65328 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

ADDRESSES: Six paper copies of each

request to participate should be

submitted to the Office of the Secretary,

Federal Trade Commission, Room 159,

Sixth Street and Pennsylvania Avenue,

N.W., Washington, D.C. 20580. Requests

should include the requester’s

telephone number and a FAX number if

available. Requests should be captioned:

‘‘Made in USA Workshop—Request to

Participate,’’ FTC File No. P894219. You

may include this request with your

comment.

FOR FURTHER INFORMATION CONTACT:

Robert Easton, Special Assistant,

Division of Enforcement, Federal Trade

Commission, Washington, D.C. 20580,

telephone 202–326–2823.

SUPPLEMENTARY INFORMATION:

A. Background

The October 18, 1995 Federal

Register Notice (60 FR 53922, hereafter

referred to as the ‘‘first Notice’’)

announced the public workshop and

requested comment on a number of

specific questions relating to advertising

and labeling claims of ‘‘Made in USA.’’

The first Notice described in detail the

substance of the issues to be discussed

at the workshop and the issues on

which written comments were

requested. The first Notice, however,

left open the specific dates and location

for the workshop. This second Notice

addresses these matters, as well as the

procedure for requesting the

opportunity to participate.

As stated in the first Notice, the intent

of the workshop will not be to achieve

a consensus among participants, or

between participants and Commission

staff, with regard to any issue raised in

this proceeding. However, the

Commission will consider the views

and suggestions made during the

workshop, in addition to any written

comments, in formulating its future

policy regarding ‘‘Made in USA’’ claims.

B. The Workshop

The Commission expects the

workshop to be conducted over two

days, with separate morning and

afternoon panels on each day. A third

day of the workshop will be held if

there is a need to do so. The subjects to

be discussed at each of the panels will

be determined after reviewing the

substantive comments received

pursuant to the first Notice. An agenda

for each panel will be announced as

soon as practical. The workshop will be

open to the public.

As mentioned in the first Notice, the

Commission is currently conducting a

consumer research project regarding

consumer perception of ‘‘Made in USA’’

claims. Results of the project will be

made available to participants and the

public before the workshop. Participants

who wish to discuss the consumer

perception study at the workshop will

be asked to submit an outline or short

statement of their views prior to the

workshop for the purpose of arranging

the workshop’s agenda. Others who

wish to submit comments on the study

are welcome to do so.

The record of the proceeding will be

open for a month after the workshop is

concluded for the receipt of any

additional comments on the study or

other issues discussed at the workshop.

This will allow workshop participants

and others to clarify any views

expressed at the workshop or to rebut

the comments and views of others in the

event that there is insufficient time to

fully address all pertinent issues.

A neutral, third-party facilitator may

be retained for the public workshop.

The discussion during the workshop

will be transcribed and the transcript

will be placed on the public record.

C. Selection of Workshop Participants

If the number of parties who request

to participate in the workshop is so

large that including all requesters would

inhibit effective discussion among the

participants, Commission staff will

select as participants a limited number

of parties to represent the interests of

those who submit written comments.

Selection will be based on the following

criteria:

1. The party must have submitted a

substantive written comment by January

16, 1996 in response to the first Federal

Register notice (60 FR 53922, Oct. 18,

1995).

2. The party must have submitted a

request to participate pursuant to this

Federal Register notice by January 16,

1996.

3. The party’s attendance would

promote the representation of a balance

of interests at the conference.

4. The party’s attendance would

promote the consideration and

discussion of the issues presented in the

workshop.

5. The party has expertise in issues

raised in the workshop.

6. The party adequately reflects the

views of the affected interest(s) which it

purports to represent.

7. The party has been designated by

one or more interested parties (who

timely file requests to participate and

written comments) as a party who

shares group interests with the

designator(s).

8. The number of parties selected will

not be so large as to inhibit effective

discussion among them.

If it is necessary to limit the number

of participants, those not selected to

participate, but who submit both

requests to participate and written

comments, will be afforded an

opportunity, if at all possible, at the end

of one or more sessions to present

statements during a limited time period.

The time allotted for these statements

will be based on the amount of time

necessary for discussion of the issues by

the selected parties, and on the number

of persons who wish to make

statements.

Requesters will be notified as soon as

possible after January 16, 1996 if they

have been selected to participate. To

assist in making this notification, please

include in your request to participate a

telephone number and a FAX number if

available.

D. Date, Time and Location of

Workshop

The workshop is scheduled to be held

in room 432 of the FTC headquarters

building, Sixth Street and Pennsylvania

Avenue, N.W., Washington, D.C. on

March 26 and 27, 1996, from 8:30 a.m.

until 5 p.m. Depending on the number

of issues raised by the comments, the

workshop may be extended through an

additional day, March 28, 1996. The

workshop is open to the public.

E. Procedure for Requesting

Opportunity to Participate in Workshop

To be eligible to participate at the

workshop, you must:

1. File a written substantive comment

by January 16, 1996 pursuant to the first

Federal Register notice.

2. File a written request to participate

by January 16, 1996 pursuant to this

Federal Register notice.

You may combine the written

substantive comment and the written

request to participate in one document.

Authority: 15 U.S.C. 41 et seq.

By direction of the Commission,

Commissioner Starek dissenting.

Donald S. Clark,

Secretary.

[FR Doc. 95–30833 Filed 12–18–95; 8:45 am]

BILLING CODE 6750–01–P

[File No. 951 0072]

Devro International PLC; Proposed

Consent Agreement With Analysis to

Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: This consent agreement,

accepted subject to final Commission

approval, settles alleged violations of
Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices 65329

federal law prohibiting unfair or

deceptive acts and practices and unfair

methods of competition allegedly

arising from the acquisition by Devro

International of Teepak International.

Devro and Teepak are the two largest

producers of collagen sausage casings

(the skins into which various meat

products are stuffed before being cooked

or smoked) in the United States. The

consent agreement, among other things,

would require Devro to divest Devro

North America, the assets it uses to

manufacture and distribute collagen

sausage casings in the United States and

Canada. The assets to be divested

include a manufacturing plant in

Somerville, New Jersey, and a finishing

plant in Ontario, Canada. The

divestiture would have to be completed

within three months of the date the

order becomes final, and the assets

would have to be sold to a buyer (1) that

does not already produce collagen

sausage casings for sale in the United

States, and (2) that is approved by the

Commission. If the divestiture is not

completed on time, the consent

agreement would permit the

Commission to appoint a trustee to

complete it.

DATES: Comments must be received on

or before February 20, 1996.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, Sixth Street and

Pennsylvania Avenue, NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

William Baer, FTC/H–374, Washington,

DC 20580 (202) 326–2932; Ronald

Rowe, FTC/S–2602, Washington, DC

20580 (202) 326–2610; or Joseph

Brownman, FTC/S–2108, Washington,

DC 20580 (202) 326–2950.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and § 2.34 of the Commission’s

Rules of Practice (16 CFR 2.34), notice

is hereby given that the following

consent agreement containing a consent

order to cease and desist, having been

filed with and accepted, subject to final

approval, by the Commission, has been

placed on the public record for a period

of sixty (60) days. Public comment is

invited. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with § 4.9(b)(6)(ii) of the

Commission’s Rules of Practice (16 CFR

4.9(b)(6)(ii)).

Agreement Containing Consent Order

The Federal Trade Commission

(‘‘Commission’’), having initiated an

investigation of the proposed

acquisition by Devro International plc

and Devro Inc. of the outstanding voting

securities of Teepak International, Inc.

and it now appearing that Devro

International plc and Devro Inc.

(hereinafter sometimes referred to as the

‘‘Proposed Respondents’’) are willing to

enter into an agreement containing an

order to divest certain assets and

providing for other relief:

It is hereby agreed by and between the

Proposed Respondents, by their duly

authorized officers and attorneys, and

counsel for the Commission, that:

1. Proposed Respondent Devro

International plc is a corporation

organized, existing, and doing business

under and by virtue of the laws of

Scotland, with its office and principal

place of business at Moodiesburn,

Chryston, G69 OJE, Scotland.

2. Proposed Respondent Devro 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

at Southside Avenue, Somerville, New

Jersey.

3. Teepak International, 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

at Three Westbrook Corporate Center,

Suite 1000, Westchester, Illinois 60153.

4. Proposed Respondents admit all the

jurisdictional facts set forth in the draft

of complaint here attached.

5. Proposed Respondents waive:

a. any further procedural steps;

b. the requirement that the

Commission’s decision contain a

statement of findings of fact and

conclusions of law;

c. all rights to seek judicial review or

otherwise to challenge or contest the

validity of the order entered pursuant to

this Agreement; and

d. any claim under the Equal Access

to Justice Act.

6. Proposed Respondents shall

submit, within five (5) days of the date

this Agreement is signed by Proposed

Respondents, an initial compliance

report, as contemplated by Rules 2.33

and 4.9(b)(7) of the Commission’s Rules

of Practice and Procedure, 16 C.F.R.

2.33 and 4.9(b)(7), duly signed by the

Proposed Respondents, setting forth in

precise detail the manner in which

Proposed Respondents will comply with

Parts II and III of the proposed consent

order, when and if entered, the

Agreement to Condition Acquisition,

and the Agreement to Hold Separate.

Among other things, the report shall

include:

a. A full and complete description of

Proposed Respondents’ compliance and

planned compliance with the terms and

conditions of the Agreement to Hold

Separate, including:

(1) The names, telephone numbers,

and business affiliations of the persons

that Proposed Respondents intend to

appoint, or are considering appointing,

or have appointed, as members of the

Management Team, pursuant to

Paragraph 4 (a) of the Agreement to

Hold Separate;

(2) the name(s), telephone number(s),

and business affiliation(s) of the

person(s) that Proposed Respondents

intend to appoint, are considering

appointing, or have appointed, as

independent auditor/manager, pursuant

to Paragraph 4 (b) of the Agreement To

Hold Separate; and

(3) copies of all written

communications, internal memoranda,

and reports and recommendations

concerning the terms of the Agreement

to Hold Separate.

b. A full and complete description of

Proposed Respondents’ compliance and

planned compliance with the terms and

conditions of the Agreement to

Condition Acquisition, including:

(1) The resolution, or draft resolution,

that Devro International plc will present

to its shareholders;

(2) the date that Devro International

plc anticipates that its shareholders will

vote on the resolution;

(3) the date that Devro International

plc anticipates learning the outcome of

the vote by the shareholders on the

resolution; and

(4) copies of all written

communications, internal memoranda,

and reports and recommendations

concerning the terms of the Agreement

to Condition Acquisition.

c. A full and complete description of

the efforts planned or underway to

comply with the terms and conditions

of the proposed order, including:

(1) A list of the firms to which

Proposed Respondents (i) have offered,

and (ii) intend to offer, the Assets To Be

Divested;

(2) the names and telephone numbers

of the representatives of the firms listed

in response to part c. (1) of this

Paragraph that Proposed Respondents

have already contacted to offer the

Assets To Be Divested;

(3) the names, addresses, telephone

numbers and business affiliations of at

least three (3) potential trustees that

would be acceptable to Proposed

Respondents should the appointment of

a trustee be deemed appropriate by the

Commission;

(4) the procedures that Proposed

Respondents will employ in finding a
65330 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

proposed acquirer of the Assets To Be

Divested;

(5) all criteria that Proposed

Respondents will employ for choosing a

proposed acquirer of the Assets To Be

Divested in the event that offers for

these assets are made by more than one

firm;

(6) a full and complete description of

all of the Assets To Be Divested;

(7) all descriptions, characterizations,

and explanations of the Assets To Be

Divested that may already have been

provided, or that Proposed Respondents

intend to provide, to potential acquirers;

(8) a full and complete description of

the financial condition and potential

viability as an independent business of

the Assets To Be Divested;

(9) all descriptions, characterizations,

and explanations of the financial

condition and potential viability as an

independent business of the Assets To

Be Divested that may already have been

provided, or that Proposed Respondents

intend to provide, to potential acquirers;

and

(10) copies of all written

communications, internal memoranda,

and reports and recommendations

concerning divestiture.

7. This Agreement shall not become

part of the public record of the

proceeding unless and until it is

accepted by the Commission. If this

Agreement is accepted by the

Commission it, together with the draft of

complaint contemplated thereby, will be

placed on the public record for a period

of sixty (60) days and information in

respect thereto publicly released. The

Commission thereafter may either

withdraw its acceptance of this

Agreement and so notify the Proposed

Respondents, in which event it will take

such action as it may consider

appropriate, or issue and serve its

complaint (in such form as the

circumstances may require) and

decision, in disposition of the

proceeding.

8. This Agreement is for settlement

purposes only and does not constitute

an admission by the Proposed

Respondents that the law has been

violated as alleged in the draft of

complaint here attached, or that the

facts as alleged in the draft complaint,

other than jurisdictional facts, are true.

9. This Agreement contemplates that,

if it is accepted by the Commission, and

if such acceptance is not subsequently

withdrawn by the Commission pursuant

to the provisions of § 2.34 of the

Commission’s Rules, the Commission

may, without further notice to the

Proposed Respondents, (1) issue its

complaint corresponding in form and

substance with the draft of complaint

here attached and its decision

containing the following order to divest

in disposition of the proceeding and (2)

make information public with respect

thereto. When so entered, the order to

divest shall have the same force and

effect and may be altered, modified or

set aside in the same manner and within

the same time provided by statute for

other orders. The order shall become

final upon service. Delivery by the U.S.

Postal Service of the complaint and

decision containing the agreed-to order

to the Proposed Respondents’ counsel at

the address as stated in this Agreement

shall constitute service. The Proposed

Respondents waive any right they may

have to any other manner of service.

The complaint may be used in

construing the terms of the order, and

no agreement, understanding,

representation, or interpretation not

contained in the order or the agreement

may be used to vary or contradict the

terms of the order.

10. The Proposed Respondents have

read the proposed complaint and order

contemplated hereby. The Proposed

Respondents understand that once the

order has been issued, they will be

required to file one or more compliance

reports showing that they have fully

complied with the order. The Proposed

Respondents further understand that

they may be liable for civil penalties in

the amount provided by law for each

violation of the order after it becomes

final.

11. Proposed Respondents agree to be

bound by all of the terms of the

Agreement to Condition Acquisition

and the Agreement to Hold Separate,

attached to this Agreement and made a

part hereof as Appendix I and Appendix

II, respectively, upon acceptance by the

Commission of this Agreement

Containing Consent Order for public

comment.

12. Proposed Respondents agree to

notify the Commission’s Bureau of

Competition in writing, within twentyfour (24) hours, of the action taken by

the shareholders of Devro International

plc regarding (a) the proposed

acquisition by Devro International plc of

Teepak International, Inc. (‘‘the

Acquisition’’), (b) the divestiture of the

Assets To Be Divested under the terms

of this Agreement Containing Consent

Order (‘‘the Divestiture’’), and (c) the

unlimited indemnification of the

independent auditor/manager,

retroactive as of the date of the

appointment of the auditor/manager,

pursuant to the Agreement to Condition

Acquisition and the Agreement to Hold

Separate (‘‘the Retroactive

Indemnification’’).

13. Subsequent to approval of this

Agreement Containing Consent Order

and acceptance for public comment of

the Consent Order by the Commission

and unconditional approval by the

shareholders of Devro International plc

of (a) the Acquisition, (b) the

Divestiture, and (c) the Retroactive

Indemnification, with written notice

having been given to the Commission’s

Bureau of Competition, in writing,

within twenty-four (24) hours, of the

unconditional approval by the

shareholders, Devro International plc

may consummate the Acquisition.

14. In the event the shareholders of

Devro International plc, prior to the

expiration of the sixty (60) day public

comment period, fail unconditionally to

approve (a) the Acquisition, (b) the

Divestiture, and (c) the Retroactive

Indemnification, Proposed Respondents,

having no authority to consummate the

Acquisition, will, within twenty-four

(24) hours of the failure of the

shareholders of Devro International plc

unconditionally to approve (a) the

Acquisition, (b) the Divestiture, and (c)

the Retroactive Indemnification, notify

the Commission of such failure and

withdraw any Hart-Scott-Rodino

Premerger Notification and Report Form

that may have been filed under the HartScott-Rodino Antitrust Improvements

Act of 1976, 15 U.S.C. 18a. After such

timely notification and withdrawal,

pursuant to the terms of this Paragraph,

the Commission will not issue the

following divestiture order.

Order

I

It is ordered That, as used in this

Order, the following definitions shall

apply:

A. ‘‘Devro International plc’’ means

that company and its predecessors,

subsidiaries, divisions, groups and

affiliates controlled by Devro

International plc, and its respective

directors, officers, employees, agents,

and representatives, and the respective

successors and assigns of each.

B. ‘‘Devro Inc.’’ means that company

and its predecessors, subsidiaries,

divisions, groups and affiliates

controlled by Devro Inc. and its

respective directors, officers, employees,

agents, and representatives, and the

respective successors and assigns of

each.

C. ‘‘Devro Canada’’ means DCI Devro

Canada Inc., and its predecessors,

subsidiaries, divisions, groups and

affiliates controlled by DCI Devro

Canada Inc. and its respective directors,

officers, employees, agents, and
Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices 65331

representatives, and the respective

successors and assigns of each.

D. ‘‘Teepak’’ means Teepak

International, Inc., and its predecessors,

subsidiaries, divisions, groups and

affiliates controlled by Teepak

International, Inc. and its respective

directors, officers, employees, agents,

and representatives, and the respective

successors and assigns of each. The

definition of ‘‘Teepak’’ specifically

excludes Devro International plc, Devro

Inc., and Devro Canada. For purposes of

Parts VII and VIII of this Order, after the

Acquisition, Teepak will be regarded as

part of Respondent Devro International

plc.

E. ‘‘Respondents’’ means Devro

International plc and Devro Inc.

F. ‘‘Acquisition’’ means the proposed

acquisition by Devro International plc of

the outstanding voting securities of

Teepak International, Inc.

G. ‘‘Assets To Be Divested’’ means:

1. All assets related to the collagen

sausage casings business of Devro Inc.

and Devro Canada, including, but not

limited to:

a. All production and finishing

facilities, plant, and equipment of Devro

Inc., including the plant located at

Somerville, New Jersey, and, wherever

located, all machinery, fixtures,

equipment, kitchen facilities, laboratory

testing equipment and facilities,

research and development facilities and

programs, vehicles, transportation

facilities, furniture, tools and other

tangible personal property, customer

lists, vendor lists, catalogs, sales

promotion literature, advertising

materials, technical information, and

management information systems;

b. All production and finishing

facilities, plant, and equipment of Devro

Canada, including the plant located in

Markham, Ontario, Canada, and,

wherever located, and to the extent they

exist, all machinery, fixtures,

equipment, kitchen facilities, laboratory

testing equipment and facilities,

research and development facilities and

programs, vehicles, transportation

facilities, furniture, tools and other

tangible personal property, customer

lists, vendor lists, catalogs, sales

promotion literature, advertising

materials, technical information, and

management information systems;

c. All intellectual property, including

product and process patents, patent

rights, patent improvements, process

improvements, trademarks, service

marks, copyrights, technology,

knowhow, basic research, trade secrets,

goodwill, or trademarks that Devro Inc.

or Devro Canada use, license, have

rights to, or otherwise have an interest

in; provided, however, that Devro

International may retain all rights to the

trademark Devro, tradename ‘‘Devro’’,

and the stylized letter ‘‘D’’;

d. All Devro Inc. and Devro Canada

inventory and storage capacity;

e. All rights, titles, and interest in and

to real property owned or leased by

Devro Inc. and Devro Canada, together

with all appurtenances, licenses, and

permits;

f. All rights, titles, and interests in

and to contracts entered into in the

ordinary course of business between

Devro Inc. and Devro Canada with

customers, suppliers, sales

representatives, distributors, agents,

personal property lessors, personal

property lessees, licensors, licensees,

consignors, and consignees;

g. All rights of Devro Inc. and Devro

Canada, under warranties and

guarantees, express or implied;

h. All books, records, and files of

Devro Inc. and Devro Canada;

i. All items of prepaid expense to

Devro Inc. and Devro Canada; and

2. From Devro International plc:

a. On a non-exclusive basis, with no

right to sub-license to a third party, all

rights to any information or intellectual

property relating to Devro International

(but not any information or intellectual

property of Teepak in existence at the

time of the Acquisition) in development

or already developed by Devro

International at the time of the

divestiture, plus all enhancements,

improvements or perfections thereof

within twenty-four (24) months of the

divestiture, including information or

intellectual property relating to product

and process patents, patent rights,

patent improvements, technology,

knowhow, basic research, or trade

secrets regarding any research and

development programs or activities,

wherever located, to the extent that such

information or intellectual property

relate to the manufacture, finishing,

distribution, or sale of collagen sausage

casings; and

b. All additional tangible and

intangible assets of Devro International,

wherever located, reasonably necessary

to enable the acquirer of the Assets To

Be Divested to manufacture, finish,

distribute, and market collagen sausage

casings in substantially the same

manner, quality, and quantity achieved

by Devro Inc. and Devro Canada prior to

the divestiture, other than any tangible

or intangible assets of Teepak in

existence at the time of the Acquisition.

H. ‘‘Excluded Assets’’ means the

following entities: Devro Limited, Devro

Holdings Limited, Devro Pty Limited,

Devro BV, Devro Asia Limited, Devro

GmbH, and Devro KK, and Teepak and

its tangible and intangible assets in

existence at the time of the Acquisition.

The term ‘‘Excluded Assets’’ does not

include (that is, the following assets are

not Excluded Assets) specifically

identifiable tangible and intangible

assets of these excluded entities (other

than those of Teepak at the time of the

divestiture) related to the manufacture

and finishing of collagen sausage

casings.

I. ‘‘Commission’’ means the Federal

Trade Commission.

II

It is further ordered That:

A. Within three (3) months of the date

the order becomes final, Respondents

shall divest, absolutely and in good

faith, at no minimum price, the Assets

To Be Divested.

B. The purpose of the divestiture of

the Assets To Be Divested is to ensure

the continued use of the Assets To Be

Divested as a viable, competitive, and

independent business, in the same

business in which the Assets To Be

Divested are engaged at the time of the

Acquisition, and to remedy the

lessening of competition resulting from

the Acquisition as alleged in the

Commission’s Complaint.

C. The proposed acquirer shall not be

a firm that has been engaged in the

manufacture of collagen sausage casings

for sale, other than to itself, in the

United States.

D. The Assets To Be Divested shall be

divested only to an acquirer that

receives the prior approval of the

Commission and only in a manner that

receives the prior approval of the

Commission.

III

It is further ordered That:

A. If Respondents have not divested

the Assets To Be Divested, absolutely

and in good faith, with the

Commission’s prior approval, within

three (3) months of the date this Order

becomes final, the Commission may

appoint a trustee to divest the Assets To

Be Divested. In the event that the

Commission or the Attorney General

brings an action pursuant to section 5(l)

of the Federal Trade Commission Act,

15 U.S.C. 45(l), 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 courtappointed trustee, pursuant to section

5(l) of the Federal Trade Commission

Act, or any other statute enforced by the
65332 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

Commission, for any failure by

Respondents to comply with this Order.

B. If a trustee is appointed by the

Commission or a court pursuant to

Paragraph III. A. of this 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

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 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.

2. Subject to the prior approval of the

Commission, and consistent with the

provisions of Paragraphs II. B.–D. of this

Order, the trustee shall have the

exclusive power and authority to divest

the Assets To Be Divested.

3. 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 courtappointed trustee, of the court, transfers

to the trustee all rights and powers

necessary to permit the trustee to effect

the divestiture required by this Order.

4. The trustee shall have six (6)

months from the date the Commission

approves the trust agreement described

in Paragraph III. B. 3. to accomplish the

divestiture, which shall be subject to the

prior approval of the Commission. If,

however, at the end of the six-month

period, the trustee has submitted a plan

of divestiture or believes that divestiture

can be achieved within 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 for up to an

additional twelve (12) months each

time.

5. The trustee shall, to the extent not

prohibited by United States or Canadian

law, have full and complete access to

the personnel, books, records and

facilities related to the Assets To Be

Divested or to any other relevant

information, as the trustee may

reasonably request. Respondents shall

develop such financial or other

information as such 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 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.

6. 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, subject to Respondents’

absolute and unconditional obligation to

divest at no minimum price. The

divestiture shall be made in the manner

and to the acquirer as set out in Part II

of this Order; 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.

7. 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, and at

reasonable fees, 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 Assets To Be Divested.

8. 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.

9. 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 III. A. of this

Order.

10. In the event the trustee is unable

to divest the Assets To Be Divested, the

trustee may divest such additional

assets of Respondent Devro

International, other than the Excluded

Assets, as may be reasonably necessary

to enable the trustee to divest the Assets

To Be Divested.

11. 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 Order.

12. The trustee shall have no

obligation or authority to operate or

maintain the Assets To Be Divested.

13. The trustee shall report in writing

to Respondents and the Commission

every sixty (60) days concerning the

trustee’s efforts to accomplish

divestiture.

IV

It is further ordered That:

A. Upon reasonable notice to

Respondents from the acquirer

approved by the Commission pursuant

to this Order, Respondents shall provide

such assistance to the acquirer as is

reasonably necessary to enable the

acquirer to manufacture, finish,

distribute and market collagen sausage

casings in substantially the same

manner, quality, and quantity achieved

by Devro Inc. and Devro Canada prior to

the divestiture. Such assistance shall

include reasonable consultation with

knowledgeable employees of

Respondents and training at the

acquirer’s facility for a period of time

sufficient to ensure that the acquirer’s

personnel are appropriately trained in

the manufacture, finishing, distribution,

and marketing of collagen sausage

casings in the manner carried on by

Devro Inc. and Devro Canada prior to

the divestiture. Respondents, however,

shall not be required to continue

providing such assistance for more than

two (2) years from the date of the

divestiture. Respondents may charge the

acquirer at a rate no greater than their

direct costs for providing such technical

assistance.

B. Respondents shall facilitate and not

interfere with the hiring by the acquirer

approved by the Commission of

employees of Devro Inc. and Devro
Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices 65333

Canada who may desire to undertake

employment.

C. Pending divestiture of the Assets

To Be Divested, Respondents shall take

such actions as are reasonably necessary

to maintain the viability and

marketability of the Assets To Be

Divested and to prevent their

destruction, removal, wasting,

deterioration or impairment of any kind,

except for ordinary wear and tear.

V

It is further ordered That Respondents

shall continue to comply with all terms

of the Agreement to Hold Separate

attached to this Order and made a part

hereof as Appendix II. Said Agreement

shall remain in force and effect until the

Assets To Be Divested have been

divested as required by this Order.

VI

It is further ordered That:

Within thirty (30) days after the date

this Order becomes final and every

thirty (30) days thereafter until

Respondents have fully complied with

the provisions of Parts II, III, and IV of

this Order, Respondents shall submit to

the Commission a verified written

report setting forth in detail the manner

and form in which they intend to

comply, are complying, or have

complied with this 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 the Order, and their

compliance with the terms and

conditions of the Agreement To

Condition Acquisition and the

Agreement To Hold Separate, and set

forth the monthly sales of Devro Inc.

and Devro Canada during the preceding

two months and compared to the

monthly sales during the same months

in the preceding calendar year.

Respondents shall include in their

compliance reports copies of all written

communications, internal memoranda,

and reports and recommendations

concerning divestiture and the manner

in which the Assets To Be Divested are

being held separate.

VII

It is further ordered That, for the

purpose of determining or securing

compliance with this Order, and subject

to any legally recognized privilege,

upon written request and reasonable

notice, each Respondent shall permit

any duly authorized representative of

the Commission:

A. Access, during office hours and in

the presence of counsel, to inspect and

copy all books, ledgers, accounts,

correspondence, memoranda and other

records and documents in the

possession or under the control of

Respondent relating to any matters

contained in this Order; and

B. Upon five (5) days’ notice to the

appropriate Respondent, and without

restraint or interference, to interview

officers, directors, or employees of the

Respondent, who may have counsel

present.

VIII

It is further ordered That Respondents

shall notify the Commission at least

thirty (30) days prior to any proposed

change in the corporate respondents

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 corporations that may

affect compliance obligations arising out

of the Order.

Appendix I

Agreement To Condition Acquisition on

Shareholder Approval of Divestiture

and Retroactive Indemnification

This Agreement To Condition Acquisition

on Shareholder Approval of Divestiture and

Retroactive Indemnification (‘‘Agreement To

Condition Acquisition’’) is by and between

Devro International plc, a corporation

organized, existing, and doing business

under and by virtue of the laws of Scotland,

with its office and principal place of business

at Moodiesburn, Chryston, Scotland; Devro

Inc., 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 Somerville,

New Jersey; and the Federal Trade

Commission (‘‘Commission’’), an

independent agency of the United States

Government, established under the Federal

Trade Commission Act of 1914, 15 U.S.C. 41,

et seq.

Whereas Devro International plc entered

into an agreement with Hillside Industries

Incorporated for Devro International plc to

acquire the outstanding voting securities of

Teepak International Inc. (‘‘Teepak’’), a

Delaware corporation (hereinafter ‘‘the

Acquisition’’);

Whereas Devro International plc and Devro

Inc. manufacture, finish, distribute, and sell

collagen sausage casings, and DCI Devro

Canada Inc. (‘‘Devro Canada’’) finishes,

distributes, and sells collagen sausage

casings;

Whereas Teepak, with principal offices

located at Westchester, Illinois, among other

things, also manufactures, finishes,

distributes, and sells collagen sausage

casings;

Whereas the Commission is investigating

the Acquisition to determine whether it

would violate any statute enforced by the

Commission;

Whereas Devro International plc and Devro

Inc. are willing (a) to enter into an Agreement

Containing Consent Order requiring them to

divest certain Assets To Be Divested, as

defined in Part I of the proposed Consent

Order of the Agreement Containing Consent

Order, which include the collagen sausage

casings business of Devro Inc., Devro Canada,

and assets of Devro International plc related

thereto (hereinafter ‘‘the Divestiture’’); (b) to

enter into an Agreement To Hold Separate

requiring that the Assets To Be Divested be

held separate and apart from the remainder

of the assets of Devro International pending

their divestiture; and (c) to arrange and

provide for the unlimited indemnification for

the independent auditor/manager, retroactive

as of the date of the appointment of the

auditor/manager, pursuant to this Agreement

To Condition Acquisition and the Agreement

To Hold Separate (hereinafter ‘‘the

Retroactive Indemnification’’);

Whereas if the Commission accepts the

attached Agreement Containing Consent

Order, which would require the divestiture of

the Assets To Be Divested, the Commission

is required to place the Consent Order on the

public record for a period of at least sixty (60)

days and may subsequently withdraw such

acceptance pursuant to the provisions of Rule

2.34 of the Commission’s Rules of Practice

and Procedure, 16 C.F.R. 2.34;

Whereas the Commission is advised and

concerned that, under the applicable law of

the United Kingdom, Devro International will

be unable to commit to, or be bound by,

certain of the terms of the Agreement

Containing Consent Order and the Agreement

To Hold Separate unless and until those

terms are approved by the shareholders of

Devro International plc;

Whereas the Commission is advised that,

under the applicable law of the United

Kingdom, Devro International plc will not be

able to seek shareholder approval for (a) the

Divestiture or (b) the Retroactive

Indemnification, until after all of the terms of

the Agreement Containing Consent Order, the

Agreement To Hold Separate, and this

Agreement To Condition Acquisition are

made known to the shareholders of Devro

International plc, which can only happen

after the Commission accepts the Agreement

Containing Consent Order for public

comment, and the Agreement To Hold

Separate and the Agreement To Condition

Acquisition;

Whereas the Commission will not accept

for public comment an Agreement

Containing Consent Order or an Agreement

to Hold Separate that is not binding on the

Proposed Respondents;

Whereas the undersigned officials of Devro

International plc and Devro Inc. and their

attorneys at this time are authorized to make

the following binding commitments:

1. Devro International plc and Devro Inc.

will seek shareholder approval for, at the

same time, as part of a single package, and

as a mutually contingent matter, (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification;

2. the shareholder approval will be sought,

and if unconditionally obtained, (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification will be fully

authorized, no less than seven (7) days prior

to the completion of the sixty (60) day public

comment period during which the
65334 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

Agreement Containing Consent Order will

have been placed on the public record;

3. Devro International plc and Devro Inc.

will advise the Commission’s Bureau of

Competition in writing, within twenty-four

(24) hours, of all actions taken by the

shareholders in connection with the effort to

obtain approval for (a) the Acquisition, (b)

the Divestiture, and (c) the Retroactive

Indemnification; and

4. Devro International plc, Devro Inc., and

all entities controlled by either of them will

not acquire, directly or indirectly, Teepak or

any of its assets without unconditional

shareholder approvals having been obtained

and fully authorized for (a) the Divestiture

and (b) the Retroactive Indemnification;

Whereas Devro International plc represents

to the Commission that (1) the directors of

Devro International plc will officially

recommend to the shareholders of Devro

International plc that they approve (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification; (2) Devro

International plc will use its best efforts to

obtain shareholder approval for (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification; (3) in light of (1)

and (2) above, it would be highly unusual if

the shareholders of Devro International plc

were to reject (a) the Acquisition, (b) the

Divestiture, and (c) the Retroactive

Indemnification; and (4) Devro International

plc fully expects the shareholders of Devro

International plc to approve (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification;

Whereas shareholder approval of (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification will be

presented to the shareholders for their

approval as part of a single resolution, to be

voted upon as a package only, and Devro

International plc and Devro Inc. will not be

authorized to consummate the Acquisition

unless and until they are also authorized (a)

to make the Divestiture and (b) to grant the

Retroactive Indemnification;

Whereas shareholder approval for (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification will be sought,

and determined, prior to the time that the

Commission will consider whether to accept

the final Agreement Containing Consent

Order under the Commission’s Rules;

Whereas the Commission is concerned that

if an agreement is not reached regarding the

nature and timing of the shareholder

approval and the commitment on the part of

Devro International and Devro Inc. not to

consummate the acquisition unless and until

the requisite shareholder approvals are

obtained, appropriate divestiture resulting

from any proceeding challenging the

Acquisition might not be possible or might

produce a less than effective remedy;

Whereas the Commission is concerned that

if the Acquisition is consummated, it will be

necessary to preserve the Commission’s

ability to require the Divestiture and the

continued viability and competitiveness of

the Assets To Be Divested;

Whereas Devro International plc and Devro

Inc.’s entering into this Agreement shall in

no way be construed as an admission by

them that the Acquisition is illegal;

Whereas Devro International plc and Devro

Inc. understand that no act or transaction

contemplated by this Agreement shall be

deemed immune or exempt from the

provisions of the antitrust laws or the Federal

Trade Commission Act by reason of anything

contained in this Agreement;

Now, therefore, the parties agree, upon

understanding that the Commission has not

yet determined whether the Acquisition will

be challenged, and in consideration of the

Commission’s agreement that, unless the

Commission determines to reject the Consent

Order, it will not seek further relief from

Devro International plc or Devro Inc. with

respect to the Acquisition, except that the

Commission may exercise any and all rights

to enforce this Agreement, the Agreement to

Hold Separate, and the Consent Order to

which this Agreement is annexed and made

a part thereof, as follows:

1. The Acquisition by Devro International

plc or Devro Inc. of Teepak is contingent

upon shareholder approval.

2. Devro International plc and Devro Inc.

will not seek shareholder approval for the

Acquisition without, at the same time, and as

part of the same package, also seeking

mutually contingent shareholder approval for

(a) the Divestiture and (b) the Retroactive

Indemnification.

3. Unconditional shareholder approval will

be sought, and if obtained, be fully

authorized, no less than seven (7) days prior

to the completion of the sixty (60) day public

comment period during which the

Agreement Containing Consent Order will

have been placed on the public record.

4. In no event will Devro International plc

or Devro Inc. or any entity controlled by

either acquire, directly or indirectly, Teepak

or any of its assets without unconditional

shareholder approvals having been obtained

and fully authorized for (a) the Divestiture

and (b) the Retroactive Indemnification.

5. Unless and until unconditional

shareholder approval is obtained for (a) the

Acquisition, (b) the Divestiture, and (c) the

Retroactive Indemnification, Devro

International plc and Devro Inc., or any

entity controlled by either, will not acquire,

directly or indirectly, Teepak or any of its

assets.

6. At such time as the shareholders of

Devro International may unconditionally

approve (a) the Acquisition, (b) the

Divestiture, and (c) the Retroactive

Indemnification, Devro International and

Devro Inc., by and through their authorized

representatives, shall notify the

Commission’s Bureau of Competition, in

writing, within twenty-four (24) hours, of the

action taken.

7. Devro International and Devro Inc., by

and through their signatories, warrant that

they are fully authorized to enter into the

terms of this Agreement to Condition

Acquisition and to bind Devro International

plc and Devro Inc. to all of its terms and

conditions.

8. This Agreement shall be binding when

approved by the Commission.

Appendix II

Agreement to Hold Separate

This Agreement to Hold Separate

(‘‘Agreement’’) is by and between Devro

International plc, a corporation organized,

existing, and doing business under and by

virtue of the laws of Scotland, with its office

and principal place of business at

Moodiesburn, Chryston, Scotland; Devro Inc.,

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 Somerville,

New Jersey; and the Federal Trade

Commission (‘‘Commission’’), an

independent agency of the United States

Government, established under the Federal

Trade Commission Act of 1914, 15 U.S.C. 41,

et seq.

Whereas Devro International plc entered

into an agreement with Hillside Industries

Incorporated for Devro International plc to

acquire the outstanding voting securities of

Teepak International, Inc. (‘‘Teepak’’), a

Delaware corporation (hereinafter

‘‘Acquisition’’);

Whereas Devro International plc and Devro

Inc. manufacture, finish, distribute, and sell

collagen sausage casings, and DCI Devro

Canada Inc. (‘‘Devro Canada’’) finishes,

distributes, and sells collagen sausage

casings;

Whereas Teepak, with principal offices

located at Westchester, Illinois, among other

things, also manufactures, finishes,

distributes, and sells collagen sausage

casings;

Whereas the Commission is investigating

the Acquisition to determine whether it

would violate any statute enforced by the

Commission;

Whereas if the Commission accepts the

attached Agreement Containing Consent

Order, which would require the divestiture of

certain Assets To Be Divested, as defined in

Part I of the Consent Order, which include

the collagen sausage casings business of

Devro Inc., Devro Canada, and assets of

Devro International plc related thereto, the

Commission is required to place the Consent

Order on the public record for a period of at

least sixty (60) days and may subsequently

withdraw such acceptance pursuant to the

provisions of Section 2.34 of the

Commission’s Rules of Practice and

Procedure, 16 C.F.R. 2.34;

Whereas the Commission is concerned that

if an understanding is not reached preserving

the status quo ante of the Assets To Be

Divested during the period prior to the

acceptance of the final Consent Order by the

Commission, after the 60-day notice period,

divestiture resulting from any proceeding

challenging the Acquisition might not be

possible or might produce a less than

effective remedy;

Whereas the Commission is concerned that

if the Acquisition is consummated, it will be

necessary to preserve the Commission’s

ability to require the divestiture of the Assets

To Be Divested and the continued viability

and competitiveness of the Assets To Be

Divested;

Whereas the purpose of this Agreement

and the Consent Order is to:
Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices 65335

1. Preserve and maintain the Assets To Be

Divested as a viable, competitive and

independent business engaged in the

manufacture, finishing, distribution and sale

of collagen sausage casings pending

divestiture;

2. Limit the potential for interim

competitive harm during the period between

the Acquisition and the required divestiture;

and

3. Remedy any anticompetitive effects of

the Acquisition;

Whereas Devro International plc and Devro

Inc.’s entering into this Agreement shall in

no way be construed as an admission by

them that the Acquisition is illegal;

Whereas Devro International plc and Devro

Inc. understand that no act or transaction

contemplated by this Agreement shall be

deemed immune or exempt from the

provisions of the antitrust laws or the Federal

Trade Commission Act by reason of anything

contained in this Agreement;

Now, therefore, the parties agree, upon

understanding that the Commission has not

yet determined whether the Acquisition will

be challenged, and in consideration of the

Commission’s agreement that, unless the

Commission determines to reject the Consent

Order, it will not seek further relief from

Devro International plc or Devro Inc. with

respect to the Acquisition, except that the

Commission may exercise any and all rights

to enforce this Agreement, the Agreement to

Condition Acquisition, and the Consent

Order to which this Agreement is annexed

and made a part thereof, as follows:

1. Devro International plc and Devro Inc.

agree to execute the Agreement Containing

Consent Order and be bound by the Consent

Order.

2. Devro International plc and Devro Inc.

agree to execute and be bound by the

Agreement To Condition Acquisition.

3. Devro International plc and Devro Inc.

agree that until the earlier of the dates listed

in subparagraphs 3(a) and 3(b) of this

Paragraph, they will comply with the

provisions of Paragraph 4 of this Agreement:

(a) Three (3) business days after the

Commission withdraws its acceptance of the

Consent Order pursuant to the provisions of

Commission Rule 2.34, 16 C.F.R. 2.34; or

(b) The day after the divestiture required

by the Consent Order has been completed.

4. To ensure the complete independence

and viability of Devro Inc., Devro Canada,

and the Assets To Be Divested, and to further

ensure that no competitive information is

exchanged between Devro International plc

and Devro Inc., Devro Canada, and the

persons responsible for maintaining and

operating the Assets To Be Divested, Devro

International plc shall hold Devro Inc., Devro

Canada, and the Assets To Be Divested, as

defined in the Consent Order, separate and

apart from all of its other operations, on the

following terms and conditions:

(a) Devro International plc will appoint

three persons to manage and maintain the

business and assets of Devro Inc., Devro

Canada, and the Assets To Be Divested.

These persons (‘‘the Management Team’’)

shall agree to be bound by this Agreement

and shall manage Devro Inc., Devro Canada,

and the Assets To Be Divested independent

of the management of Devro International

plc’s other business operations, including

those of Teepak, after Devro International plc

acquires Teepak. The persons on the

Management Team shall not be involved in

any way in the manufacture, finishing,

distribution, or sale of sausage casings by

Devro International plc or Teepak. The

management team shall conduct the business

operations of Devro Inc., Devro Canada, and

the Assets To Be Divested.

(b) The Management Team, in its capacity

as such, shall report directly and exclusively

to an independent auditor/manager, to be

appointed by Devro International plc. The

independent auditor/manager, who shall not

be an employee or agent of Devro

International plc or a person likely to be an

employee or agent of Devro International plc

within two years of the divestiture, shall

have expertise in the manufacture, finishing,

distribution, or sale of collagen sausage

casings. The independent auditor/manager

shall agree to be bound by this Agreement

and shall have exclusive control over the

operations of Devro Inc., Devro Canada, and

the Assets To Be Divested, with

responsibility for their management and

maintaining their independence. The

independent auditor/manager shall not be

involved in any way in the business of

manufacturing, finishing, distribution, or sale

of sausage casings by Devro International plc

or Teepak.

(c) Devro International plc shall not

exercise direction or control over, or

influence directly or indirectly, the

independent auditor/manager, or the

Management Team, or Devro Inc., Devro

Canada, or the Assets To Be Divested, other

than as may reasonably be necessary to

assure compliance with this Agreement and

with all applicable laws.

(d) Devro International plc shall not change

the composition of the Management Team

without the consent of the independent

auditor/manager.

(e) Devro International plc shall maintain

the viability, competitiveness, and

marketability of the Assets To Be Divested

and shall neither cause nor permit the

destruction, removal, wasting, deterioration,

or impairment of the Assets To Be Divested,

except as may occur in the ordinary course

of business and except for ordinary wear and

tear, and shall not sell, transfer, encumber

(other than in the normal course of business),

or otherwise impair their viability,

competitiveness, or marketability.

(f) Except for the Management Team, Devro

International plc shall not permit any Devro

International plc Board Member, officer,

director, employee, or agent to be involved in

the business operations of the Assets To Be

Divested.

(g) Except as required by law, and except

to the extent that necessary information is

exchanged in the course of evaluating the

Acquisition, complying with requirements of

the London Stock Exchange and independent

auditors, defending investigations or

defending or prosecuting litigation,

negotiating agreements to divest assets, or

complying with this Agreement or the

Consent Order, Devro International plc shall

not receive or have access to, or use or

continue to use, any material confidential

information about Devro Inc., Devro Canada,

or the Assets To Be Divested, in connection

with the operation of Devro International plc

or its operation of the Teepak business.

‘‘Material confidential information’’ means

competitively sensitive or proprietary

information not in the public domain,

including, but not limited to, customer lists,

price lists, marketing methods, patent rights,

knowhow, technologies, processes, process

improvements or other trade secrets or

confidential business information.

(h) Devro International plc, Devro Inc. and

Devro Canada shall circulate to all employees

of Devro Inc. and Devro Canada, and display

in a conspicuous place at Devro Inc. and

Devro Canada manufacturing facilities, notice

of this Agreement to Hold Separate and the

proposed Consent Order in the form attached

hereto as Attachment A.

(i) Devro International plc shall give funds

to the Management Team for all capital

expenditures relating to Devro Inc. and Devro

Canada previously planned or approved by

Devro International plc to the extent Devro

Inc. does not generate sufficient cash flow to

fund such capital expenditures. The

Management Team shall expend the funds

for these previously planned capital

expenditures.

(j) The Management Team shall take all

steps reasonably necessary to optimize the

profitable operations and continued viability

of Devro Inc., Devro Canada, and the Assets

To Be Divested, including, but not limited to:

(1) Paying all direct costs and indirect

overheads relating to the business of Devro

Inc., Devro Canada, and the Assets To Be

Divested;

(2) Making available funds for advertising

and other marketing and promotional

activities at no less than the level for the

comparable period in the preceding calendar

year;

(3) Providing no less than the same level

of sales commissions or incentives for sales

personnel as were provided for the

comparable period in the preceding calendar

year;

(4) Maintaining the same level of resources

involved in sales and marketing as was the

case in the normal course of business prior

to the Acquisition; and

(5) Expending funds sufficient to perform

all reasonably necessary routine maintenance

to, and replacements of, the Assets To Be

Divested.

In the event that Devro Inc., Devro Canada,

and the Assets To Be Divested do not

generate sufficient cash flow to fund the

activities reasonably necessary to optimize

the profitable operations and viability of

Devro Inc., Devro Canada, and the Assets To

Be Divested, Devro International plc shall

advance such sums as are reasonably

necessary to pay for same, to be repaid by the

acquirer at no interest within two (2) years.

(k) The compensation and expenses of the

independent auditor/manager shall be the

responsibility of Devro International plc.

Devro Inc., Devro Canada, and the Assets To

Be Divested shall not be charged by Devro

International plc with those costs and

expenses.

(l) Devro International plc shall indemnify

the independent auditor/manager against any
65336 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

losses or claims of any kind that might arise

out of his or her involvement under this

Agreement, not to exceed $5 million, except

to the extent that such losses or claims result

from misfeasance, gross negligence, willful or

wanton acts or bad faith; provided however,

upon shareholder approval of the unlimited

indemnification of the auditor/manager,

retroactive as of the date of the appointment

of the auditor/manager, the $5 million

liability limitation shall become null and

void, under the terms of the Agreement to

Condition Acquisition.

(m) If the independent auditor/manager

fails to act, or ceases to act, diligently, a

substitute auditor/manager shall be

appointed by Devro International plc in the

manner provided in Paragraph 4 (b) of this

Agreement.

(n) The independent auditor/manager shall

have access to, and be informed about, the

names of the companies who may inquire

about, or seek or propose to buy, Devro Inc.,

Devro Canada, or the Assets To Be Divested.

Devro International plc may require the

independent auditor/manager to sign a

confidentiality agreement prohibiting the

auditor/manager from disclosing any material

confidential information obtained as a result

of his or her role as independent auditor/

manager, to anyone other than the

Commission.

(o) All material transactions other than

those in the ordinary course of business, if

not precluded by this Paragraph, shall be

subject to a majority vote of the Management

Team. In the event of a tie vote, the

independent auditor/manager shall cast the

deciding vote.

5. Should the Federal Trade Commission

seek in any proceeding to compel Devro

International plc or Devro Inc. to divest any

of the Assets To Be Divested, or any

additional assets, as provided in the Consent

Order, or to seek any other injunctive or

equitable relief for any failure to comply with

the Consent Order or this Agreement, as

defined in the draft complaint attached to the

Agreement Containing Consent Order, Devro

International plc and Devro Inc. shall not

raise any objection based upon the expiration

of the applicable Hart-Scott-Rodino Antitrust

Improvements Act waiting period or the fact

that the Commission permitted the

Acquisition. Devro International plc and

Devro Inc. also waive all their rights to

contest the validity of this Agreement.

6. To the extent that this Agreement

requires Devro International plc or Devro Inc.

to take, or prohibits them from taking, certain

actions that otherwise may be required or

prohibited by contract, Devro International

plc and Devro Inc. shall abide by the terms

of this Agreement and the Consent Order and

shall not assert as a defense such contract

requirements in a civil penalty action

brought by the Commission to enforce the

terms of this Agreement or Consent Order.

7. For the purpose of determining or

securing compliance with this Agreement,

subject to any legally recognized privilege,

and upon written request with reasonable

notice to counsel, Devro International plc

and Devro Inc. shall permit any duly

authorized representative or representatives

of the Commission:

(a) Access during the office hours of Devro

International plc and Devro Inc., and in the

presence of counsel, to inspect and copy all

books, ledgers, accounts, correspondence,

memoranda, and other records and

documents in their possession or under their

control relating to compliance with this

Agreement; and

(b) Upon five (5) days’ notice to counsel,

and without restraint or interference from

counsel, to interview officers or employees of

Devro International plc and Devro Inc., who

may have counsel present, regarding any

such matters.

8. This Agreement shall not be binding

until approved by the Commission. Devro

International plc and Devro Inc. acknowledge

that from the date they sign this Agreement

until such time as the Commission may

approve this Agreement, they will undertake

to maintain the Assets To Be Divested in a

viable condition.

9. Subsequent to acceptance for public

comment of the Agreement Containing

Consent Order by the Commission and after

the unconditional approval by the

shareholders of Devro International obtained

not less than seven (7) days prior to the end

of the 60-day public comment period, of (a)

the Acquisition, (b) the divestiture of the

Assets To Be Divested under the terms of the

Agreement Containing Consent Order, and (c)

the retroactive indemnification, under the

definitions and terms of the Agreement To

Condition Acquisition and this Agreement to

Hold Separate, with written notice having

been given to the Commission’s Bureau of

Competition, in writing, within twenty-four

(24) hours, of the unconditional approval by

the shareholders, Devro International plc

may consummate the Acquisition.

10. This Agreement shall be binding when

approved by the Commission.

11. Devro International plc and Devro Inc.,

by and through their signatories, warrant that

they are fully authorized to enter into the

terms of this Agreement to Hold Separate and

to bind Devro International plc and Devro

Inc. to all of its terms and conditions.

Attachment A

Important Notice

As you know, Devro International plc

has entered into an agreement with the

Federal Trade Commission (FTC) in

connection with the proposed

acquisition of Teepak International, Inc.

Under the terms of the agreement with

the FTC, Devro International must sell

Devro Inc. and DCI Devro Canada Inc.

to a third party that is acceptable to the

FTC. We anticipate that this will occur

within the next several months.

The agreement with the FTC also

requires that, until Devro Inc. and Devro

Canada are sold, Devro International

must preserve and maintain them as

competitive and independent

businesses separate from Devro

International.

To ensure that Devro Inc. and Devro

Canada are kept separate from Devro

International, a three-person

management team, composed of

llllllll, llllllll,

and llllllll, will assume the

management of Devro Inc. and Devro

Canada. This management team, which

will operate totally independently of

Devro International, will report directly

and exclusively to llllllll, an

independent auditor/manager.

The effect of Devro International’s

agreement with the FTC is that, for all

intents and purposes, Devro

International will no longer be playing

any role in the management and

operation of Devro Inc. and Devro

Canada. Until such time as the future

owners of Devro Inc. and Devro Canada

are determined, it is the responsibility

of every employee of Devro Inc. and

Devro Canada to cooperate with the new

management team and to help to

preserve Devro Inc. and Devro Canada

as competitive and independent

businesses.

Analysis to Aid Public Comment on the

Provisionally Accepted Consent Order

The Federal Trade Commission has

accepted for public comment from

Devro International plc and its United

States subsidiary, Devro Inc.

(collectively referred to as ‘‘Devro’’) an

Agreement Containing Consent Order.

This agreement has been placed on the

public record for sixty (60) days for

receipt of comments from interested

persons.

Comments received during this period

will become part of the public record.

After sixty (60) days, the Commission

will again review the agreement and the

comments received, and will decide

whether it should withdraw from the

agreement or make final the consent

order in the agreement.

According to the draft of complaint

that the Commission intends to issue,

Devro and Teepak International, Inc.

(‘‘Teepak’’) are competitors, nationwide

and worldwide, in the manufacture of

collagen sausage casings. Sausage

casings are the skins into which various

sausage-meat products are stuffed before

being cooked or smoked. Among the

sausage products using collagen sausage

casings are beef jerkys, small sausages,

and frankfurters. Unlike other types of

synthetic sausage casings, such as

fibrous sausage casings, used

principally to make salamis and hams,

and cellulose sausage casings, used

principally to make skinless

frankfurters, most collagen sausage

casings are edible. Edible sausage

casings produce a ‘‘bite’’ to a sausage

when eaten.

The Commission’s draft of complaint

states that Devro entered into an

agreement with Hillside Industries, Inc.,
Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices 65337

1Order Paragraph II.C of the proposed order states

that the proposed acquirer of the assets to be

divested ‘‘shall not be a firm that has been engaged

in the manufacture of collagen sausage casings for

sale, other than to itself, in the United States.’’

2Order Paragraph II.D.

the current owners of Teepak, for Devro

to acquire all of Teepak for

approximately $135 million. The

Commission is concerned that the

proposed merger would eliminate

substantial competition between Devro

and Teepak, increase concentration in

the highly concentrated collagen

sausage casings markets, and lead to

higher prices and fewer customer

services. The Commission stated it has

reason to believe that the proposed

acquisition would have anticompetitive

effects and be in violation of Section 7

of the Clayton Act and Section 5 of the

Federal Trade Commission Act.

According to the Commission’s draft

complaint, the anticompetitive effects of

the proposed acquisition will be felt in

an all-collagen sausage casings product

market as well as in an edible collagen

sausage casings product market, in both

the United States and the world as a

whole. In the United States all-collagen

sausage casings and edible sausage

casings markets, only four firms sell

collagen sausage casings, and Devro and

Teepak are the nation’s top two

producers. The proposed acquisition

would increase the HerfindahlHirschman Index (‘‘HHI’’), the

customary measure of industry

concentration, by a substantial amount.

For example, in the United States allcollagen sausage casings market, the

HHI will increase by approximately

2000 points and produce an industry

concentration of approximately 4700

points. In the United States edible

collagen sausage casings market, the

HHI would increase by approximately

3300 points and produce an industry

concentration of approximately 6800

points. In the world all-collagen and

edible sausage casings markets, the

proposed acquisition would affect

concentration as measured by four-firm

concentration and the HHI by very

similar orders of magnitude.

The Agreement Containing Consent

Order, if finally issued by the

Commission, would settle all of the

charges alleged in the Commission’s

complaint. Under the terms of the

proposed consent order, Devro will be

required to divest all of its collagen

sausage casings business assets in the

United States and Canada (‘‘Devro North

America’’) to an acquirer acceptable to

the Commission. Devro North America

consists primarily of a collagen sausage

casings manufacturing plant in

Somerville, New Jersey, and a collagen

sausage casings finishing plant in

Markham, Ontario, Canada. Because the

Canadian and United States facilities

constitute a single operation, Devro is

required to divest the Canadian facility

along with the United States plant. This

will insure that the divested assets will

continue to operate as a viable,

competitive business. Devro will also be

required to make available to the

acquirer of these assets, on a nonexclusive basis, any new technology

that Devro may develop related to

collagen sausage casings for a period of

two (2) years following the final entry of

the order.

Devro will be required to complete

the required divestiture within three (3)

months of the Commission’s final

issuance of the consent order. In the

event Devro does not divest Devro North

America to an acquirer acceptable to the

Commission in the requisite time,

procedures for the appointment of a

trustee to sell the assets have been

agreed to and will be triggered.

An additional feature of the consent

order accepted for public comment is

that it limits to some extent the class of

potential acquirers for Teepak that

would be acceptable to the Commission.

Firms already producing collagen

sausage casings for sale in the United

States are excluded as prospective

acquirers of Devro North America. The

purpose of this exclusion is to preclude

Devro from attempting to divest Devro

North America to a competitor where

there are likely to be further

anticompetitive effects.

Accompanying the Agreement

Containing Consent Order are two

ancillary agreements. The first is an

Agreement to Condition Acquisition

and the second is an Agreement to Hold

Separate.

The Agreement to Condition

Acquisition requires that Devro may not

acquire Teepak until Devro is

authorized by its shareholders to divest

Devro North America and related assets.

The purpose of this agreement is to

ensure that the Commission, through

the appointed trustee, will have an

enforceable divestiture remedy available

should Devro acquire Teepak and not

divest Devro North America. For

reasons related to United Kingdom

procedure and practice, Devro believes

it cannot seek shareholder approval for

the proposed acquisition of Teepak, or

for the proposed divestiture of Devro

North America, unless and until the

Commission accepts the Agreement

Containing Consent Order for public

comment. Under the terms of the

Agreement to Condition Acquisition,

Devro is required to seek shareholder

approval of the divestiture at the same

time that it seeks shareholder approval

of the acquisition, and these approvals

must be obtained unconditionally and at

least 7 days before the end of the 60-day

public comment period. Devro will not

be permitted to acquire Teepak unless it

has shareholder approval to divest

Devro North America. Also, when the

Commission decides whether to issue

the final order, the Commission will

know whether the conditions have been

satisfied. If the Devro shareholders

reject the proposed resolution that, if

passed, would authorize Devro to

acquire Teepak and divest Devro North

America, no anticompetitive acquisition

will occur and the Commission will not

issue the final consent order.

The Agreement to Hold Separate

requires that Devro preserve Devro

North America’s assets and operate

Devro North America as a separate,

ongoing business apart from Devro and

Teepak. The purpose of this agreement

is to help insure that the competitive

value of Devro North America will be

maintained after Devro acquires Teepak

but before the assets are actually

divested.

By accepting the consent order subject

to final approval, the Commission

anticipates that the competitive

problems alleged in the complaint will

be resolved. The purpose of this

analysis is to invite and facilitate public

comment concerning the consent order.

It is not intended to constitute an

official interpretation of the agreement

and proposed order or in any way to

modify their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

Concurring Statement of

Commissioner Mary L. Azcuenaga in

Devro International PLC

[File No. 951–0072]

Although I have voted to accept the

proposed consent order requiring

divestiture for public comment, I have

reservations about the provision of the

order that excludes some incumbent

firms from eligibility to acquire the

assets to be divested.1 According to the

Notice to Aid Public Comment, the

‘‘purpose of this exclusion is to

preclude Devro from attempting to

divest Devro North American to a

competitor where there are likely to be

further anticompetitive effects.’’ Since

any proposed divestiture under the

order must be approved by the

Commission,2 an attempt by Devro to

make an anticompetitive divestiture

likely would be fruitless. In addition,

Devro would risk appointment under

the order of a trustee to accomplish
65338 Federal Register / Vol. 60, No. 243 / Tuesday, December 19, 1995 / Notices

divestiture and incurring civil penalties

for failure to make a timely divestiture.

Attempts to define in advance the

field of eligible acquirers under a

divestiture order are unnecessary, at

best, potentially inefficient and possibly

even anticompetitive. It is an inefficient

use of resources to attempt to assess in

advance the competitive effects of a

transaction that Devro might or might

not propose (especially if the exclusion

covers more than one firm), even if the

transaction-specific information

necessary to our merger analysis were

available. As a practical matter, any

such exclusions will be based on

something less than an adequate factual

examination of the various possible

proposed divestitures and will

necessarily involve the risk of excluding

firms that might have been acceptable

and even procompetitive acquirers. That

risk is unnecessary and should be

unacceptable in view of the requirement

to obtain the Commission’s approval

before any divestiture can take place

and the availability of other sanctions

for failing to make a timely divestiture.

[FR Doc. 95–30834 Filed 12–18–95; 8:45 am]

BILLING CODE 6750–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Administration on Aging

Statement of Organization, Functions,

and Delegations of Authority

This notice amends Part B of the

Statement of Organization, Functions,

and Delegations of Authority of the

Department of Health and Human

Services (HHS), Administration on

Aging (AoA), as follows: continues the

Office of the Assistant Secretary for

Aging; establishes two Offices, the

Office of Program Operations and

Development, and the Office of

Governmental Affairs and Elder Rights;

the operating grant programs (Titles III

and VI) and the developmental grant

program (Title IV) are placed under the

Office of Program Operations and

Development; all inter- and intragovernmental cooperative programs,

domestic and international, as well as

the elder rights services of Titles II and

VII are placed under the Office of

Governmental Affairs and Elder Rights;

the executive secretariat and policy

coordination functions are moved to the

Office of the Assistant Secretary;

supervision of the Regional Offices is

moved to the Director, Office of Program

Operations and Development; planning

functions are moved to the Office of

Management; and the former Office of

the Deputy Assistant Secretary for

Program Operations and

Intergovernmental Affairs, Office of the

Deputy Assistant Secretary for Program

Development and Elder Rights

Programs, Office of Field Operations,

and Office of Policy Coordination and

Analysis and the division structure

under the Office of State and

Community Programs and the suboffices under the Office of Program

Development are abolished.

The language to implement these

changes is as follows: Part B, Chapter B,

‘‘The Administration on Aging,’’ as

published in the Federal Register on

September 13, 1991 (56 FR 46620);

amended on December 24, 1992 (57 FR

61433); and further amended on March

2, 1993 (58 FR 12040) is amended as

follows.

Delete B.00 and replace with the

following:

B.OO Mission

The Administration on Aging, an

Operating Division of the Department of

Health and Human Services, is the

principal agency designated to carry out

the provisions of the Older Americans

Act (‘‘OAA’’ or ‘‘The Act’’) of 1965, as

amended, 42 U.S.C. 3001 et seq. Serves

as the effective and visible advocate for

older persons within the Department of

Health and Human Services and with

other Federal departments and agencies.

Directly assists the Secretary in all

matters pertaining to problems of the

aging. Advocates for the needs of older

persons in program planning and policy

development within the Department

and in other Federal agencies. Gives

priority to older persons in greatest

economic or social need. Develops

standards and issues best practice

guidelines; disseminates information;

provides technical assistance; and

initiates policy related to services

funded by the Department and provided

to older persons. Advises the Secretary,

Department components and other

Federal departments and agencies on

the characteristics, circumstances and

needs of older people and develops

policies, plans and programs designed

to promote their welfare; under Title III

of the Act (45 CFR Part 1321)

administers a program of formula grants

to States to establish State and

community programs for older persons;

administers a program of grants to

American Indians, Alaskan Natives and

Native Hawaiians to establish programs

for older Native Americans under Title

VI of the Act (45 CFR parts 1326 and

1328). Provides policy and procedural

direction, advice and assistance to

States and Native American grantees to

promote the development of State and

Native American administered,

community-based systems of

comprehensive social services for older

persons. Administers long term care

ombudsman and protective services

programs, legal services development

programs, and outreach, counseling and

assistance programs for older people

under Title VII of the Act. Approves or

disapproves State plans and Native

American funding applications.

Administers programs of training,

research and demonstration under Title

IV of the Act. Administers national

centers for service development and

assistance, and information

dissemination benefitting older persons.

Promotes through the State and Area

Agencies on Aging and Indian Tribal

Organizations a national communitybased long term care program for older

persons. Develops and issues program

designs, guidelines, standards and

assistance to State and Area Agencies,

Indian Tribal Organizations and

nutrition providers to support Titles III

and VI nutrition services and

disseminate nutrition education

material.

Delete B.10 and replace with the

following:

B.10 Organization

The Administration on Aging is

headed by the Assistant Secretary for

Aging and consists of:

Office of the Assistant Secretary

Congressional and White House

Liaison

Executive Secretariat and Policy

Coordination

Office of Governmental Affairs and

Elder Rights

Office of Elder Rights Protection

Office of Management

Division of Budget and Finance

Division of Personnel and Planning

Division of Grants and Contracts

Management

Division of Information Resources

Management

Office of Program Operations and

Development

Regional Offices on Aging

Office of State and Community

Programs

Office for American Indian, Alaskan

Native and Native Hawaiian

Programs

Office of Program Development

Delete B.20, A–I, and replace with the

following:

B.20. Functions

A. Office of the Assistant Secretary (BA)

The Office of the Assistant Secretary

serves as the focal point for OAA

programs through the development,