Violations Charged

35. The proposed acquisition described in Complaint Paragraph 10 herein, if
consummated, would violate 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.

WHEREFORE THE PREMISES CONSIDERED, the Federal Trade Commission, on
this day of. 2000, issues its Complaint against said Respondents.

By the Commission.

Donald S. Clark
Secretary

SEAL:


Page 14 of 14

Ix.

IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this Decision and Order, and subject to any legally recognized privilege, and
upon written request with reasonable notice to Respondents, Respondents shall permit any duly
authorized representative of the Commission:

A Access, during office hours and in the presence of counsel, to all facilities and access to
inspect and copy all non-privileged books, ledgers, accounts, correspondence,
memoranda and other records and documents in the possession or under the control of
Respondents relating to any matter contained in this Decision and Order; and

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

them, to interview officers, directors, or employees of Respondents, who may have
counsel present, regarding any such matters.

X.
IT IS FURTHER ORDERED that this Decision and Order shall terminate:

A. With respect to Respondent Agrium, on » 20

B. With respect to Respondents Unocal and Union Oil, when the transfer of the Divestiture
Assets to Respondent Agrium has been completed pursuant to the Acquisition Agreement.

By the Commission.
Donald S. Clark
Secretary

SEAL

ISSUED:


Page 5 of 14

Any adjacent strips and gores between the property and any abutting
properties, and any land lying in or under the bed of any creek, stream, or
waterway or any highway, avenue, road, easement, street, alley, or right-
of-way, open or proposed, in, on, across, abutting, or adjacent to the
property;

A lease for transfer, storage, and handling of up to 20,000 short tons of
anhydrous ammonia at the ammonia facilities at Hedges for a period of ten
years with an option to extend the lease for another ten years, according to
the terms of the Transfer, Storage, and Handling Agreement set out in
Exhibit I;

A perpetual, non-exclusive easement granting to Simplot or the Alternate
Acquirer, as applicable, the right-of-way to pass and repass, and to install
and/or maintain utilities to or from Apportioned Hedges over and along
the private roadway and the rail track spur (as identified in Exhibit A of
the Easement Agreement), according to the terms of the Easement
Agreement set out in Exhibit L;

An irrevocable, non-exclusive license to access the Pier (as identified in
Exhibit A of the Easement Agreement) for the purposes of barge
unloading and loading of dry fertilizer products, according to the terms of
the Easement Agreement set out in Exhibit L;

Truck and rail car scale services, according to the terms of the Easement
Agreement set forth in Exhibit L;

For five (5) years, either a commercially reasonable lease for ammonia
barge services or, if an agreement cannot be reached, an unconditional
option to purchase one barge at its independently appraised value,
according to the terms of the Divestiture Agreement;

Right of First Refusal on the non-divested portion of the Hedges site,
according to the terms of the Right of First Refusal Agreement set out in
Exhibit G;

All rights under warranties and guarantees, express or implied, wherever
located;

All separately maintained, as well as relevant portions of not separately
maintained books, records, and files, wherever located;


Federal Trade Commission Act, as amended, 15 U.S.C. § 45, in the following ways, among
others:

a. the Agrium Acquisition would eliminate actual and potential competition
between Agrium and Unocal to supply urea in this relevant section of the country; and

b. Agrium would be likely to exact anticompetitive price increases from buyers of
urea in this relevant section of the country.

18. Entry would not be timely, likely, or sufficient to prevent anticompetitive effects
in the relevant section of the country set out in Complaint Paragraph 12.

Count Two — UAN 32

19. One relevant line of commerce is the production, distribution, and wholesale sale
of the nitrogen-based fertilizer UAN 32% solution (““UAN 32").

20. One relevant section of the country is the Northwest, as defined in Complaint
Paragraph 12.

21. Respondent Agrium is one of the largest suppliers of UAN 32 in the Northwest.
22. Respondent Unocal is one of the largest suppliers of UAN 32 in the Northwest.

23. Respondents Agrium and Unocal are direct and substantial competitors in the
business of producing, distributing, and selling UAN 32 in the relevant section of the country set
out in Complaint Paragraph 20.

24. The business of producing, distributing, and selling UAN 32 in the relevant
section of the country set out in Complaint Paragraph 20 is highly concentrated. The Agrium
Acquisition would significantly increase concentration in this relevant section of the country as
evidenced by an increase in the HHI of over 1922 to over 4200.

25. The effect of the Agrium Acquisition, if consummated, may be substantially to
lessen competition or to tend to create a monopoly in the production, distribution, and sale of
UAN 32 in the relevant section of the country set out in Complaint Paragraph 20, in violation 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, in the following ways, among others:

a. the Agrium Acquisition would eliminate actual and potential competition
between Agrium and Unocal to supply UAN 32 in this relevant section of the country;
and


Page 10 of 14

trustee, pursuant to § 5(1) of the Federal Trade Commission Act, or any other statute
enforced by the Commission, for any failure by the Respondents to comply with this
Decision and Order.

Ifa trustee is appointed by the Commission or a court pursuant to Paragraph V.A. of this
Decision and Order, Respondents 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 the
Respondents, which consent shall not be unreasonably withheld. The trustee shall
be a person with experience and expertise in acquisitions and divestitures. If
Respondents have not opposed, in writing, including the reasons for opposing, the
selection of any proposed trustee within ten (10) days after receipt of notice by
the staff of the Commission to Respondents of the identity of any proposed
trustee, Respondents shall be deemed to have consented to the selection of the
proposed trustee.

Subject to the prior approval of the Commission, the trustee shall have the
exclusive power and authority to divest or cause to be divested, respectively, the
Divestiture Assets.

Within ten (10) days after appointment of the trustee, Respondents 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 and obtain the
consents required by this Decision and Order.

The trustee shall have twelve (12) months from the date the Commission approves
the trust agreement described in Paragraph V.C.3. to accomplish the divestiture
and obtain the consents, 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 or that consents can be obtained in 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.

The trustee shall have full and complete access, subject to any legally recognized
privilege of Respondents, to the personnel, books, records and facilities related to
the Divestiture Assets or to any other relevant information, as the trustee may
request. Respondents shall develop such financial or other information as the
trustee may request and shall cooperate with the trustee. Respondents shall take
no action to interfere with or impede the trustee's accomplishment of the


Page 7 of 14

8. “Third Party Approvals” means all consents or waivers from private entities, and local,
state and federal regulatory bodies, or other consents or waivers from partners or
otherwise, that are necessary to effect the complete transfer of the Divestiture Assets to
Simplot or the Alternate Acquirer, as applicable.

T. “Unocal Employees” means all employees currently employed by Unocal who work
primarily at the Rivergate facility, including but not limited to (a) individuals executing
the duties generally performed by executive managers, managers, and supervisors, (b) all
“Employees” as that term is defined and used in the Divestiture Agreement, and (c) all
other personnel necessary and beneficial to maintaining Rivergate as an ongoing facility.

U. “Crane Operators” means qualified, state certified crane operators of the type currently
utilized at Rivergate.

I.
IT IS FURTHER ORDERED that:

A Respondents shall divest or cause to be divested to Simplot, or to the Alternate Acquirer
if applicable, absolutely and in good faith, at no minimum price, the Divestiture Assets as
ongoing facilities in the distribution and wholesale sale of Nitrogen-Based Fertilizers.

B. 1. The divestiture shall be made immediately after Respondent Agrium
consummates the Acquisition, and shall be pursuant to and in accordance with the
Divestiture Agreement (which agreement shall not vary or contradict, or be
construed to vary or contradict, the terms of this Decision and Order). Failure to
comply with the Divestiture Agreement shall constitute a failure to comply with
this Decision and Order.

2. PROVIDED, HOWEVER, that if Respondents have divested the Divestiture
Assets to Simplot prior to the date the Decision and Order becomes final, and if,
at the time the Commission determines to make the Decision and Order final, the
Commission notifies Respondents that Simplot is not an acceptable acquirer or
that the Divestiture Agreement specifies an unacceptable manner of divestiture,
then Respondents shall immediately rescind the transaction with Simplot and shall
divest the Divestiture Assets within four (4) months of the date the Decision and
Order becomes final. Respondents shall divest the Divestiture Assets only to an
Alternate Acquirer that receives the prior approval of the Commission and only in
a manner that receives the prior approval of the Commission.

Cc. Respondents shall secure all Third-Party Approvals prior to the Closing Date.


Page 6 of 14

k. All federal, state, and local regulatory agency registrations, permits, and
applications, and all documents related thereto, wherever located;

L All items of prepaid expense; and
m. Any additional assets defined in the Divestiture Agreement.

3. Agrium storage and handling lease for the Tidewater Terminal Co., Inc. terminal
at East Pasco, Washington (defined as “Lease” in the Divestiture Agreement), and
Prodica leases for the Tidewater Terminal Co., Inc. terminals at Vancouver and
Wilma, Washington (as listed in Exhibit D) .

PROVIDED, HOWEVER, Divestiture Assets do not include the following assets:

(1) Product inventory located at either Rivergate or Apportioned Hedges;

(2) The non-divested, western portion (approximately 29 acres) of Hedges including the
pier and related ammonia truck and barge handling equipment systems and sites (as
illustrated in Exhibit B);

(3) The assets and facilities known as the N-Phuric Production Facility, as illustrated by
Exhibit B; and

(4) Any additional assets excluded in the Divestiture Agreement.

“Nitrogen-Based Fertilizers” means urea, UAN 32% solution, and anhydrous ammonia.

“Acquisition” means the proposed acquisition by Agrium of Unocal’s Agricultural
Products Business as described in the January 19, 2000, Purchase and Sale Agreement
between RSI Acquisition, Inc., and Union Oil.

“Agricultural Products Business” means the assets of Prodica LLC, a Delaware limited
liability company, and the assets of Alaska Nitrogen Products LLC, an Alaska limited
liability company, both with their principal places of business at 2141 Rosecrans Avenue,
Suite 4000, El Segundo, California 90245. Prodica LLC and Alaska Nitrogen Products
LLC are wholly owned subsidiaries of Respondent Union Oil.

“Acquisition Agreement” means the January 19, 2000, Purchase and Sale Agreement
between RSI Acquisition, Inc., and Union Oil.

“Closing Date” means the date, as defined in the Divestiture Agreement, when the parties
have fully consummated the transfer of assets contemplated in the Divestiture Agreement.

“Northwest” means the State of Washington and any and all land and territorial waters
subject to the jurisdiction of the State of Washington; the State of Oregon and any and all
land and territorial waters subject to the jurisdiction of the State of Oregon; and the State
of Idaho and any and all land subject to the jurisdiction of the State of Idaho.


b. Agrium would be likely to exact anticompetitive price increases from buyers of
UAN 32 in this relevant section of the country.

26. — Entry would not be timely, likely, or sufficient to prevent anticompetitive effects
in the relevant section of the country set out in Complaint Paragraph 20.

Count Three —- Ammonia

27. One relevant line of commerce is the production, distribution, and wholesale sale
of the nitrogen-based fertilizer anhydrous ammonia (“ammonia”).

28. One relevant section of the country is the Northwest, as defined in Complaint
Paragraph 12.

29. Respondent Agrium is one of the largest suppliers of ammonia to the Northwest.
30. Respondent Unocal is one of the largest suppliers of ammonia to the Northwest.

31. Respondents Agrium and Unocal are direct and substantial competitors in the
business of producing, distributing, and selling ammonia in the relevant section of the country set
out in Complaint Paragraph 28.

32. The business of producing, distributing, and selling ammonia in the relevant
section of the country set out in Complaint Paragraph 28 is highly concentrated. The Agrium
Acquisition would significantly increase concentration in this relevant section of the country as
evidenced by an increase in the HHI of over 1560 to over 3800.

33. The effect of the Agrium Acquisition, if consummated, may be substantially to
lessen competition or to tend to create a monopoly in the production, distribution, and sale of
ammonia in the relevant section of the country set out in Complaint Paragraph 28, in violation 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, in the following ways, among others:

a. the Agrium Acquisition would eliminate actual and potential competition
between Agrium and Unocal to supply ammonia in this relevant section of the country;
and

b. Agrium would be likely to exact anticompetitive price increases from buyers of
ammonia in this relevant section of the country.

34. Entry would not be timely, likely, or sufficient to prevent anticompetitive effects
in the relevant section of the country set out in Complaint Paragraph 28.

5


Page 9 of 14

business consistent with past practice, or unless otherwise agreed to by
Respondents in the Divestiture Agreement; and

3. Make any payment required to be paid under any contract or lease when due,
maintain and renew all permits and licenses associated with any Divestiture Asset,
and otherwise pay all liabilities and satisfy all obligations associated with any
Divestiture Asset, in each case in a manner consistent with past practice.

IV.
IT IS FURTHER ORDERED that:

From the date Respondents sign the Consent Agreement until the divestiture is completed
pursuant to the terms of this Decision and Order, Respondents shall take, or cause to be
taken, reasonable steps, including implementing appropriate incentive plans (such as
vesting or crediting of all current and accrued benefits and pensions, to which Unocal
Employees are entitled) and paying bonuses, to cause the Unocal Employees to accept
offers of employment from Simplot or the Alternate Acquirer, as applicable.

For a period of two (2) years following the date Respondents sign the Consent
Agreement, Respondents shall not solicit for employment any Unocal Employee
employed by Simplot or the Alternate Acquirer, as applicable, unless and until such
employee’s employment by Simplot or the Alternate Acquirer, as applicable, has been
terminated.

IT IS FURTHER ORDERED that:

If Respondents have not divested or have not caused to be divested, absolutely and in
good faith the Divestiture Assets to Simplot or the Alternate Acquirer, as applicable,
within the time period required by Paragraph II. of this Decision and Order, the
Commission may appoint a trustee to divest or cause to be divested the Divestiture
Assets.

In the event that the Commission or the Attorney General brings an action pursuant to

§ 5() of the Federal Trade Commission Act, 15 U.S.C. § 45(J), or any other statute
enforced by the Commission, Respondents 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


UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS: Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
In the Matter of )
)
Agrium, Inc., )
a corporation, and )
) Docket No. C -
Union Oil Company of California )
and Unocal Corporation, )
corporations. )
)

DECISION AND ORDER

The Federal Trade Commission (“Commission”) having initiated an investigation of the
acquisition by Respondent Agrium, Inc. (“Agrium”) of assets held by Respondents Union Oil
Company of California (“Union Oil”) and Unocal Corporation (“Unocal”), and Respondents
having been furnished thereafter with a copy of a draft of Complaint that the Bureau of
Competition presented to the Commission for its consideration and which, if issued, would
charge Respondents with violations of Section 5 of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 45, and Section 7 of the Clayton Act, as amended 15 U.S.C. § 18; and

Respondents, their attorneys, and counsel for the Commission having thereafter executed
an Agreement Containing Consent Order (“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

The Commission having thereafter considered the matter and having determined that it
had reason to believe that Respondents have violated said Acts, and that a Complaint should
issue stating its charges in that respect, and having accepted the executed Consent Agreement


Page 12 of 14

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 Decision and Order.

11. In the event that the trustee determines that he or she is unable to divest or cause
to be divested the Divestiture Assets in a manner consistent with the
Commission's purpose as described in Paragraph II., the trustee may divest assets
similar and corresponding to the Divestiture Assets of Respondents as necessary
to achieve the remedial purposes of this Decision and Order.

12. The trustee shall have no obligation or authority to operate or maintain the
Divestiture Assets.

13. The trustee shall report in writing to Respondents and the Commission every sixty
(60) days concerning the trustee's efforts to accomplish the divestiture and to
obtain the necessary consents.

VI.

IT IS FURTHER ORDERED that, for a period commencing on the date this Decision
and Order becomes final and continuing for ten (10) years, Respondents shall not, without
providing advance written notification to the Commission acquire, directly or indirectly, through
subsidiaries or otherwise, any ownership, leasehold, or other interest, in whole or in part, in (a)
any of the Divestiture Assets required to be divested pursuant to Paragraph II. of this Decision
and Order, and (b) any terminal facility that has “tidewater” access and is used in the transfer and
storage of UAN 32% solution in the Northwest.

Said notification shall be given on the Notification and Report Form set forth in the
Appendix to Part 803 of Title 16 of the Code of Federal Regulations as amended (hereinafter
referred to as “the Notification”), and shall be prepared and transmitted in accordance with the
requirements of that part, except that no filing fee will be required for any such notification,
notification shall be filed with the Secretary of the Commission, notification need not be made to
the United States Department of Justice, and notification is required only of Respondents and not
of any other party to the transaction. Respondents shall provide the Notification to the
Commission at least thirty (30) days prior to consummating any such transaction (hereinafter
referred to as the “first waiting period”). If, within the first waiting period, representatives of the
Commission make a written request for additional information or documentary material (within
the meaning of 16 C.F.R. § 803.20), Respondents shall not consummate the transaction until
twenty (20) days after submitting such additional information or documentary material. Early
termination of the waiting periods in this Paragraph may be requested and, where appropriate,
granted by letter from the Bureau of Competition. Provided, however, that prior notification


Page 11 of 14

divestiture. Any delays in divestiture caused by Respondents shall extend the
time for divestiture under this Paragraph in an amount equal to the delay, as
determined by the Commission or, for a court-appointed trustee, by the court.

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, but shall
divest expeditiously at no minimum price. The divestiture shall be made only to
an acquirer that receives the prior approval of the Commission, and the divestiture
and consents shall be accomplished only in a manner that receives the prior
approval of the Commission; 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 Respondents from among those approved
by the Commission; provided further, however, that Respondents shall select such
entity within five (5) days of receiving written notification of the Commission’s
approval.

The trustee shall serve, without bond or other security, at the cost and expense of
Respondents, 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 Respondents 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 and, 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 the Respondents,
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 Divestiture Assets.

Respondents shall indemnify the trustee and hold the trustee harmless against any
losses, claims, damages, liabilities, 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, damages, claims, or expenses result from misfeasance,
gross negligence, willful or wanton acts, or bad faith by the trustee.

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 Decision and
Order.


Page 8 of 14

The purpose of the divestiture of the Divestiture Assets is to ensure the continued use of
the Divestiture Assets in the same businesses in which they were engaged at the time of
the announcement of the proposed Acquisition, and to remedy the lessening of
competition resulting from the Acquisition as alleged in the Commission's complaint.

Respondents shall waive and not exercise any preferential right, right of first refusal,
back-in right, or any contractual option that would permit Respondents, as a result of the
divestiture to Simplot or Alternate Acquirer, as applicable, to acquire any interest in any
Divestiture Asset acquired pursuant to this Decision and Order by Simplot or Alternate
Acquirer, as applicable.

IT IS FURTHER ORDERED that:

Respondents shall maintain the viability, marketability, and competitiveness of the
Divestiture Assets, and shall not cause the wasting or deterioration of the Divestiture
Assets, nor shall they cause the Divestiture Assets to be operated in a manner inconsistent
with applicable laws, nor shall they sell, transfer, encumber, or otherwise impair the
viability, marketability, or competitiveness of the Divestiture Assets. Respondents shall
comply with the terms of this Paragraph until such time as Respondents have divested the
Divestiture Assets pursuant to the terms of this Decision and Order. Respondents shall
conduct or cause to be conducted the business of the Divestiture Assets in the regular and
ordinary course and in accordance with past practice (including regular repair and
maintenance efforts) and shall use their best efforts to preserve the existing relationships
with suppliers, customers, employees, and others having business relations with the
Divestiture Assets in the ordinary course of business and in accordance with past practice.
Respondents shall not terminate the operation of any Divestiture Asset and Respondents
shall continue to operate the Divestiture Assets at a level and manner consistent with
those maintained by Respondents in the ordinary course of business consistent with past
practices.

Respondents shall use best efforts to keep the organization and properties of each
Divestiture Asset intact, including current business operations and physical facilities.
Included in the above obligations as set forth in Paragraph III.A. and B., Respondents
shall, without limitation:

1. Maintain operations and departments and neither reduce hours nor manner of
operation of any Divestiture Asset;

2. Not transfer inventory or equipment from any Divestiture Asset or make any
physical alterations to any Divestiture Asset other than in the ordinary course of


j.

Page 4 of 14

quality control data, vehicles, transportation and storage facilities,
furniture, tools, supplies, stores, spare parts, and any tangible personal
property defined in Exhibit E;

Any adjacent strips and gores between the property and any abutting
properties, and any land lying in or under the bed of any creek, stream, or
waterway or any highway, avenue, road, easement, street, alley, or right-
of-way, open or proposed, in, on, across, abutting, or adjacent to the
property,

All certificates for appropriation of water and other water rights generally
that relate to the property;

All right, title, interest in and to the contracts listed in Exhibit D;

All rights under warranties and guarantees, express or implied, wherever
located;

All dedicated management information systems and information contained
in management information systems, and all separately maintained, as well
as relevant portions of not separately maintained books, records, and files,
wherever located;

All federal, state, and local regulatory agency registrations, permits, and
applications, and all documents related thereto, wherever located;

All items of prepaid expense;
Services of one to four Crane Operators at any given time for a period of
(12) twelve months following the Closing Date, according to the terms of

the Crane Operator Labor Agreement set out in Exhibit J; and

Any additional assets defined in the Divestiture Agreement.

The real property Apportioned Hedges together with all rights, interests,
improvements, and appurtenances pertaining thereto, including but not limited to
the following assets:

a.

A 10,000 short ton dry warehouse, related loading and unloading
equipment, machinery, fixtures, equipment, designs, drawings, and
transportation and storage facilities;


UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

AGRIUM, INC.,
a corporation,

and Docket No.

UNION OIL COMPANY OF CALIFORNIA
AND UNOCAL CORPORATION,
corporations.

were eer SH SH ES WD

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act and the Clayton Act, and
by virtue of the authority vested in it by said Acts, the Federal Trade Commission
(‘Commission”) having reason to believe that Respondents Agrium Inc. (“Agrium”), and Union
Oil Company of California and Unocal Corporation (“Unocal”), have entered into an agreement
whereby Agrium would acquire certain assets owned by Unocal in violation of Section 7 of the
Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act
(‘FTC Act”), as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding
in respect thereof would be in the public interest, hereby issues its Complaint pursuant to Section
11 of the Clayton Act, as amended, 15 U.S.C. § 21, and Section 5(b) of the FTC Act, as
amended, 15 U.S.C. § 45(b), stating its charges as follows:


9. At all times relevant herein, Respondent Unocal has been and is now engaged in
commerce as “commerce” is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C.
§ 12, and is a corporation whose business is in or affecting commerce as “commerce” is defined
in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

The Proposed Merger and Acquisition

10. Pursuant to a Purchase and Sale Agreement between RSI Acquisitions Inc. and
Unocal, dated January 19, 2000 (hereinafter referred to as the “Agreement”), Unocal agreed to
sell to Agrium its Agricultural Products Business for a purchase price of $325 million plus an
“Earn-Out” for six years based on the future relationship between certain commodity price
indexes and certain forecasted prices for Kenai, Alaska, facilities (hereinafter referred to as the
“Agrium Acquisition”).

Count One —- UREA

11. One relevant line of commerce is the production, distribution, and wholesale sale
of the nitrogen-based fertilizer urea.

12. One relevant section of the country is the Northwest, which consists of the states
of Washington, Oregon, and Idaho.

13. Respondent Agrium is one of the largest suppliers of urea in the Northwest.
14. Respondent Unocal is one of the largest suppliers of urea in the Northwest.

15. Respondents Agrium and Unocal are direct and substantial competitors in the
business of producing, distributing, and selling urea in the relevant section of the country set out
in Complaint Paragraph 12.

16. The business of producing, distributing and selling urea in the relevant section of
the country set out in Complaint Paragraph 12 is highly concentrated. The Agrium Acquisition
would significantly increase concentration in this relevant section of the country as evidenced by
an increase in the Herfindahl-Hirschman Index (commonly referred to as “HHI”) of over 2200 to
over 4800.

17. The effect of the proposed Agrium Acquisition, if consummated, may be
substantially to lessen competition or to tend to create a monopoly in the production, distribution
and sale of urea in the relevant section of the country set out in Complaint Paragraph 12, in
violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the

3 .


Page 3 of 14

“Unocal” means Unocal Corporation, its directors, officers, employees, agents,
representatives, successors, and assigns; its joint ventures, subsidiaries, divisions, groups,
and affiliates controlled by Unocal Corporation, and the respective directors, officers,
employees, agents, representatives, successors, and assigns of each.

“Respondents” means Agrium, Union Oil, and Unocal, individually and collectively.

“Simplot” means J.R. Simplot Company, a Nevada corporation with its principal place of
business at 999 Main Street, Suite 1300, Boise, Idaho 83605.

“Commission” means the Federal Trade Commission.

“Alternate Acquirer” means the entity or entities to whom the Divestiture Assets, as
defined in Paragraph I.L., may be divested by the Respondents pursuant to Paragraph II.
of this Decision and Order or by the trustee pursuant to Paragraph V. of this Decision and
Order, as applicable.

“Divestiture Agreement” means the July 12, 2000, Purchase and Sale Agreement and the
August 3, 2000, Amendment to that Agreement (and all Exhibits attached to either)
between Simplot and Agrium whereby Simplot acquires the Divestiture Assets from
Agrium (non-public Appendix I hereto). All references in this Decision and Order to
Exhibits are to the Exhibits of the Divestiture Agreement, unless otherwise specified.

“Rivergate” means the terminal facility that has “tidewater” access and is located in
Portland, Oregon, as defined in Exhibit A.

“Hedges” means the terminal facility located in Kennewick, Washington, as defined in
Exhibit C.

“Apportioned Hedges” means the divested terminal facility comprised of a 600 x 700 foot
block in the east south east corner of Hedges and a 200 foot wide corridor along the south
east property line of Hedges, as illustrated in Exhibit B.

“Divestiture Assets” means all of Agrium’s right, title, and interest acquired from Union
Oil and Unocal pursuant to the Acquisition in all assets described in the Divestiture
Agreement, including, without limitation, the following:

L. The real property Rivergate together with all rights, interests, improvements, and
appurtenances pertaining thereto, including but not limited to the following assets:

a. All fertilizer terminal related assets such as the “tidewater” piers, ship
unloading systems, warehousing facilities, machinery, fixtures, equipment,
technology, know-how, specifications, designs, drawings, processes,


Page 2 of 14

and placed 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 makes the
following jurisdictional findings and issues the following Order:

1. Respondent Agrium, Inc., is a corporation organized, existing and doing business
under and by virtue of the laws of Canada, with its office and principal place of
business located at 13131 Lake Fraser Drive SE, Calgary, Alberta, T2J7E8,
Canada. For the purposes of this matter, Agrium, Inc. acquires all assets through
its wholly owned subsidiary RSI Acquisition, Inc., a California company with its
principal place of business located at 4582 S. Ulster St., Suite 1400, Denver,
Colorado 80237.

2. Respondent Union Oil Company of California, a wholly owned subsidiary of
Unocal Corporation, is a corporation organized, existing and doing business under
and by virtue of the laws of the State of California, with its principal place of
business at 2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245.

3. Respondent Unocal Corporation 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 at 2141 Rosecrans Avenue, Suite 4000, El
Segundo, California 90245.

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

ORDER
IL
IT IS ORDERED that, as used in this order, the following definitions shall apply:

A “Agrium” means Agrium, Inc., its directors, officers, employees, agents, representatives,
successors, and assigns; its joint ventures, subsidiaries, divisions, groups and affiliates
controlled by Agrium, Inc., and the respective directors, officers, employees, agents,
representatives, successors, and assigns of each.

B. “Union Oil” means Union Oil Company of California, its directors, officers, employees,
agents, representatives, successors, and assigns; its joint ventures, subsidiaries, divisions,
groups and affiliates controlled by Union Oil Company of California, and the respective
directors, officers, employees, agents, representatives, successors, and assigns of each.


Page 13 of 14

shall not be required by this Paragraph for a transaction for which notification is required to be
made, and has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. § 18a.

Vil.
IT IS FURTHER ORDERED that:

A Within thirty (30) days after the date this Decision and Order becomes final and every
thirty (30) days thereafter until Respondents have fully complied with the provisions of
Paragraphs II. through IV. of this Decision and 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 Paragraphs II. through IV.
of this Decision and Order. Respondents shall include in their 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. through IV. of the Decision and Order, including a
description of all substantive contacts or negotiations relating to the divestitures and the
approvals. 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
approvals. The final compliance report required by this Paragraph VII. A. shall include a
statement that the divestiture has been accomplished in the manner approved by the
Commission and shall include the date the divestiture was accomplished.

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, Respondents shall file a verified written report with the
Commission setting forth in detail the manner and form in which they have complied and
are complying with this Order.

Vol.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least
thirty (30) days prior to any proposed change in the Respondents that may affect compliance
obligations arising out of this Decision and Order, 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 the corporation.


Agrium

1. Agrium is a corporation organized, existing and doing business under and by
virtue of the laws of the country of Canada, with its office and principal place of business located
at 13131 Lake Fraser Drive SE, Calgary, Alberta, T2J7E8, Canada.

2. Agrium is a leading producer and marketer of fertilizer in North America and a
major retail supplier of agricultural products and services in North America. In 1999, Agrium
operated six nitrogen fertilizer plants and generated wholesale sales of nitrogen fertilizer of
approximately $500 million.

3. Agrium is acquiring Unocal’s corporate assets through its wholly owned
subsidiary RSI Acquisition, Inc., a California corporation with its principal place of business
located at 4582 S. Ulster St., Suite 1400, Denver, Colorado 80237.

4. At all times relevant herein, Respondent Agrium has been and is now engaged in
commerce as “commerce” is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C.
§ 12, and is a corporation whose business is in or affecting commerce as “commerce” is defined
in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

Unocal

5. Union Oil Company of California, a wholly owned subsidiary of Unocal
Corporation, is a corporation organized, existing and doing business under and by virtue of the
laws of the State of California, with its office and principal place of business located at 2141
Rosecrans Avenue, Suite 4000, El Segundo, California 90245.

6. Unocal Corporation 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 2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245.

7. Unocal manufactures, distributes, and sells nitrogen-based fertilizers. Unocal
operates seven nitrogen fertilizer plants and three deepwater terminals within the states of
Alaska, Washington, Oregon, and California.

8. Unocal operates its Agricultural Products Business, which includes its nitrogen.
fertilizer manufacturing and distribution facilities, through Prodica, LLC, and Alaska Nitrogen
Products, LLC, two wholly owned subsidiaries of Union Oil Company of California.