WHEREFORE, Libbey prays for judgment as follows:

1. That the Complaint be dismissed with prejudice;

2. That judgment be entered in favor of Libbey and against Plaintiff
on each and every claim set forth in the Complaint; and

3. For such other and further relief as is just and proper.


ANSWER: Libbey admits that on January 21, 2002 it amended
the Original Agreement in response to the Commission’s vote to challenge the
acquisition. Libbey admits it proposes to acquire to acquire the stock of Anchor
Hocking from Newell Rubbermaid pursuant to Amended Agreement, which
superseded the Original Agreement. Libbey admits that the Amended Agreement
reduced the purchase price by $32.5 million. Except as stated above, Libbey
denies each and every allegation in Paragraph 9.

10. Under the amended merger agreement, the assets to be
transferred to RCP are most (not all) of the molds, customers relationships and
certain other assets used in Anchor’s food service glassware business. Anchor
would keep, and Libbey would still acquire, key assets used by Anchor in the
food service glassware business, most significantly Anchor’s two glassware
manufacturing plants. Newell would not retain any capability to manufacture
glassware.

ANSWER: Libbey admits it will acquire from Anchor Hocking
two manufacturing plants and certain other assets (including molds and customer
relationships) pursuant to the Amended Agreement. Except as stated above,
Libbey denies each and every allegation in Paragraph 10.

11. After the district court granted the Commission’s motion
for a preliminary injunction, respondents told the court that Libbey would not
solicit certain Anchor employees. At approximately the same time, Newell and a

third party modified the price term under a supply agreement for RCP.


f. they may allow Libbey to exercise market power in the
relevant market either unilaterally or in coordination with
others.

ANSWER: Libbey denies each and every allegation of

Paragraph 21.

22. Entry into the relevant product market would not be timely,
likely, or sufficient in its magnitude, character, and scope to deter or counteract
anticompetitive effects of the acquisition and the amended merger agreement.

ANSWER: Libbey denies each and every allegation of
Paragraph 22, and states that entry into the United States for the sale of glassware
to all customers including food service distributors and end-users would not only
be likely, but actual, timely, and sufficient in its magnitude, character and scope
to deter and counteract the any alleged anticompetitive effects of the acquisition.
Further, Libbey states that the Original Agreement has been superseded by the
Amended Agreement and therefore there is no basis to assess the effects of the
Original Agreement pursuant to the Clayton Act or the FTC Act.

COUNT I - ILLEGAL ACQUISITION

23. The allegations contained in Paragraphs 1-22 are repeated
and realleged as though fully set forth here.

ANSWER: Libbey repeats its responses to the allegations
contained in Paragraphs 1-22 and realleges them as though fully set forth here.

24. The effect of the acquisition may be substantially to lessen

competition or tend to create a monopoly in violation of Section 7 of the Clayton

10


been superseded by the Amended Agreement and therefore there is no reason to
assess the effects of the Original Agreement.

14. The relevant geographic are in which to assess the effects
of the acquisition and amended merger agreement is the United States.

ANSWER: Libbey admits that the relevant geographic area in
which to assess the effects of the Amended Agreement is the United States and
further states that this market includes all domestic and foreign companies that
have the ability to sell glass tableware in the United States. Moreover, Libbey
states that the Original Agreement has been superseded by the Amended
Agreement and therefore there is no basis to assess the effects of the Original
Agreement pursuant to the Clayton Act or the FTC Act. Except as stated above,
Libbey denies each and every allegation in Paragraph 14.

15. The United States food service glassware market is highly
concentrated.

ANSWER: Libbey denies each and every allegation of
Paragraph 15 including the characterization of “food service glassware” as the
relevant line of commerce. Libbey further states the glass tableware market is not
highly concentrated.

16. Libbey is the largest maker and seller of food service
glassware to, among other customers, food service distributors and end-users in
the United States, with substantially more than half of the sales.

ANSWER: Libbey admits that it produces and sells glassware.

Except as stated above, Libbey denies each and every allegation in Paragraph 16,


ANSWER: Libbey admits that after the district court granted
the Commission’s motion for a preliminary injunction, respondents told the court
Libbey would not solicit certain Anchor Hocking employees. Based on
information and belief, Libbey admits that Newell Rubbermaid and a third party
modified the price term under a supply agreement for RCP.

12. The amended merger agreement and the changes described
in Paragraph 11 do not materially change the acquisition or its likely effect on
competition.

ANSWER: Libbey denies each and every allegation of
Paragraph 12. Moreover, Libbey states that pursuant to the Original Agreement,
Libbey proposed to acquire from Newell Rubbermaid its Anchor Hocking
division, including its food service, retail and industrial glassware businesses.
Libbey further states that that pursuant to the Amended Agreement, which
superseded the Original Agreement, Libbey is to acquire only Newell
Rubbermaid’s retail and specialty glassware businesses, which do not compete in
the FTC’s alleged relevant market. Newell Rubbermaid will retain its food
service glassware business, which competes in the FTC’s alleged relevant market.

13. A relevant line of commerce in which to assess the effects
of the acquisition and the amended merger agreement is food service glassware.

ANSWER: Libbey denies each and every allegation of
Paragraph 13. Libbey instead states that the relevant line of commence in which
to assess the effects of the Amended Agreement is the sale of all glass tableware

in the United States. Moreover, Libbey states that the Original Agreement has


service glassware market, would result in a highly concentrated market, would
eliminate the existing substantial competition between Libbey and Anchor, would
impair the competitive viability of Newell Rubbermaid, and would substantially
reduce competition and tend to create a monopoly in the market for food service
glassware in the United States.

ANSWER: Libbey denies each and every allegation of
Paragraph 19 and states that the Original Agreement has been superseded and
rendered null by the Amended Agreement.

20. The amended merger agreement, if consummated, would
impair the competitive viability of Newell Rubbermaid as a competitor in the sale
of food service glassware in the United States, and would reduce competition in
the food service glassware market.

ANSWER: Libbey denies each and every allegation of
Paragraph 20.

21. The acquisition and the amended merger agreement may
substantially lessen competition in the following ways, among others:

a. they would eliminate actual, direct and substantial competition

between Libbey and Anchor;

b. they would increase the level of concentration in the relevant

market;

c. they may lead to increases in price for the relevant product;

d. they may increase barriers to entry into the relevant market;

e. they may give Libbey market power in the relevant market; and


UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION

NEWELL RUBBERMAID, INC., a corporation.

)

In the Matter of )

)

LIBBEY INC, a corporation, )
) Docket No. 9301

and )

)

)

)

ANSWER AND AFFIRMATIVE DEFENSES OF LIBBEY INC.

Respondent Libbey Inc. (“Libbey”), by and through it attorneys,
Latham & Watkins, hereby answers the allegations of the Federal Trade
Commission (“FTC”) Complaint as follows:

1. Respondent Libbey is a corporation organized and existing
under the laws of the State of Delaware, with its principal place of business at 300
Madison Avenue, Toledo, Ohio 43699-0060.

ANSWER: Libbey admits the allegations in Paragraph 1.

2. Libbey is the largest maker and seller of food service
glassware in the United States, with substantially more than half of the sales.
Libbey produces and sells food service glassware, a line of products that includes
many different styles of tumblers and stemware for beverages, and other
glassware products ranging from serving platters to candle holders. Libbey
produces and sells glassware, among other segments, to food service customers,
including distributors who resell soda-lime glassware to restaurants, hotels and

other food service establishments.


ANSWER: Libbey repeats its responses to the allegations
contained in Paragraphs 1-22 and realleges them as though fully set forth here.

28. The effect of the amended merger agreement may be
substantially to lessen competition or tend to create a monopoly in violation of
Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the Federal Trade
Commission Act, 15 U.S.C. § 45.

ANSWER: Libbey denies each and every allegation of
Paragraph 28.

COUNT IV - ILLEGAL ACQUISITION AGREEMENT
AMENDED MERGER AGREEMENT

29. The allegations contained in Paragraphs 1-22 are repeated
and realleged as though fully set forth here.

ANSWER: Libbey repeats its responses to the allegations
contained in Paragraphs 1-22 and realleges them as though fully set forth here.

30. Libbey and Newell Rubbermaid, through the merger
agreement described in Paragraph 9 and the changes thereto described in
Paragraph 11, have engaged in unfair methods of competition in or affecting
commerce in violation of Section 5 of the Federal Trade Commission Act, 15
US.C. § 45.

ANSWER: Libbey denies each and every allegation of

Paragraph 30.

12


Act, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, 15
U.S.C. § 45.

ANSWER: Libbey denies each and every allegation of
Paragraph 24. Further, Libbey states that the Original Agreement has been
superseded by the Amended Agreement and therefore there is no basis to assess
the effects of the Original Agreement pursuant to the Clayton Act or the FTC Act.

COUNT II - ILLEGAL ACQUISITION AGREEMENT

25. The allegations contained in Paragraphs 1-22 are repeated
and realleged as though fully set forth here.

ANSWER: Libbey repeats its responses to the allegations
contained in Paragraphs 1-22 and realleges them as though fully set forth here.

26. Libbey and Newell Rubbermaid, through the Stock
Purchase Agreement described in Paragraph 7, have engaged in unfair methods of
competition in or affecting commerce in violation of Section 5 of the Federal
Trade Commission Act, 15 U.S.C. § 45.

ANSWER: Libbey denies each and every allegation of
Paragraph 26. Further, Libbey states that the Original Agreement has been
superseded by the Amended Agreement and therefore there is no basis to assess
the effects of the Original Agreement pursuant to the Clayton Act or the FTC Act.

COUNT III - ILLEGAL ACQUISITION AGREEMENT
AMENDED MERGER AGREEMENT

27. The allegations contained in Paragraphs 1-22 are repeated

and realleged as though fully set forth here.

11


including the characterization of “food service glassware” as a distinct product
line.

17. Anchor is the third largest maker and seller of food service
glassware in the United States, with substantially more than half of the sales.

ANSWER: Libbey admits that Anchor Hocking makes and sells
glassware. Except as stated above, Libbey denies each and every allegation in
Paragraph 17, including the characterization of “food service glassware” as a
distinct product line.

18. Libbey and Anchor are direct and actual competitors in the
manufacture and sale of food service glassware. They compete with each other
on price by, among other things, offering discounts and other promotions on the
sale of their food service glassware. Anchor prices and discounts its food service
glassware in response to Libbey’s pricing, and in order to take sales from Libbey.
Anchor has succeeded in taking food service glassware sales from Libbey by
offering lower prices to food service customers and distributors.

ANSWER: Libbey admits that it competes with Anchor and
many other entities in the sale of glassware and that competition is based, among
other factors, on price. Libbey denies that “food service glassware” is a distinct
product line. Except as stated above, Libbey denies each and every allegation in
Paragraph 18.

19. The acquisition and the amended merger agreement would
combine the largest and third largest manufacturers and sellers of food service

glassware in the United States, substantially increasing concentration in the food


8. On December 18, 2001, the Commission authorized the
commencement of an action under Section 13(b) of the FTC Act to seek a
preliminary injunction barring the acquisition during the pendency of
administrative proceedings. Thereafter, on January 14, 2002, the FTC
commenced such an action in the United States District Court for the District of
Columbia, and on April 22, 2002, the district court granted the FTC’s motion for
a preliminary injunction pending the completion of administrative adjudication.

ANSWER: | Based on information and belief, Libbey admits the
allegations in Paragraph 8. Libbey further states that the transaction upon which
the Commission voted to seek authorize the commencement of an action under
Section 13(b) of the FTC Act was the acquisition contemplated by the Original
Agreement, a transaction that was superseded and rendered null by the Amended
Agreement.

9. On or about January 21, 2002, after the preliminary
injunction action was commenced, respondents amended their merger agreement
(the “amended merger agreement”). Respondents amended their merger
agreement in response to the Commission’s vote to challenge the acquisition.
Pursuant to the amended agreement, Libbey would still acquire all of the stock of
Anchor, but prior to closing Anchor would transfer to Newell Rubbermaid’s
Rubbermaid Commercial Products (“RCP”) division less than 10% of the assets
of Anchor, and the consideration to be paid by Libbey for Anchor would be

reduced by less than 10%.


Dated: May 29, 2002 LATHAM & WATKINS

James V. Kearney

Bruce J. Prager

E. Marcellus Williamson
Steven H. Schulman
Geoffrey A. Manne
Matthew R. VanderGoot
Stephen J. Spiegelhalter

555 Eleventh Street, N.W.
Suite 1000

Washington, DC 20004
(202) 637-2200

Richard C. Weisberg
512 Prescott Road
Merion, PA 19066
Tel: (610) 664-9405

Attorneys for Respondent
Libbey Inc.

By al 44 LL L224
even H. Schulman

15


5. Libbey is, and at all times relevant herein has been,
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 affects
commerce as “commerce” is defined in Section 4 of the Federal Trade
Commission Act, as amended, 15 U.S.C. § 44.

ANSWER: Libbey admits the allegations in Paragraph 5.

6. Newell Rubbermaid is, and at all times relevant herein has
been, 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
affects commerce as “commerce” is defined in Section 4 of the Federal Trade
Commission Act, as amended, 15 U.S.C. § 44.

ANSWER: | Based on information and belief, Libbey admits the
allegations in Paragraph 6.

7. Pursuant to a Stock Purchase Agreement dated June 17,
2001, Libbey proposed to acquire all of the stock of anchor from Newell
Rubbermaid (the “acquisition”).

ANSWER: Libbey admits the allegations in Paragraph 7.
Libbey also avers that Libbey will acquire the stock of Anchor Hocking from
Newell Rubbermaid Inc. (“Newell Rubbermaid”) pursuant to an Amended and
Restated Stock Purchase Agreement, dated January 21, 2002 (the “Amended
Agreement”), which supersedes the Stock Purchase Agreement dated June 17,

2001 (the “Original Agreement”).


ANSWER: Libbey admits that it produces and sells glassware,
including tumblers, stemware, platters and candleholders, to, among other
customers, food service customers, including distributors who resell glassware to
restaurants, hotels and other food service establishments. Except as stated above,
Libbey denies each and every allegation in Paragraph 2, including the
characterization of “food service glassware” as a distinct product line.

3. Respondent Newell Rubbermaid is a corporation organized
and existing under the laws of the State of Delaware, with its principal place of
business at 29 East Stephenson Street, Freeport, Illinois 61032. Anchor is an
indirect, wholly-owned subsidiary of Newell Rubbermaid.

ANSWER: _ Based on information and belief, Libbey admits the
allegations in Paragraph 3.

4, Anchor is the third largest maker and seller of food service
glassware in the United States. Anchor is Libbey’s most formidable competitor in
the food service glassware market.

ANSWER: Libbey admits Anchor Hocking Corp. (“Anchor
Hocking”) produces and sells glassware to, among other customers, food service
customers. Libbey admits that Anchor Hocking is one of several companies that
sell of glassware to food service customers and states that Libbey and Anchor
Hocking are only two of at least sixteen domestic and foreign companies that
compete in the sale of glass tableware in the United States. Except as stated
above, Libbey denies each and every allegation in Paragraph 4, including the

characterization of “food service glassware” as a distinct product line.


DEFENSES AND AFFIRMATIVE DEFENSES

Without assuming any burden that it would not otherwise bear, Libbey
asserts the following defenses and affirmative defenses:
FIRST AFFIRMATIVE DEFENSE
Plaintiff's Complaint, in whole or in part, fails to state a claim upon which

relief can be granted.

SECOND AFFIRMATIVE DEFENSE

The acquisition is a pro-competitive response to market dynamics. As a
result of the proposed merger, efficiencies in the production, distribution, and sale
of soda lime glass will be realized.

THIRD AFFIRMATIVE DEFENSE

Because the Original Acquisition has been abandoned and superseded by
the Amended Stock Purchase Agreement dated January 21, 2002, there presently
exists no actual or potential violation of Clayton Act § 7 as a result of the
proposed acquisition. Therefore, to the extent that it is directed to the Original
Acquisition, Plaintiff's Complaint is moot.

FOURTH AFFIRMATIVE DEFENSE

Libbey has not knowingly or intentionally waived any applicable
affirmative defenses. Libbey presently lacks sufficient knowledge or information
on which to form a belief as to whether it may have available additional, as yet
unstated, affirmative defenses, and reserves the right to assert such additional

defenses.