[Federal Register Volume 60, Number 9 (Friday, January 13, 1995)]
[Notices]
[Pages 3236-3246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-759]



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FEDERAL TRADE COMMISSION

[File No. 951-0013]


Reckitt & Colman plc; Proposed Consent Agreement With Analysis To 
Aid Pubic Comment

AGENCY: Federal Trade Commission.

ACTION:  Proposed consent agreement.

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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 
allow, among other things, Reckitt & Colman to acquire L&F Products 
Inc. with the required prior approval on the condition that it sells 
its own rug cleaning assets, within six months, to a Commission 
approved acquirer. If the divestiture is not completed on time, the 
consent agreement would permit the Commission to appoint a trustee to 
complete the transaction. In addition, the consent agreement would 
require the respondent to obtain Commission approval, for ten years, 
before acquiring any interest in the carpet-deodorizer business in the 
United States.

DATES: Comments must be received on or before March 14, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th Street and Pennsylvania Avenue NW., Washington, D.C. 
20580.

FOR FURTHER INFORMATION CONTACT: Ann Malester, FTC/S-2224, Washington, 
D.C. 20580. (202) 326-2682.

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 comments 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

    Commissioners: Janet D. Steiger, Chairman, Mary L. Azcuenaga, 
Roscoe B. Starek, III, Christine A. Varney.

    The Federal Trade Commission (``Commission''), having initiated an 
investigation of the proposed acquisition by Reckitt & Colman plc 
(``Reckitt & Colman''), a United Kingdom corporation, of substantially 
all of the assets and liabilities of L&F Products Inc., a Delaware 
corporation, from Eastman Kodak Company, and it now appearing that 
Reckitt & Colman, hereinafter sometimes referred to as ``proposed 
respondent,'' is wiling to enter into an agreement containing an order 
to divest certain assets and cease and desist from making certain 
acquisitions, and providing for certain other relief:
    It is hereby agreed by and between proposed respondent, by its duly 
authorized officers and attorneys, and counsel for the Commission that:
    1. Proposed respondent Reckitt & Colman is a corporation organized, 
existing, and doing business under and by virtue of the laws of England 
and Wales with its principal executive offices located at One 
Burlington Lane, London, England W4 2RW. Reckitt & Colman does business 
in the United States through its wholly-owned subsidiary Reckitt & 
Colman Inc., with its offices and principal place of 
[[Page 3237]] business at 1655 Valley Road, Wayne, New Jersey 07474-
0943.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint.
    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.
    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, 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 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 1655 Valley 
Road, Wayne, New Jersey 07474-0943 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 that the Commission's approval, 
pursuant to the Commission's Order in Docket No. C-3306, of the 
Acquisition, as defined in the following order, is conditioned upon the 
proposed respondent's compliance with the terms of the following order. 
Proposed respondent further understands that it may be liable for civil 
penalties in the amount provided by law for each violation of this 
order after it becomes final, or of the Commission's Order in Docket 
No. C-3306.

Order

I.

Definitions

    It is ordered that, as used in this order, the following 
definitions shall apply:
    A. ``Reckitt & Colman'' means Reckitt & Colman plc, its 
predecessors, successors and assigns, the divisions, subsidiaries, 
affiliates, companies, groups, partnerships and joint ventures that 
Reckitt & Colman controls, directly or indirectly, and their directors, 
officers, employees, agents and representatives, and their respective 
successors and assigns.
    B. ``Kodak'' means Eastman Kodak Company, its predecessors, 
successors and assigns, the divisions, subsidiaries, affiliates, 
companies, groups, partnerships and joint ventures that Kodak controls, 
directly or indirectly, and their directors, officers, employees, 
agents and representatives and their respective successors and assigns.
    C. ``L&F''means the United States Assets and Businesses acquired by 
Reckitt & Colman in the Acquisition.
    D. ``Respondent'' means Reckitt & Colman.
    E. ``Commission'' means the Federal Trade Commission.
    F. ``Acquisition'' means Reckitt & Colman's acquisition of 
substantially all of the assets and liabilities of the household 
products, professional products and personal products businesses of L&F 
Products Inc. pursuant to an asset purchase agreement dated September 
26, 1994, with Eastman Kodak Company, L&F Products Inc., a wholly-owned 
subsidiary of Kodak, and Sterling Winthrop Inc., a wholly-owned 
subsidiary of L&F Products Inc.
    G. ``Carpet Deodorizer Products'' means powder products designed to 
combat and eliminate offensive odors in rugs and carpets that are 
distributed to consumers primarily through grocery, drug, and mass 
merchandise stores. Carpet Deodorizer Products does not include Rug 
Cleaning Products.
    H. ``Carpet Deodorizer Assets'' means all of Reckitt & Colman's 
United States rights, title and interest in and to:
    (1) Carpet Deodorizer Products, including, but not limited to, the 
brands, trademarks and tradedress ``Carpet Fresh'', ``Rug Fresh''; and
    (2) All of Reckitt & Colman's Carpet Deodorizer Products assets and 
businesses delineated in Schedule A, attached hereto and made a part 
hereof.
    Carpet Deodorizer Assets excludes any assets or businesses acquired 
in the Acquisition.
    I. ``Rug Cleaning Products'' means products designed to clean rugs 
and carpets that are applied by aerosol spray, or in liquid, foam or 
other forms and that are distributed to consumers primarily through 
grocery, drug, and mass merchandise stores. Rug Cleaning Products does 
not include Carpet Deodorizer Products.
    J. ``Rug Cleaning Assets'' means all of Reckitt & Colman's United 
States rights, title and interest in and to:
    (1) Rug Cleaning Products, including, but not limited to, the right 
to use the brands, trademarks and tradedress ``Woolite Heavy Traffic 
Carpet Cleaner'', ``Woolite One Step Carpet Cleaner'', ``Woolite Spot & 
Stain Carpet Cleaner'', ``Woolite Fabric and Upholstery Cleaner'', and 
``Woolite Pet Stain Carpet Cleaner'' in connection with the production, 
marketing and sale of Rug Cleaning Products; and
    (2) all of Reckitt & Colman's Rug Cleaning Products assets and 
businesses delineated in schedule B, attached hereto and made a part 
hereof.
    Rug Cleaning Assets excludes any assets or businesses acquired in 
the Acquisition.
    K. ``Woolite Fabric Care Products'' means products designed to 
clean fabric and clothing that are applied by aerosol spray, or in 
liquid, foam or other forms and that are distributed to consumers 
primarily through grocery, drug, and mass merchandise stores. Woolite 
[[Page 3238]] Fabric Care Products excludes Rug Cleaning Products.
    L. ``Woolite Assets'' means all of Reckitt & Colman's United States 
rights, title and interest in and to:
    (1) Woolite Fabric Care Products, including, but not limited to, 
the brand and trademark ``Woolite''; and
    (2) all of Reckitt & Colman's Woolite Fabric Care Products assets 
and businesses delineated in Schedule C, attached hereto and made a 
part hereof.
    Woolite Assets excludes any assets or businesses acquired in the 
Acquisition.
    M. ``Air Freshener Products'' means products that are specifically 
designed to scent the air in the home that are applied by aerosol 
spray, or in liquid, solid, wick or other forms and that are 
distributed to consumers primarily through grocery, drug, and mass 
merchandise stores.
    N. ``Air Freshener Assets'' means all of Reckitt & Colman's United 
States rights, title and interest in and to:
    (1) Air Freshener Products, including, but not limited to, the 
brands and trademarks ``Airwick'', ``Stick Ups'', ``Air Waves'', 
``Wizard'', ``Botanicals'', and ``Airwick Neutra Air''; and
    (2) all of Reckitt & Colman's Air Freshener Products assets and 
businesses delineated in Schedule D, attached hereto and made a part 
hereof.
    Air Freshener Assets excludes any assets or businesses acquired in 
the Acquisition.

II

Divestiture of Carpet Deodorizer Assets

    It is ordered that:
    A. Reckitt & Colman shall divest the Carpet Deodorizer Assets, 
absolutely and in good faith, within six (6) months of the date this 
order becomes final, and shall also divest such additional ancillary 
assets and effect such arrangements as are necessary to assure the 
marketability, viability, and competitiveness of the Carpet Deodorizer 
Assets; provided, however, that Reckitt & Colman is not required to 
divest nay of the Carpet Deodorizer Assets identified in Schedule A, 
Part 2, if such assets are not required by the acquirer.
    B. Reckitt & Colman shall divest the Carpet Deodorizer Assets 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 of the Carpet Deodorizer Assets is to 
ensure the continuation of the assets as an ongoing, viable enterprise 
engaged in the same businesses in which the Carpet Deodorizer Assets 
presently are employed, and to remedy the lessening of competition 
resulting from the Acquisition as alleged in the Commission's 
complaint.
    C. Upon reasonable notice from the acquirer of the Carpet 
Deodorizer Assets to Reckitt & Colman, for a period of six (6) months 
following the date of the divestiture, Reckitt & Colman shall provide 
such personnel, information, assistance, advice and training to the 
acquirer as is necessary to transfer the Carpet Deodorizer Assets 
pursuant to Paragraph II.A. of this order and establish such business 
as a viable, ongoing concern. Such assistance shall include reasonable 
consultation with knowledgeable employees of Reckitt & Colman as 
necessary to satisfy the acquirer's management that its personnel are 
appropriately trained in the manufacture, distribution and marketing of 
Carpet Deodorizer Products. Reckitt & Colman shall not charge the 
acquirer a rate more than its own direct costs for providing such 
assistance.
    D. Reckitt & Colman shall cooperate and assist the acquirer in 
obtaining approvals for the transfer of all registrations, leases, 
licenses, certifications, permits, or similar documents relating to the 
Carpet Deodorizer Assets.
    E. Reckitt & Colman shall take such actions as are necessary to 
maintain the viability and marketability of the Carpet Deodorizer 
Assets and to prevent the destruction, removal, wasting, deterioration 
or impairment of any of the Carpet Deodorizer Assets except in the 
ordinary course of business and except for ordinary wear and tear.

III

Rug Cleaning Divestiture

    It is further ordered that:
    A. Reckitt & Colman shall divest, absolutely and in good faith, 
within six (6) months of the date the Commission approves the 
Acquisition pursuant to Paragraph V of the order in Docket No. C-3306, 
the Rug Cleaning Assets, and shall also divest such additional 
ancillary assets and effect such arrangements as are necessary to 
assure the marketability, viability, and competitiveness of the Rug 
Cleaning Assets; provided, however, that Reckitt & Colman is not 
required to divest any of the Rug Cleaning Assets identified in 
Schedule B, Part 2, if such assets are not required by the acquirer.
    B. Reckitt & Colman shall divest the Rug Cleaning Assets 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 of the Rug Cleaning Assets is to ensure the 
continuation of the assets as an ongoing, viable enterprise engaged in 
the same businesses in which the Rug Cleaning Assets presently are 
employed, and to remedy the lessening of competition resulting from the 
Acquisition as described in the Commission's letter approving the 
Acquisition.
    C. Upon reasonable notice from the acquirer of the Rug Cleaning 
Assets to Reckitt & Colman, for a period of six months following the 
date of the divestiture, Reckitt & Colman shall provide such personnel, 
information, assistance, advice and training to the acquirer as is 
necessary to transfer the Rug Cleaning Assets pursuant to Paragraph 
III.A. of this order and establish such business as a viable, ongoing 
concern. Such assistance shall include reasonable consultation with 
knowledgeable employees of Reckitt & Colman to satisfy the acquirer's 
management that its personnel are appropriately trained in the 
manufacture, distribution and marketing of Rug Cleaning Products. 
Reckitt & Colman shall not charge the acquirer a rate more than its own 
direct costs for providing such assistance.
    D. Reckitt & Colman shall cooperate and assist the acquirer in 
obtaining approvals for the transfer of all registrations, leases, 
licenses, certifications, permits, or similar documents relating to the 
Rug Cleaning Assets.
    E. Reckitt & Colman shall take such actions as are necessary to 
maintain the viability and marketability of the Rug Cleaning Assets to 
prevent the destruction, removal, wasting, deterioration or impairment 
of any of the Rug Cleaning Assets except in the ordinary course of 
business and except for ordinary wear and tear.

IV

Trustee provisions

    It is further ordered that:
    A. (1) If Reckitt & Colman has not divested, absolutely and in good 
faith and with the Commission's prior approval the Carpet Deodorizer 
Assets within six (6) months of the date this order becomes final, the 
Commission may appoint a trustee to divest the Carpet Deodorizer Assets 
and the Air Freshener Assets; provided, however, that the trustee is 
not required to divest any of the Carpet Deodorizer Assets identified 
in Schedule A, Part 2, or any of the Air Freshener Assets identified in 
Schedule D, Part 2, if such assets are not required by the 
acquirer. [[Page 3239]] 
    (2) If Reckitt & Colman has not divested, absolutely and in good 
faith and with the Commission's prior approval the Rug Cleaning Assets 
within six (6) months of the date the Commission approves the 
Acquisition pursuant to the order in Docket No. C-3306, the Commission 
may appoint a trustee to divest the Rug Cleaning Assets and the Woolite 
Assets; provided, however, that the trustee is not required to divest 
any of the Rug Cleaning Assets identified in Schedule B, Part 2, or any 
of the Woolite Assets identified in Schedule C, Part 2, if such assets 
are not required by the acquirer.
    B. In the event the Commission or the Attorney General brings an 
action pursuant to Sec. 5(1) of the Federal Trade Commission Act, 15 
U.S.C. Sec. 45(1), or any other statute enforced by the Commission, 
Reckitt & Colman shall consent to the appointment of a trustee in such 
action. Neither the appointment of a trustee nor a decision not to 
appoint a trustee under this Paragraph shall preclude the Commission or 
the Attorney General from seeking civil penalties or any other relief 
available to it, including a court-appointed trustee, pursuant to 
Section 5(1) of the Federal Trade Commission Act, or any other statute 
enforced by the Commission, for any failure by Reckitt & Colman to 
comply with this order, or the order in Docket No. C-3306.
    C. If a trustee is appointed by the Commission or a court pursuant 
to Paragraph IV.A.(1) or Paragraph IV.A.(2) of this order, Reckitt & 
Colman shall consent to the following terms and conditions regarding 
the trustee's powers, duties, authorities, and responsibilities.
    1. The Commission shall select the trustee, subject to the consent 
of Reckitt & Colman, which consent shall not be unreasonably withheld. 
The trustee shall be a person with experience and expertise in 
acquisitions and divestitures. If Reckitt & Colman 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 Reckitt & Colman of the identity of any proposed trustee, 
Reckitt & Colman shall be deemed to have consented to the selection of 
the proposed trustee.
    2. Subject to the prior approval of the Commission and under the 
terms and conditions described in Paragraph IV.A. of this order, the 
trustee shall have the exclusive power and authority to divest the 
Carpet Deodorizer Assets and the Air Freshener Assets, and/or the Rug 
Cleaning Assets and the Woolite Assets, together with any additional, 
incidental assets of Reckitt & Colman that may be reasonably necessary 
to assure the viability and competitiveness of the Carpet Deodorizer 
Assets and the Air Freshener Assets, and/or the Rug Cleaning Assets and 
the Woolite Assets.
    3. Within ten (10) days after the appointment of the trustee, 
Reckitt & Colman shall execute a trust agreement that, subject to the 
prior approval of the Commission, and, in the case of a court-appointed 
trustee, of the court, transfers to the trustee all rights and powers 
necessary to effect the divestiture(s) require by this order.
    4. The trustee shall have twelve (12) months from the date the 
Commission approves the trust agreement described in Paragraph IV.C.3. 
of this order to accomplish the divestiture(s). If, however, at the end 
of the twelve-month period, the trustee has submitted a plan of 
divestiture or believes that divestiture(s) can be accomplished 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 only extend the divestiture 
period two (2) times.
    5. The trustee shall have full and complete access (subject to the 
terms and conditions described in Paragraph IV.A. of this order) to the 
personnel, books, records, and facilities related to the Carpet 
Deodorizer Assets, Air Freshener Assets, Rug Cleaning Assets and 
Woolite Assets and to any other relevant information, as the trustee 
may reasonably request. Reckitt & Colman shall develop such financial 
or other information as such trustee may request and shall cooperate 
with the trustee. Reckitt & Colman shall take no action to interfere 
with or impede the trustee's accomplishment of the divestiture(s). Any 
delays in the divestiture(s) caused by Reckitt & Colman 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. Subject to Reckitt & Colman's absolute and unconditional 
obligation to divest at no minimum price the assets described in 
Paragraph IV.A. of this order (and subject to the terms and conditions 
described in Paragraph IV.A. of this order), and to remedy the 
lessening of competition resulting from the Acquisition as alleged in 
the Commission's complaint and as described in the Commission's letter 
approving the Acquisition, the trustee shall use his or her best 
efforts to negotiate the most favorable price and terms available with 
each acquirer for each divestiture described in Paragraph IV.A of this 
order. If the trustee receives bona fide offers from more than one 
acquirer for each divestiture, and if the Commission determines to 
approve more than one such acquirer, the trustee shall divest the 
assets described in Paragraph IV.A. of this order to each acquirer 
selected by Reckitt & Colman from among those approved by the 
Commission for each divestiture.
    7. The trustee shall serve, without bond or other security, at the 
cost and expense of Reckitt & Colman, on such reasonable and customary 
terms and conditions as the Commission or a court may set. The trustee 
shall have authority to employ, at the cost and expense of Reckitt & 
Colman, such consultants, accountants, attorneys, investment bankers, 
business brokers, appraisers, and other representatives and assistants 
as are reasonably necessary to carry out the trustee's duties and 
responsibilities. The trustee shall account for all monies derived from 
the sale 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 Reckitt & Colman 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 described in Paragraph 
IV.A. of this order.
    8. Reckitt & Colman 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 
trusteeship, 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, claims, or expenses result from 
misfeasance, 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 IV.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 each divestiture required by this order.
    11. The trustee shall have no obligation or authority to operate or 
[[Page 3240]] maintain the assets described in Paragraph IV.A. of this 
order.
    12. The trustee shall report in writing to Reckitt & Colman and to 
the Commission every thirty (30) days concerning the trustee's efforts 
to accomplish the divestitures.

V

Hold Separate

    It is further ordered that Reckitt & Colman shall comply with all 
terms of the Agreement to Hold Separate, attached to this order and 
made a part hereof as Appendix I. The Agreement to Hold Separate shall 
continue in effect according to its terms until Reckitt & Colman has 
divested all of the Rug Cleaning Assets and all of the Carpet 
Deodorizer Assets as required by this order.

VI

Prior approval

    It is further ordered that, for a ten (10) year period commencing 
on the date this order becomes final, Reckitt & Colman shall not, 
without the prior approval of the Commission, directly or indirectly, 
through subsidiaries, partnerships or otherwise:
    (1) acquire any stock, share capital, equity or other interest in 
any concern, corporate or non-corporate, engaged in at the time of such 
acquisition, or within the two years preceding such acquisition engaged 
in the development, production, distribution, or sale for resale of 
Carpet Deodorizer Products in the United States; or
    (2) acquire any assets used or previously used (and still suitable 
for use) in the manufacture, distribution, or sale for resale of Carpet 
Deodorizer Products in the United States.
    Provided, however, that this Paragraph VI shall not apply to the 
acquisition of products or services acquired in the ordinary course of 
business.

VII

Compliance Reports

    It is further ordered that:
    A. Within sixty (60) days after the date this order becomes final 
and every sixty (60) days thereafter until Reckitt & Colman has fully 
complied with the provisions of Paragraphs II, III, IV and V of this 
order, Reckitt & Colman 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 those 
provisions. Reckitt & Colman shall include in its compliance reports, 
among other things that are required from time to time, a full 
description of all substantive contacts or negotiations for each 
divestiture, including the identity of all parties contacted. Reckitt & 
Colman also shall include in its compliance reports, subject to any 
legally recognized privilege, copies of all written communications to 
and from such parties, all internal memoranda, and all reports and 
recommendations concerning each divestiture.
    B. One (1) year from the date this order becomes final and annually 
thereafter for nine (9) years on the anniversary date of this order, 
Reckitt & Colman shall submit to the Commission a verified written 
report setting forth in detail the manner and form in which it has 
complied and is complying with this order.

VIII

Access

    It is further ordered that, for the purposes of determining or 
securing compliance with this order, and subject to any legally 
recognized privilege, upon written request and on reasonable notice to 
Reckitt & Colman, Reckitt & Colman 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 Reckitt & Colman or L&F relating to any matters 
contained in this consent order; and
    B. Upon five (5) days' notice to Reckitt & Colman, and without 
restraint or interference from Reckitt & Colman, to interview officers 
or employees of Reckitt & Colman or L&F, who may have counsel present, 
regarding such matters.

IX

Corporate Change

    It is further ordered that Reckitt & Colman shall notify the 
Commission at least thirty (30) days prior to any proposed change in 
the corporate respondent 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.

Schedule A

    Reckitt & Colman shall divest all of the Carpet Deodorizer Products 
assets and businesses pursuant to the terms of this order. The assets 
and businesses identified in Paragraph I.H.(2) of this order shall 
include all assets, properties, business and goodwill, tangible and 
intangible, utilized by Reckitt & Colman in the development, 
production, distribution and sale of Carpet Deodorizer Products in the 
United States, including, but not limited to, the following:

Part 1

    (1) all customer lists, vendor lists, catalogs, sales promotion 
literature, existing advertising materials, marketing information, 
product development information, research materials, technical 
information, management information systems, software, inventions, 
trade secrets, technology, know-how, specifications, designs, drawings, 
processes and quality control data;
    (2) intellectual property rights, patents and patent applications 
and the formulas, copyrights, trademarks, trade names, tradedress, 
service marks, and UPC codes;
    (3) all rights, title and interest in and to the contracts entered 
in the ordinary course of business with customers (together with 
associated bid and performance bonds), suppliers, sales 
representatives, brokers and distributors, agents, inventors, product 
testing and laboratory research institutions, providers of electronic 
data exchange services, personal property lessors, personal property 
lessees, licensers, licensees, consignors and consignees;
    (4) all rights under warranties and guarantees, express or implied;
    (5) all Environmental Protection Agency and all other federal and 
state regulatory agency registrations and applications, and all 
documents related thereto;
    (6) all books, records, files, financial statements, business plans 
and supporting documents;
    (7) all items of prepaid expense; and
    (8) a perpetual license at no royalty to use the brands, trademarks 
and tradedress ``Airwick Neutra Air'' and ``Botanicals'' in connection 
with the production, marketing and sale of Carpet Deodorizer Products 
in the United States.

Part 2

    (1) a perpetual license at no royalty to use the brand, trademark 
and tradedress ``Airwick'' in connection with the production, marketing 
and sale of Carpet Deodorizer Products in the United States;
    (2) all machinery, fixtures, equipment, molds, vehicles, furniture, 
tools and all other tangible personal property;
    (3) inventory; [[Page 3241]] 
    (4) accounts and notes receivable; and
    (5) all rights, title and interest in and to owned or leased real 
property, together with appurtenances, licenses and permits.

Schedule B

    Reckitt & Colman shall divest all of the Rug Cleaning Products 
assets and businesses pursuant to the terms of this order. The assets 
and business identified in Paragraph I.J. (2) of this order shall 
include all assets, properties, business and goodwill, tangible and 
intangible, utilized by Reckitt & Colman in the development, 
production, distribution and sale of Rug Cleaning Products in the 
United States, including, but not limited to, the following:

Part 1

    (1) a perpetual license at no royalty to use the brand, trademark, 
and tradedress ``Woolite'' in connection with the production, marketing 
and sale of Rug Cleaning Products in or into the United States;
    (2) all customer lists, vendor lists, catalogs, sales promotion 
literature, existing advertising materials, marketing information, 
product development information, research materials, technical 
information, management information systems, software, inventions, 
trade secrets, technology, know-how, specifications, designs, drawings, 
processes and quality control data;
    (3) intellectual property rights, patents and patent applications 
and the formulas, copyrights, trademarks, trade names, service marks, 
and UPC codes;
    (4) all rights, title and interest in and to the contracts entered 
in the ordinary course of business with customers (together with 
associated bid and performance bonds), suppliers, sales 
representatives, brokers and distributors, agents, inventors, product 
testing and laboratory research institutions, providers of electronic 
data exchange services, personal property lessors, personal property 
lessees, licensors, licensees, consignors and consignees;
    (5) all rights under warranties and guarantees, express or implied;
    (6) all Environmental Protection Agency and all other federal and 
state regulatory agency registrations and applications, and all 
documents related thereto;
    (7) all books, records, files, financial statements, business plans 
and supporting documents; and
    (8) all items of prepaid expense.

Part 2

    (1) all machinery, fixtures, equipment, molds, vehicles, furniture, 
tools and all other tangible personal property;
    (2) inventory;
    (3) accounts and notes receivable; and
    (4) all rights, title and interest in and to owned or leased real 
property, together with appurtenances, licenses and permits.

Schedule C

    The trustee shall divest all of the Woolite Fabric Care Products 
assets and businesses pursuant to the terms of this order. The assets 
and businesses identified in Paragraph I.L.(2) of this order shall 
include all assets, properties, business and goodwill, tangible and 
intangible, utilized by Reckitt & Colman in the development, 
production, distribution and sale of Woolite Fabric Care Products in 
the United States, including, but not limited to, the following:

Part 1

    (1) all customer lists, vendor lists, catalogs, sales promotion 
literature, existing advertising materials, marketing information, 
product development information, research materials, technical 
information, management information systems, software, inventions, 
trade secrets, technology, know-how, specifications, designs, drawings, 
processes and quality control data;
    (2) intellectual property rights, patents and patent applications 
and the formulas, copyrights, trademarks, trade names, tradedress, 
service marks, and UPC codes;
    (3) all rights, title and interest in and to the contracts entered 
in the ordinary course of business with customers (together with 
associated bid and performance bonds), suppliers, sales 
representatives, brokers and distributors, agents, inventors, product 
testing and laboratory research institutions, providers of electronic 
data exchange services, personal property lessors, personal property 
lessees, licensors, licensees, consignors and consignees;
    (4) all rights under warranties and guarantees, express or implied;
    (5) all Environmental Protection Agency and all other federal and 
state regulatory agency registrations and applications, and all 
documents related thereto;
    (6) all books, records, files, financial statements, business plans 
and supporting documents; and
    (7) all items of prepaid expense.

Part 2

    (1) all machinery, fixtures, equipment, molds, vehicles, furniture, 
tools and all other tangible personal property;
    (2) inventory;
    (3) accounts and notes receivable, and
    (4) all rights, title and interest in and to owned or leased real 
property, together with appurtenances, licenses and permits.

 Schedule D

    The trustee shall divest all of the Air Freshener Products assets 
and businesses pursuant to the terms of this order. The assets and 
businesses identified in Paragraph I.N.(2) of this order shall include 
all assets, properties, business and goodwill, tangible and intangible, 
utilized by Reckitt & Colman in the development, production, 
distribution and sale of Air Freshener Products in the United States, 
including, but not limited to the following:

Part 1

    (1) all customer lists, vendor lists, catalogs, sales promotion 
literature, existing advertising materials, marketing information, 
product development information, research materials, technical 
information, management information systems, software, inventions, 
trade secrets, technology, know-how, specifications, designs, drawings, 
processes and quality control data;
    (2) intellectual property rights, patents and patent applications 
and the formulas, copyrights, trademarks, trade names, tradedress, 
service marks, and UPC codes;
    (3) all rights, title and interest in and to the contracts entered 
in the ordinary course of business with customers (together with 
associated bid and performance bonds), suppliers, sales 
representatives, brokers and distributors, agents, inventors, product 
testing and laboratory research institutions, providers of electronic 
data exchange services, personal property lessors, personal property 
lessees, licensors, licensees, consignors and consignees;
    (4) all rights under warranties and guarantees, express or implied;
    (5) all Environmental Protection Agency and all other federal and 
state regulatory agency registrations and applications, and all 
documents related thereto;
    (6) all books, records, files, financial statements, business plans 
and supporting documents; and
    (7) all items of prepaid expense. [[Page 3242]] 

Part 2

    (1) all machinery, fixtures, equipment, molds, vehicles, furniture, 
tools and all other tangible personal property;
    (2) inventory;
    (3) accounts and notes receivable, and
    (4) all rights, title and interest in and to owned or leased real 
property, together with appurtenances, licenses and permits.

Appendix I--Agreement to Hold Separate

    This Agreement to Hold Separate (``Hold Separate'') is by and 
between Reckitt & Colman plc (``Reckitt & Colman''), a corporation 
organized, existing, and doing business under and by virtue of the laws 
of England and Wales, with its office and principal place of business 
at One Burlington Lane, London 4W 2RW, England, which does business in 
the United States through its wholly-owned subsidiary Reckitt & Colman 
Inc., with its offices and principal place of business at 1655 Valley 
Road, Wayne, New Jersey 07474-0943; and the Federal Trade Commission 
(``the Commission''), an independent agency of the United States 
Government, established under the Federal Trade Commission Act of 1914, 
15 U.S.C. Sec. 41, et seq. (collectively the ``Parties'').

Premises

    Whereas, on September 26, 1994 Reckitt & Colman entered into an 
agreement with Eastman Kodak Company (``Kodak'') to acquire 
substantially all of the United States assets and liabilities of the 
household products, professional products and personal products 
businesses of L&F Products Inc. (such assets and businesses hereinafter 
referred to as ``L&F''), as well as the voting securities of certain 
wholly-owned subsidiaries of L&F or Kodak that sell products outside 
the United States (hereinafter ``Acquisition''); and
    Whereas, on October 22, 1990, the Commission, with the consent of 
Reckitt & Colman, issued its complaint and made final its Order to 
settle charges that the acquisition by Reckitt & Colman of the Boyle-
Midway Division of American Home Products Corporation violated Section 
7 of the Clayton Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of 
the Federal Trade Commission Act (``FTC Act''), as amended, 15 U.S.C. 
Sec. 45 (In the Matter of Reckett & Colman plc, FTC Docket No. C-3306); 
and
    Whereas, the Order in Docket No. C-3306 provides that for a period 
of ten (10) years Reckitt & Colman shall not acquire, without the prior 
approval of the Commission, directly or indirectly through 
subsidiaries, partnerships, or otherwie, any interest in, or the whole 
or any part of the stock or share capital of any person or business 
that is engaged in the rug cleaning products business in the United 
States, or, except in the ordinary course of business, any assets used 
or previously used in (and still suitable for use in) the rug cleaning 
products business; and
    Whereas, Reckitt & Colman products and markets, among other things, 
Carpet Deodorizer Products and Rug Cleaning Products, as defined in 
Paragraph I of the Agreement Containing Consent Order (``Consent 
Agreement'' or ``Consent Order'') to which this Hold Separate is 
attached and made a part thereof as Appendix I; and
    Whereas, L&F, with its principal office and place of business 
located at 225 Summit Avenue, Montvale, New Jersey 07645-1575, produces 
and markets, among other things, Carpet Deodorizer Products and Rug 
Cleaning Products, as defined in Paragraph I of the Consent Order; and
    Whereas, the Commission is now investigating the Acquisition to 
determine whether it would violate any of the statutes enforced by the 
Commission and whether the Commission should approve the Acquisition 
pursuant to the Order in In the Matter of Reckitt & Colman plc, FTC 
Docket No. C-3306; and
    Whereas, the Commission has determined to grant Reckitt & Colman 
the prior approval required for its acquisition of L&F conditioned, 
however, upon Reckitt & Colman divesting, as required under the Consent 
Agreement, the Carpet Deodorizer Assets and the Rug Cleaning Assets, as 
defined in Paragraph I of the Consent Agreement; and
    Whereas, if the Commission accepts the Consent Agreement, the 
Commission must place it 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; and
    Whereas, the Commission is concerned that if an understanding is 
not reached, preserving the status quo ante of the Carpet Deodorizer 
Assets and the Rug Cleaning Assets, as defined in Paragraph I of the 
Consent Agreement, during the perioid prior to the final acceptance and 
issuance of the order by the Commission (after the 60-day public 
comment period), divestiture resulting from any proceeding challenging 
the legality of the Acquisition might not be possible, or might be less 
than an effective remedy; and
    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 Carpet Deodorizer Assets and the Rug 
Cleaning Assets, as defined in Paragraph I of the Consent Agreement, 
and the Commission's right to have the Carpet Deodorizer Assets and the 
Rug Cleaning Assets continue as viable competitors; and
    Whereas, the purpose of the Hold Separate and the Consent Agreement 
is:
    1. to preserve the Carpet Deodorizer Assets, the Air Freshener 
Assets, and the Rug Cleaning Assets as viable, independent, ongoing 
enterprises, pending the divestiture of the Carpet Deodorizer Assets, 
the Air Freshener Assets, and Rug Cleaning Assets required under the 
terms of the Consent Agreement;
    2. to remedy any anticompetitive effects of the Acquisition; and
    3. to preserve the Carpet Deodorizer Assets, the Air Freshener 
Assets, and the Rug Cleaning Assets as ongoing and competitive entities 
engaged in the same businesses in which they are presently employed 
until each of the respective divestitures required under the terms of 
the Consent Agreement is achieved; and
    Whereas, Reckitt & Colman's entering into this Hold Separate shall 
in no way be construed as an admission by Reckitt & Colman that the 
Acquisition is illegal; and
    Whereas, Reckitt & Colman understands that no act or transaction 
contemplated by this Hold Separate shall be deemed immune or exempt 
from the provisions of the antitrust laws of the FTC Act by reason of 
anything contained in this Consent Agreement.
    Now, Therefore, the Parties agree, upon the understanding that the 
Commission has not yet determined whether the Acquisition will be 
challenged, and in consideration of the Commission's conditional 
approval of the Acquisition and its 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, and unless the 
Commission determines to reject the Consent Agreement, it will not seek 
further relief from Reckitt & Colman with respect to the Acquisition, 
except that the Commission may exercise any and all rights to enforce 
this Hold Separate and the Consent Agreement to which it is annexed and 
made a part thereof, and the Order in Docket No. C-3306, and in the 
event the required divestiture of the Carpet Deodorizer 
[[Page 3243]] Assets is not accomplished, to appoint a trustee to seek 
divestiture of the Air Freshener Assets as well as the Carpet 
Deodorizer Assets, and in the event the required divestiture of the Rug 
Cleaning Assets is not accomplished, to appoint a trustee to seek 
divestiture of the Woolite Assets as well as the Rug Cleaning Assets, 
or to seek civil penalties or a court appointed trust or other 
equitable relief, as follows:
    1. Reckitt & Colman agrees to execute and be bound by the Consent 
Agreement.
    2. Reckitt & Colman agrees that from the date this Hold Separate is 
accepted until the earlier of the dates listed below in subparagraphs 
2.a and 2.b, it will comply with the provisions of paragraph 4 of this 
Hold Separate:
    a. three (3) business days after the Commission withdraws its 
acceptance of the Consent Order pursuant to the provisions of Section 
2.34 of the Commission's rules; or
    b. the day after the divestiture of the Carpet Deodorizer Assets 
required by the Consent Order has been completed.
    3. Reckitt & Colman agrees that from the date this Hold Separate is 
accepted until the day after the divestiture of the Rug Cleaning Assets 
required by the Consent Order has been completed, it will comply with 
the provisions of Paragraph 5 of this Hold Separate.
    4. Reckitt & Colman agrees to manage and maintain the Carpet 
Deodorizer Assets and the Air Freshener Assets, as they are presently 
constituted, on the following terms and conditions:
    a. Reckitt & Colman shall appoint four individuals, one each from 
among Reckitt & Colman's current employees working in Reckitt & 
Colman's marketing, sales, materials management, and finance 
operations, to manage and maintain the Carpet Deodorizer Assets and the 
Air Freshener Assets. These individuals (``the management team'') shall 
manage the Carpet Deodorizer Assets and the Air Freshener Assets 
independently of the management of Reckitt & Colman's other businesses, 
except that these individuals will arrange for the Reckitt & Colman 
Carpet Deodorizer Products and the Reckitt & Colman Air Freshener 
Products to be marketed and sold by Reckitt & Colman's marketing and 
sales forces. The management team shall not thereafter, until the 
Carpet Deodorizer Assets are divested pursuant to the Consent Order, be 
in any way involved in the marketing, selling or materials management 
of any other Reckitt & Colman product.
    b. The management team, in its capacity as such, shall report 
directly and exclusively to an independent auditor/manager, to be 
appointed by Reckitt & Colman. The independent auditor/manager shall 
have exclusive control over the operations of the Carpet Deodorizer 
Assets and the Air Freshener Assets, with responsibility for the 
management of the Carpet Deodorizer Assets and the Air Freshener Assets 
and for maintaining the independence of those businesses.
    c. Reckitt & Colman shall not exercise direction or control over, 
or influence directly or indirectly, the independent auditor/manager or 
the management team or any of its operations relating to the operations 
of the Carpet Deodorizer Assets and the Air Freshener Assets; provided 
however, that Reckitt & Colman may exercise only such direction and 
control over the management team and the Carpet Deodorizer Assets and 
the Air Freshener Assets as is necessary to assure compliance with this 
Hold Separate or the Consent Order.
    d. Reckitt & Colman shall maintain the viability and marketability 
of the Carpet Deodorizer Assets and the Air Freshener Assets and shall 
not cause or permit the destruction, removal, wasting, deterioration, 
or impairment of any assets or businesses it may have to divest except 
in the ordinary course of business and except for ordinary wear and 
tear. Reckitt & Colman shall not sell, transfer, or encumber the Carpet 
Deodorizer Assets or the Air Freshener Assets except in the ordinary 
course of business, or to effect the divestitures contemplated by the 
Consent Order pursuant to the terms of the Consent Order.
    e. Except for the management team, Reckitt & Colman shall not 
permit any other Reckitt & Colman employee, officer, or director to be 
involved in the management of the Carpet Deodorizer Assets or the Air 
Freshener Assets except to the extent the services of Reckitt & 
Colman's sales, marketing, and materials management personnel are 
necessary as set forth in subparagraph 4.a.
    f. Except as required by law, and except to the extent that 
necessary information is exchanged in the course of evaluating the 
Acquisition, defending investigations or defending or prosecuting 
litigation, or negotiating agreements to divest assets, Reckitt & 
Colman shall not receive or have access to, or the use of, any material 
confidential information not in the public domain about the Carpet 
Deodorizer Assets or the Air Freshener Assets or the activities of the 
management team in managing those businesses, nor shall the management 
team receive or have access to, or use of, any material confidential 
information not in the public domain about Reckitt & Colman's competing 
Carpet Deodorizer Products or Air Freshener Products businesses, or the 
activities of Reckitt & Colman in managing its Carpet Deodorizer 
Products or Air Freshener Products businesses. Reckitt & Colman may 
receive on a regular basis from the management team aggregate financial 
information necessary and essential to allow Reckitt & Colman to 
prepare United States consolidated 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 the 
subparagraph. (``Material confidential information'' as used herein, 
means competitively sensitive or proprietary information not 
independently known to Reckitt & Colman from sources other than the 
management team, including, but not limited to, customer lists, price 
lists, marketing methods (except to the extent marketing and sales 
plans need to be divulged to the Reckitt & Colman marketing and sales 
force in the ordinary course of business), patents, technologies, 
processes, or other trade secrets).
    g. Nothing in this Hold Separate shall prohibit Reckitt & Colman 
from providing cash management, tax preparation and/or insurance 
functions for the Carpet Deodorizer Assets and the Air Freshener Assets 
heretofore provided by Reckitt & Colman. Reckitt & Colman personnel 
providing such support services must retain and maintain all material 
confidential information relating to the Carpet Deodorizer Assets and 
the Air Freshener Assets on a confidential basis and, except as 
permitted by this Hold Separate, such persons shall be prohibited from 
providing, discussing, exchanging, circulating, or otherwise furnishing 
such information to or with any person whose employment involves any 
other Reckitt & Colman Carpet Deodorizer Product business or Rug 
Cleaning Products business. Reckitt & Colman personnel providing these 
support services to the Carpet Deodorizer Assets and the Air Freshener 
Assets shall execute a confidentiality agreement prohibiting the 
disclosure of any Carpet Deodorizer Assets or Air Freshener Assets 
confidential information.
    h. Reckitt & Colman shall not change the composition of the 
management team, and the independent auditor/manager shall have the 
power to remove employees only for cause.
    i. All material transactions, out of the ordinary course of 
business and not [[Page 3244]] precluded by Paragraph 4 hereof, shall 
be subject to a majority vote of the management team. In the case of a 
tie, the independent auditor/manager shall cast the deciding vote.
    j. Reckitt & Colman shall establish written procedures to be 
approved by the independent auditor/manager, covering the management, 
maintenance, and independence of the Carpet Deodorizer Assets and the 
Air Freshener Assets and the conduct of the management team in 
accordance with this Consent Agreement. Reckitt & Colman shall also 
circulate to its employees and appropriately display a notice of this 
Hold Separate Agreement and Consent Order in the form attached hereto 
as Appendix A.
    k. All earnings and profits from the Carpet Deodorizer Assets and 
the Air Freshener Assets shall be available for use in those businesses 
until divestiture. In computing earnings and profits for the Carpet 
Deodorizer Assets and the Air Freshener Assets, Reckitt & Colman may 
deduct from the revenues generated by the Carpet Deodorizer Assets and 
the Air Freshener Assets only direct product costs and indirect 
overheads allocated to those businesses.
    l. Reckitt & Colman shall make available for use in the Carpet 
Deodorizer Assets and the Air Freshener Assets businesses until 
divestiture an amount not lower than those budgeted for 1995 and 1996 
for advertising, trade promotion, and product development of the 
Reckitt & Colman Carpet Deodorizer Products and Air Freshener Products, 
and shall increase such spending as deemed reasonably necessary by the 
management team in light of competitive conditions. If necessary, 
Reckitt & Colman shall provide the management team with any funds to 
accomplish the foregoing.
    m. Reckitt & Colman shall pay all direct product costs and indirect 
overheads for the Carpet Deodorizer Assets and the Air Freshener Assets 
businesses. The management team and the independent auditor/manager 
shall serve at the cost and expense of Reckitt & Colman, and the Carpet 
Deodorizer Assets and the Air Freshener Assets businesses shall not be 
charged with the compensation and expenses of the independent auditor/
manager.
    n. If the independent auditor/manager ceases to act or fails to act 
diligently, a substitute independent auditor/manager shall be appointed 
in the same manner as provided in subparagraph 4.b. of this Hold 
Separate. Any replacement for independent auditor/manager shall be 
appointed with the consent of the Commission.
    o. Reckitt & Colman shall indemnify the management team and the 
independent auditor/manager against any losses or claims of any kind 
that might arise out of 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 team 
or the independent auditor/manager.
    p. The independent auditor/manager shall report in writing to the 
Commission every thirty (30) days concerning the efforts to accomplish 
the purposes of this Hold Separate.
    5. To ensure the complete independence and viability of L&F and to 
assure that no competitive information is exchanged between L&F and 
Reckitt & Colman, Reckitt & Colman shall hold L&F as it is presently 
constituted separate and apart on the following terms and conditions:
    a. L&F, as defined in paragraph I of the Consent Agreement, shall 
be held separate and apart and shall be operated independently of 
Reckitt & Colman, except to the extent that Reckitt & Colman must 
exercise direction and control over L&F to assure compliance with this 
Hold Separate Agreement, the Consent Order, or the Order in Docket No. 
C-3306.
    b. Reckitt & Colman shall assign to L&F its rights under the 
transition services agreements and all supply agreements contemplated, 
respectively, by Secs. 5.12 and 5.13 of the September 26, 1994, Asset 
Purchase Agreement among Eastman Kodak Company, L&F Products Inc., 
Sterling Winthrop Inc., and Reckitt & Colman plc; and, as contemplated 
by Secs. 5.12 and 5.13 of the September 26, 1994 Asset Purchase 
Agreement, Sterling Winthrop Inc. (``Sterling'') personnel will 
continue the support and administrative services being provided by such 
Sterling personnel to L&F as of the date this Hold Separate was signed, 
and all arrangements, existing on the date this Hold Separate was 
signed, that provide for the supply by Sterling of materials to L&F 
will remain in place. Reckitt & Colman shall enforce all its rights to 
cause such Sterling personnel providing support and administrative 
services and maintaining existing supply arrangements to retain and 
maintain all material confidential information relating to L&F 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 Reckitt 
& Colman business, including the Reckitt & Colman Rug Cleaning Products 
business.
    c. Reckitt & Colman shall appoint four individuals, one each from 
among L&F's current employees working in L&F's marketing, sales, 
materials management, and finance operations to manage and maintain 
L&F. These individuals, (``the management team'') shall manage L&F 
independently of the management of Reckitt & Colman's other businesses. 
The management team shall not thereafter, until the Rug Cleaning Assets 
are divested pursuant to the Consent Order, be in any way involved in 
the marketing, selling or materials management of any competing Reckitt 
& Colman products.
    d. The management team, in its capacity as such, shall report 
directly and exclusively to an independent auditor/manager, to be 
appointed by Reckitt & Colman. The independent auditor/manager shall 
have exclusive control over the operations of L&F with responsibility 
for the management of L&F and for maintaining the independence of those 
businesses. Provided, however, that the auditor/manager appointed 
pursuant to this Paragraph 5 shall not be the same auditor/manager 
appointed pursuant to Paragraph 4.
    e. Reckitt & Colman shall not exercise direction or control over, 
or influence directly or indirectly, L&F, the independent auditor/
manager or the management team or any of their operations relating to 
the operations of L&F provided however, that Reckitt & Coleman may 
exercise only such direction and control over the Management team of 
L&F as is necessary to assure compliance with this Hold Separate, the 
Consent Order, and the Order in Docket No. C-3306.
    f. Except as required by law, and except to the extent that 
necessary information is exchanged in the course of evaluating the 
Acquisition, defending investigations or defending or prosecuting 
litigation, or negotiating agreements to divest assets, Reckitt & 
Colman shall not receive or have access to, or the use of, any material 
confidential information not in the public domain about L&F or the 
activities of the management team in managing L&F nor shall L&F or the 
management team receive or have access to, or use of, any material 
confidential information not in the public domain about Reckitt & 
Colman's businesses, of the activities of Reckitt & Colman in managing 
its businesses. Reckitt & Colman may receive on a regular basis from 
L&F aggregate financial information necessary and essential to allow 
Reckitt & Colman to [[Page 3245]] prepare United States consolidated 
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 Reckitt 
& Colman from sources other than L&F or the management team including, 
but not limited to, customer lists, price lists, marketing methods, 
patents, technologies, processes, or other trade secrets).
    g. Nothing in this Hold Separate shall prohibit Reckitt & Colman 
from providing cash management, tax preparation and/or insurance 
functions for L&F heretofore provided by Sterling or Kodak. Reckitt & 
Colman personnel providing such support services must retain and 
maintain all material confidential information relating to L&F on a 
confidential basis and, except as permitted by this Hold Separate, such 
persons shall be prohibited from providing, discussing, exchanging, 
circulating, or otherwise furnishing such information to or with any 
person whose employment involves any other Reckitt & Colman Carpet 
Deodorizer Product business or Rug Cleaning Products business. Reckitt 
& Colman personnel providing these support services to L&F shall not be 
involved in any other Reckitt & Colman Carpet Deodorizer Products 
business or Rug Cleaning products business, and shall execute a 
confidentiality agreement prohibiting the disclosure of any L&F 
confidential information.
    h. L&F shall be staffed with sufficient employees to maintain the 
viability and competitiveness of L&F, which employees shall be selected 
from L&F's existing employee base and may also be hired from sources 
other than L&F. Each director, officer and management employee of L&F 
shall execute a confidentiality agreement prohibiting the disclosure of 
any L&F confidential information.
    i. Reckitt & Colman shall not change the composition of the 
management team and the independent auditor/manager shall have the 
power to remove employees only for cause.
    j. All material transactions, out of the ordinary course of 
business and not precluded by Paragraph 5 hereof, shall be subject to a 
majority vote of the management team. In case of a tie, the independent 
auditor/manager shall cast the deciding vote.
    k. Reckitt & Colman shall establish written procedures to be 
approved by the independent auditor/manager, covering the management, 
maintenance, and independence of L&F and the conduct of the management 
team in accordance with this Consent Agreement.
    l. All earnings and profits of L&F shall be retained separately by 
L&F. If necessary, Reckitt & Colman shall provided L&F with sufficient 
working capital to operate at the rate of operation in effect during 
the twelve (12) months preceding the date of this Hold Separate.
    m. Reckitt & Colman shall cause L&F to continue to expend funds for 
the advertising, trade promotion, and product development of L&F 
products at levels not lower than those budgeted for 1995 and 1996, and 
shall increase such spending as deemed reasonably necessary by the 
management team in light of competitive conditions. If necessary, 
Reckitt & Colman shall provide L&F with any funds to accomplish the 
foregoing.
    n. If the independent auditor/manager ceases to act or fails to act 
diligently, a substitute independent auditor/manager shall be appointed 
in the same manner as provided in subparagraph 5.d of this Hold 
Separate. Any replacement for independent auditor/manager shall be 
appointed with the consent of the Commission.
    o. The management team and the independent auditor/manager shall 
serve at the cost and expense of Reckitt & Colman. Reckitt & Colman 
shall indemnify the management team and the independent auditor/manager 
against any losses or claims of any kind that might arise out of 
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 team or the independent 
auditor/manager.
    p. The independent auditor/manager shall report in writing to the 
Commission every thirty (30) days concerning the efforts to accomplish 
the purposes of this Hold Separate.
    6. Should the Commission seek in any proceeding to compel Reckitt & 
Colman to divest itself of the Carpet Deodorizer Assets or the Rug 
Cleaning Assets or any additional assets, as provided in the Consent 
Agreement, or to seek any other equitable relief, Reckitt & Colman 
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 Acquisition. Reckitt & Colman 
also waives all rights to contest the validity of this Hold Separate.
    7. For the purpose of determining or securing compliance with this 
Hold Separate, subject to any legally recognized privilege, and upon 
written request with reasonable notice to Reckitt & Colman made to its 
principal office in the United States, Reckitt & Colman shall permit 
any duly authorized representative or 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 Reckitt & Colman or L&F relating to compliance with this 
Hold Separate; and
    b. Upon five (5) days' notice to Reckitt & Colman, and without 
restraint or interference from it, to interview officers or employees 
of Reckitt & Colman or L&F, who may have counsel present, regarding any 
such matters.
    8. This Hold Separate shall not be binding until approved by the 
Commission.

Appendix A--Divestiture and Requirement for Confidentiality

    Reckitt & Colman has entered into a Consent Order and Hold Separate 
Agreement with the Federal Trade Commission relating to the divestiture 
of certain Reckitt & Colman carpet deodorizer assets and products, 
including Carpet Fresh, Rug Fresh, Botanicals, and Airwick Neutra Air; 
or alternatively, if that divestiture is not accomplished within six 
months, the additional divestiture of certain Reckitt & Colman air 
freshener assets and products, including Airwick, Stick Ups, Air Waves, 
Wizard, Botanicals, and Airwick Neutra Air. Until such divestitures as 
are required by the Consent Order are accomplished, the Reckitt & 
Colman carpet deodorizer assets and products, including Carpet Fresh, 
Rug Fresh, Botanicals, and Airwick Neutra Air, and the Reckitt & Colman 
air freshener assets and products, including Airwick, Stick Ups, Air 
Waves, Wizard, Botanicals, and Airwick Neutra Air must be managed and 
maintained as a separate, ongoing business, independent of all other 
competing lines of Reckitt & Colman as provided by the Agreement to 
Hold Separate. All competitive information relating to these product 
lines must be retained and maintained by the persons responsible for 
the management of these products 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 [[Page 3246]] person whose employment involves any competing 
Reckitt & Colman carpet deodorizer or air freshener product. Similarly, 
all persons responsible for the management of any competing Reckitt & 
Colman carpet deodorizer product or air freshener product shall be 
prohibited from providing, discussing, exchanging, circulating or 
otherwise furnishing any such information to or with any other person 
responsible for the Carpet Fresh, Rug Fresh, Botanicals, or Airwick 
Neutra Air carpet deodorizer products, or Airwick, Stick Ups, Air 
Waves, Wizard, Botanicals, and Airwick Neutra Air air freshener 
products.
    Any violation of the Consent Order or the Hold Separate Agreement, 
incorporated by reference as part of the Consent Order, subjects the 
violator 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 
Reckitt & Colman plc (``Reckitt & Colman'') to resolve competitive 
concerns with the proposed acquisition of certain assets and 
liabilities of the household products, professional products and 
personal products businesses of L&F Products Inc. Under the proposed 
order, Reckitt & Colman would divest assets relating to its carpet 
deodorizer products business and its rug cleaning products business 
(respectively, the ``Carpet Deodorizer Assets'' and the ``Rug Cleaning 
Assets'').
    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 review the agreement 
and the comments received and will decide whether to withdraw from the 
agreement or make final the agreement's proposed order.
    The draft complaint alleges that the proposed acquisition, if 
consummated, would violate Section 7 of the Clayton Act, 15 U.S.C. 
Sec. 18, as amended, and Section 56 of the FTC Act, 15 U.S.C. Sec. 45, 
as amended, in the market for carpet deodorizers. Additionally, Reckitt 
& Colman is already subject to a Commission order issued to settle 
charges that its previous acquisition of the Boyle-Midway Division of 
American Home Products Corporation violated Section 7 of the Clayton 
Act, 15 U.S.C. Sec. 18, as amended, and Section 5 of the FTC Act, 15 
U.S.C. Sec. 45, as amended (In the Matter of Reckitt & Colman plc, FTC 
Docket No. C-3306). The Order in Docket No. C-3306 provides that for a 
period of ten (10) years Reckitt & Colman shall not acquire, without 
the prior approval of the Commission, any interest in, stock of, or any 
assets used in the rug cleaning products business. The proposed consent 
order would remedy the violation alleged in the draft complaint by 
requiring the divestiture of the Carpet Deodorizer Assets. 
Additionally, the proposed order would allow Reckitt & Colman to 
acquire L&F with the required prior approval of the Commission on the 
condition that Reckitt & Colman divest the Rug Cleaning Assets.
    The proposed order would require Reckitt & Colman to divest the 
Carpet Deodorizer Assets within six (6) months after the proposed order 
becomes final. The proposed order also would require Reckitt & Colman 
to divest the Rug Cleaning Assets within six (6) months after the 
Commission approves Reckitt & Colman's acquisition of L&F pursuant to 
the Order in Docket No. C-3306.
    Reckitt & Colman would also be required to divest, at the option of 
the acquirer of the Carpet Deodorizer Assets, the rights to use the 
Airwick brand name in connection with the manufacture and sale of 
carpet deodorizer products. In addition, Reckitt & Colman would be 
required to divest manufacturing equipment and facilities associated 
with the Carpet Deodorizer Assets and Rug Cleaning Assets at the 
acquirer(s)' option.
    To help ensure the viability of the Carpet Deodorizer Assets and 
the Rug Cleaning Assets, Reckitt & Colman would be required to provide 
such personnel, information, assistance, advice, and training as are 
necessary to transfer these assets pursuant to the order and establish 
these businesses as viable, ongoing concerns. In addition, Reckitt & 
Colman would be required to assist the acquirer(s) in obtaining 
approvals for the transfer of all registrations, leases, licenses, 
certifications, permits, or other similar documents relating to the 
Carpet deodorizer Assets and the Rug Cleaning Assets.
    If Reckitt & Colman fails to divest the Carpet Deodorizer Assets 
during the allotted time, a trustee could be appointed to divest, 
within twelve (12) months, the Carpet Deodorizer Assets and, in 
addition, assets relating to Reckitt & Colman's air freshener products 
business (``Air Freshener Assets''). If Reckitt & Colman does not 
divest the Rug Cleaning Assets within the allotted time, a trustee 
could be appointed to divest, within twelve (12) months, the Rug 
Cleaning Assets and, in addition, assets relating to Reckitt & Colman's 
Woolite fabric care products business (``Woolite Assets''). If, at the 
end of twelve months, the trustee submitted a plan of divestiture or 
believed that divestiture could be achieved within a reasonable time, 
the time period for divestiture could be extended by the Commission, 
or, in the case of a court-appointed trustee, by the court. The 
Commission, however, may extend this period only two (2) times.
    A Hold Separate Agreement signed by a Reckitt & Colman provides 
that until divestiture of the Carpet Deodorizer Assets is completed, 
the Reckitt & Colman Carpet Deodorizer Assets and Air Freshener Assets 
businesses shall be held separate from and operated independently of 
Reckitt & Colman. The Hold Separate Agreement also provides that until 
the divestiture of the Rug Cleaning Assets required by the proposed 
order is completed, the L&F businesses being acquired by Reckitt & 
Colman shall be held separate from and operated independently of 
Reckitt & Colman.
    The proposed order would require Reckitt & Colman, for a period of 
ten (10) years, to obtain the prior approval of the Commission before 
acquiring any interest in any other company engaged in the development, 
production, distribution, or sale for resale of carpet deodorizer 
products in the United States.
    Under the proposed order, Reckitt & Colman would be required to 
provide to the Commission reports of its compliance with the 
divestiture provisions of the order sixty (60) days after the order 
becomes final and every sixty (60) days thereafter, until the 
divestitures have been completed.
    Additionally, one year from the date the order becomes final and 
annually thereafter for nine (9) years, Reckitt & Colman would be 
required to provide to the Commission a report of its compliance with 
the order.
    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.
Donald S. Clark,
Secretary.
[FR Doc. 95-759 Filed 1-12-95; 8:45 am]
BILLING CODE 6750-01-M