UNITED STATES OF AMERICA 

BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS: Jon Leibowitz, Chairman 

 J. Thomas Rosch 

 Edith Ramirez 

 Julie Brill 

 

 ) 

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. ) 

 ) 

ORDER TO HOLD SEPARATE AND MAINTAIN ASSETS 

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 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 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 

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 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The Secretary of the Commission having thereafter withdrawn the matter from 

adjudication in accordance with § 3.25(c) of its Rules; and 

The Commission having thereafter considered the matter and the executed Consent 

Agreement, now in further conformity with the procedure described in § 3.25(f) of its Rules, the 
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Commission hereby makes the following jurisdictional findings and issues this Order to Hold 

Separate and Maintain Assets (“Hold Separate”): 

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 ORDERED that, as used in this Hold Separate, the following definitions, and all 

other definitions used in the Consent Agreement and the proposed Decision and Order (and when 

made final, the Decision and Order), shall apply: 

A. “Acquisition” means the proposed 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”). 

B. “Acquisition Date” means the date the Acquisition is consummated. 

C. “Commission-approved Acquirer” means any Person that receives the prior approval of 

the Commission to acquire the Liquid Finishing Business Assets pursuant to the Decision 

and Order. 

D. “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. 

E. “Decision and Order” means (i) the proposed Decision and Order contained in the 

Consent Agreement in this matter until the issuance and service of a final Decision and 
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Order by the Commission; and (ii) the final Decision and Order issued by the 

Commission following the issuance and service of a final Decision and Order by the 

Commission. 

F. “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 

Decision and Order. 

G. “Gema Powder Finishing Business” means the worldwide business of developing, 

assembling, manufacturing, distributing, selling, or servicing powder finishing systems 

and products conducted prior to the Acquisition by Respondent ITW, including all 

business activities relating to the development, manufacture, and sale of products under 

the brand name Gema. “Gema Powder Finishing Business” does not include the Liquid 

Finishing Business. 

H. “Hold Separate” means this Order to Hold Separate and Maintain Assets. 

I. “Hold Separate Business” means the (i) Liquid Finishing Business Assets and (ii) Liquid 

Finishing Business. 

J. “Hold Separate Business Employees” means the Liquid Finishing Business Employees, 

the Hold Separate Gema Employees, and the Hold Separate Gema Shared Employees. 

K. “Hold Separate Gema Employees” means employees located in the United Kingdom, 

Germany, France, Italy, Australia, Japan, and Mexico in facilities shared with the Liquid 

Finishing Business or Liquid Finishing Business Assets whose job responsibilities relate 

exclusively to Gema powder finishing products. 

L. “Hold Separate Gema Shared Employees” means employees located in the United 

Kingdom, Germany, France, Italy, Australia, Japan, and Mexico in facilities shared with 

the Liquid Finishing Business or Liquid Finishing Business Assets whose job 

responsibilities relate to both the liquid finishing and powder finishing businesses. 

M. “Hold Separate Period” means the time period during which the Hold Separate is in 

effect, which shall begin on the date this Hold Separate becomes a final and effective 

order, which shall occur on or prior to the Acquisition Date, and terminate pursuant to 

Paragraph V. of this Hold Separate. 

N. “Hold Separate Manager(s)” means the Person(s) appointed pursuant to Paragraph II.C.2. 

of this Hold Separate. 

O. “Hold Separate Trustee” means the Person appointed pursuant to Paragraph II.C.l. of this 

Hold Separate. 

P. “Liquid Finishing Business” means the worldwide business of developing, assembling, 

manufacturing, distributing, selling, or servicing liquid finishing systems and products 
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conducted prior to the Acquisition by Respondent ITW, including all business activities 

relating to the development, manufacture, and sale of products under the brand names 

Binks, DeVilbiss, Ransburg, and BGK. “Liquid Finishing Business” does not include the 

Gema Powder Finishing Business. 

Q. “Liquid Finishing Business Assets” means all 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. 

R. “Liquid Finishing Business Employees” means any full-time, part-time, or contract 

employee(s) of the Liquid Finishing Business, including the Hold Separate Gema Shared 

Employees, immediately prior to the Acquisition. 

S. “Orders” means the Decision and Order and this Hold Separate. 

T. “Person” means any individual, partnership, firm, corporation, association, trust, 

unincorporated organization or other business entity. 

U. “Prospective Acquirer” means a Person that Graco (or a Divestiture Trustee appointed 

under the Decision and Order) intends to submit as a Commission-approved Acquirer to 

the Commission for its prior approval pursuant to the Decision and Order. 

II. 

IT IS FURTHER ORDERED that: 

A. During the Hold Separate Period, Respondent Graco shall: 

1. Hold the Hold Separate Business separate, apart, and independent as required by 

this Hold Separate and shall vest the Hold Separate Business with all rights, 

powers, and authority necessary to conduct its business. 

2. Not exercise direction or control over, or influence directly or indirectly, the Hold 

Separate Business or any of its operations, the Hold Separate Trustee, or the Hold 

Separate Managers, except to the extent that Respondent Graco must exercise 

direction and control over the Hold Separate Business as is necessary to assure 

compliance with this Hold Separate, the Consent Agreement, the Decision and 

Order, and all applicable laws. Nothing herein shall limit taking such action as 

may be required to ensure compliance with financial reporting requirements, with 

all applicable laws, regulations, and other legal requirements, or with policies and 

standards concerning health, safety, and environmental aspects of the Hold 

Separate Business or with the integrity of the Hold Separate Business financial 

controls. 

3. Take such actions as are necessary to maintain and assure the continued viability, 

marketability, and competitiveness of the Hold Separate Business, and to prevent 

the destruction, removal, wasting, deterioration, or impairment of any of the 
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assets, except for ordinary wear and tear, and shall not sell, transfer, encumber, or 

otherwise impair the Hold Separate Business (except as required by the Decision 

and Order). 

B. From the time Respondents execute the Consent Agreement until the Acquisition Date, 

Respondent ITW shall take such actions as are necessary to maintain and assure the 

continued maintenance of the full economic viability, marketability, and competitiveness 

of the Hold Separate Business, and prevent the destruction, removal, wasting, 

deterioration, or impairment of any of the assets, except for ordinary wear and tear. 

C. Respondent Graco shall hold the Hold Separate Business separate, apart, and independent 

of Respondent Graco on the following terms and conditions: 

1. At any time after the Respondents sign the Consent Agreement, the Commission 

may appoint a Hold Separate Trustee to monitor the operations of the Hold 

Separate Business and to ensure that the Respondents comply with their 

obligations as required by this Hold Separate and the Decision and Order. The 

Hold Separate Trustee shall serve as Hold Separate Trustee pursuant to the 

agreement executed by the Hold Separate Trustee and Respondent Graco (“Hold 

Separate Trustee Agreement”). 

(a) The Commission shall select the Hold Separate Trustee, subject to the 

consent of Respondent Graco, which consent shall not be unreasonably 

withheld. If Respondent Graco has not opposed, in writing, including the 

reasons for opposing, the selection of the proposed Hold Separate Trustee 

within ten (l0) days after notice by the staff of the Commission to 

Respondent Graco of the identity of the proposed Hold Separate Trustee, 

Respondent Graco shall be deemed to have consented to the selection of 

the proposed Hold Separate Trustee. 

(b) The Hold Separate Trustee shall have the responsibility for monitoring the 

organization of the Hold Separate Business; supervising the management 

of the Hold Separate Business by the Hold Separate Managers; 

maintaining the independence of the Hold Separate Business; and 

monitoring Respondents’ compliance with their respective obligations 

pursuant to the Orders, including, without limitation, maintaining the 

viability, marketability, and competitiveness of the Hold Separate 

Business pending divestiture. 

(c) No later than one (1) day after the appointment of the Hold Separate 

Trustee, Respondent Graco shall enter into an agreement (“Hold Separate 

Trustee Agreement”) that, subject to the prior approval of the 

Commission, transfers to and confers upon the Hold Separate Trustee all 

rights, powers, and authority necessary to permit the Hold Separate 

Trustee to perform his or her duties and responsibilities pursuant to this 

Hold Separate, in a manner consistent with the purposes of the Orders and 

in consultation with Commission staff, and shall require that the Hold 
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Separate Trustee shall act in a fiduciary capacity for the benefit of the 

Commission. 

(d) Subject to all applicable laws and regulations, the Hold Separate Trustee 

shall have full and complete access to all personnel, books, records, 

documents, and facilities of the Hold Separate Business, and to any other 

relevant information as the Hold Separate Trustee may reasonably request 

including, but not limited to, all documents and records kept by 

Respondents in the ordinary course of business that relate to the Hold 

Separate Business. Respondents shall develop such financial or other 

information as the Hold Separate Trustee may reasonably request and shall 

cooperate with the Hold Separate Trustee. 

(e) Respondents shall take no action to interfere with or impede the Hold 

Separate Trustee’s ability to monitor Respondents’ compliance with this 

Hold Separate, the Consent Agreement, or the Decision and Order, or 

otherwise to perform his or her duties and responsibilities consistent with 

the terms of this Hold Separate. 

(f) The Hold Separate Trustee shall have the authority to employ, at the cost 

and expense of Respondent Graco, such consultants, accountants, 

attorneys, and other representatives and assistants as are reasonably 

necessary to carry out the Hold Separate Trustee’s duties and 

responsibilities. 

(g) The Commission may require the Hold Separate Trustee and each of the 

Hold Separate Trustee’s consultants, accountants, attorneys, and other 

representatives and assistants to sign an appropriate confidentiality 

agreement relating to materials and information received from the 

Commission in connection with performance of the Hold Separate 

Trustee’s duties. 

(h) Respondents may require the Hold Separate Trustee and each of the Hold 

Separate Trustee’s consultants, accountants, attorneys, and other 

representatives and assistants to sign an appropriate confidentiality 

agreement; provided, however, such agreement shall not restrict the Hold 

Separate Trustee from providing any information to the Commission. 

(i) Thirty (30) days after the Acquisition Date, and every thirty (30) days 

thereafter until the Hold Separate terminates, the Hold Separate Trustee 

shall report in writing to the Commission concerning the efforts to 

accomplish the purposes of this Hold Separate and Respondents’ 

compliance with their obligations under the Hold Separate and the 

Decision and Order. Included within that report shall be the Hold 

Separate Trustee’s assessment of the extent to which the businesses 

comprising the Hold Separate Business are meeting (or exceeding) their 
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projected goals as are reflected in operating plans, budgets, projections, or 

any other regularly prepared financial statements. 

(j) If the Hold Separate Trustee ceases to act or fails to act diligently and 

consistent with the purposes of this Hold Separate, the Commission may 

appoint a substitute Hold Separate Trustee consistent with the terms of this 

Hold Separate, subject to the consent of Respondent Graco, which consent 

shall not be unreasonably withheld. If Respondent Graco has not 

opposed, in writing, including the reasons for opposing, the selection of 

the substitute Hold Separate Trustee within ten (l0) days after notice by 

the staff of the Commission to Respondent Graco of the identity of any 

substitute Hold Separate Trustee, Respondent Graco shall be deemed to 

have consented to the selection of the proposed substitute Hold Separate 

Trustee. Respondent Graco and the substitute Hold Separate Trustee shall 

execute a Hold Separate Trustee Agreement, subject to the approval of the 

Commission, consistent with this paragraph. 

(k) The Hold Separate Trustee shall serve until the day after the Divestiture 

Date; provided, however, that the Commission may extend or modify this 

period as may be necessary or appropriate to accomplish the purposes of 

the Orders. 

2. No later than five (5) days after the Acquisition Date, Respondent Graco shall 

appoint one or more Hold Separate Managers (collectively the “Hold Separate 

Managers”), subject to the approval of the Hold Separate Trustee in consultation 

with Commission staff, to manage and maintain the Hold Separate Business in the 

regular and ordinary course of business and in accordance with past practice. 

(a) The Hold Separate Managers shall be responsible for the operation of the 

Hold Separate Business and shall report directly and exclusively to the 

Hold Separate Trustee, and shall manage the Hold Separate Business 

independently of the management of Respondent Graco. The Hold 

Separate Managers shall not be involved, in any way, in the operations of 

the other businesses of Respondent Graco during the term of this Hold 

Separate. 

(b) No later than three (3) days after appointment of the Hold Separate 

Manager(s), Respondent Graco shall enter into a management agreement 

with each such manager that, subject to the prior approval of the Hold 

Separate Trustee, in consultation with the Commission staff, transfers all 

rights, powers, and authority necessary to permit each such Hold Separate 

Manager to perform his or her duties and responsibilities pursuant to this 

Hold Separate, in a manner consistent with the purposes of the Orders. 

(c) Respondents shall provide the Hold Separate Managers with reasonable 

financial incentives to undertake this position. Such incentives shall 

include employee benefits, including regularly scheduled raises, bonuses, 
8 

vesting of retirement benefits (as permitted by law) on the same basis as 

provided for under the Asset Purchase Agreement for other employees 

hired by Respondent Graco, and additional incentives as may be necessary 

to assure the continuation and prevent any diminution of the Hold 

Separate Business’s viability, marketability, and competitiveness until the 

end of the Hold Separate Period, and as may otherwise be necessary to 

achieve the purposes of this Hold Separate. 

(d) The Hold Separate Managers shall make no material changes in the 

ongoing operations of the Hold Separate Business except with the 

approval of the Hold Separate Trustee, in consultation with the 

Commission staff. 

(e) The Hold Separate Managers shall have the authority, with the approval of 

the Hold Separate Trustee, to remove Hold Separate Business Employees 

and replace them with others of similar experience or skills. If any Person 

ceases to act or fails to act diligently and consistent with the purposes of 

this Hold Separate, the Hold Separate Managers, in consultation with the 

Hold Separate Trustee, may request Respondent Graco to, and Respondent 

Graco shall, appoint a substitute Person, which Person the respective 

manager shall have the right to approve. 

(f) In addition to Hold Separate Business Employees, the Hold Separate 

Managers may, with the approval of the Hold Separate Trustee and at the 

cost and expense of Respondent Graco, employ such consultants, 

accountants, attorneys, and other representatives and assistants as are 

reasonably necessary to assist the respective manager in managing the 

Hold Separate Business and in carrying out the manager’s duties and 

responsibilities. Nothing contained herein shall preclude a Hold Separate 

Manager from contacting or communicating directly with the staff of the 

Commission, either at the request of the staff of the Commission or in the 

discretion of the manager. 

(g) The Hold Separate Trustee shall be permitted, in consultation with the 

Commission staff, to remove any Hold Separate Manager for cause. 

Within three (3) days after such removal, Respondent Graco shall appoint 

a replacement manager, subject to the approval of the Hold Separate 

Trustee in consultation with Commission staff, on the same terms and 

conditions as provided in this paragraph. 

3. The Hold Separate Trustee and the Hold Separate Managers shall serve, without 

bond or other security, at the cost and expense of Respondent Graco, on 

reasonable and customary terms commensurate with the person’s experience and 

responsibilities. 

4. Respondent Graco shall indemnify the Hold Separate Trustee and Hold Separate 

Managers and hold each harmless against any losses, claims, damages, liabilities, 
9 

or expenses arising out of, or in connection with, the performance of the Hold 

Separate Trustee’s or the Hold Separate Managers’ 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 gross 

negligence or willful misconduct by the Hold Separate Trustee or the Hold 

Separate Managers. 

5. The Hold Separate Business shall be staffed with sufficient employees (including 

any full-time, part-time, or contract employee of the Hold Separate Business) to 

maintain the viability and competitiveness of the Hold Separate Business. To the 

extent that such employees leave or have left the Hold Separate Business prior to 

the Divestiture Date, the Hold Separate Managers, with the approval of the Hold 

Separate Trustee, may replace departing or departed employees with persons who 

have similar experience and expertise or determine not to replace such departing or 

departed employees. 

6. In connection with support services or products not included within the Hold 

Separate Business, Respondent Graco shall continue to provide, or offer to 

provide, the same support services to the Hold Separate Business as customarily 

have been or were being provided to such businesses by ITW prior to the 

Acquisition Date. For any services or products that Respondents may provide to 

the Hold Separate Business, Respondents may charge no more than the same price 

they charge others for the same services or products (or a commercially reasonable 

rate if ITW had not previously charged for such services). Respondents’ personnel 

providing such services or products must retain and maintain all Confidential 

Business Information of or pertaining to the Hold Separate Business on a 

confidential basis, and, except as is permitted by this Hold Separate, such persons 

shall be prohibited from disclosing, providing, discussing, exchanging, circulating, 

or otherwise furnishing any such information to or with any person whose 

employment involves any of Respondents’ businesses, other than the Hold 

Separate Business. Such personnel shall also execute confidentiality agreements 

prohibiting the disclosure of any Confidential Business Information of the Hold 

Separate Business. 

(a) Respondent Graco shall offer to the Hold Separate Business, directly or 

through Respondent ITW, any services and products that Respondent ITW 

provided, in the ordinary course of business directly or through third party 

contracts to the business constituting the Hold Separate Business at any 

time since December 31, 2011, or such services that Respondent ITW is 

obligated to provide under Schedule 1.2 of the Asset Purchase Agreement. 

Respondent ITW shall treat the Hold Separate Business as a Graco 

Subsidiary, as that term is defined in the Asset Purchase Agreement. 

Subject to the foregoing, the services and products that Respondent Graco 

shall offer the Hold Separate Business shall include, but shall not be 

limited to, the following: 
10 

(1) human resources and administrative services, including but not 

limited to payroll processing, labor relations support, retirement 

administration, and procurement and administration of employee 

benefits, including health benefits; 

(2) federal and state regulatory compliance and policy development 

services; 

(3) environmental health and safety services, which are used to 

develop corporate policies and insure compliance with federal and 

state regulations and corporate policies; 

(4) financial accounting services; 

(5) preparation of tax returns; 

(6) audit services; 

(7) information technology support services; 

(8) processing of accounts payable and accounts receivable; 

(9) technical support; 

(10) procurement of supplies; 

(11) maintenance and repair of facilities; 

(12) procurement of goods and services utilized in the ordinary course 

of business by the Hold Separate Business; 

(13) legal services; and 

(14) cash management services in the ordinary course of business, 

including cash sweeps, consistent with the cash management 

services provided by Respondent ITW prior to the Acquisition 

Date. 

(b) The Hold Separate Business shall have, at the option of the Hold Separate 

Managers with the approval of the Hold Separate Trustee, the ability to 

acquire services and products from third parties (including Respondent 

ITW) unaffiliated with Respondent Graco. 

7. Respondent Graco shall provide the Hold Separate Business with sufficient 

financial and other resources: 

(a) as are appropriate in the judgment of the Hold Separate Trustee to operate 

the Hold Separate Business as it is currently operated (including efforts to 
11 

generate new business) consistent with the practices of the Hold Separate 

Business in place prior to the Acquisition; 

(b) to perform all maintenance to, and replacements of, the assets of the Hold 

Separate Business in the ordinary course of business and in accordance 

with past practice and current plans; 

(c) to carry on during the Hold Separate Period such capital projects, physical 

plant improvements, and business plans as are already underway for which 

all necessary regulatory and legal approvals have been obtained, including 

but not limited to existing or planned renovation or expansion projects; 

and 

(d) to maintain the viability, competitiveness, and marketability of the Hold 

Separate Business. 

Such financial resources to be provided to the Hold Separate Business shall 

include, but shall not be limited to, (i) general funds, (ii) capital, (iii) working 

capital, and (iv) reimbursement for any operating losses, capital losses, or other 

losses; provided, however, that, consistent with the purposes of the Decision and 

Order and in consultation with the Hold Separate Trustee: (i) the Hold Separate 

Managers may reduce in scale or pace any capital or research and development 

project, or substitute any capital or research and development project for another 

of the same cost; and (ii) to the extent that the Hold Separate Business generates 

financial funds in excess of financial resource needs, Respondent Graco shall 

have availability to such excess funds consistent with practices in place for the 

Hold Separate Business prior to the Acquisition. 

8. Respondent Graco shall cause the following individuals that have access to 

Confidential Business Information of or pertaining to the Hold Separate Business 

to submit to the Hold Separate Trustee, or Commission staff as appropriate, a 

signed statement that the individual will maintain the confidentiality required by 

the terms and conditions of this Hold Separate: (i) the Hold Separate Trustee, 

(ii) the Hold Separate Managers, (iii) each of Respondent Graco’s employees not 

subject to the Hold Separate, (iv) the Hold Separate Gema Employees, (v) the 

Hold Separate Gema Shared Employees, and (vi) such additional Persons that the 

Hold Separate Trustee, in consultation with Commission staff, may identify. 

These individuals must retain and maintain all Confidential Business Information 

of, or pertaining to, the Hold Separate Business on a confidential basis and, except 

as is permitted by this Hold Separate, such Persons shall be prohibited from 

disclosing, providing, discussing; exchanging, circulating, or otherwise furnishing 

any such information to or with any other Person whose employment involves any 

of Respondents’ businesses or activities other than the Hold Separate Business. 

9. Except for the Hold Separate Managers, Hold Separate Business Employees, and 

support services employees involved in providing services to the Hold Separate 

Business pursuant to this Hold Separate, and except to the extent provided in this 
12 

Hold Separate, Respondent Graco shall not permit any other of its employees, 

officers, or directors to be involved in the operations of the Hold Separate 

Business. 

10. Respondents’ employees (other than the Liquid Finishing Business Employees, the 

Hold Separate Gema Shared Employees, and Graco employees involved in 

providing support services to the Hold Separate Business pursuant to Paragraph 

II.C.6.) shall not receive, or have access to, or use or continue to use any 

Confidential Business Information of the Hold Separate Business except: 

(a) as required by law; and 

(b) to the extent that necessary information is exchanged: 

(1) in the course of consummating the Acquisition in compliance with 

the terms of the Asset Purchase Agreement; 

(2) as necessary to effect the divestiture of the Hold Separate 

Business, including in connection with the marketing of the 

divested assets pursuant to the Consent Agreement, in negotiating 

agreements to divest assets pursuant to the Consent Agreement and 

engaging in related due diligence; 

(3) in complying with this Hold Separate or the Consent Agreement; 

(4) in overseeing compliance with policies and standards concerning 

the safety, health, and environmental aspects of the operations of 

the Hold Separate Business and the integrity of the financial 

controls of the Hold Separate Business; 

(5) in defending legal claims, investigations, or enforcement actions 

threatened or brought against or related to the Hold Separate 

Business; 

(6) to lenders and auditors; or 

(7) in obtaining legal advice. 

Nor shall the Hold Separate Managers or any Hold Separate Business Employees 

receive or have access to, or use or continue to use, any Confidential Business 

Information about Respondents and relating to Respondents’ businesses, except 

such information as is necessary to maintain and operate the Hold Separate 

Business. 

In addition to the foregoing, Respondent Graco may receive aggregate financial 

and operational information relating to the Hold Separate Business to the extent 

necessary to allow Respondent Graco to comply with the requirements and 

obligations of the laws of the United States and other countries, to prepare 
13 

consolidated financial reports, tax returns, reports required by securities laws, 

payroll and benefits information, and personnel reports, and to comply with this 

Hold Separate. Any such information that is obtained pursuant to this 

subparagraph shall be used only for the purposes set forth in this subparagraph. 

11. Subject to all other provisions in this Hold Separate, the: 

(a) Hold Separate Gema Employees (i) may receive or have access to, use or 

continue to use, or disclose any Confidential Business Information 

pertaining to the Gema Powder Finishing Business; (ii) shall not seek, 

receive, have access to, or disclose any Confidential Business Information 

pertaining to the Liquid Finishing Business; and (iii) shall provide the 

signed confidentiality statement required by Paragraph II.C.8. of this Hold 

Separate. 

(b) Hold Separate Gema Shared Employees (i) may receive or have access to, 

use or continue to use, or disclose any Confidential Business Information 

pertaining to the Gema Powder Finishing Business and to the Liquid 

Finishing Business; (ii) shall not disclose, provide, discuss, exchange, 

circulate, or otherwise furnish any such information pertaining to the 

Liquid Finishing Business to or with any other Person whose employment 

involves any of Respondent Graco’s competing liquid finishing 

businesses; and (iii) shall provide the signed confidentiality statement 

required by Paragraph II.C.8. of this Hold Separate. 

12. Respondent Graco and the Hold Separate Business shall jointly implement, and at 

all times during the Hold Separate Period maintain in operation, a system, as 

approved by the Hold Separate Trustee, of access and data controls to prevent 

unauthorized access to or dissemination of Confidential Business Information of 

the Hold Separate Business, including, but not limited to, the opportunity by the 

Hold Separate Trustee, on terms and conditions agreed to with Respondents, to 

audit Respondents’ networks and systems to verify compliance with this Hold 

Separate. 

13. No later than five (5) days after the Acquisition Date, Respondent Graco shall 

establish written procedures, subject to the approval of the Hold Separate Trustee, 

covering the management, maintenance, and independence of the Hold Separate 

Business consistent with the provisions of this Hold Separate. 

14. No later than five (5) days after the date this Hold Separate becomes final, 

Respondent Graco shall circulate to persons who are employed in Respondent 

Graco’s businesses that compete with the Hold Separate Business, and shall 

circulate on the Acquisition Date to employees of the Hold Separate Business, a 

notice of this Hold Separate, in a form approved by the Hold Separate Trustee in 

consultation with Commission staff. 
14 

D. Until the Divestiture Date, Respondent Graco shall provide each Hold Separate 

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 and the Liquid Finishing 

Business Assets pending divestiture. Such incentives shall include employee benefits, 

including regularly scheduled raises, bonuses, vesting of retirement benefits (as permitted 

by law) on the same basis as provided for under the Asset Purchase Agreement for other 

employees hired by Respondent Graco, and additional incentives as may be necessary to 

assure the continuation and 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 Hold Separate. 

E. From the date the Respondents execute the Consent Agreement until this Hold Separate 

terminates, Respondent Graco shall not, directly or indirectly, solicit, induce, or attempt 

to solicit or induce any Hold Separate Employee for a position of employment with 

Respondent Graco. A Prospective Acquirer or the Commission-approved Acquirer shall 

have the option of offering employment to any Hold Separate Employee. Respondent 

Graco shall not interfere with the employment by a Prospective Acquirer or the 

Commission-approved Acquirer of such employee; shall not offer any incentive to such 

employee to decline employment with a Prospective Acquirer or the CommissionAcquirer or to accept other employment with the Respondent Graco; and shall remove 

any impediments that may deter such employee from accepting employment with a 

Prospective Acquirer or the Commission-approved Acquirer including, but not limited to, 

any non-compete or confidentiality provisions of employment or other contracts that 

would affect the ability of such employee to be employed by a Prospective Acquirer or 

the Commission-approved Acquirer. 

F. Respondent Graco shall not, directly or indirectly, solicit, induce, or attempt to solicit or 

induce any Hold Separate Employee who has accepted an offer of employment with a 

Prospective Acquirer or the Commission-approved Acquirer to terminate his or her 

employment relationship with such Person; 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 Hold Separate Business Employees; 

and 

2. hire Hold Separate Business Employees who apply for employment with 

Respondent Graco, so long as such individuals were not solicited by the 

Respondent Graco in violation of this paragraph; provided further, that this subParagraph shall not prohibit Respondent Graco from making offers of 

employment to or employing any Hold Separate Business Employees if a 

Prospective Acquirer or the Commission-approved Acquirer has notified 

Respondent Graco in writing that a Prospective Acquirer or the Commissionapproved 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 
15 

the offer, or where the individual’s employment has been terminated by a 

Prospective Acquirer or the Commission-approved Acquirer. 

G. The purpose of this Hold Separate is to: (1) preserve the assets and businesses within the 

Hold Separate Business as viable, competitive, and ongoing businesses independent of 

Respondent Graco until the divestiture required by the Decision and Order is achieved; 

(2) assure that no Confidential Business Information is exchanged between the 

Respondents and the Hold Separate Business, except in accordance with the provisions of 

this Hold Separate; (3) prevent interim harm to competition pending the relevant 

divestitures and other relief; and (4) maintain the full economic viability, marketability, 

and competitiveness of the Hold Separate Business, and prevent the destruction, removal, 

wasting, deterioration, or impairment of any of the assets or businesses within the Hold 

Separate Business except for ordinary wear and tear. 

III. 

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. 

IV. 

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

compliance with this Hold Separate, and subject to any legally recognized privilege, and upon 

written request and upon five (5) days’ notice to the relevant Respondent, relating to compliance 

with this Hold Separate, Respondents 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. 
16 

V. 

IT IS FURTHER ORDERED that this Hold Separate shall terminate at the earlier of: 

A. Three (3) business days after the Commission withdraws its acceptance of the Consent 

Agreement pursuant to the provisions of Commission Rule 3.25(f), 16 C.F.R. § 3.25(f); 

or 

B. The day after the Divestiture Date of the Hold Separate Assets required to be divested 

pursuant to the Decision and Order. 

By the Commission. 

Donald S. Clark 

Secretary 

SEAL: 

ISSUED: March 26, 2012