66 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

• A drip on the new suction pipeline;

and

• Facilities to interconnect new Lines

JP–296 and JP–297 to existing Lines JP–

250 and JP–40, respectively, at the

South Oakford Gate.

The EA also addresses the potential

environmental effects of the proposed

abandonment of facilities including:

• All buildings, parking lots,

driveways, equipment, piping, and

7,980 horsepower (hp) of compression

at the Jeannette Compressor Station;

• A pig receiver and barrel drip at the

Huff Gate near the Jeannette Compressor

Station (to be removed and installed at

Earhart Gate);

• 75 feet of Line JP–40 within the

Earhart Gate; and

• A 20-inch mainline gate setting

(250–IM) for Line JP–250 at the Earhart

Gate.

The purpose of the proposed facilities

would be to improve safety, reliability,

and flexibility in the operation of the

Oakford Storage Field. There would be

no increase in the amount of gas stored

in the Oakford Storage Field as a result

of construction of the proposed

facilities. Presently, the Jeannette

Compressor Station delivers gas out of

the Oakford Storage Field, recovers

migrating gas, and re-injects recovered

gas into the storage pool. With the

addition of the proposed compression

and related facilities at the existing

South Oakford Compressor Station, the

recovery operation performed by the

Jeannette Compressor Station would

continue with facilities consolidated at

one location.

The EA has been placed in the public

files of the FERC and is available for

public inspection at: Federal Energy

Regulatory Commission, Public

Reference and Files Maintenance

Branch, 888 First Street NE.,

Washington, DC 20426, (202) 208–1371.

Copies of the EA have been mailed to

Federal, State and local agencies, public

interest groups, interested individuals,

newspapers, and parties to this

proceeding.

A limited number of copies of the EA

are available from: Ms. Jennifer Goggin,

Environmental Project Manager,

Environmental Review and Compliance

Branch II, Office of Pipeline Regulation,

888 First Street NE., PR 11.2,

Washington, DC 20426, (202) 208–2226.

Any person wishing to comment on

the EA may do so. Written comments

must reference Docket No. CP95–668–

000 and be addressed to: Office of the

Secretary, Federal Energy Regulatory

Commission, 888 First Street NE.,

Washington, DC 20426.

Comments should be filed as soon as

possible, but must be received no later

than January 26, 1996, to ensure

consideration prior to a Commission

decision on this proposal. A copy of any

comments should also be sent to Ms.

Jennifer Goggin, Environmental Project

Manager, at the above address.

Comments will be considered by the

Commission but will not serve to make

the commentor a party to the

proceeding. Any person seeking to

become a party to the proceeding must

file a motion to intervene pursuant to

Rule 214 of the Commission’s Rules of

Practice and Procedure (18 CFR

385.214).

The date for filing timely motions to

intervene in this proceeding has passed.

Therefore, parties now seeking to file

late interventions must show good

cause, as required by section

385.214(b)(3), why this time limitation

should be waived. Environmental issues

have been viewed as good cause for late

intervention. You do not need

intervenor status to have your

comments considered.

Additional information about this

project is available from Ms. Jennifer

Goggin, Environmental Project Manager.

Lois D. Cashell,

Secretary.

[FR Doc. 95–31532 Filed 12–29–95; 8:45 am]

BILLING CODE 6717–01–M

FEDERAL TRADE COMMISSION

[File No. 961–0014]

Johnson & Johnson; Consent

Agreement With Analysis To Aid

Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair acts and practices and unfair

methods of competition, this consent

agreement, accepted subject to final

Commission approval, would require

the New Brunswick, New Jersey-based

manufacturer of health care products to

divest the Cordis Neuroscience

Business, which develops cranial shunts

used in the treatment of hydrocephalus.

The Commission had alleged that

Johnson & Johnson’s acquisition of

Cordis Corporation would reduce

competition in the market for

neurological shunts by giving two firms

control of 85 percent of the market.

DATES: Comments must be received on

or before March 4, 1996.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Ann

Malester, Federal Trade Commission, S–

2035, 6th and Pennsylvania Avenue,

NW, Washington, DC 20580, (202) 326–

2682. Michael R. Moiseyev, Federal

Trade Commission, S.–2025, 6th and

Pennsylvania Avenue, NW, Washington,

DC 20580. (202) 326–3106.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

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

46 and Section 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 Section 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 merger of

Johnson & Johnson, a corporation, and

Cordis Corporation (‘‘Cordis’’), a

corporation, and it now appearing that

Johnson & Johnson, hereinafter

sometimes referred to as ‘‘Proposed

Respondent,’’ is willing to enter into an

agreement containing an order to divest

certain assets, and providing for certain

other relief:

It is hereby agreed by and between

Proposed Respondent Johnson &

Johnson, by its duly authorized officers

and attorneys, and counsel for the

Commission that:

1. Proposed Respondent Johnson &

Johnson is a corporation organized,

existing, and doing business under and

by virtue of the laws of the state of New

Jersey with its principal executive

offices located at One Johnson &

Johnson Plaza, New Brunswick, New

Jersey 08933.

2. Proposed Respondent admits all the

jurisdictional facts set forth in the draft

of complaint here attached.

3. Proposed Respondent waives:

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 claims under the Equal Access

to Justice Act.
Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 67

4. 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

Respondent, 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.

5. This agreement is for settlement

purposes only and does not constitute

an admission by Proposed Respondent

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.

6. 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 Section 2.34 of the

Commission’s Rules, the Commission

may, without further notice to Proposed

Respondent, (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 and to cease

and desist in disposition of the

proceeding, and (2) make information

public with respect thereto. When so

entered, the order 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 Proposed

Respondent shall constitute service.

Proposed Respondent waives any right

it 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.

7. Proposed Respondent has read the

proposed complaint and order

contemplated hereby. Proposed

Respondent understands that once the

order has been issued, it will be

required to file one or more compliance

reports showing that it has fully

complied with the order. Proposed

Respondent further understands it may

be liable for civil penalties in the

amount provided by law for each

violation of the order by Proposed

Respondent or any agent of Proposed

Respondent after it becomes final. By

signing this Agreement, Proposed

Respondent represents that the relief

contemplated by this Agreement can be

accomplished.

Order

I

It is ordered that, as used in this

order, the following definitions shall

apply:

A. ‘‘Respondent’’ or ‘‘Johnson &

Johnson’’ means Johnson & Johnson, its

directors, officers, employees, agents

and representatives, predecessors,

successors and assigns; its subsidiaries,

divisions, and groups and affiliates

controlled by Johnson & Johnson, and

the respective directors, officers,

employees, agents, and representatives,

successors, and assigns of each.

B. ‘‘Cordis’’ means Cordis

Corporation, its directors, officers,

employees, agents and representatives,

predecessors, successors and assigns; its

subsidiaries, divisions, and groups and

affiliates controlled by Cordis, and the

respective directors, officers, employees,

agents, and representatives, successors,

and assigns of each.

C. ‘‘Cordis Innovasive Systems’’

means Cordis Innovasive Systems Inc.,

its directors, officers, employees, agents

and representatives, predecessors,

successors and assigns; its subsidiaries,

divisions, and groups and affiliates

controlled by Cordis Innovasive

Systems, and the respective directors,

officers, employees, agents, and

representatives, successors, and assigns

of each.

D. ‘‘Nobles-Lai’’ means Nobles-Lai

Engineering, Inc. (formerly known as

Visioneering, Inc.), its directors, officers,

employees, agents and representatives,

predecessors, successors and assigns; its

subsidiaries, divisions, and groups and

affiliates controlled by Nobles-Lai, and

the respective directors, officers,

employees, agents, and representatives,

successors, and assigns of each.

E. ‘‘Commission’’ means the Federal

Trade Commission.

F. ‘‘Merger’’ means the stock-for-stock

merger of Johnson & Johnson and Cordis

pursuant to the merger agreement dated

November 12, 1995.

G. ‘‘Assets and Businesses’’ means all

assets, properties, business and

goodwill, tangible and intangible,

including, without limitation, the

following:

1. All real property interests,

including rights, title and interest in and

to owned or leased property, together

with all buildings, improvements,

appurtenances, licenses and permits;

2. All machinery, fixtures, equipment,

vehicles, transportation facilities,

furniture, tools and other tangible

personal property;

3. All customer lists, vendor lists,

catalogs, sales promotion literature,

advertising materials, research

materials, technical information,

management information systems,

software, software licenses, inventions,

copyrights, trademarks, trade names,

trade secrets, intellectual property,

patents, technology, know-how,

specifications, designs, drawings,

processes and quality control data;

4. Inventory, supplies and storage

capacity;

5. All rights, title and interest in and

to the contracts entered into in the

ordinary course of business with

Nobles-Lai, customers (together with

associated bid and performance bonds),

suppliers, sales representatives,

distributors, agents, personal property

lessors, personal property lessees,

licensors, licensees, consignors and

consignees;

6. All rights under warranties and

guarantees, express or implied;

7. All books, records, and files; and

8. All items of prepaid expense.

H. ‘‘Cordis Neuroscience Business’’

means:

1. Cordis Innovasive Systems and all

of its Assets and Businesses; and

2. All of Cordis’s rights, title, and

interest, as of November 11, 1995, in all

Assets and Businesses relating to the

development, manufacture, distribution

and sale of Neuroscience Products,

including, but not limited to, all interest

in Nobles-Lai.

I. ‘‘Neuroscience Products’’ means:

1. Neurological shunts, including, but

not limited to, the Orbis-Sigma and

Hakim shunt products;

2. Neurological external drainage

systems, including, but not limited to,

External Drainage Systems (EDS) and

External Ventricular Drainage System

Set (EDVS) products; and

3. Neuroendoscopy products,

including, but not limited to, the Vision

2020 neuroendoscope product and the

Cordis HawkVision Neuroendoscopy

System.

J. ‘‘Neurological Shunts’’ means

systems consisting of a ventricular

catheter, a distal catheter, and a valve

that are implanted in the brain to divert

cerebrospinal fluid (CSF) into the

bloodstream of patients experiencing

excessive intercranial pressure because

of a surplus of CSF inside the skull.
68 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

K. ‘‘Neurological External Drainage

Systems’’ means systems consisting of a

ventricular catheter, a drainage bag,

tubing, and a stopcock that are used for

draining CSF to control intracranial

pressure and for monitoring intracranial

pressure.

L. ‘‘Neuroendoscopy Products’’

means:

1. Neuroendoscopes, which are handheld devices with an optical and light

system that permit viewing of the neural

cavity for use in neurosurgical

procedures;

2. Neuroendoscopy systems, which

are imaging systems used in conjunction

with neuroendoscopes; and

3. Neuroendoscopy disposables and

accessories, including, but not limited

to, cannulas, irrigators, plugs, probes,

forceps, scissors, graspers, aspirators,

couplers, pumps, cameras and other

products used in conjunction with

neuroendoscopes and neuroendoscopy

systems.

II

It is further ordered that:

A. Johnson & Johnson shall divest,

absolutely and in good faith, within

twelve (12) months of the date this order

becomes final, the Cordis Neuroscience

Business, and shall also divest such

additional ancillary Assets and

Businesses and effect such arrangements

as are necessary to assure the

marketability, viability and

competitiveness of the Cordis

Neuroscience Business.

B. Johnson & Johnson shall divest the

Cordis Neuroscience Business 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. The

purpose of the divestiture is to ensure

the continuation of the Cordis

Neuroscience Business as an ongoing,

viable operation, engaged in the same

business in which the Cordis

Neuroscience Business is engaged at the

time of the proposed divestiture, and to

remedy the lessening of competition

resulting from the Merger as alleged in

the Commission’s complaint.

C. Pending divestiture of the Cordis

Neuroscience Business, Johnson &

Johnson shall take such actions as are

necessary to maintain the viability,

marketability, and competitiveness of

the Cordis Neuroscience Business, and

to prevent the destruction, removal,

wasting, deterioration or impairment of

the Cordis Neuroscience Business

except for ordinary wear and tear.

D. If Johnson & Johnson is prevented

from divesting the Cordis Neuroscience

Business because of, or as a result of, the

assertion by Nobles-Lai of any

contractual rights, requirements or

prohibitions, then for a period of five (5)

years commencing on the date that this

order is accepted by the Commission,

Johnson & Johnson shall not:

1. Contract with Nobles-Lai for the

research, development or manufacture

of any Neuroendoscopy Product; or

2. Purchase any Neuroendoscopy

Product from, or distribute any

Neuroendoscopy Product for, NoblesLai.

III

It is further ordered that:

A. If Johnson & Johnson has not

divested, absolutely and in good faith,

and with the prior approval of the

Commission, the Cordis Neuroscience

Business within twelve (12) months of

the date this order becomes final, the

Commission may appoint a trustee to

divest the Cordis Neuroscience Business

B. In the event that the Commission

or the Attorney General brings an action

pursuant to § 5(l) of the Federal Trade

Commission Act, 15 U.S.C. (§ 45l), or

any other statute enforced by the

Commission, Johnson & Johnson 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 III shall

preclude the Commission or the

Attorney General from seeking civil

penalties or any other relief available to

it, including a court-appointed trustee,

pursuant to § 5(l) of the Federal Trade

Commission Act, or any other statute

enforced by the Commission, for any

failure by Johnson & Johnson to comply

with this order.

C. If a trustee is appointed by the

Commission or a court pursuant to

Paragraph III.A., Johnson & Johnson

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

Johnson & Johnson, which consent shall

not be unreasonably withheld. The

trustee shall be a person with

experience and expertise in mergers and

divestitures. If Johnson & Johnson has

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 Johnson & Johnson of

the identity of any proposed trustee,

Johnson & Johnson shall be deemed to

have consented to the selection of the

proposed trustee.

2. Subject to the prior approval of the

Commission, the trustee shall have the

exclusive power and authority to divest

the Cordis Neuroscience Business.

3. Within ten (10) days after

appointment of the trustee, Johnson &

Johnson 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 twelve (12)

months from the date the Commission

approves the trust agreement described

in Paragraph III.C.3. to accomplish the

divestiture, which shall be subject to the

prior approval of the Commission. If,

however, at the end of the twelve month

period, the trustee has submitted a plan

of divestiture or believes that divestiture

can be achieved within a reasonable

time, 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.

5. The trustee shall have full and

complete access to the personnel, books,

records and facilities related to the

Cordis Neuroscience Business, or to any

other relevant information, as the

trustee may request. Johnson & Johnson

shall develop such financial or other

information as such trustee may request

and shall cooperate with the trustee.

Johnson & Johnson shall take no action

to interfere with or impede the trustee’s

accomplishment of the divestiture. Any

delays in divestiture caused by Johnson

& Johnson 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 Johnson &

Johnson’s absolute and unconditional

obligation to divest at no minimum

price. The divestiture shall be made in

the manner and to acquirer as set out in

Paragraph II of this order, as

appropriate; 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 selected by Johnson & Johnson

from among those approved by the

Commission.

7. The trustee shall serve, without

bond or other security, at the cost and

expense of Johnson & Johnson, 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
Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 69

expense of Johnson & Johnson, 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 Johnson &

Johnson, 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 Cordis Neuroscience

Business.

8. Johnson & Johnson 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. 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.

11. The trustee shall have no

obligation or authority to operate or

maintain the Cordis Neuroscience

Business.

12. In the event that the trustee

determines that he or she is unable to

divest the Cordis Neuroscience Business

in a manner consistent with the

Commission’s purpose as described in

Paragraph II, the trustee may divest

additional ancillary assets of Johnson &

Johnson and effect such arrangements as

are necessary to satisfy the requirements

of this order.

13. The trustee shall report in writing

to Johnson & Johnson and the

Commission every sixty (60) days

concerning the trustee’s efforts to

accomplish divestiture.

IV

It is further ordered that Johnson &

Johnson shall comply with all terms of

the Cordis Neuroscience Business

Agreement to Hold Separate, attached to

this order and made a part hereof as

Appendix I. The Cordis Neuroscience

Business Agreement to Hold Separate

shall continue in effect until Johnson &

Johnson has divested all of the Cordis

Neuroscience Business.

V

It is further ordered that:

A. Within sixty (60) days after the

date this order becomes final and every

sixty (60) days thereafter until Johnson

& Johnson has fully complied with

Paragraphs II, III, and IV of this order,

Johnson & Johnson shall submit to the

Commission a verified written report

setting forth in detail the manner and

form in which it intends to comply, is

complying, and has complied with

Paragraphs II, III, and IV of this order.

Johnson & Johnson shall include in its

compliance reports, among other things

that are required from time to time, a

full description of the efforts being

made to comply with Paragraphs II, III,

and IV, including a description of all

substantive contacts or negotiations for

the divestiture required by this order,

including the identity of all parties

contacted. Johnson & Johnson shall

include in its compliance reports copies

of all written communications to and

from such parties, all internal

memoranda, and all reports and

recommendations concerning the

divestiture.

B. If Johnson & Johnson is precluded

from purchasing from, contracting with,

or distributing for Nobles-Lai pursuant

to Paragraph II.D. of this order, then one

(1) year from the date this order

becomes final, annually for the next (5)

years on the anniversary of the date this

order becomes final, and at other times

as the Commission may require,

Respondent shall file a verified written

report with the Commission setting

forth in detail the manner and form in

which it has complied and is complying

with Paragraph II.D. of this order.

VI

It is further ordered that, for the

purpose of determining or securing

compliance with this order, Johnson &

Johnson shall permit any duly

authorized representatives 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

Johnson & Johnson, relating to any

matters contained in this order; and

B. Upon five (5) days’ notice to

Johnson & Johnson, and without

restraint or interference from Johnson &

Johnson, to interview officers, directors,

or employees of Johnson & Johnson.

Officers and employees of Johnson &

Johnson whose places of employment

are outside the United States shall be

made available on reasonable notice.

VII

It is further ordered that Johnson &

Johnson shall notify the Commission at

least thirty (30) days prior to any

proposed change in the corporate

Johnson & Johnson such as dissolution,

assignment, sale resulting in the

emergence of a successor corporation, or

the creation or dissolution of

subsidiaries or any other change in the

corporation that may affect compliance

obligations arising out of the order.

Benjamin I. Berman,

Acting Secretary.

Appendix I

Cordis Neuroscience Business

Agreement To Hold Separate

This Agreement to Hold Separate (‘‘Hold

Separate’’) is by and between Johnson &

Johnson, a corporation organized, existing,

and doing business under and by virtue of

the laws of the state of New Jersey, with its

office and principal place of business at One

Johnson & Johnson Plaza, New Brunswick,

New Jersey 08933; 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. (collectively, the ‘‘Parties’’).

Premises

Whereas, Johnson & Johnson and Cordis

Corporation (‘‘Cordis’’), on November 12,

1995, entered into a stock-for stock merger

(hereinafter ‘‘Merger’’); and

Whereas, Cordis, with its principal office

and place of business located at 14201 N.W.

60th Avenue, Miami Lakes, Florida 33014

develops, manufactures and markets, among

other things, neurological shunts; and

Whereas, Johnson & Johnson, with its

principal office and place of business located

at One Johnson & Johnson Plaza, New

Brunswick, New Jersey 08933, through its

subsidiary Johnson & Johnson Professional,

Inc., develops, manufactures and markets,

among other things, neurological shunts; and

Whereas, the Commission is now

investigating the Merger to determine

whether it would violate any of the statutes

enforced by the Commission; and

Whereas, if the Commission accepts the

Agreement Containing Consent Order

(‘‘Consent Agreement’’), the Commission

must place it on the public record for a
70 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

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; and

Whereas, the Commission is concerned

that if an understanding is not reached,

preserving the status quo ante of Cordis

Neuroscience Business, as defined in

Paragraph I.H. of the Consent Agreement,

during the period prior to the final

acceptance and issuance of the Consent

Agreement by the Commission (after the 60-

day public comment period), divestiture

resulting from any proceeding challenging

the legality of the Merger might not be

possible, or might be less than an effective

remedy; and

Whereas, the Commission is concerned

that if the Merger is consummated, it will be

necessary to preserve the Commission’s

ability to require the divestiture of the Cordis

Neuroscience Business and the Commission’s

right to have the Cordis Neuroscience

Business continue as a viable competitor; and

Whereas, the purpose of this Hold Separate

and the Consent Agreement are:

A. To preserve the Cordis Neuroscience

Business as a viable, competitive, and

independent business pending divestiture of

the Cordis Neuroscience Business, and

B. To remedy any anticompetitive effects of

the Merger; and

Whereas, Johnson & Johnson’s entering

into this Hold Separate shall in no way be

construed as an admission by Johnson &

Johnson that the Merger is illegal; and

Whereas, Johnson & Johnson understands

that no act or transaction contemplated by

this Hold Separate 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 Hold

Separate.

Now, therefore, the Parties agree, upon the

understanding that the Commission has not

yet determined whether the Merger will be

challenged, and in consideration of the

Commission’s agreement that, at the time it

accepts the Consent Agreement for public

comment, it will grant early termination of

the Hart-Scott-Rodino waiting period, as

follows:

1. Johnson & Johnson agrees to execute and

be bound by the Consent Agreement.

2. Johnson & Johnson agrees that from the

date this Hold Separate is accepted until the

earliest of the times listed in subparagraphs

2.a.–2.b., it will comply with the provisions

of Paragraph 3. of this Hold Separate:

a. Three (3) business days after the

Commission withdraws its acceptance of the

Consent Agreement pursuant to the

provisions of Section 2.34 of the

Commission’s Rules; or

b. The time that divestiture of the Cordis

Neuroscience Business is required by

Paragraph II of the Consent Agreement is

completed.

3. To assure the complete independence

and viability of the Cordis Neuroscience

Business, and to assure that no material

confidential information is exchanged

between Johnson & Johnson and the Cordis

Neuroscience Business, Johnson & Johnson

shall hold the Cordis Neuroscience Business

separate and apart on the following terms

and conditions:

a. The Cordis Neuroscience Business, as

defined in Paragraph I.H. of the Consent

Agreement, shall be held separate and apart

and shall be managed and operated

independently of Johnson & Johnson

(meaning here and hereinafter, Johnson &

Johnson excluding the Cordis Neuroscience

Business and excluding all personnel

connected with the Cordis Neuroscience

Business as of the date this Agreement is

signed, but including all other portions of

Cordis), except to the extent that Johnson &

Johnson must exercise direction and control

over the Cordis Neuroscience Business to

assure compliance with this Hold Separate or

the Consent Agreement.

b. Johnson & Johnson shall maintain the

marketability, viability, and competitiveness

of the Cordis Neuroscience Business and

shall not cause or permit the destruction,

removal, wasting, deterioration, or

impairment of any assets or business it may

have to divest except in the ordinary course

of business and except for ordinary wear and

tear, and it shall not sell, transfer, encumber

(other than in the normal course of business),

or otherwise impair the marketability,

viability or competitiveness of the Cordis

Neuroscience Business.

c. Johnson & Johnson shall appoint a

knowledgeable person among the top

management of the Cordis Neuroscience

Business, as Manager to manage and

maintain the Cordis Neuroscience Business

on a day to day basis during the Hold

Separate. The Manager shall have exclusive

management and control of the Cordis

Neuroscience Business, and shall manage the

Cordis Neuroscience Business independently

of Johnson & Johnson’s other businesses.

d. The Manager shall report exclusively to

the Cordis Neuroscience Business

Management Committee (‘‘Management

Committee’’), which shall be appointed by

Johnson & Johnson. The Committee shall

consist of two knowledgeable persons from

among the top management of the Cordis

Neurological Products business; and a

Johnson & Johnson financial officer or a

comparable, knowledgeable person from

Johnson & Johnson’s financial office who has

no direct involvement with Johnson &

Johnson’s Neurological Products Business

(‘‘Johnson & Johnson Management Committee

Member’’). The Manager shall be the

Chairman of the Management Committee.

Except for the Johnson & Johnson

Management Committee Member serving on

the Management Committee, Johnson &

Johnson shall not permit any officer,

employee, or agent of Johnson & Johnson also

to be an officer, employee or agent of the

Cordis Neuroscience Business. Each

Management Committee member shall enter

into a confidentiality agreement agreeing to

be bound by the terms and conditions set

forth in Attachment A, appended to this Hold

Separate. The Management Committee shall

meet monthly during the course of the Hold

Separate, and as otherwise necessary.

Meetings of the Management Committee

during the term of the Hold Separate shall be

audio recorded, and the recording shall be

retained for two (2) years after the

termination of the Hold Separate.

e. All material transactions, out of the

ordinary course of business and not

precluded by Paragraph 3 hereof, shall be

subject to a majority vote of the Management

Committee.

f. Johnson & Johnson shall not exercise

direction or control over, or influence

directly or indirectly, the Cordis

Neuroscience Business, the Management

Committee, or the Manager of the Cordis

Neuroscience Business, any of their

operations, assets, or businesses; provided,

however, that Johnson & Johnson may

exercise only such direction and control over

the Cordis Neuroscience Business as is

necessary to assure compliance with this

Hold Separate, the Consent Order and with

all applicable laws and except as otherwise

provided in this Hold Separate.

g. Except as required by law, and except to

the extent that necessary information is

exchanged in the course of evaluating and

consummating the Merger, defending

investigations or litigation, obtaining legal

advice, complying with this Hold Separate or

the Consent Order or negotiating agreements

to divest assets, Johnson & Johnson shall not

receive or have access to, or the use of, any

material confidential information of the

Cordis Neuroscience Business or the

activities of the Manager or Management

Committee not in the public domain, nor

shall the Cordis Neuroscience Business,

Manager, or the Management Committee

receive or have access to, or the use of, any

material confidential information about

Johnson & Johnson. Johnson & Johnson may

receive on a regular basis from the Cordis

Neuroscience Business aggregate financial

information necessary and essential to allow

Johnson & Johnson to file financial reports,

tax returns, and personnel reports. Any such

information that is obtained pursuant to this

subparagraph shall be used only for the

purposes set forth in this subparagraph.

(‘‘Material confidential information,’’ as used

herein, means competitively sensitive or

proprietary information not independently

known to:

1. Johnson & Johnson, with regard to the

Cordis Neuroscience Business, from sources

other than the Cordis Neuroscience Business

or its employees or the Management

Committee; or

2. The Management Committee or the

Cordis Neuroscience Business or its

employees, with regard to Johnson &

Johnson, from sources other than Johnson &

Johnson,

and includes, but is not limited to, customer

lists, price lists, marketing methods, patents,

technologies, processes, or other trade

secrets.)

h. Except as is permitted by this Hold

Separate, the Johnson & Johnson

Management Committee Member shall not

receive any Cordis Neuroscience Business

material confidential information and shall

not disclose any such information obtained

through his or her involvement with the

Cordis Neuroscience Business to Johnson &

Johnson or use it to obtain any advantage for

Johnson & Johnson. The Johnson & Johnson

Management Committee Member shall

participate in matters that come before the

Management Committee only for the limited

purpose of considering any capital

investment of over $250,000, approving any
Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices 71

proposed budget and operating plans,

authorizing dividends and repayment of

loans consistent with the provisions hereof,

reviewing material transactions described in

subparagraph 3.e, and carrying out Johnson

& Johnson’s responsibilities under the Hold

Separate and the Consent Agreement. Except

as permitted by the Hold Separate, the

Johnson & Johnson Management Committee

Member shall not participate in any matter,

or attempt to influence the votes of the other

directors on the Management Committee

with respect to matters that would involve a

conflict of interest between Johnson &

Johnson and the Cordis Neuroscience

Business.

i. Johnson & Johnson shall not change the

composition of the Management Committee

unless a majority of the Management

Committee consents. The Chairman of the

Management Committee shall have the power

to remove members of the Management

Committee for cause and to require Johnson

& Johnson to appoint replacement members

to the Management Committee in the same

manner as provided in Paragraph 3.d. of this

Hold Separate. Johnson & Johnson shall not

change the composition of the management

of the Cordis Neuroscience Business, except

that the Management Committee shall have

the power to remove management employees

for unsatisfactory performance or for cause.

j. If the Chairman of the Management

Committee ceases to act or fails to act

diligently, a substitute Chairman shall be

appointed in the same manner as provided in

Paragraphs 3.c. and 3.d.

k. Cordis personnel connected with the

Cordis Neuroscience Business or providing

support services to the Cordis Neuroscience

Business as of the date this Hold Separate is

signed shall continue, as employees of

Johnson & Johnson, to provide such services

as of the date of this Hold Separate. Such

Johnson & Johnson personnel must retain and

maintain all material confidential

information relating to the Cordis

Neuroscience Business on a confidential

basis and, except as is permitted by this Hold

Separate, such persons shall be prohibited

from providing, discussing, exchanging,

circulating, or otherwise furnishing any such

information to or with any other person

whose employment involves any other

Johnson & Johnson business.

Such Johnson & Johnson personnel shall

also execute a confidentiality agreement

prohibiting the disclosure of any material

confidential Cordis Neuroscience Business or

Johnson & Johnson information.

1. The Cordis Neuroscience Business shall

be staffed with sufficient employees to

maintain the viability and competitiveness of

the Cordis Neuroscience Business, which

employees shall be the Cordis Neuroscience

Business’s employees and may also be hired

from sources other than Johnson & Johnson.

Each management employee of the Cordis

Neuroscience Business shall execute a

confidentiality agreement prohibiting the

disclosure of any Cordis Neuroscience

Business confidential information.

m. Johnson & Johnson shall circulate to the

management employees of the Cordis

Neuroscience Business and appropriately

display a notice of this Hold Separate and

Consent Order in the form attached hereto as

Attachment A.

n. Johnson & Johnson shall cause the

Cordis Neuroscience Business to expend

funds for research and development, quality

control, manufacturing and marketing of

Cordis Neuroscience Business products at a

level not lower than that budgeted for either

the 1994 or 1995 fiscal year, and shall

increase such spending as deemed

reasonably necessary in light of competitive

conditions. Within thirty (30) days of the

date of this Hold Separate, the Chairman of

the Management Committee shall develop a

budget and operating plan for the 1996 fiscal

year that complies with the provisions of this

Paragraph and present it to the Management

Committee for approval. If necessary,

Johnson & Johnson shall provide the Cordis

Neuroscience Business with any funds to

accomplish the foregoing. Johnson & Johnson

shall provide to the Cordis Neuroscience

Business such support services as provided

by Cordis prior to the Merger.

o. Johnson & Johnson shall provide the

Cordis Neuroscience Business with sufficient

working capital to operate at a level not less

than the rate of operation in effect during the

twelve (12) months preceding the date of this

Hold Separate.

p. The Management Committee shall serve

at the cost and expense of Johnson &

Johnson. Johnson & Johnson shall indemnify

the Management Committee against any

losses or claims of any kind that might arise

out of its involvement under this Hold

Separate, except to the extent that such losses

or claims result from misfeasance, gross

negligence, willful or wanton acts, or bad

faith by the Management Committee

members.

q. The Management Committee shall have

access to and be informed about all

companies who inquire about, seek or

propose to buy the Cordis Neuroscience

Business.

r. Notwithstanding the provisions of

Paragraph 3.h., companies who undertake a

due diligence process in the course of

negotiations to purchase the Cordis

Neuroscience Business may be accompanied

and assisted by the Johnson & Johnson

Management Committee Member, in addition

to appropriate Cordis Neuroscience Business

employees selected by the Management

Committee. The Johnson & Johnson

Management Committee Member may

delegate tasks relating to such due diligence

to attorneys, accountants and/or other

financial employees of Johnson & Johnson

who are not directly engaged in the Johnson

& Johnson Neurological Products Business;

provided, however, that such Johnson &

Johnson employees, accountants and

attorneys shall execute a confidentiality

agreement prohibiting the disclosure of any

Cordis Neuroscience Business material

confidential information.

4. Should the Federal Trade Commission

seek in any proceeding to compel Johnson &

Johnson to divest itself of the Cordis

Neuroscience Business, or any additional

assets, as provided in the Consent

Agreement, or to seek any other injunctive or

equitable relief, Johnson & Johnson shall not

raise any objection based on the expiration of

the applicable Hart-Scott-Rodino Antitrust

Improvements Act waiting period or the fact

that the Commission has permitted the

Merger. Johnson & Johnson shall also waive

all rights to contest the validity of this Hold

Separate.

5. To the extent that this Hold Separate

requires Johnson & Johnson to take, or

prohibits Johnson & Johnson from taking,

certain actions that otherwise may be

required or prohibited by contract, Johnson &

Johnson shall abide by the terms of this Hold

Separate or the Consent Agreement, 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 Hold Separate or the Consent

Agreement.

6. For the purpose of determining or

securing compliance with this Hold Separate,

subject to any legally recognized privilege or

provision of applicable law, and upon

written request with reasonable notice to

Johnson & Johnson made to its General

Counsel, Johnson & Johnson shall permit any

duly authorized representative or

representatives of the Commission:

a. Access during the office hours of

Johnson & Johnson 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 Johnson & Johnson or relating to

compliance with this Hold Separate;

b. Upon five (5) days’ notice to Johnson &

Johnson, and without restraint or interference

from it, to interview officers or employees of

Johnson & Johnson, who may have counsel

present, regarding any such matters.

7. This Hold Separate shall not be binding

until approved by the Commission.

Attachment A.—Notice of Divestiture

and Requirement for Confidentiality

Johnson & Johnson and Cordis

Corporation have entered into a Consent

Agreement and Agreement to Hold

Separate with the Federal Trade

Commission (‘‘Commission’’) relating to

the divestiture of the Cordis

Neuroscience Business. Until after the

Commission’s Order becomes final and

the Cordis Neuroscience Business are

divested, the Cordis Neuroscience

Business must be managed and

maintained as a separate, ongoing

business, independent of all other

Johnson & Johnson businesses. All

competitive information relating to The

Cordis Neuroscience Business must be

retained and maintained by the persons

involved in the Cordis Neuroscience

Business on a confidential basis and

such persons shall be prohibited from

providing, discussing, exchanging,

circulating, or otherwise furnishing any

such information to or with any other

person whose employment or agency

involves any other Johnson & Johnson

business. Similarly, all such persons

involved in any other Johnson &

Johnson business small be prohibited
72 Federal Register / Vol. 61, No. 1 / Tuesday, January 2, 1996 / Notices

from providing, discussing, exchanging,

circulating or otherwise furnishing

competitive information about such

business to or with any person whose

employment or agency involves the

Cordis Neuroscience Business.

Any violation of the Consent

Agreement or the Agreement to Hold

Separate, incorporated by reference as

part of the Consent Order, may subject

Johnson & Johnson to civil penalties and

other relief as provided by law.

Analysis of Proposed Consent Order To

Aid Public Comment

The Federal Trade Commission

(‘‘Commission’’) has accepted subject to

final approval an agreement containing

a proposed consent order from Johnson

& Johnson under which Johnson &

Johnson would divest the Cordis

Neuroscience Business, which includes

Cordis’ neurological shunt product line.

The proposed consent order has been

placed on the public record for sixty

(60) days for reception of comments by

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 agreement’s proposed order.

Johnson & Johnson, a New Jersey

based corporation, has proposed to

acquire Cordis Corporation, a Florida

based corporation, in a stock for stock

exchange worth $1.8 billion.

The proposed complaint alleges that

the proposed merger, if consummated,

would constitute a violation of Section

7 of the Clayton Act, as amended, 15

U.S.C. § 18, and Section 5 of the FTC

Act, as amended, 15 U.S.C. § 45, in the

market for neurological shunts.

Neurological shunts are medical devices

used to treat hydrocephalus, a brain

disorder that primarily afflicts young

children. The merger will substantially

increase concentration in the already

highly concentrated U.S. shunt market:

two firms will control over 85% of the

market. Anticompetitive effects, such as

increased prices and decreased services,

are likely to result. In addition, timely

entry by other companies, both in the

United States and overseas, is unlikely

to defeat these anticompetitive effects.

Entry cannot occur in a timely fashion

because of the difficulty of developing

competitive neurological shunt designs,

establishing manufacturing facilities,

organizing a sales and service network,

receiving Food and Drug Administration

approval, and gaining physician

acceptance in the market.

The proposed consent order would

remedy the alleged violation by

replacing the lost competition that

would result from the merger. It

provides that Johnson & Johnson shall

divest the Cordis Neuroscience Business

within twelve (12) months of the date

the proposed order becomes final. The

Cordis Neuroscience Business is a single

operational unit that sells neurological

shunts, intracranial pressure drainage

systems and neuroendoscopy

equipment. Significant synergies

between the products manufactured and

sold by the Business exist, and Cordis’

shunts are sold as part of the broader

product line. Therefore, a divestiture of

the whole business is necessary to

maintain competition in the shunt

market. The proposed order requires

Cordis Neuroscience Business to take all

the steps necessary to assure the

viability, marketability, and

competitiveness of the Cordis

Neuroscience Business, and to prevent

the destruction, removal, wasting,

deterioration, or impairment of the

Cordis Neuroscience Business.

If Johnson & Johnson is unable to

divest the Cordis Neuroscience Business

within twelve (12) months, then a

trustee may be appointed by the

Commission to divest the Cordis

Neuroscience Business within an

additional twelve (12) month period. If,

at the end of that twelve (12) month

period, the trustee has submitted a plan

of divestiture or believes that divestiture

can be achieved within a reasonable

time, the time period for divestiture can

be extended up to two (2) times by the

court.

A Hold Separate Agreement signed by

Johnson & Johnson provides that, during

the time period from the date the Hold

Separate is accepted until the

divestiture of the Cordis Neuroscience

Business is completed, the Cordis

Neuroscience Business shall be held

separate and operated independently of

Johnson & Johnson.

Under the provisions of the order,

Johnson & Johnson is also required to

provide to the Commission a report of

compliance with the divestiture

provisions of the order within sixty (60)

days following the date this order

becomes final, and every sixty (60) days

thereafter until Johnson & Johnson has

completely divested its interest in the

Cordis Neuroscience Business.

The purpose of this analysis is to

facilitate public comment on the

proposed order, and it is not intended

to constitute an official interpretation of

the agreement and proposed order or to

modify in any way their terms.

[FR Doc. 95–31558 Filed 12–29–95; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

[Docket No. 95E–0301]

Determination of Regulatory Review

Period for Purposes of Patent

Extension; PREVACID

AGENCY: Food and Drug Administration,

HHS.

ACTION: Notice.

SUMMARY: The Food and Drug

Administration (FDA) has determined

the regulatory review period for

PREVACID and is publishing this

notice of that determination as required

by law. FDA has made the

determination because of the

submission of an application to the

Commissioner of Patents and

Trademarks, Department of Commerce,

for the extension of a patent which

claims that human drug product.

ADDRESSES: Written comments and

petitions should be directed to the

Dockets Management Branch (HFA–

305), Food and Drug Administration,

rm. 1–23, 12420 Parklawn Dr.,

Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT:

Brian J. Malkin, Office of Health Affairs

(HFY–20), Food and Drug

Administration,5600 Fishers Lane,

Rockville, MD 20857, 301–443–1382.

SUPPLEMENTARY INFORMATION: The Drug

Price Competition and Patent Term

Restoration Act of 1984 (Pub. L. 98–417)

and the Generic Animal Drug and Patent

Term Restoration Act (Pub. L. 100–670)

generally provide that a patent may be

extended for a period of up to 5 years

so long as the patented item (human

drug product, animal drug product,

medical device, food additive, or color

additive) was subject to regulatory

review by FDA before the item was

marketed. Under these acts, a product’s

regulatory review period forms the basis

for determining the amount of extension

an applicant may receive.

A regulatory review period consists of

two periods of time: A testing phase and

an approval phase. For human drug

products, the testing phase begins when

the exemption to permit the clinical

investigations of the drug becomes

effective and runs until the approval

phase begins. The approval phase starts

with the initial submission of an

application to market the human drug

product and continues until FDA grants

permission to market the drug product.

Although only a portion of a regulatory

review period may count toward the

actual amount of extension that the