/application: powder finishing.

 

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DD. “LFB Powder Finishing Business” means the worldwide business of developing,
assembling, manufacturing, distributing, selling, or servicing the LFB Powder
Finishing Products conducted prior to the Acquisition by Respondent ITW, and as
it has been and is required to be maintained since the Acquisition pursuant to
the requirements of the Hold Separate, including all business activities
relating thereto.

 

EE. “LFB Powder Finishing Intellectual Property” means all DeVilbiss Powder
Finishing Intellectual Property and all Divested Ransburg Powder Finishing
Intellectual Property owned or licensed (as licensor or licensee) by Respondent
Graco (after the Acquisition) in which Graco has a proprietary interest, and all
associated rights thereto, that were acquired by Graco in the Acquisition or
that have been assigned, transferred, conveyed to, acquired, or owned by Graco
after the Acquisition, and that are required to be divested by Graco to the
Commission-approved Acquirer pursuant to this Order.

 

FF. “LFB Powder Finishing Products” means the DeVilbiss Powder Finishing
Products and the Ransburg Powder Finishing Products, which are identified and
described on Appendix 2, Exhibits 1 and 2, respectively, to this Order.

 

GG. “Licensed-Back Powder Finishing Intellectual Property” means the Divested
Ransburg Powder Finishing Intellectual Property, which is specifically
identified and described on Appendix 5 to this Order, and which Graco is
permitted to license back from the Commission-approved Acquirer consistent with
the divestiture requirements of Paragraph II.A of this Order pursuant to an LFB
License-Back.

 

HH. “Liquid Finishing Business” means the worldwide business of developing,
assembling, manufacturing, distributing, selling, or servicing Liquid Finishing
Products conducted prior to the Acquisition by Respondent ITW, and as it has
been and is required to be maintained since the Acquisition pursuant to the
requirements of the Hold Separate, including all business activities relating
thereto.

 

II. “Liquid Finishing Business Assets” means all of Graco’s rights, title, and
interest in and to all property and assets, tangible and intangible, of every
kind and description, wherever located, and any improvements or additions
thereto, relating to the Liquid Finishing Business or to the LFB Powder
Finishing Business that were acquired by Graco in the Acquisition (except as
otherwise provided in this Order) or that have been assigned, transferred,
conveyed to, or acquired or owned by Graco after the Acquisition pursuant to the
3M-ITW Settlement-Related Agreements or otherwise, and as they have been and are
required to be maintained pursuant to the requirements of the Hold Separate,
including but not limited to:

 

  1. All real property interests (including fee simple interests and real
property leasehold interests), including all easements, appurtenances, licenses,
and permits, together with all buildings and other structures, facilities, and
improvements located thereon, owned, leased, or otherwise held;

 

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2. All Tangible Personal Property, including any Tangible Personal Property
removed from any location of the Liquid Finishing Business or of the LFB Powder
Finishing Business since the date of the announcement of the Acquisition, and
not replaced, if such property was used in connection with the operation of the
Liquid Finishing Business or of the LFB Powder Finishing Business prior to the
Acquisition;

 

3. All inventories, wherever located, including all finished product, work in
process, raw materials, spare parts, and all other materials and supplies to be
used or consumed in the production of finished products;

 

4. All (a) trade accounts receivable and other rights to payment from customers
of Respondents and the full benefit of all security for such accounts or rights
to payment, (b) all other accounts or notes receivable by Respondents and the
full benefit of all security for such accounts or notes, and (c) any claim,
remedy, or other right related to any of the foregoing;

 

5. All agreements and contracts (including, but not limited to, the 3M
Agreements and other agreements and contracts with customers, distributors,
suppliers, vendors, sales representatives, agents, licensees, and licensors),
purchase orders, sales orders, leases, mortgages, notes, bonds, and other
binding commitments, whether written or oral, and all rights thereunder and
related thereto;

 

6. All consents, licenses, certificates, registrations, or permits issued,
granted, given, or otherwise made available by or under the authority of any
governmental body or pursuant to any legal requirement, and all pending
applications therefor or renewals thereof;

 

7. All intangible rights and property, including all Liquid Finishing Business
Intellectual Property and all LFB Powder Finishing Business Intellectual
Property, and all going-concern value, goodwill, telephone, telecopy, and e-mail
addresses and listings;

 

8. All Business Records; provided, however, that where documents or other
materials included in the Business Records to be divested contain information:
(a) that relates both to the Liquid Finishing Business Assets to be divested and
to Respondent Graco’s retained assets or other products or businesses and cannot
be segregated in a manner that preserves the usefulness of the information as it
relates to the Liquid Finishing Business Assets to be divested; or (b) for which
the relevant party has a legal obligation to retain the original copies, the
relevant party shall be required to provide only copies or relevant excerpts of
the documents and materials containing this information. In instances where such
copies are provided to the Commission-approved Acquirer, the relevant party
shall provide the Commission-approved Acquirer access to original documents
under circumstances where copies of the documents are insufficient for
evidentiary or regulatory purposes;

 

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  9. All insurance benefits, including rights and proceeds;

 

  10. All rights under warranties and guarantees, express or implied; and

 

  11. All rights relating to deposits and prepaid expenses, claims for refunds
and rights to offset in respect thereof.

Provided, however, that the Liquid Finishing Business Assets need not include
any part of such assets that the Commission-approved Acquirer determines it does
not need, or that the Commission otherwise determines need not be divested, if
the Commission approves the divestiture without such assets, and

Provided further that the Liquid Finishing Business Assets shall not include the
following (and Respondent Graco is not required to divest any of the following
to the Commission-approved Acquirer pursuant to this Order):

 

  a. The Graco Retained Intellectual Property (except insofar as the Liquid
Finishing Business Assets shall include a Graco License to the Graco Retained
Intellectual Property as provided in Paragraph II.D. of this Order);

 

  b. Properties, tangible and intangible, used in or relating to the businesses
engaged in by Respondent Graco (other than the Liquid Finishing Business and the
LFB Powder Finishing Business), including but not limited to the worldwide
business of develop- ing, assembling, manufacturing, distributing, selling, or
servicing liquid finishing sys- tems and products in which Respondent Graco was
engaged prior to the Acquisition and in which Respondent Graco has continued to
be engaged since the Acquisition; and

 

  c. Assets and properties, tangible and intangible, relating to the Gema Powder
Finishing Products and/or the Gema Powder Finishing Business, except for any
Intellectual Property specifically identified on Appendix 6 or Appendix 3,
Exhibit 2, to this Order.

 

JJ. “Liquid Finishing Business Employees” means any full-time, part-time, or
contract employees of the Liquid Finishing Business or the LFB Powder Finishing
Business who were employed at any time immediately prior to the Acquisition
through the Divestiture Date.

 

KK. “Liquid Finishing Business Intellectual Property” means all Intellectual
Property owned or licensed (as licensor or licensee) by Respondent Graco (after
the Acquisition) in which Graco has a proprietary interest, and all associated
rights thereto, that were acquired by Graco in the Acquisition or that have been
assigned, transferred, conveyed to, acquired, or owned by Graco after the
Acquisition, or by Respondents pursuant to the 3M-ITW Settlement-Related
Agreements or otherwise (including, but not limited to, the DeKups IP and
Tooling), and that relate to the Liquid Finishing Products and/or the Liquid

 

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  Finishing Business, all of which is required to be divested by Graco to the
Commission- approved Acquirer pursuant to this Order. The Liquid Finishing
Business Intellectual Property includes, but is not limited to, the Intellectual
Property identified and described on Appendix 1, Exhibit 3, and Appendix 6.

 

LL. “Liquid Finishing Products” means the liquid finishing products and systems
manufactured, sold, or serviced prior to the Acquisition by Respondent ITW,
including, but not limited to, liquid finishing products and systems
manufactured, sold, or serviced under the Binks®, DeVilbiss®, Ransburg®, and BGK
Finishing Systems trademarks or brand names, and any improvements or additions
thereto specifically directed to developing, assembling, manufacturing,
distributing, selling, or servicing liquid finishing systems and products.

 

MM. “Person” means any individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint stock company,
trust, unincorporated association, joint venture, other entity, or a
governmental body.

 

NN. “Prospective Acquirer” means a Person that Respondent Graco (or a
Divestiture Trustee) intends to submit as a Commission-approved Acquirer to the
Commission for its prior approval pursuant to Paragraph II. (or Paragraph V.) of
this Order.

 

OO. “Ransburg Powder Finishing Intellectual Property” means all Intellectual
Property that is necessary for making, having made, using, offering for sale,
selling, importing, or exporting Ransburg Powder Finishing Products, including,
but not limited to, the Intellectual Property specifically identified and
described on Appendix 3, Exhibit 1, to this Order.

 

PP. “Ransburg Powder Finishing Products” means the powder finishing products and
systems manufactured, sold, or serviced under the Ransburg® trademarks or brand
names prior to the Acquisition by Respondent ITW, which are specifically
identified and described on Appendix 2, Exhibit 2, to this Order.

 

QQ. “Respondents” means Graco and ITW, individually and collectively.

 

RR. “Retained Ransburg Powder Finishing Intellectual Property” means the
Ransburg Powder Finishing Intellectual Property specifically identified and
described on Appendix 3, Exhibit 3, to this Order. The Retained Ransburg Powder
Finishing Intellectual Property is not required to be divested by Graco to the
Commission-approved Acquirer pursuant to Paragraph II.A. of this Order;
provided, however, that Graco is required to enter into a Graco License
conveying rights in the Graco Retained Intellectual Property, including, but not
limited to, the Retained Ransburg Powder Finishing Intellectual Property, to the
Commission-approved Acquirer in accordance with the requirements of Paragraph
II.D. of this Order.

 

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SS. “Tangible Personal Property” means all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies, materials, vehicles,
rolling stock, and other items of tangible personal property (other than
inventories) of every kind owned or leased (including, but not limited to, all
tangible personal property included in the DeKups IP and Tooling), together with
any express or implied warranty by the manufacturers or sellers or lessors of
any item or component part thereof and all maintenance records and other
documents relating thereto.

 

TT. “Transitional Services” means any transitional assistance, support, or
services necessary to enable the Commission-approved Acquirer to continue the
development, manufacturing, distribution, sales, and services related to
operation of the Liquid Finishing Business Assets, including, but not limited
to, the provision of administrative services, consultation and advice, technical
assistance, and training.

II.

IT IS FURTHER ORDERED that:

 

A. Respondent Graco shall divest the Liquid Finishing Business Assets,
absolutely and in good faith, at no minimum price, as an on-going business, no
later than 180 days after the date this Order becomes final, to a
Commission-approved Acquirer, and only in a manner (and pursuant to a
Divestiture Agreement with the Commission-approved Acquirer) that receives the
prior approval of the Commission; provided, however, that nothing in this Order
shall prevent Respondent Graco from entering into an LFB License-Back, subject
to the prior approval of the Commission, with the Commission-approved Acquirer.

 

B. No later than the Divestiture Date, Respondent Graco shall secure all
consents, assignments, waivers, licenses, certificates, registrations, permits,
and other authorizations from all Persons that are necessary for the divestiture
and operation of the Liquid Finishing Business Assets to the Commission-approved
Acquirer; provided, however, that Respondent Graco may satisfy this requirement
by certifying that the Commission-approved Acquirer has executed appropriate
agreements directly with each of the relevant Persons.

 

C. In the event Respondent Graco is unable to obtain any consent(s),
assignment(s), waiver(s), license(s), certificate(s), registration(s),
permit(s), or other authorizations necessary for the divestiture and/or
operation of the Liquid Finishing Business Assets from any Person, Respondent
Graco shall:

 

  1. Provide such assistance as the Commission-approved Acquirer may reasonably
request in its efforts to obtain a comparable license, certificate,
registration, permit, or other authorization; and/or

 

  2. With the acceptance of the Commission-approved Acquirer and the prior
approval of the Commission, substitute equivalent assets or arrangements.

 

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D. No later than the Divestiture Date, Respondent Graco shall grant a Graco
License under the Graco Retained Intellectual Property to the
Commission-approved Acquirer in connection with the Liquid Finishing Business
Assets as divested pursuant to this Order, and only in a manner (and pursuant to
a Divestiture Agreement with the Commission- approved Acquirer) that receives
the prior approval of the Commission. Respondent Graco is not required to make
any representations or warranties with respect to the ownership, existence, or
maintenance of the Category 2 – Graco Retained Intellectual Property in the
Divestiture Agreement.

 

E. Respondent Graco:

 

  1. shall not join, file, prosecute, or maintain any suit, in law or equity, or
take any administrative action, either directly or indirectly through a third
party (including assignees, transferees, or licensees), against the
Commission-approved Acquirer or any of its customers or affiliates (including
integrators, distributors, licensees, manufacturers, and suppliers), assigns or
successors in interest, under or with regard to any Intellectual Property
acquired by Respondent Graco in the Acquisition or developed or otherwise
obtained by the Hold Separate Business during the Hold Separate Period, and
owned or licensed by Respondent Graco relating to the Gema Powder Finishing
Business or to the Liquid Finishing Business Assets as of the Divestiture Date,
if such suit or action would, or would have the potential to, interfere with the
Commission-approved Acquirer’s freedom to practice in the research, development,
manufacture, use, import, export, distribution, offer to sell, or sale of any
Liquid Finishing Products or LFB Powder Finishing Products; and

 

  2. shall not (i) assert, directly or indirectly through a third party, any
Intellectual Property rights acquired by Respondent Graco in the Acquisition
against the Commission- approved Acquirer or any of its customers or affiliates,
or assigns or successors in interest, if such assertion would, or would have the
potential to, interfere with the Commission-approved Acquirer’s freedom to
practice in the research, development, manufacture, use, import, export,
distribution, offer to sell, or sale of any Liquid Finishing Products or LFB
Powder Finishing Products; or (ii) seek to challenge or invalidate any rights
under the Liquid Finishing Business Intellectual Property or the LFB Powder
Finishing Intellectual Property in a civil action or administrative proceeding,
to the extent that the Commission-approved Acquirer or any of its customers or
affiliates, or assigns or successors in interest, exercise the rights divested
by, expressly granted by, or that are required to be granted by Graco pursuant
to the requirements of this Order;

provided, however, that the scope of the prohibitions in sub-Paragraphs II.E.1
and II.E.2 of this Order shall be limited for the DeVilbiss Powder Finishing
Products to South America and for the Ransburg Powder Finishing Products to
transportation and related supply chain markets; and

 

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  3. shall include a covenant not to sue or take any other action effecting the
foregoing prohibitions in sub-Paragraphs II.E.1 and II.E.2 of this Order in any
Divestiture Agreement related to the Liquid Finishing Business Assets;

provided, however, that Respondent Graco may, subject to the prior approval of
the Commission, receive a covenant not to sue from the Commission-approved
Acquirer not to assert against the Gema Powder Finishing Business any
Intellectual Property that is divested by Respondent Graco to the
Commission-approved Acquirer pursuant to this Order; and

provided further that any such covenant not to sue the Gema Powder Finishing
Business received by Respondent Graco from the Commission-approved Acquirer
shall be limited to the following field/application: powder finishing.

 

F. At the request of the Commission-approved Acquirer, pursuant to an agreement
that receives the prior approval of the Commission, Respondent Graco shall, for
a period not to exceed twelve (12) months from the Divestiture Date, or as
otherwise approved by the Commission, provide Transitional Services to the
Commission-approved Acquirer:

 

  1. Sufficient to enable the Commission-approved Acquirer to operate the
divested assets and business in substantially the same manner as they were
operated prior to the Acquisition; and

 

  2. At substantially the same level and quality as such services were provided
by Respondents in connection with the operation of the divested assets and
business prior to the Acquisition.

Provided, however, that Respondent Graco shall not (i) require the
Commission-approved Acquirer to pay compensation for Transitional Services that
exceeds the Direct Cost of providing such goods and services, (ii) terminate its
obligation to provide Transitional Services because of a material breach by the
Commission-approved Acquirer of any agreement to provide such assistance, in the
absence of a final order of a court of competent jurisdiction, except if
Respondent Graco is unable to provide such services due to such material breach,
or (iii) seek to limit the damages (such as indirect, special, and consequential
damages) which a Commission-approved Acquirer would be entitled to receive in
the event of Respondent Graco’s breach of any agreement to provide Transitional
Services.

 

G. Respondent ITW shall provide the Commission-approved Acquirer, at the request
of the Commission-approved Acquirer, the transition and support services
Respondent ITW has agreed to provide to Respondent Graco in the Asset Purchase
Agreement on the terms and subject to the conditions contemplated by the Asset
Purchase Agreement.

 

H. Respondent Graco shall provide the Commission-approved Acquirer with the
opportunity to identify, recruit, and employ any Liquid Finishing Business
Employee in conformance with the following:

 

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  1. No later than ten (10) days after a request from a Prospective Acquirer, or
staff of the Commission, Respondents shall provide the Prospective Acquirer with
the following information for each Liquid Finishing Business Employee, as and to
the extent permitted by law:

 

  a. name, job title or position, date of hire, and effective service date;

  b. a specific description of the employee’s responsibilities;

  c. the base salary or current wages;

  d. the most recent bonus paid, aggregate annual compensation for Respondent
ITW’s last fiscal year, and current target or guaranteed bonus, if any;

  e. employment status (i.e., active or on leave or disability; full-time or
part- time);

  f. any other material terms and conditions of employment in regard to such
employee that are not otherwise generally available to similarly-situated
employees; and

  g. at the Prospective Acquirer’s option, copies of all employee benefit plans
and summary plan descriptions (if any) applicable to the relevant Liquid
Finishing Business Employee.

 

  2. No later than thirty (30) days before the Divestiture Date, after a request
from a Prospective Acquirer, Respondent Graco shall provide the Prospective
Acquirer with an opportunity (i) to meet, personally and outside the presence or
hearing of any employee or agent of any Respondent, with any Liquid Finishing
Business Employee for the purpose of discussing potential employment, (ii) to
inspect the personnel files and other documentation relating to any such
employee, to the extent permissible under applicable laws, and (iii) to make
offers of employment to any Liquid Finishing Business Employee.

 

  3. Respondent Graco shall (i) not interfere, directly or indirectly, with the
hiring or employing by the Prospective Acquirer of any Liquid Finishing Business
Employee, (ii) not offer any incentive to any Liquid Finishing Business Employee
to decline employment with the Prospective Acquirer, (iii) not make any
counteroffer to any Liquid Finishing Business Employee who receives a written
offer of employment from the Prospective Acquirer; provided, however, that
nothing in this Order shall be construed to require Respondent Graco to
terminate the employment of any employee or prevent Respondent Graco from
continuing the employment of any employee; (iv) remove any impediments within
the control of Respondent Graco that may deter any Liquid Finishing Business
Employee from accepting employment with the Prospective Acquirer, including, but
not limited to, any non-compete or confidentiality provisions of employment or
other contracts with Respondent Graco that would affect the ability of such
employee to be employed by the Prospective Acquirer, and (v) not otherwise
interfere with the recruitment of any Liquid Finishing Business Employee by the
Prospective Acquirer.

 

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I. Until the Divestiture Date, Respondent Graco shall provide each Liquid
Finishing Business Employee with reasonable financial incentives to continue in
his or her position consistent with past practices and/or as may be necessary to
preserve the marketability, viability, and competitiveness of the Liquid
Finishing Business Assets pending divestiture. Such incentives shall include
employee benefits, including regularly scheduled raises, bonuses, vesting of
current and accrued retirement benefits (as permitted by law), on the same basis
as provided under the Asset Purchase Agreement to other employees hired by
Respondent Graco in the Acquisition, and such additional incentives as may be
necessary to assure the continuation and to prevent any diminution of the
viability, marketability, and competitiveness of the Liquid Finishing Business
Assets until the Divestiture Date, and as may otherwise be necessary to achieve
the purposes of this Order and the Hold Separate.

 

J. For a period of two (2) years after the Divestiture Date, Respondent Graco
shall not, directly or indirectly, solicit, induce, or attempt to solicit or
induce any Liquid Finishing Business Employee who has accepted an offer of
employment with the Commission- approved Acquirer, or who is employed by the
Commission-approved Acquirer, to terminate his or her employment relationship
with the Commission-approved Acquirer; provided, however, Respondent Graco may:

 

  1. Advertise for employees in newspapers, trade publications, or other media,
or engage recruiters to conduct general employee search activities, so long as
these actions are not targeted specifically at any Liquid Finishing Business
Employees; and

 

  2. Hire Liquid Finishing Business Employees who apply for employment with
Respondent Graco, so long as such individuals were not solicited by Respondent
Graco in violation of this paragraph; provided further, that this sub-Paragraph
shall not prohibit Respondent Graco from making offers of employment to or
employing any Liquid Finishing Business Employees if the Commission- approved
Acquirer has notified Respondent Graco in writing that the Commission-approved
Acquirer does not intend to make an offer of employment to that employee, or
where such an offer has been made and the employee has declined the offer, or
where the individual’s employment has been terminated by the Commission-approved
Acquirer.

 

K. No later than the Divestiture Date, Respondents shall assign, transfer,
convey, and divest all rights, title and interest in and to the 3M Agreements,
the DeKups Products, and the DeKups IP and Tooling (including upon termination
of the 3M Agreements) to the Liquid Finishing Business and/or the
Commission-approved Acquirer pursuant to the 3M-ITW Settlement-Related
Agreements or otherwise; provided, however, that in the event Respondent ITW
obtains ownership, possession, or control of any rights, title or interest in or
to the 3M Agreements, the DeKups Products, and/or the DeKups IP and Tooling
after the Divestiture Date, then Respondent ITW shall immediately transfer,
convey, and deliver all such rights, title, and interest, absolutely and in good
faith, to the Liquid Finishing Business and/or the Commission-approved Acquirer.

 

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L. The purpose of the divestiture of the Liquid Finishing Business Assets is to
ensure the continuation of the Liquid Finishing Business Assets as an ongoing,
viable business operating in the same relevant markets in which such assets were
competing at the time of the announcement of the Acquisition by Respondents, and
to remedy the lessening of competition resulting from the Acquisition as alleged
in the Commission’s Complaint.

III.

IT IS FURTHER ORDERED that:

 

A. Respondents shall (i) keep confidential and not disclose (including with
respect to Respondents’ employees) and (ii) not use for any reason or purpose,
any Confidential Business Information pertaining to the Liquid Finishing
Business, the LFB Powder Finishing Business, and the Liquid Finishing Business
Assets; provided, however, that the Respondents may disclose or use such
Confidential Business Information:

 

  1. In the course of performing their obligations as permitted under this Order
or the Hold Separate, including as necessary to effect the marketing and
divestiture of the Liquid Finishing Business Assets pursuant to Paragraph II. of
this Order and the provision of Transitional Services; provided further, that
Respondents’ employees who provide support services under the Hold Separate or
Transitional Services under the Divestiture Agreement(s), or who staff the Hold
Separate Business, shall be deemed to be performing obligations under this Order
or the Hold Separate.

 

  2. In the course of performing their obligations under the Divestiture
Agreement(s);

 

  3. To enforce the terms of the Divestiture Agreement(s) or to prosecute or
defend against any dispute or legal proceeding;

 

  4. To comply with financial reporting requirements, obtain legal advice,
defend legal claims, enforce actions threatened or brought against the Liquid
Finishing Business, the LFB Powder Finishing Business, or the Liquid Finishing
Business Assets, or as required by applicable law, regulations, and other legal
requirements (including in connection with tax returns, reports required by
securities laws and payroll, benefits, or personnel reports or information) or
in overseeing compliance with policies and standards concerning health, safety,
and environmental aspects of the operation of the Liquid Finishing Business and
the LFB Powder Finishing Business and the integrity of the Liquid Finishing
Business and LFB Powder Finishing Business financial controls;

 

  5. To Respondent Graco’s lenders, auditors, attorneys, and financial advisors;
and

 

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  6. As otherwise permitted by the Commission staff, this Order, the Hold
Separate, or the Divestiture Agreement(s).

 

B. If the disclosure or use of any Confidential Business Information is
permitted to Respondents’ employees or to any other Person under Paragraph
III.A. of this Order, then Respondents shall limit such information (i) only to
those employees or other Persons who require such information for the purposes
permitted under Paragraph III.A., (ii) only to the extent such information is
required, and (iii) only after such employees or other Persons have signed an
agreement in writing to maintain the confidentiality of such information.

 

C. Respondents shall enforce the terms of this Paragraph III. as to their
employees and any other Person and take such action as is necessary to cause
each of their employees and any other Person to comply with the terms of this
Paragraph III., including implementation of access and data controls, training
of their employees, and all other actions that Respondents would take to protect
their own trade secrets and proprietary information.

IV.

IT IS FURTHER ORDERED that:

 

A. The Divestiture Agreement(s) shall not limit or contradict, or be construed
to limit or contradict, the terms of this Order, it being understood that
nothing in this Order shall be construed to reduce any rights or benefits of the
Commission-approved Acquirer or to reduce any obligations of the Respondents
under such agreements.

 

B. The Divestiture Agreement(s) shall be incorporated by reference into this
Order and made a part hereof.

 

C. Respondent Graco shall comply with all provisions of the Divestiture
Agreement(s), and any breach by Respondent Graco of any term of such agreement
shall constitute a violation of this Order. If any term of a Divestiture
Agreement varies from the terms of this Order (“Order Term”), then to the extent
that Respondent Graco cannot fully comply with both terms, the Order Term shall
determine Respondent Graco’s obligations under this Order. Any failure by
Respondent Graco to comply with any term of a Divestiture Agreement shall
constitute a failure to comply with this Order.

 

D. Respondent Graco shall not modify or amend any of the terms of the
Divestiture Agreement(s) without the prior approval of the Commission, except as
otherwise provided in Rule 2.41(f)(5) of the Commission’s Rules of Practice and
Procedure, 16 C.F.R. § 2.41(f)(5). Notwithstanding any paragraph, section, or
other provision of the Divestiture Agreement, any modification of the
Divestiture Agreement without the prior approval of the Commission, or as
otherwise provided in Rule 2.41(f)(5), shall constitute a failure to comply with
this Order.

 

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V.

IT IS FURTHER ORDERED that:

 

A. If Respondent Graco has not divested the Liquid Finishing Business Assets and
otherwise fully complied with its obligations as required by Paragraphs
II.A.-I., of this Order, the Commission may appoint a trustee (“Divestiture
Trustee”) to divest the Liquid Finishing Business Assets, grant a Graco License,
and/or perform Respondent Graco’s other obligations in a manner that satisfies
the requirements of this Order. The Divestiture Trustee appointed pursuant to
this Paragraph may be the same Person appointed as Hold Separate Trustee
pursuant to the relevant provisions of the Hold Separate entered in this matter.

 

B. In the event that the Commission or the Attorney General brings an action
pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or
any other statute enforced by the Commission, Respondent Graco shall consent to
the appointment of a Divestiture Trustee in such action to divest the relevant
assets and grant the relevant license in accordance with the terms of this
Order. Neither the appointment of a Divestiture Trustee nor a decision not to
appoint a Divestiture 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 Divestiture Trustee, pursuant to §
5(l) of the Federal Trade Commission Act, or any other statute enforced by the
Commission, for any failure by the Respondents to comply with this Order.

 

C. The Commission shall select the Divestiture Trustee, subject to the consent
of Respondent Graco, which consent shall not be unreasonably withheld. The
Divestiture Trustee shall be a person with experience and expertise in
acquisitions and divestitures. If Respondent Graco has not opposed, in writing,
including the reasons for opposing, the selection of any proposed Divestiture
Trustee within ten (10) days after notice by the staff of the Commission to
Respondent Graco of the identity of any proposed Divestiture Trustee, Respondent
Graco shall be deemed to have consented to the selection of the proposed
Divestiture Trustee.

 

D. Within ten (10) days after appointment of a Divestiture Trustee, Respondent
Graco shall execute a trust agreement that, subject to the prior approval of the
Commission, transfers to the Divestiture Trustee all rights and powers necessary
to permit the Divestiture Trustee to effect the relevant divestiture or transfer
required by this Order.

 

E. If a Divestiture Trustee is appointed by the Commission or a court pursuant
to this Order, Respondent Graco shall consent to the following terms and
conditions regarding the Divestiture Trustee’s powers, duties, authority, and
responsibilities:

 

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  1. Subject to the prior approval of the Commission, the Divestiture Trustee
shall have the exclusive power and authority to divest, assign, grant, license,
transfer, deliver, or otherwise convey the relevant assets that are required by
this Order to be divested, assigned, granted, licensed, transferred, delivered,
or otherwise conveyed.

 

  2. The Divestiture Trustee shall have twelve (12) months from the date the
Commission approves the trust agreement described herein to accomplish the
divestiture and/or other obligations required by this Order, which shall be
subject to the prior approval of the Commission. If, however, at the end of the
twelve (12) month period, the Divestiture Trustee has submitted a plan of
divestiture or compliance with other obligations, or believes that the
divestiture or compliance with other obligations can be achieved within a
reasonable time, the divestiture period may be extended by the Commission, or,
in the case of a court-appointed Divestiture Trustee, by the court; provided,
however, that the Commission may extend the period only two (2) times.

 

  3. Subject to any demonstrated legally recognized privilege, the Divestiture
Trustee shall have full and complete access to the personnel, books, records,
and facilities related to the relevant assets that are required to be divested,
assigned, granted, licensed, delivered, or otherwise conveyed by this Order and
to any other relevant information, as the Divestiture Trustee may request.
Respondent Graco shall develop such financial or other information as the
Divestiture Trustee may request and shall cooperate with the Divestiture
Trustee. Respondent Graco shall take no action to interfere with or impede the
Divestiture Trustee’s accomplishment of the divestiture. Any delays in
divestiture caused by Respondent Graco shall extend the time for divestiture
under this Paragraph V in an amount equal to the delay, as determined by the
Commission or, for a court-appointed Divestiture Trustee, by the court.

 

  4. The Divestiture Trustee shall use commercially reasonable best efforts to
negotiate the most favorable price and terms available in each contract that is
submitted to the Commission, subject to Respondent Graco’s absolute and
unconditional obligation to divest expeditiously and at no minimum price. The
divestiture shall be made in the manner and to a Commission-approved Acquirer as
required by this Order; provided, however, if the Divestiture 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 Divestiture
Trustee shall divest to the acquiring entity selected by Respondent Graco from
among those approved by the Commission; provided further, however, that
Respondent Graco shall select such entity within five (5) days of receiving
notification of the Commission’s approval.

`

 

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  5. The Divestiture Trustee shall serve, without bond or other security, at the
cost and expense of Respondent Graco, on such reasonable and customary terms and
conditions as the Commission or a court may set. The Divestiture Trustee shall
have the authority to employ, at the cost and expense of Respondent Graco, such
consultants, accountants, attorneys, investment bankers, business brokers,
appraisers, and other representatives and assistants as are necessary to carry
out the Divestiture Trustee’s duties and responsibilities. The Divestiture
Trustee shall account for all monies derived from the divestiture and all
expenses incurred. After approval by the Commission and, in the case of a
court-appointed Divestiture Trustee, by the court, of the account of the
Divestiture Trustee, including fees for the Divestiture Trustee’s services, all
remaining monies shall be paid at the direction of Respondent Graco, and the
Divestiture Trustee’s power shall be terminated. The compensation of the
Divestiture Trustee shall be based at least in significant part on a commission
arrangement contingent on the divestiture of all of the relevant assets that are
required to be divested by this Order.

 

  6. Respondent Graco shall indemnify the Divestiture Trustee and hold the
Divestiture Trustee harmless against any losses, claims, damages, liabilities,
or expenses arising out of, or in connection with, the performance of the
Divestiture 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
losses, claims, damages, liabilities, or expenses result from gross negligence
or willful misconduct by the Divestiture Trustee. For purposes of this Paragraph
V.E.6., the term “Divestiture Trustee” shall include all Persons retained by the
Divestiture Trustee pursuant to Paragraph V.E.5. of this Order.

 

  7. The Divestiture Trustee shall have no obligation or authority to operate or
maintain the relevant assets required to be divested by this Order.

 

  8. The Divestiture Trustee shall report in writing to Respondent Graco and to
the Commission every thirty (30) days concerning the Divestiture Trustee’s
efforts to accomplish the divestiture.

 

  9. Respondents may require the Divestiture Trustee and each of the Divestiture
Trustee’s consultants, accountants, attorneys, and other representatives and
assistants to sign a customary confidentiality agreement; provided, however,
such agreement shall not restrict the Divestiture Trustee from providing any
information to the Commission.

 

F. If the Commission determines that a Divestiture Trustee has ceased to act or
failed to act diligently, the Commission may appoint a substitute Divestiture
Trustee in the same manner as provided in this Paragraph V.

 

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G. The Commission or, in the case of a court-appointed Divestiture Trustee, the
court, may on its own initiative or at the request of the Divestiture Trustee
issue such additional orders or directions as may be necessary or appropriate to
accomplish the divestiture required by this Order.

VI.

IT IS FURTHER ORDERED that:

 

A. Within thirty (30) days after the date this Order becomes final and every
thirty (30) days thereafter until Respondents have fully complied with the
provisions of Paragraphs II and V of this Order, Respondents shall submit to the
Commission a verified written report setting forth in detail the manner and form
in which they intend to comply, are complying, and have complied with this
Order, and the Hold Separate. Respondent Graco 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 this Order and with the
Hold Separate, including a description of all substantive contacts or
negotiations relating to the divestiture and approval, and the identities of all
parties contacted. Respondents shall include in their compliance reports copies,
other than of privileged materials, of all written communications to and from
such parties, all internal memoranda, and all reports and recommendations
concerning the divestiture and approval, and, as applicable, a statement that
the divestiture approved by the Commission has been accomplished, including a
description of the manner in which Respondent Graco completed such divestiture
and the date the divestiture was accomplished.

 

B. One (1) year after the date this Order becomes final, Respondents, and
annually thereafter for the next five (5) years on the anniversary of the date
this Order becomes final, and at such other times as the Commission may request,
Respondent Graco shall 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 the Order and any Divestiture Agreement.

VII.

IT IS FURTHER ORDERED that Respondent Graco shall notify the Commission at least
thirty (30) days prior to:

 

A. Any proposed dissolution of Respondent Graco;

 

B. Any proposed acquisition, merger, or consolidation of Respondent Graco; or

 

C. Any other change in Respondent Graco, including, but not limited to,
assignment and the creation or dissolution of subsidiaries, if such change might
affect compliance obligations arising out of this Order.

 

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VIII.

IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this Order, subject to any legally recognized privilege, upon
written request and five (5) days’ notice to the relevant Respondent, with
respect to any matter contained in this Order, the relevant Respondent shall
permit any duly authorized representative of the Commission:

 

A. Access, during business office hours of the relevant Respondent(s) and in the
presence of counsel, to all facilities and access to inspect and copy all books,
ledgers, accounts, correspondence, memoranda, and all other records and
documents in the possession or under the control of the relevant Respondent(s)
related to compliance with the Consent Agreement and/or the Orders, which
copying services shall be provided by such Respondent(s) at the request of the
authorized representative(s) of the Commission and at the expense of such
Respondent(s); and

 

B. Without restraint or interference from such Respondent(s), to interview
officers, directors, or employees of such Respondent(s), who may have counsel
present.

IX.

IT IS FURTHER ORDERED that this Order shall terminate on October 6, 2024.

By the Commission, Commissioner Ohlhausen abstaining, and Commissioner Wright
and Commissioner McSweeny not participating.

Donald S. Clark

Secretary

SEAL:

ISSUED: October 6, 2014

ATTACHMENTS

[Confidential Exhibits Redacted From the Public Record Version,

But Incorporated By Reference]

APPENDIX 1: DeKups Products and 3M Agreements

CONFIDENTIAL Exhibit 1: The 3M Agreements

CONFIDENTIAL Exhibit 2: 3M-ITW Settlement-Related Agreements

Exhibit 3: DeKups Intellectual Property Transferred Pursuant to 3M-ITW
Settlement-Related Agreements

APPENDIX 2: LFB Powder Finishing Products

Exhibit 1: DeVilbiss Powder Finishing Products

Exhibit 2: Ransburg Powder Finishing Products

 

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APPENDIX 3: Ransburg Powder Finishing Intellectual Property

Exhibit 1:  Ransburg Powder Finishing Intellectual Property

Exhibit 2:  Divested Ransburg Powder Finishing Intellectual Property

Exhibit 3:  Retained Ransburg Powder Finishing Intellectual Property

APPENDIX 4:  Graco Retained Intellectual Property

APPENDIX 5:  Licensed-Back Powder Finishing Intellectual Property

APPENDIX 6:  Liquid Finishing Business Intellectual Property

Exhibit 1:  Patents and Patent Applications

CONFIDENTIAL Exhibits 2 and 2A: Unpublished and Unfiled Patent Applications

CONFIDENTIAL Exhibit 3: Abandoned or Expired Patents

Exhibit 4:  Trademarks

Exhibit 5:  Inactive Trademarks

 

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