0710168

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS: Deborah Platt Majoras, Chairman

Pamela Jones Harbour

Jon Leibowitz

William E. Kovacic

J. Thomas Rosch

________________________________________________

)

 In the Matter of )

)

JARDEN CORPORATION, )

 a corporation, and )

) Docket No. C-4196

K2 Inc., )

 a corporation. )

)

________________________________________________)

ORDER TO MAINTAIN ASSETS

The Federal Trade Commission (“Commission”), having initiated an investigation of the

proposed acquisition by Respondent Jarden Corporation ("Jarden") of Respondent K2 Inc.

(“K2"), hereinafter referred to as “Respondents,” and Respondents having been furnished

thereafter with a copy of a draft Complaint that the Bureau of Competition proposed to present to

the Commission for its consideration and that, if issued by the Commission, would charge

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

Respondents, their attorneys, and counsel for the Commission having thereafter executed

an Agreement Containing Consent Orders (“Consent Agreement”), containing an admission by

Respondents of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a

statement that the signing of said Consent Agreement is for settlement purposes only and does

not constitute an admission by 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 
2

The Commission having thereafter considered the matter and having determined to accept

the executed Consent Agreement and to place such Consent Agreement on the public record for a

period of thirty (30) days for the receipt and consideration of public comments, now in further

conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the

Commission hereby issues its Complaint, makes the following jurisdictional findings and issues

this Order to Maintain Assets:

1. Respondent Jarden is a corporation organized, existing and doing business under and

by virtue of the laws of the state of Delaware, with its offices and principal place of

business located at 555 Theodore Fremd Avenue, Suite B-302, Rye, NY 10580.

2. Respondent K2 is a corporation organized, existing and doing business under and by

virtue of the laws of the state of Delaware, with its offices and principal place of

business located at 5818 El Camino Real, Carlsbad, CA 92008.

3. The 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 ORDERED that, as used in this Order to Maintain Assets, the definitions used in the

Consent Agreement and the proposed Decision and Order (and when made final, the Decision

and Order), shall apply.

II.

IT IS FURTHER ORDERED that from the date this Order to Maintain Assets becomes

final:

A. Respondents shall take such actions as are necessary to maintain the full economic viability,

marketability and competitiveness of the assets and business associated with the Divestiture

Assets, to minimize any risk of loss of competitive potential for the business associated with

the Divestiture Assets, and to prevent the destruction, removal, wasting, deterioration, or

impairment of any of the Divestiture Assets except for ordinary wear and tear. Respondents

shall not sell, transfer, encumber or otherwise impair the full economic viability,

marketability or competitiveness of the Divestiture Assets.
3

B. Respondents shall maintain the operations of the Divestiture Assets in the regular and

ordinary course of business and in accordance with past practice (including regular repair and

maintenance of the Divestiture Assets) and/or as may be necessary to preserve the marketability,

viability, and competitiveness of each of the Divested Fishing Line Products associated with the

Divestiture Assets and shall use their best efforts to preserve the existing relationships with the

following: suppliers; vendors; distributors; customers; employees; and others having business

relations with the Divestiture Assets. Respondents’ responsibilities shall include, but are not

limited to, the following:

1. providing the Divestiture Assets with sufficient working capital to operate the

Divestiture Assets at least at current rates of operation, to meet all capital calls with

respect to the Divestiture Assets and to carry on, at least at their scheduled pace, all

capital projects, business plans and promotional activities for the Divestiture Assets; 

2. continuing, at least at their scheduled pace, any additional expenditures for the

Divestiture Assets authorized prior to the date the Consent Agreement was signed by

Respondents including, but not limited to, all research, development, and marketing

expenditures;

3. provide such resources as may be necessary to respond to competition against the

Divested Fishing Line Products associated with the Divestiture Assets and/or to prevent

any diminution in retail sales of such Products during and after the Acquisition and prior

to divestiture;

4. provide such resources as may be necessary to maintain the competitive strength and

positioning of the Divested Fishing Line Products associated with the Divestiture Assets

at all retail accounts;

5. making available for use by the Divestiture Assets funds sufficient to perform all routine

maintenance and all other maintenance as may be necessary to, and all replacements of,

the Divestiture Assets;

6. providing the Divestiture Assets with such funds as are necessary to maintain the full

economic viability, marketability and competitiveness of the Divestiture Assets; and

7. providing such support services to the Divestiture Assets as were being provided to these

businesses by Respondents as of the date the Consent Agreement was signed by

Respondents.

C. Respondents shall maintain a work force at least as equivalent in size, training, and expertise

to what has been associated with the Divestiture Assets for the relevant Divested Fishing Line

Product’s most recent pre-Acquisition marketing plan.
4

D. Respondents shall, until the Divestiture Date, provide all Divestiture Assets Core Employees

with reasonable financial incentives to continue in their positions and to market and promote the

Divestiture Assets consistent with past practices and/or as may be necessary to preserve the

marketability, viability and competitiveness of the Divestiture Assets and to ensure successful

execution of the pre-Acquisition marketing plans related to the Divestiture Assets. Such

incentives shall include a continuation of all employee compensation and benefits offered by

Respondents until the Divestiture Date has occurred, including regularly scheduled raises,

bonuses, and vesting of pension benefits (as permitted by Law). In addition to the foregoing,

Respondents shall provide to each Divestiture Assets Key Employee who accepts employment

with the Commission-approved Acquirer, an incentive equal to twenty-five (25) percent of such

employee’s base annual salary to be paid upon the employee’s completion of one (1) year of

employment with the Commission-approved Acquirer;

provided, however, that nothing in this Order requires or shall be construed to require the

Respondents to terminate the employment of any employee or prevent Respondents from

continuing the employment of Divestiture Assets Key Employees (other than those

conditions contained in this Order) in connection with the Acquisition or prevents the

Respondents from continuing the employment of the Divestiture Assets Key Employees in

connection with the Acquisition.

E. During the Employee Access Period, Respondents shall not interfere with the hiring or

employing by the Commission-approved Acquirer of Divestiture Assets Key Employees, and

remove any impediments within the control of Respondents that may deter these employees from

accepting employment with the Commission-approved Acquirer, including, but not limited to,

any noncompete or nondisclosure provisions of employment or other contracts with Respondents

that would affect the ability or incentive of those individuals to be employed by the Commissionapproved Acquirer. In addition, Respondents shall not make any counteroffer to a Divestiture

Assets Key Employee who receives a written offer of employment from the Commissionapproved Acquirer;

provided, however, that this Paragraph E. shall not prohibit the Respondents from making

offers of employment to or employing any Divestiture Assets Key Employee during the

Employee Access Period where the Commission-approved Acquirer has notified the

Respondents in writing that the Commission-approved Acquirer does not intend to make an

offer of employment to that employee; 

provided further that if the Respondents notify the Commission-approved Acquirer in writing

of their desire to make an offer of employment to a particular Divestiture Assets Key

Employee and the Commission-approved Acquirer does not make an offer of employment to

that employee within twenty (20) Days of the date the Commission-approved Acquirer

receives such notice, the Respondents may make an offer of employment to that employee.

F. Pending divestiture of the relevant Divestiture Assets, Respondents shall:
5

1. not use, directly or indirectly, any Confidential Business Information related to the 

research, development, manufacturing, marketing, or sale of the Divestiture Assets 

other than as necessary to comply with the requirements of this Order or the Decision 

and Order;

2. not disclose or convey any Confidential Business Information, directly or

indirectly, to any person except the Commission-approved Acquirer; and

3. not provide, disclose or otherwise make available, directly or indirectly, any 

Confidential Business Information related to the research, development, 

manufacturing, marketing or sale of the Divestiture Assets.

G. Not later than five (5) days after the Acquisition Date, or the date on which this Order to

Maintain Assets becomes final, whichever is earlier, Respondents shall provide written or

electronic notification of the restrictions on the use of the Confidential Business Information by

Respondents’ personnel to all of Respondents’ employees who:

1. are, or were, directly involved in the research, development, manufacturing, 

distribution, sale or marketing of the Divestiture Assets;

2. are directly involved in the research, development, manufacturing, distribution, sale 

or marketing of Respondents’ Fishing Line products; and

3. may have Confidential Business Information.

Respondents shall provide such notification (in a form similar to that attached as Appendix

B. to this Order to Maintain Assets) by e-mail with return receipt requested or by whatever

manner or form of transmission as will assure receipt and acknowledgment by Respondents’

employees, and keep a file of such receipts for one (1) year after the relevant Divestiture

Date. Respondents shall maintain complete records of all such agreements at Respondents’

corporate headquarters, and provide an officer’s certification to the Commission stating that

such acknowledgment program has been implemented and is being complied with. 

Respondents shall provide the Commission-approved Acquirer with copies of all

certifications, notifications and reminders sent to Respondents’ personnel relating to the

Divestiture Assets.

H. Respondents shall adhere to and abide by the Divestiture Assets Supply Agreement,

Transition Services Agreement and the Respondent Run-Off Licenses (“Agreements”). These

Agreements shall not vary or contradict, or be construed to vary or contradict, the terms of the

related Decision and Order and this Order to Maintain Assets (“Orders”), it being understood that

nothing in the Orders shall be construed to reduce any obligations of Respondents under such

Agreement(s), which are incorporated by reference into this Order to Maintain Assets and made a
6

part hereof.

I. The purpose of this Order to Maintain Assets is to maintain the full economic viability,

marketability and competitiveness of the business associated with the Divestiture Assets, to

minimize any risk of loss of competitive potential for the business associated with the Divestiture

Assets, and to prevent the destruction, removal, wasting, deterioration, or impairment of any of

the Divestiture Assets except for ordinary wear and tear.

III.

IT IS FURTHER ORDERED that, within thirty (30) Days after the date this Order to

Maintain Assets becomes final, and every thirty (30) Days thereafter until Respondents have fully

complied with their obligations to divest the Divestiture Assets as required by Paragraphs II. and

III. of the related Decision and Order in this matter, 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 to Maintain Assets and the related

Decision and Order; provided, however, that, after the Decision and Order in this matter becomes

final, the reports due under this Order to Maintain Assets may be consolidated with, and

submitted to the Commission at the same time as, the reports required to be submitted by

Respondents pursuant to Paragraph V. of the Decision and Order.

IV.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty

(30) Days prior to any proposed (1) dissolution of the Respondents, (2) acquisition, merger or

consolidation of Respondents, or (3) any other change in the Respondents that may affect

compliance obligations arising out of the order, including, but not limited to, assignment, the

creation or dissolution of subsidiaries, or any other change in Respondents.

V.

IT IS FURTHER ORDERED that, for the purposes of determining or securing compliance

with this Order to Maintain Assets, and subject to any legally recognized privilege, and upon

written request with reasonable notice to Respondents made to their principal United States

offices, Respondents shall permit any duly authorized representatives of the Commission:

A. Access, during office hours of Respondents 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 Respondents

relating to compliance with this Order to Maintain Assets; and

B. Upon five (5) Days notice to Respondents and without restraint or interference from
7

Respondents, to interview officers, directors, or employees of Respondents, who may have

counsel present, regarding such matters.

VI.

IT IS FURTHER ORDERED that this Order to Maintain Assets shall terminate on the

earlier of:

A. Three (3) Days after the Commission withdraws its acceptance of the Consent Agreement

pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. § 2.34; or

B. The day after the divestiture of the Divestiture Assets, as required by and described in the

Decision and Order, has been completed and Respondents notify the Commission that all

related assignments, conveyances, deliveries, grants, licenses, transactions, transfers and

other transitions are complete, or the Commission otherwise directs that this Order to

Maintain Assets is terminated.

By the Commission.

C. Landis Plummer

Acting Secretary

SEAL

ISSUED: August 8, 2007
PUBLIC

APPENDIX A

TO THE ORDER TO MAINTAIN ASSETS

AGREEMENT CONTAINING CONSENT ORDERS 

AND 

PROPOSED DECISION AND ORDER
PUBLIC

APPENDIX B

TO THE ORDER TO MAINTAIN ASSETS

NOTICE OF FTC ORDERS AND REQUIREMENT TO MAINTAIN

CONFIDENTIALITY

Jarden Corporation (“Jarden”) and K2 Inc. (“K2"), hereinafter referred to as “Respondents,”

have entered into an Agreement Containing Consent Orders (“Consent Agreement”) with the

Federal Trade Commission (“FTC”) providing for divestiture of certain assets and other relief, in

connection with the acquisition of K2 by Jarden. That Consent Agreement includes two orders:

the Decision and Order and the Order to Maintain Assets.

The Decision and Order requires the divestiture of assets relating to Cajun Line®,

Omniflex®, Outcast®, and SupremeTM monofilament fishing line products. These assets are

hereinafter referred to as the “Divestiture Assets.” Both the Decision and Order and the Order to

Maintain Assets require Respondents to commit that no Confidential Business Information

relating to the Divestiture Assets will be disclosed to or used by any employee of the combined

entity formed by the acquisition of a controlling interest in K2 by Jarden (“Combined Entity”). 

In particular, this is to protect such information from being used in any way for the research,

development, sale or manufacture of any product that competes or may compete with any product

that is marketed by the Respondents after the proposed acquisition. The Decision and Order also

requires the complete divestiture of ALL documents (including electronically stored material)

that contain Confidential Business Information related to the Divestiture Assets. Accordingly, no

employee of the Combined Entity may maintain copies of documents containing such

information, except as otherwise required by law.

Under the Decision and Order, the Respondents are required to divest the Divestiture Assets

to W.C. Bradley/Zebco (“Zebco”). Until a complete divestiture of all of the Divestiture Assets

occurs, the requirements of the second order – the Order to Maintain Assets – are in place to

ensure the continued marketability, viability and competitive vigor of the Divestiture Assets and

to ensure that no confidential business information related to the Divestiture Assets is

communicated to the employees of Jarden. 

You are receiving this notice because you are one or more of the following: (i) an employee

with work responsibilities related to the Divestiture Assets; (ii) an employee for Jarden, or the

Combined Entity, who has work responsibilities in some way related to products that compete or

may compete with the Divestiture Assets; or (iii) an employee, former employee, contractor, or

former contractor of K2 who might have Confidential Business Information in your possession

related to Divestiture Assets.

All Confidential Business Information related to the Divestiture Assets must be retained and

maintained by the persons involved in the operation of that business on a confidential basis, and

such persons must not provide, discuss, exchange, circulate, or otherwise disclose any such

information to or with any other person whose employment involves responsibilities unrelated to
the Divestiture Assets (such as persons with job responsibilities related to Jarden or K2 products

that compete or may compete with the Divestiture Assets). In addition, any person who

possesses such Confidential Business Information related to the Divestiture Assets and who

becomes involved in the Combined Entity’s business related to any product that competes or may

compete with the Divestiture Assets must not provide, discuss, exchange, circulate, or otherwise

disclose any such information to or with any other person whose employment relates to such

businesses. Finally, any K2 employee, former employee, contractor, or former contractor, with

documents that contain information that he or she believes might be considered Confidential

Business Information related to Divestiture Assets and who has not received specific instructions

as to how the documents in his or her possession should be disposed of should contact the

contact person identified at the end of this notice.

Furthermore, the Decision and Order places restrictions upon the functions that certain

employees of K2 can perform for the Combined Entity until two years (2) from the date of the

divestiture of all of the Divestiture Assets.

Any violation of the Decision and Order or the Order to Maintain Assets may subject Jarden,

K2, or the Combined Entity to civil penalties and other relief as provided by law. If you have any

questions regarding the contents of this notice, the confidentiality of information, the Decision

and Order or the Order to Maintain Assets, you should contact [insert name and title]. 

ACKNOWLEDGMENT

I, (print name), hereby acknowledge that I

have read the above notification and agree to abide by its provisions.