[Federal Register Volume 60, Number 18 (Friday, January 27, 1995)]
[Notices]
[Pages 5414-5428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2061]



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FEDERAL TRADE COMMISSION
[File No. 941-0043]


Montedison S.p.A., et al.; Proposed Consent Agreement With 
Analysis To Aid Public 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 
require, among other things, the Royal Dutch Petroleum Company and the 
Shell Group of Companies to divest all of Shell Oil's polypropylene 
assets to Union Carbide Corporation, or to another Commission approved 
acquirer, within six months; would require Montedison to relinquish 
revenues under the profit sharing agreement from future U.S. licenses 
by Mitsui Petrochemical Industries Ltd.; and would prohibit the company 
from entering into similar agreements.

DATES: Comments must be received on or before March 28, 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:
Howard Morse or Rhett Krulla, FTC/S-3627, Washington, D.C. 20580. (202) 
326-6320 or 326-2608.

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).

    In the matter of Montedison S.p.A., a corporation, HIMONT 
Incorporated, a corporation, Royal Dutch Petroleum Company, a 
corporation, The ``Shell'' Transport and Trading Company, p.l.c., a 
corporation, and Shell Oil Company, a corporation, File No. 941-
0043.

Agreement Containing Consent Order

    The Federal Trade Commission (``the Commission''), having initiated 
an investigation of the proposed formation of a joint venture between 
Montedison S.p.A. and HIMONT Incorporated (collectively ``Montedison'') 
and Shell Petroleum N.V., a holding company of the Royal Dutch/Shell 
Group of Companies (``the Shell Group'') controlled by N.V. Koninklijke 
Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company) 
(``Royal Dutch'') and The ``Shell'' Transport and Trading Company, 
p.l.c. (``Shell T&T''), that would merge certain assets and businesses 
of Montedison and of companies of the Shell Group and it now appearing 
that Royal Dutch, Shell T&T, and Shell Oil Company (``Shell Oil''), a 
company of the Shell Group, (collectively ``Shell'') and Montedison, 
all collectively hereinafter sometimes referred to as ``proposed 
respondents,'' are willing to enter into an agreement containing an 
order to exclude certain assets and businesses from the joint venture, 
to divest certain assets and businesses, and to cease and desist from 
making certain acquisitions, and providing for other relief:
    It is hereby agreed by and between proposed respondents, by their 
duly authorized officers and attorneys, and counsel for the Commission 
that:
    1. Proposed respondent Montedison S.p.A. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of Italy with its principal executive offices located at Foro 
Buonaparte, 31, 20121 Milan, Italy.
    2. Proposed respondent HIMONT Incorporated is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of [[Page 5415]] Delaware with its principal executive 
offices located at Three Little Falls Centre, 2801 Centerville Road, 
Wilmington, Delaware 19850-5439. HIMONT Incorporated is a wholly-owned, 
indirect subsidiary of Montedison S.p.A.
    3. Proposed respondent Royal Dutch is a corporation organized, 
existing and doing business under and by virtue of the laws of the 
Netherlands with its principal executive offices located at Carel van 
Bylandtlaan 30, The Hague, The Netherlands. Royal Dutch is a holding 
company which, together with Shell T&T, controls the Shell Group.
    4. Proposed respondent Shell T&T is a corporation organized, 
existing and doing business under and by virtue of the laws of England 
with its principal executive offices located at Shell Centre, London 
SE1 7NA, England. Shell T&T is a holding company which, together with 
Royal Dutch, controls the Shell Group.
    5. Proposed respondent Shell Oil is a corporation organized, 
existing and doing business under and by virtue of the laws of Delaware 
with its principal executive offices located at One Shell Plaza, 
Houston, Texas 77002. Shell Oil is a member company of the Shell Group, 
and all of its shares are directly or indirectly owned by Royal Dutch 
and Shell T&T.
    6. Proposed respondents admit, for purposes of this Agreement and 
Order and any related enforcement action, all the jurisdictional facts 
set forth in the draft of complaint.
    7. Proposed respondents waive:
    (a) any further procedural steps;
    (b) the requirement that the Commission's decision contains a 
statement of findings of fact and conclusions of law;
    (c) all rights to seek judicial review or otherwise to challenge or 
contest the validity of the Order entered pursuant to this Agreement; 
and
    (d) any claim under the Equal Access to Justice Act.
    8. 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 
released. The Commission thereafter may either withdraw its acceptance 
of this Agreement and so notify the proposed respondents, in which 
event it will take such action as it may consider appropriate, or issue 
and serve its complaint (in such forms as the circumstances may 
require) and decision, in disposition of the proceeding.
    9. This Agreement is for settlement purposes only and does not 
constitute an admission by proposed respondents that the law has been 
violated as alleged in the draft of complaint, or that the facts as 
alleged in the draft of complaint, other than jurisdictional facts 
admitted as specified above, are true.
    10. 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 the 
proposed respondents, (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 proposed respondents' 
attorneys of record, William C. Pelster, Esq., Skadden, Arps, Slate, 
Meagher & Flom, 919 Third Avenue, New York, NY 10022, for Montedison; 
Robert D. Joffe, Esq., Cravath, Swaine & Moore, 825 Eighth Avenue, New 
York, NY 10019, for Royal Dutch and Shell T&T and S. Allen Lackey, 
Esq., Shell Oil Company, One Shell Plaza, Houston, Texas 77252, for 
Shell Oil, shall constitute service. Proposed respondents waive any 
right they may have to any other manner of service. The complaint may 
be used in construing the terms of the Order, and no agreement, 
understanding, representation or interpretation not contained in the 
Order or this Agreement may be used to vary or contradict the terms of 
the Order.
    11. Proposed respondents have read the proposed complaint and Order 
contemplated hereby. Proposed respondents understand that once the 
Order has been issued, they will be required to file one or more 
compliance reports showing they have fully complied with the Order. 
Proposed respondents further understand that they may be liable for 
civil penalties in the amount provided by law for each violation of the 
Order after it becomes final.

Order

I

    It is ordered that, as used in this Order, the following 
definitions shall apply:
    A. The following terms shall mean the following entities:
    1. ``Montedison'' means Montedison S.p.A. and its wholly owned 
subsidiary Montedison (Nederland) N.V., a holding company that owns 
Montecatini Nederland B.V., which in turn owns, directly or indirectly, 
through its subsidiaries HIMONT Incorporated, Spherilene S.r.l., 
Moplefan S.p.A. and Montepolmieri Sud, S.p.A., all of the polyolefins 
interests of Montedison S.p.A. ``Montedison'' includes all 
subsidiaries, divisions, and groups and affiliates controlled by 
Montedison S.p.A., their respective successors and assigns, and their 
respective directors, officers, employees, agents and representatives. 
Unless otherwise indicated, ``Montedison'' does not include Montell.
    2. ``HIMONT'' means HIMONT Incorporated. ``HIMON'' includes all 
subsidiaries, divisions, and groups and affiliates controlled by 
HIMONT, their respective successors and assigns, and their respective 
directors, officers, employees, agents and representatives.
    3. ``Shell'' means N.V. Koninklijke Nederlandsche Petroleum 
Maatschappij (Royal Dutch Petroleum Company) (``Royal Dutch''), The 
``Shell'' Transport and Trading Company, p.l.c. (``Shell T&T''), and 
the Shell Group.
    4. ``The Shell Group'' means all companies controlled by Royal 
Dutch and/or Shell T&T, including Shell Oil and Shell Petroleum N.V. 
``The Shell Group'' includes all subsidiaries, divisions, and groups 
and affiliates controlled by companies of the Shell Group, Royal Dutch 
or Shell T&T, their respective successors and assigns, and their 
respective directors, officers, and agents and representatives. Unless 
otherwise indicated, ``the Shell Group'' does not include Montell.
    5. ``Shell Oil'' means Shell Oil Company. ``Shell Oil'' includes 
all subsidiaries, divisions, and groups controlled by Shell Oil, their 
respective successors and assigns, and their respective directors, 
officers, agents and representatives. Unless otherwise indicated, 
``Shell Oil'' does not include Polyco.
    6. ``Montell'' means Montell Polyolefins, the corporation to be 
formed, pursuant to the Agreement to Merge Polyolefins Businesses, to 
hold the majority of the polyolefins businesses of Montedison and of 
Shell and to be owned, directly or indirectly, [[Page 5416]] by 
Montedison and companies of the Shell Group. ``Montell'' includes all 
subsidiaries, divisions, and groups controlled by Montell, their 
respective successors and assigns, and their respective directors, 
officers, agents and representatives.
    7. ``Montell Affiliates'' means companies that Montell controls as 
that term is defined in 16 C.F.R. Sec. 801.1(b), except that this term 
shall also include (i) any entity other than Montell in which Shell or 
Montedison has an ownership interest of 25% or more as of December 1, 
1994 and which interest is contributed to Montell, and (ii) companies 
in which Montell has an ownership interest of 35% or more and would 
have control as defined in 16 CFR 801.1(b) if ownership interests held 
directly or indirectly by a government were excluded.
    8. ``Technipol'' means a company to be formed and held separate by 
Montedison under the terms and conditions of the attached Agreement to 
Hold Separate. ``Technipol'' includes all subsidiaries, divisions, and 
groups controlled by Technipol, their respective successors and 
assigns, and their respective directors, officers, agents and 
representatives.
    9. ``Polyco'' means a company to be formed by Shell Oil to succeed 
to and conduct, under the terms and conditions of this Order, the 
Properties to Be Divested. ``Polyco'' includes all subsidiaries, 
divisions, and groups controlled by Polyco, their respective successors 
and assigns, and their respective directors, officers, agents and 
representatives.
    10. ``Akzo Nobel'' means Akzo Nobel N.V., Akzo Nobel Inc., Akzo 
Chemicals BV and Akzo Chemicals Inc.
    11. ``Mitsui'' means Mitsui Petrochemical Industries Ltd.
    12. ``Union Carbide'' or ``UCC'' means Union Carbide Corporation.
    B. ``Commission'' means the Federal Trade Commission.
    C. ``Agreement to Merge Polyolefins Businesses'' means the 
agreement between Montedison and Shell Petroleum N.V. (a company of the 
Shell Group) dated December 30, 1993, and amendments thereto, to merger 
the majority of the worldwide polyolefins businesses of Montedison and 
of Shell into a new entity to be owned by Montedison and companies of 
the Shell Group.
    D. ``Propylene Polymers'' or ``PP'' means homopolymers of propylene 
and copolymers or polyolefinic alloys of propylene with less than 50% 
by mol of other monoolefins and having a flexural moduls (measured 
according to ASTM D 790-71) higher than 4,000 Kg/cm2.
    E. ``PP Catalyst'' means supported catalyst components including 
compounds of transition metals of Groups IV-VIII of the Periodic Table, 
at least in part supported on a carrier, the essential component of 
which is a halogen-containing compound of magnesium, for use in 
production of Propylene Polymers.
    F. ``Catalyst Support'' means preformed catalyst supports or 
support carriers which may be titanated, i.e., combined with titanium 
or with a titanium containing compound, to produce PP Catalyst.
    G. ``Catalyst Systems'' means specified combinations of PP Catalyst 
and other components designed, developed, used, or suitable for use for 
the production of Propylene Polymers.
    H. ``PP Technology'' means technology relating to Propylene 
Polymers and the production thereof, and to the preparation and use of 
Catalyst Systems.
    I. ``Catalyst Technology'' means technology relating to PP Catalyst 
and to the production, preparation and use of PP Catalyst, Catalyst 
Support and Catalyst Systems.
    J. ``Shell Catalyst Technology'' means Catalyst Technology, 
including Know-How and patent rights, developed, under development, 
used, offered for license or licensed to any person by companies of the 
Shell Group at any time prior to the date of transfer to Polyco of the 
Properties to Be Divested.
    K. ``Shell Oil Catalyst Technology'' means Catalyst Technology, 
including Know-How and patent rights, developed, under development, 
used, offered for license or licensed to any person by Union Carbide or 
Shell Oil at any time prior to that date of transfer to Polyco of the 
Properties to Be Divested.
    L. ``Unipol PP Technology'' means PP Technology and Catalyst 
Technology, including Know-How and patent rights, developed, under 
development, offered for license, or licensed to any person by UCC and/
or Shell Oil in accordance with their Cooperative Undertaking Agreement 
dated December 22, 1983, or used by UCC and Shell Oil in their 
partnership PP facility at Seadrift, Texas at any time prior to the 
date this Order becomes final.
    M. ``Unipol/SHAC Technology Business'' means the research and 
development, promotion, and licensing of Unipol PP Technology and Shell 
Oil Catalyst Technology; the research and development of PP Catalyst, 
Catalyst Support and Catalyst Systems utilizing Unipol PP Technology 
and Shell Oil Catalyst Technology; rights and obligations under, and 
activities conducted pursuant to, the Cooperative Undertaking Agreement 
between UCC and Shell Oil dated December 22, 1983, and the 
Polypropylene Catalyst Research and Development Agreement among Shell 
Oil, UCC and Shell Internationale Research Maatschappij B.V. (``The 
Tripartite Catalyst Research Agreement''); and the research and 
development, production and sale of Propylene Polymers, and the 
demonstration of Unipol PP Technology and Shell Oil Catalyst 
Technology, pursuant to the Seadrift Polypropylene Company partnership 
agreement between UCC and Shell Oil.
    N. ``LIPP Process'' means PP Technology developed and used by Shell 
for the production of Propylene Polymers through a bulk liquid 
polymerization process.
    O. ``Know-How'' means all relevant information, including 
knowledge, experience and specifications.
    P. ``Material Confidential Information'' means competitively 
sensitive or proprietary information, not in the public domain, 
concerning the PP Technology, Catalyst Technology, PP Catalyst, 
Catalyst Support, or Propylene Polymers businesses.
    Q. ``Properties to Be Divested'' means
    1. All assets, tangible and intangible, of Shell Oil relating to PP 
Technology, Catalyst Technology, Propylene Polymers and PP Catalyst, 
including without limitation:
    a. Shell Oil's Propylene Polymers plant and assets at Norco, 
Louisiana, and Shell Oil's associated facilities at Norco, Louisiana 
for splitting and separating polymer-grade propylene and propane from 
chemical-grade propylene;
    b. Shell Oil's PP Catalyst plant and assets at Norco, Louisiana;
    c. Shell Oil's interest in the Seadrift Polypropylene Company and 
the Propylene Polymers plant at Seadrift, Texas;
    d. Shell Oil's PP Catalyst pilot plant;
    e. Shell Oil's facilities and equipment (other than real property 
and general, chemical analytical equipment) at the Westhollow 
Technology Center at Houston, Texas, primarily utilized during the year 
prior to the transfer to Polyco of the Properties to Be Divested in 
research, development and technical support with respect to Shell Oil's 
Propylene Polymers, PP Catalyst and Catalyst Technology businesses;
    f. A rent-free lease, until five years from the date of divestiture 
of the Properties to Be Divested or until such earlier date as the 
acquirer may elect, to offices and research and development space at 
the Westhollow Technology Center at Houston, Texas, associated with the 
Properties to Be Divested; [[Page 5417]] 
    g. All owned or leased distribution facilities, rail cars and other 
assets used in sales or technical service of Propylene Polymers or PP 
Catalyst, other than real property at the headquarters offices, general 
sales offices, and research center of Shell Oil;
    h. All intellectual property, including patent rights, trade 
secrets, technology and Know-How, relating to Catalyst Technology, PP 
Catalyst, Catalyst Systems, and Propylene Polymers;
    i. All customer lists, vendor lists, catalogs, sales promotion 
literature, advertising materials, research materials, technical 
information, management information systems, software, inventions, 
specifications, designs, drawings, processes and quality control data;
    j. All interest in and to the contracts entered into in the 
ordinary course of business with customers (together with associated 
bid and performance bonds), suppliers, sales representatives, 
distributors, agents, personal property lessors, personal property 
lessees, licensors, licensees, consignors and consignees, including 
without limitation agreements with Shell Canada and Pecten, and rights 
under warranties and guarantees, express or implied;
    k. All books, records, and files;
    l. Shell Oil's interest in owned or leased real property associated 
with the Norco, Louisiana, and Seadrift, Texas, Propylene Polymers 
plants, together with appurtenances, licenses and permits;
    m. Shell Oil's interest in owned or leased improvements to real 
property associated with the Norco, Louisiana, PP Catalyst plant, 
together with appurtenances, licenses and permits, and a rent-free 
lease to the land associated with the PP Catalyst plant for the life of 
the plant;
    n. Shell Oil's interest in the Unipol/SHAC Technology Business and 
in the Cooperative Undertaking Agreement dated December 22, 1983, 
including but not limited to all future revenue of Shell Oil from 
Unipol PP Technology and Shell Catalyst Technology developed, under 
development, offered for license, or licensed to any person by UCC or 
Shell Oil at any time prior to the date of transfer to Polyco;
    o. Exclusive world-wide rights to all Shell Oil trademarks and 
trade names relating to Propylene Polymers other than Shell Oil 
trademarks used by Shell Oil for its products generally, such as the 
``SHELL'' mark and the Pecten emblem;
    p. All licenses relating to the manufacture and sale of Propylene 
Polymers and PP Catalyst or the licensing of PP Technology or Catalyst 
Technology, including but not limited to Shell Oil's rights under the 
following patents:
    (1) All applicable patents of Shell;
    (2) All patents of Montedison and Mitsui covered by the July 30, 
1985 Agreement of Himont Incorporated, Mitsui, Union Carbide 
Corporation, and Shell Chemical Company; any patent license agreements 
between Montedison and Shell; and any patent license agreements between 
Mitsui and Shell;
    (3) Phillips U.S. Patent 4,376,851 ``crystalline polypropylene'';
    (4) Studiengesellschaft Kohle U.S. Patent 4,125,698 covering 
production of PP with a titanium chloride/DEAC catalyst; and
    (5) Amoco Chemical Company patents covering ``PP Catalyst'' 
identified in the patent license agreement between Amoco and Shell Oil, 
including Amoco U.S. Patent 4,540,679; Japan Patent Application 59350/
85 and European Patent Application 159,150; and
    q. Shell Oil's rights under he Tripartite Catalyst Research 
Agreement; the Polypropylene Agreement between Shell Research Limited 
and Shell Oil Company; the PP Catalyst Patent Settlement Agreement 
between Shell Internationale Research Maatschappij B.V. and Shell Oil 
Company; and the July 30, 1985 Agreement of Himont Incorporated, 
Mitsui, Union Carbide Corporation, and Shell Chemical Company, subject 
to any necessary approval of parties not subject to this Order; and
    2. All Shell's worldwide rights to the ``SHAC'' trademark; all 
customer lists, records and files, all catalogs, and all sales 
promotion literature relating to sales by Shell outside the United 
States of PP Catalyst and Propylene Polymers manufactured by Shell Oil; 
and all interest in and to contracts entered into by Shell in the 
ordinary course of business with customers, sales representatives, 
distributors and agents relating to the sale, outside the United 
States, of PP Catalyst or Propylene Polymers manufactured by Shell Oil 
(together with associated bid and performance bonds).
    R. ``Viability and competitiveness'' means having the capability 
and incentive to operate independently at annual levels of research and 
development, licensing, production, and sales of PP Technology, 
Catalyst Technology, PP Catalyst, Catalyst Support and Propylene 
Polymers at least equal to levels experienced during each of the two 
(2) calendar years immediately preceding the date of transfer to Polyco 
of the Properties to Be Divested, and capable through its own resources 
of functioning independently and competitively in the PP Technology, 
Catalyst Technology, PP Catalyst, and Propylene Polymers businesses.

II

    It is further ordered that:
    A. Shell and Shell oil, as applicable, shall divest the Properties 
to Be Divested, 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 businesses and effect such 
arrangements as are necessary to assure the marketability and the 
Viability and Competitiveness of the Properties to Be Divested.
    B. The period of six (6) months as specified in Paragraph II.A 
shall be extended to March 31, 1997, if either of the following 
conditions is satisfied:
    1. Union Carbide declines, within thirty (30) days following 
receipt by Union Carbide of the report of the independent appraiser, to 
acquire the Properties to Be Divested for the fair market value of the 
Properties to Be Divested as an operating business as determined by an 
independent appraisal prepared in accordance with the following 
procedure, or as otherwise agreed, or at such price as agreed, by Shell 
Oil and Union Carbide:
    a. Prior to the expiration of fifteen (15) days from the date this 
Order becomes final shell Oil will notify Union Carbide of Shell Oil's 
selection of an independent appraiser;
    b. The independent appraiser selected by Shell Oil will perform the 
appraisal unless within fifteen (15) days from notification of Shell 
Oil's selected independent appraiser, Union Carbide objects to Shell 
Oil's selected independent appraiser and notifies Shell Oil of its 
selection of an independent appraiser;
    c. Within fifteen (15) days from the date the name of Union 
Carbide's selected independent appraiser is received by Shell Oil, 
Shell Oil will either agree to Union Carbide's selected independent 
appraiser or request that the two selected independent appraisers 
jointly select, within ten (10) days of such request, another 
independent appraiser;
    d. The compensation paid to the independent appraiser shall be paid 
by shell Oil or as otherwise agreed by Shell Oil and Union Carbide, and 
the amount of compensation shall be independent of the amount of the 
fair market value of the properties to Be Divested as determined by the 
appraisal;
    e. The independent appraiser shall be authorized by Shell to 
question [[Page 5418]] personnel and examine all relevant books and 
records, including personnel and books and records of the Unipol/SHAC 
Technology Business, in connection with the appraisal under appropriate 
confidentiality provisions;
    f. The independent appraisal shall be completed and presented by 
the appraiser to Union Carbide and Shell Oil within forty-five (45) 
days of the selection of the appraiser as set forth in this Paragraph 
II.B.1 of this Order; or
    2. Union Carbide, within (30) days of receiving notice from Shell 
Oil that Shell proposes to divest Polyco to a named acquirer approved 
by the Commission, does not consent to the transfer of Polyco's 
interest in the Cooperative Undertaking Agreement dated December 22, 
1983, to such Commission approved acquirer.
    C. In the event that, prior to the expiration of the six (6) months 
specified in Paragraph II.A of this Order, the Commission has neither 
approved nor disapproved, within sixty (60) days of receipt of the 
application, an application for approval of a divestiture to a proposed 
acquirer submitted in accordance with Paragraphs II.A and II.F of this 
Order, the time period specified in Paragraph II.A of this Order may be 
extended by the Commission by the number of days in excess of sixty 
(60) required by the Commission to rule on the divestiture application 
and, if the Commission approves divestiture to a person other than 
Union Carbide, the Commission may further extend such period, if 
necessary, by thirty (30) days in order to provide Shell Oil time to 
comply with the requirements of Paragraph II.B.2 of this Order.
    D. Provided further, if at the instance of Union Carbide over the 
opposition of Shell, Shell is enjoined or otherwise prohibited by court 
order from divesting the Properties to Be Divested, Shell shall 
promptly give written notice of such order to the Commission, whereupon 
the period within which Shell shall divest the Properties to Be 
Divested under Paragraphs II.A, II.B or II.C of this Order shall be 
extended to the earlier of (1) one year from the expiration of the time 
specified in Paragraph II.A of this Order and such additional time as 
may be allowed in Paragraphs II.B or II.C of this Order; or (2) ninety 
(90) days after the injunction or other order expires.
    E. Respondents shall comply with all terms of the Agreement to Hold 
Separate, attached to this order and made a part hereof as Appendix I. 
Said Agreement shall continue in effect until such time as Shell and 
Shell Oil, as applicable, have divested all the Properties to Be 
Divested or until such other time as the Agreement to Hold Separate 
provides. Profits accumulated by Technipol during the period the 
Agreement to Hold Separate is in effect shall be retained by Montedison 
upon expiration of the Agreement to Hold Separate and shall in no event 
be transferred to Montell or Shell.
    F. Shell and Shell Oil, as applicable, shall divest the Properties 
to Be Divested as an incorporated, ongoing business, identified herein 
as ``Polyco'' and established in accordance with the attached Agreement 
to Hold Separate, and shall divest the Properties to Be Divested only 
to Union Carbide or to another acquirer or acquirers that receive 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 Polyco as an ongoing and viable business 
engaged in the research, development, manufacture and sale of PP 
Catalyst and Propylene Polymers and in the research, development, and 
licensing of PP Technology and Catalyst Technology, and to remedy the 
lessening of competition resulting from the proposed acquisition as 
alleged in the Commission's complaint.
    G. The Properties to Be Divested shall be divested free and clear 
of (1) all royalties, mortgages, encumbrances and liens to Shell or 
Montell; and (2) any contractual commitments or obligations to Shell or 
Montell existing as of the date of divestiture.
    H. Should any transfer of an agreement, contract or license 
required by Paragraph II.A of this Order not be possible after 
reasonable effort by Shell and Shell Oil due to a person other than a 
party to this Order withholding its consent to the transfer, Shell Oil 
shall enter into an agreement with Polyco or the acquirer thereof the 
purpose of which agreement is to realize the same effect as such 
transfer. Shell Oil shall submit a copy of each such agreement with its 
compliance reports to the Commission pursuant to Paragraphs VIII.A and 
VIII.B of this Order. Further, Shell Oil shall secure, at its expense, 
patent licenses, or assignments of patent licenses, extending to Polyco 
and the acquirer thereof rights and royalty rates with respect to the 
manufacture and sale of Propylene Polymers and PP Catalyst from the 
Properties to Be Divested, and rights to expand production and sale, no 
less favorable than those held by Shell Oil as of the date of transfer 
to Polyco of the Properties to Be Divested.

III

    It is further ordered that:
    A. Prior to transfer of any assets or businesses from Shell into 
Montell or merger of any part of Shell and Montell or Montedison, Shell 
shall
    1. Extend to Polyco, without royalty to Shell or Montell, Shell's 
rights under agreements relating to the research and development, 
manufacture and sale of PP Catalyst, Catalyst Support, and Catalyst 
Systems by any person, including but not limited to nonexclusive rights 
to sell, and to contract with Akzo Nobel for the production of, PP 
Catalyst and Catalyst Support;
    2. Disclose to Polyco all Shell Catalyst Technology in its 
possession or to which it has rights;
    3. Grant Polyco, without royalty to Shell or Montell, the 
perpetual, non-exclusive right (1) to license, subject to the rights of 
Union Carbide, Shell Catalyst Technology to any person worldwide; (2) 
to sell worldwide to any person PP Catalyst and Catalyst Systems based 
on Shell Catalyst Technology; and (3) to enforce intellectual property 
rights with respect to Shell Catalyst Technology worldwide, including 
without exclusion the right to sue any person who by the manufacture, 
use or sale of any PP Catalyst or Catalyst System infringes any Shell 
patent which has been applied for in any country in the world before 
the date this Order becomes final. All costs of any such suit by Polyco 
shall be borne by Polyco and all damages recovered shall be retained by 
Polyco; and
    4. Gant Polyco, without royalty to Shell or Montell, the exclusive 
right, until seven years from the date of divestiture of the Properties 
to Be Divested, (1) to license, subject to the rights of Union Carbide, 
Shell Catalyst Technology to persons other than Montell and Montell 
Affiliates; and (2) to sell to persons other than Montell and Montell 
Affiliates (or LIPP Process licensees for use in their LIPP Process 
plants) such PP Catalyst formulations or their equivalent as were 
manufactured or sold by Shell, or manufactured for Shell by Akzo Nobel, 
prior to the date this Order becomes final; and
    B. Shell and Montell shall grant to Polyco and licensees of Unipol 
PP Technology immunity under patents relating to PP Technology, 
Catalyst Technology, PP Catalyst, Catalyst Support, Catalyst Systems or 
Propylene Polymers, based on work conducted prior to December 31, 1997, 
or prior to one year after divestiture of the Properties to Be 
Divested, whichever is later, by persons who, as Shell personnel within 
one (1) year prior to the date of the formation of Montell, had access 
to Unipol PP Technology other [[Page 5419]] than in the public domain 
and other than Catalyst Technology received by Shell Oil from other 
companies of the Shell Group.
    C. Until one (1) year after divestiture of the Properties to Be 
Divested no Shell research personnel who, within one (1) year prior to 
the date of the formation of Montell, had access to Unipol PP 
Technology (other than Catalyst Technology received by Shell Oil from 
other companies of the Shell Group) shall engage in research at 
facilities of Montell on PP Technology, Shell Catalyst Technology or 
Montedison Catalyst Tchnology. Provided, however, nothing in this Order 
shall require Shell to conduct any research and development for any 
person or to refrain from conducting research and development for, and 
at the expense of, any person, including Montell and communicating 
with, or receiving communications from, such person regarding such 
research and development work. The results of any research and 
development conducted by Shell prior to December 31, 1997, or one year 
after divestiture of the Properties to Be Divested, whichever is later, 
on Shell Catalyst Technology, including but not limited to research or 
development conducted for, or at the expense of, Montell, shall be 
provided to Polyco without payment for use in the Unipol/SHAC 
Technology Business.
    D. Shell (including former employees of Shell transferred to 
Montell) shall not provide, disclose or otherwise make available to 
Montedison, Technipol, Montell or Montell Affiliates any Material 
Confidential Information relating to Unipol PP Technology or the 
Unipol/SHAC Technology Business (other than Catalyst Technology 
received by Shell Oil from other companies of the Shell Group), 
provided however nothing in this Paragraph III.D of this Order shall 
prohibit (1) Montell Affiliates who are licensees of Unipol PP 
Technology from receiving information, in accordance with such license, 
for use in their Unipol PP Technology licensed production facilities, 
including information obtained by Shell, prior to the formation of 
Montell, under The Tripartite Catalyst Research Agreement; and (2) any 
communication between Shell and Montell necessary to ensure that 
Montell and its employees make no unauthorized use or disclosure of any 
Material Confidential Information.
    E. Until two (2) years after divestiture of the Properties to Be 
Divested, Shell, Montell and Technipol shall not employ, or make offers 
of employment to, any person employed by Shall Oil whose principal 
duties, during the year prior to the date of transfer to Polyco of the 
Properties to Be Divested, related to the management, development or 
operation of the Properties to Be Divested. This provision, however, 
does not apply to employment by Shell Oil of any employee who is 
terminated by Polyco or by the acquirer of the Properties to Be 
Divested or who is not offered employment by Polyco or by the acquirer 
of the Properties to Be Divested at a base salary that is at least 
equivalent, and incentives and benefits that are comparable, to those 
held by the employee prior to the divestiture of the Properties to Be 
Divested. Provided, however, Shell Oil shall not be required to, but 
may, terminate employment of any employee who refuses to accept 
employment with Polyco; Shell Oil shall substitute alternative 
personnel or equivalent qualifications, education and experience for 
any persons declining to accept employment with Polyco who are not 
terminated by Shell. Shell Oil shall encourage and facilitate 
employment by Polyco or by the acquirer of the Properties to Be 
Divested of employees whose principal duties, during the year prior to 
the date of transfer to Polyco of the Properties to Be Divested, 
related to the management, development or operation of the Properties 
to Be Divested; shall not offer any incentive to such employees to 
decline employment with Polyco or with the acquired or the Properties 
to Be Divested or to accept other employment in Shell; and shall remove 
any impediments that exist which may deter such employees from 
accepting employment with Polyco or with the acquirer of the Properties 
to Be Divested, including but not limited to the payment for the 
benefit of the employees of all accrued bonuses, pensions and other 
accrued benefits to which such employees are entitled as of the date of 
the divestiture. Shall Oil shall not impose any loss of pension 
benefits on employees to which such employees are entitled under the 
Shell Oil pension plan as administered under ERISA.

IV

    It is further ordered that from the date this Order becomes final 
and continuing until three (3) years following the date of the 
divestiture required by this Order, Shell shall, at Polyco's request or 
at the request of the acquirer of the Properties to Be Divested, 
contract with Polyco or the acquirer of the Properties to Be Divested 
to supply to Polyco or the acquirer propylene monomer, in such 
quantities and product grade as Polyco or the acquirer may request for 
use in the Properties to Be Divested subject only to the capacity and 
grade constraints of Shell's propylene monomer production facilities in 
the United States and preexisting contractual obligations to persons 
other than Shell, Montedison, and Montell. The price, terms, and 
conditions at which Shell shall supply any grade of propylene monomer 
to Polyco and to the acquirer of the Properties to Be Divested shall be 
no less favorable to Polyco and the acquirer of the Properties to Be 
Divested than the price, terms, and conditions at which Shell supplies 
such grade of propylene monomer, directly or indirectly, to Montell in 
North America, through exchange or otherwise.

V

    It is further ordered that:
    A. If Shell or Shell Oil, as applicable, has not divested, 
absolutely and in good faith and with the Commission's prior approval, 
the Properties to Be Divested within the time required by Paragraph 
II.A of this Order or within such additional time as may be allowed in 
Paragraphs II.B, II.C or II.D of this Order, the Commission may appoint 
a trustee to divest the Properties to Be Divested. In the event that 
the Commission or the Attorney General brings an action pursuant to 
Sec. 5(l) of the Federal Trade Commission Act, 15 U.S.C. 45(l), or any 
other statute enforced by the Commission, Shell 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 5(l) of the Federal Trade Commission 
Act, or any other statute enforced by the Commission, for any failure 
by Shell to comply with this Order.
    B. If a trustee is appointed by the Commission or a court pursuant 
to Paragraph V.A of this Order, Shell 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 Shell, which consent shall not be unreasonably withheld. The trustee 
shall be a person with experience and expertise in acquisitions and 
divestitures. If Shell 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 Shell of the 
identity of any proposed trustee, [[Page 5420]] Shell 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 Properties 
to Be Divested.
    3. Within ten (10) days after appointment of the trustee, Shell 
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 
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 V.B.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 Properties to 
Be Divested or to any other relevant information, as the trustee may 
request. Shell and Polyco shall develop such financial or other 
information as such trustee may request and shall cooperate with the 
trustee. Shell and Polyco shall take no action to interfere with or 
impede the trustee's accomplishment of the divestitures. Any delays in 
divestiture caused by Shell or Polyco shall extend the time for 
divestiture under this Paragraph in an amount equal to the delay, as 
determined by the Commission or, in the case of 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 Shell's absolute and 
unconditional obligation to divest at no minimum price. The divestiture 
shall be made in the manner and to the acquirer or acquirers as set out 
in Paragraph II.A of this Order; provided, however, if the trustee 
receives bona fide offers from more than one acquiring entity, and if 
the Commission determines to approve more than one such acquiring 
entity, the trustee shall divest to the acquiring entity or entities 
selected by Shell from among those approved by the Commission.
    7. The trustee shall serve, without bond or other security, at the 
cost and expense of Shell, on such reasonable and customary terms and 
conditions as the Commission or a court may set. The trustee shall have 
the authority to employ, at the cost and expense of Shell, 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 or, 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 Shell 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 Properties to Be Divested.
    8. Shell shall indemnify the trustee and hold the trustee harmless 
against any liabilities, losses, claims, damages, 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, claims, damages, 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 V.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 Properties to Be Divested pending completion of the 
divestiture.
    12. The trustee shall report in writing to Shell Oil and the 
Commission every sixty (60) days concerning the trustee's efforts to 
accomplish divestiture.

VI

    It is further ordered that:
    A. Royal Dutch, Shell T&T and Montedison shall obligate Montell, 
Montedison shall obligate Technipol, and Shell Oil shall obligate 
Polyco, to be bound by this Order and insure compliance with this Order 
by Montell, Technipol and Polyco, respectively.
    B. Shell, Montedison and Montell shall not restrict any Montell 
Affiliate from licensing PP Technology or Catalyst Technology from the 
Unipol/SHAC Technology Business or Technipol or from purchasing PP 
Catalyst or Catalyst Systems from Polyco or Technipol.
    C. Polyco shall not withhold its consent, except for good cause, to 
Union Carbide to grant or negotiate license fees and royalty rates 
below those minimums specified in the Cooperative Undertaking Agreement 
dated December 22, 1983, and attachments thereto.
    D. Shell, Montedison, Montell and Technipol shall not enter into or 
renew any agreement or understanding with any developer or licensor of 
PP Technology or Catalyst Technology or any manufacturer, or seller of 
PP Catalyst, Catalyst Support, or Catalyst Systems limiting the 
geographic area within which, or limiting the persons to whom, such 
person may license PP Technology or Catalyst Technology or may 
manufacture and sell PP Catalyst, Catalyst Support, or Catalyst 
Systems, unless such agreement or understanding relates exclusively to 
markets other than the United States and has no effect on United States 
commerce, including but not limited to export commerce. Nothing in this 
Paragraph VI.D shall prohibit Shell, Montedison, Montell or Technipol 
from legitimately designating a sales agent for the sale of, or 
contract manufacturer for the production of, PP Catalyst or Propylene 
Polymers in any geographic area, or from limiting the persons, 
geographic area or uses for which they respectively grant legitimate 
licenses of their PP Technology or Catalyst Technology.
    E. Montedison, Montell and Technipol shall not (1) enforce any 
provision in any agreement with Mitsui providing for sharing of 
royalties with respect to licenses granted by Mitsui after the date 
this Order becomes final for use of PP Technology and Catalyst 
Technology in the United States in Propylene Polymers plants and in the 
production of Propylene Polymers; or (2) enter into or renew any 
agreement with Mitsui providing for sharing of royalties with respect 
to licensing of PP Technology or Catalyst Technology in the United 
States for use in Propylene Polymers plants and in the production of 
Propylene Polymers.

VII

    It is further ordered that, for a period of ten (10) years from the 
date this Order [[Page 5421]] becomes final, Shell, Montedison and 
Montell shall not, without the prior approval of the Commission, 
directly or indirectly, through subsidiaries, partnerships, or 
otherwise:
    A. Acquire any stock, share capital, equity, or other interest in 
any concern, corporate or non-corporate, other than the acquisition by 
Shell or Montedison of additional shares of Montell, engaged in at the 
time of such acquisition, or within two (2) years preceding such 
acquisition engaged in,
    1. the research and development (other than only implementation of 
technology licensed from others), or sale or licensing to any person, 
of PP Technology or Catalyst Technology anywhere in the world;
    2. the research and development, sale, or manufacture for sale of 
PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the 
world; or
    3. the manufacture or sale of Propylene Polymers in the United 
States or Canada; or
    B. Acquire any assets used for or previously used for (and still 
suitable for use for)
    1. the research and development (other than only implementation of 
technology licensed from others), or sale or licensing to any person, 
of PP Technology or Catalyst Technology anywhere in the world;
    2. the research and development, sale, or manufacture for sale of 
PP Catalyst, Catalyst Support, or Catalyst Systems anywhere in the 
world; or
    3. the manufacture or sale of Propylene polymers in the United 
States or Canada.
    Provided, however, these prohibitions shall not relate to the 
construction of new facilities or the acquisition of new or used 
equipment in the ordinary course of business from a person other than 
the persons referred to in Paragraph VII.A of this Order. Provided, 
further that this Paragraph VII of this Order shall not apply to the 
acquisition of Technipol by Montell following completion of the 
divestiture of the Properties to Be Divested and expiration of the 
attached Hold Separate Agreement.

VIII

    It is further ordered that:
    A. Within sixty (60) days from the date this Order becomes final 
and every sixty (60) days thereafter until Shell has fully complied 
witht he provisions of Paragraphs II and V of this Order, Shell Oil 
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 and V of this Order. 
Shell Oil 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 and V of the Order, including a 
description of all substantive contacts or negotiations for the 
divestitute and the identity of all parties contacted. Shell Oil 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 divestiture.
    B. One (1) year from the date this Order becomes final, annually 
for the next nine (9) years on the anniversary of the date this Order 
becomes final, and at other times as the Commission may require, Royal 
Dutch, Shell Oil, Montendison and Montell shall each 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 this Order.

IX

    It is further ordered that Royal Dutch, Shell T&T, Shell Oil, 
Montedison and Montell shall each notify the Commission at least thirty 
(30) days perior to any proposed change in such company, 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 such company that may affect compliance obligations 
arising out of this Order.

X

    It is further ordered that, for the purpose of determining or 
securing compliance with this Order, and subject to any legally 
recognized privilege, upon written request, and on reasonable notice, 
Shell, Montedison and Montell shall each permit any duly authorized 
representative of the Commission:
    A. Access, during office hours and in the presence of counsel, to 
inspect and copy all books, ledgers, accounts, correspondence, 
momoranda, and other records and documents in the possession or under 
the control of Shell, Montendison or Montell, as applicable, relating 
to any matters contained in this Order; and
    B. Upon five (5) days notice to Shell, Montedison or Montell and 
without restraint or interference from it, to interview its officers, 
directors or employees, who may have counsel present, regarding such 
matters.

XI

    It is further ordered that this Order shall terminate twenty (20) 
years from the date this Order becomes final.

Attachment I

    In the Matter of: Montedison S.p.A., a corporation, HIMONT 
Incorporated, a corporation, Royal Dutch Petroleum Company, a 
corporation, The ``Shell'' Transport and Trading Company, p.l.c., a 
corporation, and Shell Oil Company, a corporation, File No. 941-
0043.

Agreement to Hold Separate

    This Agreement to Hold Separate (``Agreement'') is by and among 
Montedison S.p.A., a corporation organized, existing and doing business 
under the laws of Italy with its principal executive offices located at 
Foro Buonaparte, 31, 20121 Milan, Italy, and its wholly-owned 
subsidiary, HIMONT Incorporated, a corporation organized, existing and 
doing business under the laws of the State of Delaware with its 
principal executive offices located at Three Little Falls Centre, 2801 
Centerville Road, Wilmington, Delaware 19850-5439 (collectively 
``Montedison''); Royal Dutch Petroleum Company, a corporation 
organized, existing and doing business under the laws of the 
Netherlands with its principal executive offices located at Carel van 
Bylandtlaan 30, The Hague, The Netherlands, and The ``Shell'' Transport 
and Trading Company, p.l.c., a corporation organized, existing and 
doing business under the laws of England with its principal executive 
offices located at Shell Centre, London SE1 7NA, England, and their 
wholly-owned subsidiary, Shell Oil Company, a corporation organized, 
existing and doing business under the laws of the State of Delaware 
with its principal executive offices located at One Shell Plaza, 
Houston, Texas 77002 (collectively ``Shell''); 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 or about December 30, 1993, Montedison and Shell 
Petroleum N.V., a holding company of the Shell Group, entered into an 
agreement providing for the merger (hereinafter the ``Acquisition'') of 
the majority of the polyolefin assets and businesses of Montedison 
(hereinafter the ``Montedison Merged Assets'') and the majority of the 
polyolefin assets and [[Page 5422]] businesses of Shell (hereinafter 
the ``Shell Merged Assets''); and
    Whereas, Montedison and Shell each develop a license PP Technology 
and Catalyst Technology and each develop, manufacture and sell PP 
Catalyst and Propylene Polymers; and
    Whereas, Montedison will establish Technipol and hold Technipol 
separate from Montell in accordance with the Decision of the Commission 
of the European Communities in Case No. IV/M. 269-SHELL/MONTECATINI; 
and
    Whereas, the Commission is now investigating the Acquisition to 
determine if it would violate any of the statutes enforced by the 
Commission; and
    Whereas, if the Commission accepts the attached Agreement 
Containing Consent Order (``Consent Order''), which would require the 
divestiture of certain assets, the Commission must place the Consent 
Order on the public record for a period of at least sixty (60) days and 
may subsequently withdraw such acceptance pursuant to the provisions of 
Section 2.34 of the Commission's Rules; and
    Whereas, the Commission is concerned that if an understanding is 
not reached, preserving the status quo ante of the Montedison Merged 
Assets and the Shell Merged Assets, respectively, during the period 
specified in Paragraph 4 of this Agreement, 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 Properties to Be Divested as 
described in Paragraph I.Q of the Consent Order and the Commission's 
right to have the Properties to Be Divested continue as a separate, 
viable and independent entity; and
    Whereas, the purpose of this Agreement and the Consent Order is to:
    (i) Ppreserve the Properties to Be Divested, also referred to 
herein as ``Polyco,'' as a viable business independent from Montedison, 
pending the divestiture of the Properties to Be Divested as a viable 
and ongoing enterprise;
    (ii) Preserve Technipol as a viable business independent from 
Shell, pending the divestiture of the Properties to Be Divested as a 
viable and ongoing enterprise; and
    (iii) Remedy any anticompetitive effects of the Acquisition; and
    Whereas, Montedison's and Shell's entering into this Agreement 
shall in no way be construed as an admission by Montedison and Shell 
that the Acquisition is illegal, and this Agreement shall in no way be 
construed as limiting in any way the obligations of Montedison and 
Shell pursuant to the Decision of the Commission of the European 
Communities in Case No. IV/M. 269-SHELL/MONTECATINI; and
    Whereas, Montedison and Shell understand that no act or transaction 
contemplated by this Agreement shall be deemed immune or exempt from 
the provisions of the antitrust laws or the Federal Trade Commission 
Act by reason of anything contained in this Agreement.
    Now, therefore, upon understanding that the Commission has not yet 
determined whether the Acquisition will be challenged, and in 
consideration of the Commission's agreement that, unless the Commission 
determines to reject the Consent Order, the Commission will not seek a 
temporary restraining order, preliminary injunction, or permanent 
injunction with respect to the Acquisition, and in recognition that the 
Commission may exercise any and all rights to enforce this Agreement 
and the Consent Order to which it is annexed and made a part thereof, 
and, in the event the required divestiture is not accomplished, to seek 
divestiture of the Properties to Be Divested and such other relief as 
the Commission may consider appropriate, the Parties agree as follows:
    1. Montedison and Shell agree that from the date this Agreement is 
signed by Shell and Montedison until the earliest of the dates listed 
in Paragraphs 1.a or 1.b, they each will comply with the provisions of 
this Agreement:
    a. Ten 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 required by the Consent Order has 
been completed.
    2. Montedison, Royal Dutch, Shell T&T and Shell Oil agree to 
execute and be bound by the attached Agreement Containing Consent Order 
and to comply, from the date this Agreement is accepted, with the 
provisions of the Consent Order as if it were final.
    3. The terms capitalized herein shall have the same definitions as 
in the Consent Order. In addition, the following terms used herein 
shall have the following definitions:
    a. ``Montedison PP Technology'' means PP Technology and Catalyst 
Technology, including Know-How and patent rights, developed, under 
research and development, used, offered for license, or licensed to any 
person by Montedison at any time prior to the date of transfer to 
Technipol of the Montedison Properties to Be Transferred. For purposes 
of this Agreement Catalloy process and related catalyst technology and 
technology concerning the production of PP Catalyst or the production 
of any other component of Catalyst Systems shall be excluded from 
``Montedison PP Technology.''
    b. ``Montedison Properties to Be Transferred'' means the 
businesses, rights and interests, and other assets, tangible and 
intangible, required to be transferred from Montedison to Technipol 
pursuant to Paragraph 8 of this Agreement.
    c. ``Existing Montedison Licenses'' means licenses of Montedison PP 
Technology to persons other than Montell Affiliates in effect as of the 
date of transfer to Technipol of the Montedison Properties to Be 
Transferred and includes so-called ``catalyst use know-how licenses,'' 
``process know-how licenses'' and ``patent licenses.''
    d. ``Improvements'' means all refinements, optimizations, or new 
technical developments, patentable or unpatentable, of Know-How, PP 
Technology and Catalyst Technology, with commercial application, other 
than Major Advances.
    e. ``Major Advances'' means all new technical developments of and 
changes, patentable or unpatentable, to existing Know-How, PP 
Technology and Catalyst Technology with commercial application, of the 
type generally recognized in the industry as revolutionary or of major 
consequence and would, upon commercial implementation, (a) reduce 
production costs of Propylene Polymers by at least one (1) cent per 
pound; (b) significantly increase the quality, productivity or selling 
potential of the PP Catalyst, Catalyst Support or Catalyst System, or 
the quality or selling potential of the Propylene Polymers; or (c) 
enable production of new Propylene Polymers commercially competitive 
primarily in end-uses for which Propylene Polymers produced and sold 
commercially have not been previously suitable for technological 
reasons. Major Advances include, for example:
    i. In the case of PP Technology, elimination of a unit operation, 
addition of a unit operation, or introduction of a new comonomer or 
additive;
    ii. In the case of PP Catalyst, a change in the major type of 
Catalyst Support;
    iii. In the case of Catalyst Systems, a change in the major type of 
components [[Page 5423]] or elimination of one component together with 
a type change in another component; and
    iv. In the case of Propylene Polymers, new compositions or types 
that display chemical and physical properties not previously achievable 
by the relevant technology.
    4. Montedison and Shell agree that from the date this Agreement is 
signed by Montedison and Shell until March 1, 1995, Montedison will 
hold the Montedison Merged Assets separate and apart from Shell and 
from Montell, and Shell will hold the Shell Merged Assets separate and 
apart from Montedison and from Montell.
    5. Commencing prior to, or concurrently with, transfer to Montell 
of the Shell Merged Assets, Shell will hold the Properties to Be 
Divested as they are presently constituted (hereafter ``Polyco'') 
separate and apart on the following terms and conditions:
    a. Shell and Shell Oil, as applicable, shall transfer to Polyco all 
ownership and control of the Properties to Be Divested. Polyco shall be 
held separate and apart and shall be operated independently of Shell 
(meaning here and hereinafter, Shell excluding Polyco and excluding all 
personnel connected with Polyco as of the date this Agreement is 
signed) except to the extent that Shell Oil must exercise direction and 
control over Polyco to assure compliance with this Agreement or with 
the Consent Order.
    b. Shell Oil shall separately incorporate Polyco and cause Polyco 
to adopt new Articles of Incorporation and By-laws and any other 
required documents for Polyco that are not inconsistent with other 
provisions of this Agreement. Shall Oil shall also elect a new six-
person board of directors of Polyco (``New Board'') prior to, or 
concurrently with, transfer of any assets or businesses from Shell into 
Montell or merger of any part of Shell and Montell or Montedison. 
Questions before the New Board shall be approved by a simple majority 
of the directors voting on the matter, provided that Polyco shall 
engage in no transaction that is precluded by this Agreement or by the 
Consent Order. Shell Oil may elect the directors to the New Board; 
provided, however, that such New Board shall consist of at least three 
outside directors neither previously nor currently employed by Shell or 
Montedison; two officers of Polyco; and a maximum of one Shell Oil (but 
not Royal Dutch, Shell T&T or Montell) director, officer, employee, or 
agent; provided, further, that such Shell Oil director, officer, 
employee or agent shall enter into a confidentiality agreement in 
accordance with the provisions of Paragraph 5.h hereof and shall not be 
a person involved in Shell or Montell's Propylene Polymers or PP 
Catalyst businesses, as defined in Paragraph I. of the Consent Order. 
Such director who is also a Shell Oil director, officer, employee or 
agent shall participate in matters that come before the New Board only 
for the limited purpose of carrying out Shell Oil's and Polyco's 
responsibilities under this Agreement or under the Consent Order. Shell 
Oil will take no action to delay or limit expansion of production 
capacity by Polyco. Except as permitted by this Agreement, the Shell 
Oil director shall not participate in any matter, or attempt to 
influence the votes of the other directors with respect to matters, 
including but not limited to expansion of capacity, that would involve 
a conflict of interest if Shell Oil and Polyco were separate and 
independent entities. In the case of deadlock by the New Board on any 
question in which the Shell Oil director participates, a second vote 
shall be taken on the question and the Shell Oil director shall not 
vote. The New Board shall include a chairman who is independent of 
Shell and is competent to assure the continual Viability and 
Competitiveness of Polyco. Shell Oil shall notify the Commission in its 
next compliance report submitted pursuant to Paragraph VIII.A of the 
Consent Order of the identity and relevant qualifications and 
experience of any person whom Shell Oil has appointed as an original or 
subsequent director of Polyco.
    c. Except for the single Shell Oil director, officer, employee, or 
agent serving on the ``New Board'' (as defined in Paragraph 5.b), Shell 
shall not permit any director, officer, employee or agent of Shell to 
also be a director, officer, employee or agent of Polyco. In the event 
any members of management of the Properties to Be Divested should 
choose not to accept employment with Polyco, or should retire or 
otherwise leave their management positions, the non-Shell (as Shell is 
defined in Paragraph 5.a hereof) directors serving on the New Board (as 
defined in Paragraph 5.b hereof) shall have the exclusive power to 
replace such members of management.
    d. Polyco shall be staffed with sufficient employees to maintain 
the Viability and Competitiveness of the Properties to Be Divested. 
Shell, Montell and Technipol shall not employ, or make offers of 
employment to, any person employed by Shell Oil whose principal duties, 
during the year prior to the date of transfer to Polyco of the 
Properties to Be Divested, related to the management, development or 
operation of the Properties to Be Divested. This provision, however, 
does not apply to employment by Shell Oil of any employee who is 
terminated by Polyco or who is not offered employment by Polyco at a 
level of compensation and benefits at least equivalent to those held by 
the employee prior to the date of transfer to Polyco of the Properties 
to Be Divested. Shell Oil shall encourage and facilitate employment by 
Polyco of Shell Oil employees who had line responsibility with respect 
to the Properties to Be Divested in the year prior to the transfer to 
Polyco of the Properties to Be Divested; shall not offer any incentive 
to such employees to decline employment with Polyco or accept other 
employment in Shell; and shall remove any impediments that exist which 
may deter such employees from accepting employment with Polyco, 
including but not limited to the payment, or transfer for the account 
of the employee, of all accrued bonuses, pensions and other accrued 
benefits to which such employees would otherwise have been entitled had 
they remained in the employment of Shell Oil.
    e. Shell shall not exercise direction or control over, or influence 
directly or indirectly, Polyco; provided, however, that Shell Oil may 
exercise only such direction and control over Polyco as is necessary to 
assure compliance with this Agreement or with the Consent Order, 
including dissolution, merger, consolidation, bankruptcy, sale of 
substantially all assets, major acquisitions, issuance of equity 
securities or any change in the legal status of Polyco.
    f. Shell shall not cause or permit any destruction, removal, 
wasting, deterioration or impairment of Polyco, except for ordinary 
wear and tear. Shell Oil shall maintain the marketability and the 
Viability and Competitiveness of Polyco and shall not sell, transfer, 
encumber (other than in the normal course of business) or otherwise 
impair its marketability or Viability and Competitiveness. Shell Oil 
shall provide Polyco with sufficient working capital to operate at 
current rates of operation, to perform all necessary routine 
maintenance to, and replacement of, plant and equipment of the 
Properties to Be Divested, and to maintain the Viability and 
Competitiveness of the Properties to Be Divested.
    g. Shell shall not change the composition of the management of 
Polyco except that the non-Shell (as Shell is defined in Paragraph 5.a 
hereof) directors or members serving on the New Board (as defined in 
Paragraph 5.b hereof) shall have the power to remove [[Page 5424]] any 
employee. With the exception of the single Shell Oil director, Shell 
Oil shall not remove directors of the New Board except for cause.
    h. Except as permitted by this Agreement, the Shell Oil New Board 
member shall not in his or her capacity as a New Board member receive 
Material Confidential Information and shall not disclose any such 
information received under this Agreement to Shell, Montedison or 
Montell or use it to obtain any advantage for Shell, Montedison or 
Montell. Any Shell Oil director, officer, employee or agent who obtains 
or may obtain confidential information under this Agreement shall enter 
a confidentiality agreement prohibiting disclosure of confidential 
information until the day after the divestitures required by the 
Consent Order have been completed.
    i. Except as required by law and except to the extent that 
necessary information is exchange in the course of defending 
investigations or litigation, obtaining legal advice, acting to assure 
compliance with this Agreement or the Consent Order (including 
accomplishing the divestitures), or negotiating agreements to dispose 
of assets, Shell, Montedison and Montell shall not receive or have 
access to, or the use of, any Material Confidential Information of 
Polyco, except as such information would be available to Montedison in 
the normal course of business if the Acquisition had not taken place. 
Any such information that is obtained by Shell Oil pursuant to this 
Paragraph shall only be used for the purposes set out in this 
Paragraph. Provided, however, until divestiture of Polyco, hourly 
personnel assigned to Polyco plant operations may continue to be 
covered by existing contracts between Shell Oil and any unions 
representing such employees; and Shell Oil may assign Shell Oil 
personnel to perform the accounting, analytical chemistry, human 
resources, information systems, transportation services and tax 
functions for Polyco provided that such Shell Oil personnel shall enter 
into confidentiality agreements in accordance with the provisions in 
Paragraph 5.h hereof and provided further that those Shell Oil 
personnel working with Material Confidential Information of Polyco 
shall not be involved in Montell's PP Technology, Catalyst Technology, 
PP Catalyst or Propylene Polymers business, as defined in Paragraph I. 
of the Consent Order for the period that Shell must comply with 
Paragraph 5 hereof. Provided further that the New Board (as defined in 
subparagraph 5.b hereof) may designate and contract with Shell Oil as a 
nonexclusive sales agent for sales of PP Catalyst or Propylene Polymers 
by Polyco outside the United States, provided that all Shell Oil 
personnel with access to Material Confidential Information of Polyco in 
connection with such contract or agency shall, prior to gaining such 
access, enter into confidentiality agreements in accordance with the 
provisions of Paragraph 5.h hereof.
    j. All earnings and profits of Polyco shall be retained separately 
in Polyco.
    k. Should any transfer to Polyco of an agreement, contract or 
license required to be included in the Properties to Be Divested not be 
possible after reasonable effort by Shell Oil due to another party 
withholding its consent to the transfer, Shell Oil shall enter into an 
agreement with Polyco the purpose of which agreement is to realize the 
same effect as such transfer. Further, Shell Oil shall secure, at its 
expense, patent licenses, or assignments of patent licenses, extending 
to Polyco rights and royalty rates with respect to the manufacture and 
sale of Propylene Polymers and PP Catalyst, and rights to expand 
production and sale, no less favorable than those held by Shell Oil as 
of the date of transfer to Polyco of the Properties to Be Divested.
    6. Prior to, or concurrently with, transfer to Montell of the Shell 
Merged Assets, Royal Dutch and Shell T&T shall ensure that companies of 
the Shell Group shall:
    a. Take such actions as are necessary to establish and maintain 
separate and apart from Montell the Koninklijke/Shell Laboratorium 
Amsterdam (``KSLA'') research and development laboratory of Shell 
Research B.V., a company of the Shell Group; and
    b. Take such actions as are necessary to ensure that no Shell 
research personnel who have had access to Unipol PP Technology (other 
than Catalyst Technology received by Shell Oil from other companies of 
the Shell Group) within one (1) year prior to the date of the formation 
of Montell engage in research at facilities of Montell.
    7. Shell Oil's Pecten international marketing organization shall 
not market or distribute products of Montell but may, as requested by 
Polyco, market and distribute products produced by Polyco.
    8. Prior to, or concurrently with, transfer to Montell of the 
Montedison Merged Assets, Montedison shall
    a. transfer to Technipol as an ongoing business:
    i. PP research and development facilities in the Giulio Natta 
Research Center in Ferrara, Italy, by outright transfer or lease, 
including transfer of its PO3 pilot plant, equipment, rights-of-way, 
easements, and other rights and assets appropriate and sufficient to 
preserve the Viability and Competitiveness of the Montedison PP 
Technology business.
    ii. The irrevocable worldwide right, for a period not to expire 
prior to the divestiture of the Properties to be Divested, to grant to 
any person perpetual Montedison PP Technology licenses subject to any 
lawful rights previously granted to persons not parties to this 
Agreement. This right shall be exclusive subject to the right of 
Montell to license Montell Affiliates.
    iii. Existing Montedison Licenses and Montedison's PP Catalyst 
supply contracts with persons other than Montell Affiliates. Should any 
such transfer not be possible after reasonable effort by Montedison due 
to the other party withholding its consent to the transfer, Montedison 
or Montell shall enter into an agreement with Technipol to service the 
licenses not transferred to Technipol and account for revenues from 
such licenses strictly for the benefit and account of Technipol, the 
purpose of which agreement is to realize to the extent possible the 
same effect of a transfer of such licenses.
    iv. Montedison's PP Catalyst sales business.
    v. Personnel who possess the specific skills and experience 
required by Technipol sufficient to support, conduct and preserve the 
Viability and Competitiveness of the Montedison Properties to Be 
Transferred. Montedison shall appoint Technipol's managers on the basis 
of demonstrated ability and specific experience in the Montedison PP 
Technology field.
    vi. Such other assets (including cash and working capital) and 
personnel as may be required to effectuate the remedial purpose of this 
Order and to assure that Technipol will be capable of operating 
independently at the same level of research, development and licensing 
of PP Technology, and sale of PP Catalyst as existed in the Montedison 
Properties to Be Transferred on average during the two (2) years prior 
to the Transfer Date.
    b. Physically separate, to the extent feasible, the assets, 
personnel, offices and facilities transferred or leased to Technipol 
from those retained in Montedison and from those transferred to Montell 
so as to assure the independence of Technipol from Montell and to 
assure that Material Confidential Information that is not to be made 
available to another person pursuant to the Consent Order and this 
Agreement is not accessible to such person. [[Page 5425]] 
    c. Assign to Technipol all other agreements in which Montedison 
grants to a person other than Montell or a Montell Affiliate the right 
to practice Montedison PP Technology. Should any such assignment not be 
possible after reasonable effort by Montedison due to the other party 
withholding its consent to the assignment, Montedison or Montell shall 
enter into an agreement with Technipol the purpose of which is to 
realize the effect of such assignment.
    d. Take such actions as necessary to ensure an ongoing agreement 
between Montell and Technipol pursuant to which Montell will provide to 
Technipol, at Montell's cost, services (such as building security, fire 
protection, trash removal, shipping and receiving, accounting and 
cleaning services), utilities and common maintenance for the Montedison 
Properties to Be Transferred, as may be requested by Technipol.
    Provided, however, that Montedison shall retain for Montell 
ownership of, and free right to practice and use, and sell product 
resulting from the practice or use of, all Montedison PP Technology and 
PP Catalyst production assets.
    9. Commencing prior to, or concurrently with, transfer to Montell 
of the Montedison Merged Assets, Montedison will hold Technipol as 
constituted in accordance with Paragraph 8 of this Agreement separate 
and apart on the following terms and conditions:
    a. Montedison shall separately incorporate Technipol and adopt 
Articles of Incorporation and By-laws for Technipol that are not 
inconsistent with other provisions of this Agreement. Montedison shall 
also elect a board of directors of Technipol prior to, or concurrently 
with, transfer to Montell of the Montedison Merged Assets.
    b. Technipol shall be operated independently of Montell and Shell, 
and neither Shell nor Montell shall have any ownership or other 
financial interest in Technipol or exercise direction or control over, 
or influence directly or indirectly, Technipol, except as specifically 
authorized by this Agreement.
    c. Montedison shall not permit any director, officer, employee or 
agent of Montell, or any director, officer, employee or agent of 
Montedison involved in management or oversight of Montell, to also be a 
director, officer, employee or agent of Technipol.
    d. Any Montedison director, officer, employee or agent who obtains 
or may obtain Material Confidential Information of Technipol under this 
Agreement shall not disclose to Shell or Montell such Material 
Confidential Information until the day after divestiture of the 
Properties to Be Divested has been completed.
    e. Montedison shall not cause or permit any destruction, removal, 
wasting, deterioration or impairment of Technipol, except for ordinary 
wear and tear. Montedison shall also maintain the Viability and 
Competitiveness of Technipol and shall not sell, transfer, encumber 
(other than in the normal course of business) or otherwise impair its 
Viability and Competitiveness.
    f. The purpose of the formation of Technipol and the transfer to it 
of the Montedison Properties to Be Transferred is to ensure the 
continuation of a separate, full-functioning entity to conduct the 
business of the Montedison Properties to Be Transferred and to preserve 
the Viability and Competitiveness of that business until the Properties 
to Be Divested are divested.
    g. Montell shall provide Technipol and its licensees and 
prospective licensees access to any and all of Montell's commercial 
scale PP plants using Montedison PP Technology for demonstrating the PP 
Technology and Catalyst Technology used in the plant to prospective 
licensees and shall provide technical assistance and training for 
personnel of Technipol's licensees. In consideration for providing such 
services and assistance to Technipol, Montell may charge no more than 
its actual hourly cost of pay and benefits for the services of Montell 
personnel providing technical assistance and training and, in the case 
of technical assistance or training by Montell personnel at a 
licensee's or prospective licensee's facilities, reasonable and 
customary travel and per diem subsistence costs of such personnel.
    h. With respect to future Improvements or Major Advances in 
Montedison PP Technology by Technipol or Montell:
    i. Technipol and Montell shall each own any Improvements or Major 
Advances it develops at its own cost or finances.
    ii. Technipol shall have the right to license to any person any 
results obtained from research and development in the field of PP 
Technology performed by Technipol under contract for Montell.
    iii. Technipol may grant Montell a paid-up, royalty-free, perpetual 
and non-exclusive right to use any Improvements owned by Technipol or 
received by Technipol from its licensees.
    iv. Technipol may grant Montell a non-exclusive license to use any 
Major Advances owned by Technipol or received by Technipol from its 
licensees on a non-discriminatory basis on terms available to other 
persons.
    v. Montell shall grant Technipol a paid-up, royalty-free, perpetual 
and non-exclusive right to license persons other than Montell 
Affiliates to use any Improvements owned by Montell.
    vi. Montell shall grant Technipol the right to license third 
parties to use any Major Advances owned by Montell, unless Montell is 
contractually prohibited, by contract with any person other than a 
Montell Affiliate or a respondent, from sharing such Major Advances 
with Technipol. Such grant to Technipol shall be on reasonable terms 
and conditions which shall, in any event, be no less favorable to 
Technipol than those offered by Montell to any person other than a 
Montell Affiliate.
    i. Technipol shall have the exclusive right, subject to any lawful 
rights previously granted to persons not parties to this Agreement, to 
enforce intellectual property rights with respect to Montedison PP 
Technology, and to sell PP Catalyst to persons other than Montell and 
Montell Affiliates.
    j. Except as expressly provided in this Agreement, all sales, 
licensing and other business relationships between Technipol and either 
Montedison, Shell or Montell shall be conducted on a non-discriminatory 
basis on terms available to other persons.
    k. Pursuant to a PP Catalyst supply agreement between Montell and 
Technipol, Montell shall produce PP Catalyst, including Improvements 
thereto, for Technipol for use by Technipol's licensees and PP Catalyst 
customers, subject to the rights of Akzo Nobel. To this end, Montell 
shall dedicate such portion of its PP Catalyst production capacity as 
is required to supply Technipol's licensees and PP Catalyst customers. 
The price for PP Catalyst supplied by Montell to Technipol shall be 
negotiated between Montell and Technipol, but in no event shall be more 
than the lowest contract price, in terms of the price per pound of 
Propylene Polymers produced per pound of PP Catalyst, for PP Catalyst 
available to a licensee other than a Montell Affiliate or government 
controlled licensee, as of December 31, 1993, recalculated in 
accordance with the pricing formula in the PP Catalyst supply contract 
for that licensee, less eight percent (8%).
    l. Pursuant to a Catalyst Support supply agreement between Montell 
and Technipol, Montell shall produce Catalyst Support, including 
Improvements thereto, for Technipol for sale to Akzo Nobel. The price 
for Catalyst Support supplied by Montell to [[Page 5426]] Technipol 
shall be negotiated between Montell and Technipol, but in no event 
shall be more than the price charged to Akzo Nobel as of December 31, 
1993, recalculated in accordance with the pricing formula in the 
Catalyst Support supply contract between Akzo Nobel and Himont, less 
eight percent (8%).
    m. Notwithstanding any agreement entered into by Montell and 
Technipol pursuant to Paragraphs 9.k and 9.l of this Agreement, 
Technipol may acquire PP Catalyst and Catalyst Support from any other 
person.
    n. Technipol shall provide to Montell, on the date of transfer to 
Technipol of the Montedison Properties to Be Transferred and on the 
first day of every calendar quarter thereafter, an estimate of its 
requirements for PP Catalyst and Catalyst Support for the following 
twelve (12) months. Montell shall supply PP Catalyst and Catalyst 
Support in quantities sufficient to maintain an inventory of PP 
Catalyst and Catalyst Support equivalent to Technipol's requirements 
for PP Catalyst and Catalyst Support for a period of six (6) months. In 
the event that Montell is unable to maintain an inventory of PP 
Catalyst and Catalyst Support sufficient to supply Technipol's 
requirements for PP Catalyst and Catalyst Support for a period of six 
(6) months, Montell will grant to Technipol the right and Know-How 
necessary to produce, or have produced on its behalf, PP Catalyst and 
Catalyst Support.
    o. In the case of any shortage of PP Catalyst or Catalyst Support 
production Montell shall continue to supply Technipol with its 
requirements except that in the case of shortages that are not the 
result of Montell's actions Montell may allocate PP Catalyst and 
Catalyst Support to Technipol and Montell and Montell Affiliates on a 
pro rata basis based on the previous twelve (12) months. In the case of 
any shortage of PP Catalyst or Catalyst Support to Technipol, Technipol 
may request that Montell expand the production facilities, at Montell's 
expense, in order to meet the requirements of Technipol.
    p. Technipol shall have the sole right to determine, subject to PP 
Catalyst supply contracts with persons other than Montell or Montell 
Affiliates existing as of the date the Montedison Properties to Be 
Transferred are transferred to Technipol and the existing Akzo 
agreement, the sales price, quantity and type of PP Catalyst and 
Catalyst Support sold by Technipol to any person.
    q. Montell and Shell shall not interfere in, or attempt to 
influence, any decisions or activities of Technipol.
    r. Shell, Montedison, Montell, Technipol and Polyco shall not 
exchange or discuss between each other, directly or indirectly, current 
or future intentions, plans or forecasts for pricing, production or 
capacity for PP Catalyst, Catalyst Support, Catalyst Systems or 
Propylene Polymers, or royalty rates for licensing PP Technology or 
Catalyst Technology to others, except as required between Montell and 
Technipol in accordance with Paragraphs 9.k and 9.l of this Agreement.
    10. Except as otherwise provided in the Consent Order or this 
Agreement, as required for the purpose of tax return preparation, 
compliance with any law or request from a revenue authority, or to the 
extent that necessary information is exchanged in the course of 
evaluating and consummating the formation of Montell, Technipol or 
Polyco, defending government investigations or litigation, or 
negotiating to dispose of assets:
    a. Neither Montedison, Montell, Technipol nor Polyco shall provide, 
disclose or otherwise make available to Shell any Material Confidential 
Information.
    b. Neither Montedison nor Technipol shall provide, disclose or 
otherwise make available to Montell any Material Confidential 
Information of Technipol.
    c. Shell shall not provide, disclose or otherwise make available to 
Montedison, Montell or Technipol any Material Confidential Information 
of Polyco or the Unipol/SHAC Technology Business (other that Catalyst 
Technology received by Shell Oil from other companies of the Shell 
Group), provided however, nothing in this Paragraph 10.c of this 
Agreement shall prohibit (a) Montell Affiliates who are licensees of 
Unipol PP Technology from receiving information, in accordance with 
such license, for use in their Unipol PP Technology licensed production 
facilities, including information obtained by Shell, prior to the 
formation of Montell, under The Tripartite Catalyst Research Agreement; 
and (b) any communication between Shell and Montell necessary to ensure 
that Montell and its employees make no unauthorized use or disclosure 
of any Material Confidential Information.
    d. Neither Montell nor Shell shall provide, disclose or otherwise 
make available to Montedison or Technipol any Material Confidential 
Information.
    Provided, however, that nothing in this Agreement shall limit or 
prohibit (a) Montell, Technipol or Polyco from licensing or otherwise 
doing business on a nondiscriminatory basis with each other or with any 
entity in which Montedison or a Shell Group company has an interest; or 
(b) persons elected by Shell or Montedison to the Montell board of 
directors from participating in decisions relating to Montell if they 
do not also participate in decisions relating to similar businesses of 
Technipol or Polyco.
    11. To the extent that this Agreement or the Consent Order requires 
Shell or Montedison to take, or prohibits Shell or Montedison from 
taking, certain actions that otherwise may be required or prohibited by 
contract, Shell and Montedison shall abide by the terms of this 
Agreement and the Consent Order and shall not assert as a defense such 
contract rights in a civil penalty action brought by the Commission to 
enforce the terms of this Agreement or the Consent Order.
    12. Should the Federal Trade Commission seek in any proceeding to 
compel Shell (meaning here and hereinafter Shell including Polyco) to 
divest itself of the Montedison Merged Assets, to compel Shell to 
divest any assets of businesses of the Shell Merged Assets or the 
Montedison Merged Assets that it may hold, to compel Montedison to 
divest itself of the Shell Merged Assets, to compel Montedison to 
divest any assets or businesses of the Montedison Merged Assets or the 
Shell Merged Assets that it may hold, or to seek any other injunctive 
or equitable relief for any failure to comply with the Consent Order of 
this Agreement, or in any way relating to the Acquisition, Shell and 
Montedison shall not raise any objection based upon the expiration of 
the applicable Hart-Scott-Rodino Antitrust Improvements Act waiting 
period or the fact that the Commission has permitted the Acquisition. 
Shell and Montedison also waive all rights to contest the validity of 
this Agreement.
    13. For the purpose of determining or securing compliance with this 
Agreement, subject to any legally recognized privilege, and upon 
written request with reasonable notice to Montedison, Shell, Polyco or 
Montell made to its principal office, Montedison, Shell, Polyco and 
Montell shall permit any duly authorized representative or 
representatives of the Commission:
    a. Access during the office hours of Montedison or Shell 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 Montedison, Shell, Polyco or Montell 
relating to compliance with this Agreement; and
    b. Upon ten (10) days notice to Montedison, Shell, Polyco or 
Montell and without restraint or interference from it, to interview 
officers or [[Page 5427]] employees of Montedison, Shell, Polyco or 
Montell who may have counsel present, regarding any such matters.
    14. This Agreement shall not be binding on the Commission until it 
is approved by the Commission.

Analysis To Aid Public Comment on the Provisionally Accepted Consent 
Order

    The Federal Trade Commission (``the Commission'') has accepted, for 
public comment, an agreement containing a proposed Consent Order from 
Montedison S.p.A. and Himont Incorporated (collectively ``Montedison'') 
and Royal Dutch Petroleum Company, The ``Shell'' Transport and Trading 
Company, p.l.c., and Shell Oil Company (collectively ``Shell''). The 
proposed Consent Order has been placed on the public record for sixty 
(60) days for reception of comments from interested persons. Comments 
received during this period will become part of the public record. 
After sixty (60) days, the Commission will again review the agreement 
and the comments received and will decide whether it should withdraw 
from the agreement or make final the agreement's proposed Order.
    The Commission's proposed complaint alleges that on or about 
December 30, 1993, Montedison and Shell entered into an agreement to 
form and acquire equal interests in a joint venture, designated by 
Montedison and Shell as ``Montell'' and valued at over six billion 
dollars, that would merge the majority of Shell's and Montedison's 
worldwide polyolefins businesses. Shell would retain outside the 
proposed joint venture polypropylene assets of Shell Oil Company 
(``Shell Oil''), including Shell Oil's polypropylene catalyst and 
polypropylene resin production facilities, Shell Oil's rights and 
obligations under a 1983 Cooperative Undertaking Agreement with Union 
Carbide Corporation (``Union Carbide''), pursuant to which Shell Oil 
and Union Carbide research, develop and license polypropylene 
technology and polypropylene catalyst worldwide, and Shell Oil's 
interest in the Seadrift Polypropylene Company, a partnership with 
Union Carbide which produces polypropylene resin. According to the 
complaint, Shell would nonetheless control Shell Oil as well as 
Montell.
    The proposed complaint further states that Montedison coordinates 
with Mitsui Petrochemical Industries Ltd. (``Mitsui'') in licensing of 
polypropylene technology and in the sale of polypropylene catalysts and 
shares with Mitsui royalties from licensing of polypropylene technology 
and catalyst technology and profits from the sale of polypropylene 
catalysts manufactured in the United States for sale to licensees in 
the Western Hemisphere.
    The proposed complaint alleges that the joint venture agreement 
between Montedison and Shell violates Section 5 of the Federal Trade 
Commission Act, as amended, 15 U.S.C. 45; the proposed joint venture 
between Montedison and Shell, would, if consummated, violate Section 7 
of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the 
Federal Trade Commission Act in the world markets for polypropylene 
technology, licensing of polypropylene technology and the licensing, 
production and sale of polypropylene catalysts, and in the United 
States and Canada markets for the production and sale of polypropylene 
impact copolymer resin; the proposed joint venture would have an 
adverse effect on U.S. export trade in violation of Section 5 of the 
Federal Trade Commission Act, as amended, 15 U.S.C. 45; and the 
agreement between Montedison and Mitsui violates Section 5 of the 
Federal Trade Commission Act.
    According to the proposed complaint, polypropylene technology and 
catalyst technology are essential for entry into the production of 
polypropylene resin, and polypropylene catalysts are essential inputs 
in the production of polypropylene resin. Polypropylene resin is a 
thermoplastic with distinct price/performance characteristics and 
physical properties and relatively low cost and low density. 
Polypropylene impact copolymer resin is a type of polypropylene resin 
with high impact strength suitable for low temperature applications and 
produced through copolymerization, in a second reactor, of 
polypropylene and ethylene or other olefin monomers.
    As alleged in the proposed complaint, Montedison, through Himont, 
is the leading competitor in each of the relevant markets. Shell is the 
second largest producer of polypropylene catalyst, polypropylene resin 
and impact copolymer polypropylene resin in the world, is a leader in 
catalyst technology, and is a significant competitor in the manufacture 
and sale of polypropylene resin and polypropylene impact copolymer 
resin in the United States and Canada. Shell Oil and Union Carbide 
under the Cooperative Undertaking Agreement are the principal 
competitor to Montedison in research, development and licensing of 
polypropylene technology and catalyst technology. Other technologies 
are not a significant competitive constraint according to the 
complaint.
    The purpose of the divestiture is to ensure continuation of the 
divested assets as an ongoing, viable business engaged, in competition 
with Montedison and Montell and with other companies, in the research, 
development and licensing of polypropylene technology and catalyst 
technology and in the manufacture and sale of polypropylene catalysts 
and polypropylene resin including polypropylene impact copolymer resin, 
and to remedy any lessening of competition in the relevant markets 
resulting from the joint venture. The proposed Consent Order provides 
for accelerated divestiture. However, if Union Carbide declines to 
acquire the assets to be divested by Shell Oil, at fair market value as 
determined by an independent appraisal or as otherwise agreed by Shell 
Oil and Union Carbide, or Union Carbide objects to another acquirer 
approved by the Commission, the divestiture period may be extended to 
March 31, 1997. If Shell Oil fails to complete the required 
divestitures within the required period, the Commission may appoint a 
trustee to divest the assets required to be divested together with 
ancillary assets and businesses and arrangements necessary to assure 
the marketability of the divested assets and to assure that they are 
viable and competitive in the relevant markets. Any proposed 
divestiture pursuant to the Order must be approved by the Commission 
after the divestiture proposal has been placed on the public record for 
reception of comments from interested persons.
    In addition, the proposed Consent Order would prohibit Montedison 
and Montell from sharing in royalties from licenses granted by Mitsui 
after the Order becomes final for use of polypropylene technology and 
catalyst technology in the United States or from entering into 
agreements with Mitsui for sharing of licensing royalties in the United 
States and would prohibit Montedison, Shell and Montell from entering 
into agreements to allocate markets for licensing of polypropylene 
technology and catalyst technology or for manufacture and sale of 
polypropylene catalysts.
    A hold separate agreement executed as part of the Consent prohibits 
Shell and Montedison from transferring assets to Montell until March 1, 
1995, and until Shell has completed the required divestiture, requires 
Shell to preserve and hold separate from Shell and Montell the assets 
required to be divested and requires Montedison to preserve, and hold 
separate from Shell and Montell, assets related to Montedison's 
polypropylene technology and polypropylene catalyst 
businesses. [[Page 5428]] 
    For a period of ten years from its effective date, the Order would 
also prohibit Shell, Montedison and Montell from acquiring, without 
prior Commission approval, stock or other interest in any company 
engaged in, or assets used for, the research and development, 
manufacture for sale, or sale or licensing of polypropylene technology, 
catalyst technology or polypropylene catalyst anywhere in the world or 
the manufacture or sale of polypropylene polymers in the United States 
or Canada.
    The purpose of this analysis is to invite public comment concerning 
the Consent Order and any other aspect of the joint venture or 
Montedison license agreements. This analysis is not intended to 
constitute an official interpretation of the Consent Agreement and 
Order or to modify its terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 95-2061 Filed 1-26-95; 8:45 am]
BILLING CODE 6750-01-M