[Federal Register Volume 62, Number 141 (Wednesday, July 23, 1997)]
[Notices]
[Pages 39540-39549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19315]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Raytheon Company and Texas Instruments Inc.; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation and Order, Hold Separate and Partition Plan Stipulation and 
Order and Competitive Impact Statement have been filed with the United 
States District Court in the District of Columbia, Civil No. 
1:97CV01515.
    On July 2, 1997, the United States filed a Complaint alleging that 
the proposed acquisition by Raytheon Company of the Defense Systems and 
Electronics Unit of Texas Instruments Inc. (``DS&E'') would violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The complaint further 
alleges that the acquisition by Raytheon of DS&E would lead to a 
monopoly in X-band high power amplifier monolithic microwave integrated 
circuits (``MMICs''). The proposed Final Judgment, filed the same time 
as the Complaint, requires Raytheon to divest the MMICs business of 
DS&E.
    Public comment is invited within the statutory 60-day comment 
period. Such comments and responses thereto will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to J. Robert Kramer, Chief, Litigation II Section, Antitrust Division, 
United States Department of Justice, 1401 H Street, N.W., Suite 3000, 
Washington, D.C. 20530 (telephone: 202/307-0924).
    Copies of the Complaint, Stipulation and Order, Hold Separate and 
Partition Plan Stipulation and Order, Proposed Final Judgment, and 
Competitive Impact Statement are available for inspection in Room 215 
of the U.S. Department of Justice, Antitrust Division, 325 7th Street, 
N.W., Washington, D.C. 20530, (202) 514-2841. Copies of these

[[Page 39541]]

materials may be obtained upon request and payment of a copying fee.
Constance K. Robinson,
Director of Operations, Antitrust Division.

Stipulation and Order

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    (1) The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the United States District Court for the District of 
Columbia.
    (2) The parties stipulate that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on defendants and by filing that 
notice with the Court.
    (3) Defendant shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment by the 
Court, or until expiration of time for all appeals of any Court ruling 
declining entry of the proposed Final Judgment, and shall, from the 
date of the signing of this Stipulation by the parties, comply with all 
the terms and provisions of the proposed Final Judgment as though the 
same were in full force and effect as an Order of the Court.
    (4) This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    (5) In the event plaintiff withdraws its consent, as provided in 
paragraph 2 above, or in the event the proposed Final Judgment is not 
entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court ruling declining entry of the proposed Final 
Judgment, and the Court has not otherwise ordered continued compliance 
with the terms and provisions of the proposed Final Judgment, then the 
parties are released from all further obligations under this 
Stipulation, and the making of this Stipulation shall be without 
prejudice to any party in this or any other proceeding.
    (6) Defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained 
therein.

    Dated: July 2, 1997.

    For Plaintiff United States of America:
    Willie L. Hudgins, Esquire, (D.C. Bar #37127, U.S. Department of 
Justice, Antitrust Division, Litigation II, Suite 3000, Washington, 
D.C. 20005, (202) 307-0924.
    For Defendant Raytheon Company:
    Robert D. Paul, Esquire, (D.C. Bar #416314), Michael S. Shuster, 
Esquire, White & Case, 601 13th St., N.W., Washington, D.C. 20005-
3807, (202) 626-3614.
    For Defendant Texas Instruments Inc.:
    Kathleen L. Ferrell, Esquire, (D.C. Bar #367971), Paul Bartel, 
Esquire, Davis, Polk & Wardwell, 450 Lexington Avenue, New York, NY 
10017, (212) 450-4760.

    It is so ordered by the Court, this ______ day of July, 1997.
    ______, United States District Judge.

Parties Entitled to Notice of Entry of Order

    United States of America:
Department of Justice Antitrust Division, J. Robert Kramer II, Esq., 
Willie L. Hudgins, Esq., Suite 3000, 1401 H Street, N.W., 
Washington, D.C. 20530.
    Counsel for Raytheon Company:
Robert D. Paul, Esq., Michael S. Shuster, Esq., White & Case, 601 
13th St., N.W., Washington, D.C. 20005-3807.
    Counsel for Texas Instruments Incorporated:
    Paul W. Bartel, Esq., Thomas P. Ogden, Esq., Kathleen L. 
Ferrell, Davis, Polk & Wardwell, 450 Lexington Avenue, New York, NY 
10017.

Hold Separate and Partition Plan Stipulation and Order

    It is hereby stipulated and agreed by and between the undersigned, 
subject to approval and entry by the Court, that:

I. Definitions

    As used in this Hold Separate and Partition Plan Stipulation and 
Order:
    A. ``DoD'' means the Department of Defense.
    B. ``DOJ'' means the Antitrust Division of the Department of 
Justice.
    C. ``GaAs'' means gallium arsenide.
    D. ``MMIC'' means a Monolithic Microwave Integrated Circuit.
    E. ``MMIC Business'' means the GaAs foundry and MMIC business of 
the R/F Microwave Business Unit of TI purchased by Raytheon, including 
the GaAs Operations Group, Microwave GaAs Products Business Unit, the 
MMIC component of the Microwave Integrated Circuits Center of 
Excellence, the MMIC research and development component of the System 
Components Laboratory, and associated contracting, quality assurance 
and control personnel located in the North Building and East Building 
of TI's Expressway site, all employees listed in attachment A, and all 
assets, including:
    1. all tangible assets purchased by Raytheon used in the operation 
of the MMIC Business including but not limited to: all real property 
(owned or leased), including interests in the North Building and East 
Building, used in the operation of that MMIC Business, including 
research and development activities; all manufacturing, personal 
property, inventory, office furniture, fixed assets and fixtures, 
materials, supplies, on-site warehouses or storage facilities, and 
other tangible property or improvements used in the operation of the 
MMIC Business; all licenses, permits and authorizations issued by any 
governmental organization relating to that MMIC Business; all 
contracts, teaming arrangements, agreements, leases, commitments and 
understandings pertaining to the MMIC Business and its operations; 
supply agreements; all customer lists and credit records; and other 
records maintained by TI in connection with the MMIC Business;
    2. all intangible assets purchased by Raytheon relating to the MMIC 
Business, including but not limited to all patents, licenses and 
sublicenses, intellectual property, maskwork rights, technical 
information, know-how, trade secrets, drawings, blueprints, designs, 
design protocols, cell libraries, specifications for materials, 
specifications for parts and devices, safety procedures for the 
handling of materials and substances, quality assurance and control 
procedures, design tools and simulation capability, and all manuals and 
technical information TI provides to its own employees, customers, 
suppliers, agents or licensees; and
    3. all research data concerning historic and current research and 
development efforts relating to the MMIC Business, including designs of 
experiments, and the results of unsuccessful designs and experiments.
    F. ``Raytheon'' means Raytheon Company, a Delaware corporation with 
its headquarters and principal place of business in Lexington, 
Massaschusetts, and its successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, directors 
officers, managers, agents, and employees.
    G. ``TI'' means defendant Texas Instruments, Inc., a Delaware 
corporation with its headquarters and principal place of business in 
Dallas, Texas, and its successors, assigns subsidiaries, divisions, 
groups, affiliates, partnerships and joint

[[Page 39542]]

ventures, and directors, officers, managers, agents and employees.

II. Objectives

    The Final Judgment filed in this case is meant to ensure Raytheon's 
prompt divestiture of the MMIC Business for the purposes of creating a 
viable competitor in development, production and sale of MMICs used in 
advance military radars and to remedy the effects that the United 
States alleges would otherwise result from Raytheon's proposed 
acquisition of the MMIC Business of TI. This Hold Separate and 
Partition Plan Stipulation and Order ensures the timely and complete 
transfer of the MMIC Business and maintains the MMIC Business as an 
independent, viable competitor until divestiture is complete.

III. Hold Separate Provisions

    A. Raytheon and MMIC Business shall expressly undertake to compete 
in the MMIC market in the exercise of their best judgments and without 
regard to the merger agreement, as if they were in all respects 
separate and independent business entities.
    B. Raytheon shall preserve, maintain, and operate the MMIC Business 
purchased by Raytheon from TI as an independent competitor with 
management, research, development, production, sales and operations 
held entirely separate, distinct and apart from those of Raytheon. 
Raytheon shall not coordinate its production, marketing or sale of 
gallium arsenide products with that of the MMIC Business, except to the 
limited extent provided in III(D) below. Within fifteen (15) days of 
the entering of this Order, Raytheon will inform the DOJ and DoD of the 
steps taken to comply with this provision.
    C. Raytheon shall take all steps necessary to ensure that the MMIC 
Business will be maintained and operated as an independent, ongoing, 
economically viable and active competitor in the development, 
production and sale of gallium arsenide products, including MMICs, that 
the management of the MMIC Business will not be influenced by Raytheon, 
and that the books, records, competitively sensitive sales, marketing 
and pricing information, and decision-making associated with the MMIC 
Business, including the performance and decision-making functions 
regarding internal research and development, sales and pricing, will be 
kept separate and apart from the business of Raytheon. Raytheon's 
influence over the MMIC Business shall be limited to that necessary to 
carry out Raytheon's obligations under this Order and the Final 
Judgment. Nothing in the provision, however, shall prevent Raytheon 
from obtaining information customarily provided in due diligence to 
allow Raytheon to determine what technology, intellectual property, and 
know-how it may desire to license from the purchaser of the MMIC 
Business and to determine whether to contract with the purchaser of the 
MMIC Business to produce product for Raytheon.
    D. Raytheon shall provide and maintain sufficient working capital 
to maintain the MMIC Business as a viable, ongoing business, consistent 
with current business plans.
    E. Raytheon shall provide and maintain sufficient lines and sources 
of credit to maintain the MMIC Business as a viable, ongoing business.
    F. Raytheon shall maintain on behalf of the business of the MMIC 
Business in accordance with sound accounting practices, separate, true 
and complete financial ledgers, books and records reporting the profit 
and loss and liabilities of the business on a monthly and quarterly 
basis.
    G. Raytheon shall use all reasonable efforts to maintain and 
increase sales of the MMIC Business, and shall maintain at 1996 or 
previously approved levels for 1997, whichever are higher, internal 
research and development funding, sales, marketing, and support for 
MMIC and module products produced by the MMIC Business.
    H. Raytheon shall not sell, lease, assign, transfer or otherwise 
dispose of, or pledge as collateral for loans, assets that may be 
required to be divested pursuant to the Final Judgment.
    I. Raytheon shall preserve the assets that may be required to be 
divested pursuant to the Final Judgment in a state of repair equal to 
their state of repair as of the date of this Order, ordinary wear and 
tear excepted.
    J. Nothing in this Order shall prohibit Raytheon from contracting 
with the MMIC Business, pursuant to arm's length negotiations, to have 
the MMIC Business produce product for Raytheon from any excess capacity 
at the foundry of the MMIC Business.
    K. Except in the ordinary course of business or as is otherwise 
consistent with this Order, defendants shall not transfer or terminate, 
or alter, to the detriment of any employee, any current employment or 
salary agreements for any MMIC Business employee who, on the date of 
entry of this Order, works for the MMIC Business. Defendants shall not 
solicit to hire any individual who, on the date of entry of this Order, 
was an employee of the MMIC Business. Defendants shall not hire any 
individual who, on the date of entry of this Order, was an employee of 
the MMIC Business, unless such individual has a written offer of 
employment from a third party for a like position.
    L. Until such time as this Order is terminated, the MMIC Business 
shall be managed by Thomas Cordner. Mr. Cordner shall have complete 
managerial responsibility for the MMIC Business, subject to the 
provisions of this Order and the Final Judgment. In the event that Mr. 
Cordner is unable to perform his duties, Raytheon shall appoint from 
the current management of the MMIC Business, subject to the DOJ's 
approval, a replacement within ten (10) working days. Should Raytheon 
fail to appoint a replacement acceptable to the DOJ within ten (10) 
working days, the DOJ, after consultation with DoD, shall appoint a 
replacement.
    M. Raytheon shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestiture pursuant to the Final Judgment to a suitable 
purchaser.
    N. This Order shall remain in effect until the divestiture required 
by the Final Judgment is complete, or until further Order of the Court.

IV. Partition Plan

    A. Defendants are hereby ordered and directed to present a plan to 
partition the facilities of the MMIC Business from the facilities of 
Raytheon and TI to the DoD and DOJ, within twenty-eight (28) days of 
the entry of this Order. In the event the parties are unable to agree 
on a partition plan within twenty-eight (28) days of the entry of this 
Order, DOJ, in consultation with DoD, may appoint an expert to devise 
such a partition plan. The expert shall have the right, in its sole 
discretion, to allocate space and equipment between Raytheon, TI and 
the MMIC Business. Defendants shall not object to the partitioning plan 
devised by the expert on any grounds other than the expert's 
malfeasance. The expert shall serve at the cost and expense of 
Raytheon. Raytheon shall take no action to interfere with or impede the 
expert's partition plan.
    B. Raytheon shall ensure to the satisfaction of DoD that the 
operations of the MMIC Business, including its support of DoD programs, 
not be disrupted.

    Dated: July 2, 1997.

    For Plaintiff United States of America:
    Willie L. Hudgins, Esquire, (D.C. Bar # 37127), U.S. Department 
of Justice, Antitrust Division, Litigation II, Suite 3000, 
Washington, D.C. 20005, (202) 307-0924.
    For Defendant Raytheon Company:
    Robert D. Paul, Esquire, (D.C. Bar # 416314), Michael S. 
Shuster, Esquire, White

[[Page 39543]]

& Case, 601 13th St., N.W., Washington, D.C. 20005-3807, (202) 626-
3614.
    For Defendant Texas Instruments Inc.:
    Kathleen L. Ferrell, Esquire, (D.C. Bar # 367971), Paul Bartel, 
Esquire, Davis, Polk & Wardwell, 450 Lexington Avenue, New York, NY 
10017, (212) 450-4760.

    It is so ordered by the Court, this ______ day of July, 1997.
    __________, United States District Judge.

Parties Entitled to Notice of Entry of Order

    United States of America:
Department of Justice Antitrust Division, J. Robert Kramer II, Esq., 
Willie L. Hudgins, Esq., Suite 3000, 1401 H Street, N.W., 
Washington, DC 20530.
    Counsel for Raytheon Company:
Robert D. Paul. Esq., Michael S. Shuster, Esq., White & Case, 601 
13th St., N.W., Washington, DC 20005-3807.
    Counsel for Texas Instruments Incorporated:
Paul W. Bartel, Esq., Thomas P. Ogden, Esq., Kathleen L. Ferrell, 
Davis, Polk & Wardell, 450 Lexington Ave., New York, NY 10017.

Final Judgment

    Whereas, plaintiff, the United States of America, and defendants 
Raytheon Company (``Raytheon'') and Texas Instruments, Inc. (``TI''), 
by their respective attorneys, having consented to the entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law herein, and without this Final Judgment constituting any evidence 
against or an admission by any party with respect to any issue of law 
or fact herein;
    And whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of the gallium arsenide foundry and MMIC business 
of TI to assure that competition is not substantially lessened;
    And whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of establishing a viable competitor in the 
development, production and sale of X-band high power amplifier MMICs;
    And whereas, defendants have represented to the plaintiff that the 
divestitures ordered herein can and will be made and that defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now, therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby ordered, adjudged, and 
decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and 
over the subject matter of this action. The Complaint states a claim 
upon which relief may be granted against defendants as hereinafter 
defined, under Section 7 of the Clayton Act, as amended (15 U.S.C 
Sec. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``DoD'' means the Department of Defense.
    B. ``DOI'' means the Antitrust Division of the Department of 
Justice.
    C. ``GaAs'' means gallium arsenide.
    D. ``MMIC'' means a Monolithic Microwave Integrated Circuit.
    E. ``MMIC Business'' means the GaAs foundry and MMIC business of 
the R/F Microwave Business Unit of TI purchased by Raytheon, including 
the GaAs Operations Group, Microwave GaAs Products Business Unit, the 
MMIC component of the Microwave Integrated Circuits Center of 
Excellence, the MMIC research and development component of the System 
Components Laboratory and associated contracting, quality assurance and 
control personnel located in the North Building and East Building of 
TI's Expressway site, all employees listed in attachment A, and all 
assets, including:
    1. all tangible assets purchased by Raytheon used in the operation 
of the MMIC Business including but not limited to: all real property 
(owned or leased), including interests in the North Building and East 
building, used in the operation of that MMIC Business, including 
research and development activities, as identified pursuant to the 
Court's Hold Separate and Partition Plan Stipulation and Order; all 
manufacturing, personal property, inventory, office furniture, fixed 
assets and fixtures, materials, supplies, on-site warehouses or storage 
facilities, and other tangible property or improvements used in the 
operation of the MMIC Business; all licenses, permits and 
authorizations issued by any governmental organization relating to that 
MMIC Business; all contracts, teaming arrangements, agreements, leases, 
commitments and understandings pertaining to the MMIC Business and its 
operations; supply agreements; all customer lists and credit records; 
and other records maintained by TI in connection with the MMIC 
Business;
    2. all intangible assets purchased by Raytheon relating to the MMIC 
Business, including but not limited to all patents, licenses and 
sublicenses, intellectual property, maskwork rights, technical 
information, know-how, trade secrets, drawings, blueprints, designs, 
design protocols, cell libraries, specifications for materials, 
specifications for parts and devices, safety procedures for the 
handling of materials and substances, quality assurance and control 
procedures, design tools and simulation capability, and all manuals and 
technical information TI provides to its own employees, customers, 
suppliers, agents or licensee; and
    3. all research data concerning historic and current research and 
development efforts relating to the MMIC Business, including designs of 
experiments, and the results of unsuccessful designs and experiments.
    F. ``Module Business'' means the transmit and receive module 
business of the R/F Microwave Business Unit of TI purchased by 
Raytheon, including the R/F Microwave Manufacturing Group, Microwave 
Module & Subsystems Center for Excellence Microwave Packaging Center 
for Excellence, Microwave Laboratories and Support Systems Center for 
Excellence, Technology Programs Customer Product Team, module component 
of the Microwave Integrated Circuits Center for Excellence, and 
associated contracting, quality assurance and control personnel located 
in the North Building of TI's Expressway site, and all assets, 
including:
    1. all tangible assets purchased by Raytheon used in the operation 
of the Module Business including but not limited to: all real property 
(owned or leased), including interests in the North Building, used in 
the operation of that Module Business, including research and 
development activities; all manufacturing, personal property, 
inventory, office furniture, fixed assets and fixtures, materials, 
supplies, on-site warehouses or storage facilities, and other tangible 
property or improvements used in the operation of the Module Business; 
all licenses, permits and authorizations issued by any governmental 
organization relating to that Module Business; all contracts, teaming 
arrangements, agreements, leases, commitments and understandings 
pertaining to the Module Business and its operations; supply 
agreements; all customer lists and credit records; and other records 
maintained by TI in connection with the Module Business;
    2. all intangible assets purchased by Raytheon relating to the 
Module Business, excluding information relating to TI's MMIC Business, 
and otherwise including but not limited to all patents,

[[Page 39544]]

licenses and sublicenses, intellectual property, technical information, 
know-how, trade secrets, drawings, blueprints, designs, design 
protocols, specifications for materials, specifications for parts and 
devices, safety procedures for the handling of material and substances, 
quality assurance and control procedures, design tools and simulation 
capability, and all manuals and technical information TI provides to 
its own employees, customers, suppliers agents or licensee; and
    3. all research data concerning historic and current research and 
development efforts relating to the Module Business, including design 
of experiments, and the results of unsuccessful designs and 
experiments.
    G. ``Raytheon'' means Raytheon Company, a Delaware corporation with 
its headquarters and principal place of business in Lexington, 
Massachusetts, and its successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and directors, 
officers, managers, agents, and employees.
    H. ``TI'' means defendant Texas Instruments, Inc., a Delaware 
corporation with its headquarters and principal place of business in 
Dallas, Texas, and its successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and directors, 
officers, managers, agents and employees.

III. Applicability

    A. The provisions of this Final Judgment apply to Raytheon, its 
successors and assigns, their subsidiaries, directors, officers, 
managers, agents, and employees, and all other persons in active 
concert or participation with any of them who shall have received 
actual notice of this Final Judgment by personal service or otherwise.
    B. Raytheon shall require, as a condition of the sale or other 
disposition of all or substantially all of its assets or of a lesser 
business unit that includes Raytheon's business of developing and 
producing MMICs, that the transferee agree to be bound by the 
provisions of this Final Judgment.

IV. Divestiture

    A. Raytheon is hereby ordered and directed in accordance with the 
terms of this Final Judgment, within one hundred and eighty (180) 
calendar days after the filing of the Complaint in this matter, or five 
(5) days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to divest the MMIC Business to an acquirer 
acceptable to DOJ and DoD in their sole discretion.
    B. Raytheon shall use its best efforts to accomplish the 
divestiture as expeditiously and timely as possible. DOJ in its sole 
determination, in consultation with DoD, may extend the time period for 
any divestiture an additional period of time not to exceed thirty (30) 
calendar days.
    C. In accomplishing the divestiture ordered by this Final Judgment, 
Raytheon promptly shall make known, by usual and customary means, the 
availability of the MMIC Business described in this Final Judgment. 
Raytheon shall inform any person making an inquiry regarding a possible 
purchase that the sale is being made pursuant to this Final Judgment 
and provide such person with a copy of this Final Judgment. Raytheon 
shall also offer to furnish to all bona fide prospective purchasers, 
subject to customary confidentially assurances, all information 
regarding the MMIC Business customarily provided in a due diligence 
process except such information subject to attorney-client privilege or 
attorney work product privilege Raytheon shall make available such 
information to the DOJ at the same time that such information is made 
available to any other person.
    D. Raytheon shall permit prospective purchasers of the MMIC 
Business to have reasonable access to personnel and to make such 
inspection of the physical facilities of the MMIC Business and any and 
all Financial, Operational, or other documents and information 
customarily provided as part of a due diligence process.
    E. Raytheon shall not take any action that will impede in any way 
the operation of the MMIC Business.
    F. Unless both DOJ and DoD otherwise consent in writing, the 
divestiture pursuant to Section IV, or by trustee appointed pursuant to 
Section V of this Final Judgment, shall include the entire MMIC 
Business, operated in place pursuant to the Hold Separate and Partition 
Plan Stipulation and Order, and be accomplished by selling or otherwise 
conveying the MMIC Business to a purchaser in such a way as to satisfy 
DOJ and DoD, in their sole discretion, that the MMIC Business can and 
will be used by the purchaser as part of a viable, ongoing business or 
businesses engaged in the development, production and sale of MMICs. 
The divestiture, whether pursuant to Section IV or Section V of this 
Final Judgment, shall be made to a purchaser for whom it is 
demonstrated to DOJs and DoD sole satisfaction: (1) Has the capability 
and intent of competing effectively in the development, production and 
sale of MMICs for advanced DoD radar systems; (2) has the managerial, 
operational, and financial capability to complete effectively in the 
development, production and sale of MMICs for advanced DoD radar 
systems; (3) is eligible to receive applicable DoD security clearances; 
and (4) that none of the terms of any agreement between the purchaser 
and Raytheon give Raytheon the ability unreasonably to raise the 
purchasers costs, to lower the purchasers' efficiency, or otherwise to 
interfere in the ability of the purchaser to complete effectively. 
Subject to these provisions, nothing in this Final Judgment shall 
prohibit TI from seeking to re-acquire the MMIC Business from Raytheon.
    G. Nothing in this Final Judgment shall prevent Raytheon and the 
purchaser of the MMIC Business from entering into a contract under 
which the purchaser would produce product for Raytheon using any 
capacity of the MMIC Business not required to support DoD programs. In 
addition, nothing in this Final Judgment shall prevent Raytheon from 
licensing technology or know-how from the purchaser.
    H. For a period two years from the filing of the Complaint in this 
matter, defendants shall not solicit to hire any individual who, on the 
date of the filing of the Complaint in this matter, with an employee of 
the MMIC Business, For a period of two years from the filing of the 
Complaint in this matter, defendants shall not hire any individual who, 
on the date of the filing of the Complaint in this matter, was an 
employee of the MMIC business unless such individual has a written 
offer of employment from a third party for alike position.
    I. Raytheon shall comply with all agreements with DoD regarding the 
protection of information related to classified programs.
    J. Raytheon shall not charge to DoD any costs directly or 
indirectly incurred in complying with this Final Judgment.

V. Appointment of Trustee

    A. In the event that Raytheon has not divested the MMIC Business 
within the time specified in Section IV of this Final Judgment, the 
Court shall appoint, on application of the United States, a trustee 
selected by DOJ, in consultation with DoD, to effect the-divestiture of 
the MMIC Business.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the MMIC Business described in 
Section II(E) of this Final Judgment. The trustee shall have the power 
and authority to accomplish the divesture at the best price then

[[Page 39545]]

obtainable upon a reasonable effort by the trustee, subject to the 
provision of sections IV and VIII of this Final Judgment, and shall 
have such other powers as the Court shall deem appropriate. The trustee 
shall have the right, in its sole discretion, to include in the package 
of assets to be divested the Module Business; in such event all of the 
obligations and of Raytheon under Section IV of this Final Judgment 
shall apply to the Module Business as well. Subject to Section V(C) of 
this Final Judgment, the trustee shall have the power and authority to 
hire at the cost and expense of Raytheon any investment bankers, 
attorneys, or other agents reasonably necessary in the judgment of the 
truest to assist in the divestiture, and such professionals and agents 
shall be accountable solely to the trustee. The trustee shall have the 
power and authority to accomplish the divestiture at the earliest 
possible time to a purchaser acceptable to the DOJ and DoD, and shall 
have such other powers as this Court shall deem appropriate. Raytheon 
shall not object to a sale by the trustee on any grounds other than the 
trustee's malfeasance. Any such objections by Raytheon must be conveyed 
in writing to DOJ and the trustee within ten (10) calendar days after 
the trustee has provided the notice required under Section VI of this 
Final Judgment.
    C. The trustee shall serve at the cost and expense of Raytheon, on 
such terms and conditions as the Court may prescribe, and shall account 
for all monies derived from the sale of the assets sold by the trustee 
and all costs and expenses so incurred. After approval by the Court of 
the trustee's accounting, including fees for its services and those of 
any professionals and agents retained by the trustee, all remaining 
money shall be paid to Raytheon and the trust shall then be terminated. 
The compensation of such trustee and of any professionals and agents 
retained by the trustee shall be reasonable in light of the value of 
the divested business and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestiture and the speed with which it is accomplished.
    D. Raytheon shall use its best efforts to assist the trustee in 
accomplishing the required divestiture, including best efforts to 
affect all necessary regulatory approvals. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and Raytheon 
shall develop financial or other information relevant to the business 
to be divested customarily provided in a due diligence process as the 
trustee may reasonably request, subject to customary confidentiality 
assurances. Raytheon shall permit bona fide prospective acquirers of 
the assets to have reasonable access to personnel and to make such 
inspection of physical facilities and any and all financial, 
operational or other documents and other information as may be relevant 
to the divestiture required by this Final Judgment.
    E. After its appointment, the trustee shall file monthly reports 
with the parties and the Court setting forth the trustee's efforts to 
accomplish the divestiture ordered under this Final Judgment; provided, 
however, that to the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the court. Such reports shall include the name, 
address and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the business to be divested, 
and shall describe in detail each contact with any such person during 
that period. The trustee shall maintain full records of all efforts 
made to divest the business to be divested.
    F. If the trustee has not accomplished such divestiture within six 
(6) months after its appointment, the trustee thereupon shall file 
promptly with the Court a report setting forth (1) The trustee's 
efforts to accomplish the required divestiture, (2) the reasons, in the 
trustee's judgment, why the required divestiture has not been 
accomplished, and (3) the trustee's recommendations; provided, however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. The trustee shall at the same time furnish such 
report to the parties, who shall each have the right to be heard and to 
make additional recommendations consistent with the purpose of the 
trust. The Court shall enter thereafter such orders as it shall deem 
appropriate in order to carry out the purpose of the trust which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by DOJ.

VI. Notification

    Within two (2) business days following execution of a definitive 
agreement, contingent upon compliance with the terms of this Final 
Judgment, to effect, in whole or in part, any proposed divestiture 
pursuant to Sections IV or V of this Final Judgment, Raytheon or the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify DOJ and DoD of the proposed divestiture. If the trustee is 
responsible, it shall similarly notify Raytheon. The notice shall set 
forth the details of the proposed transaction and list the name, 
address, and telephone number of each person previously identified who 
offered to, or expressed an interest in or a desire to, acquire any 
ownership interest in the business to be divested that is the subject 
of the binding contract, together with full details of same. Within 
fifteen (15) calendar days of receipt by DOJ and DoD of such notice, 
DOJ, in consultation with DoD, may request from Raytheon, the proposed 
purchaser, or any other third party additional information concerning 
the proposed divestiture and the proposed purchaser. Raytheon and the 
trustee shall furnish any additional information requested from them 
within fifteen (15) calendar days of the receipt of the request, unless 
the parties shall otherwise agree. Within thirty (30) calendar days 
after receipt of the notice or within twenty (20) calendar days after 
the DOJ has been provided the additional information requested from 
Raytheon, the proposed purchaser, and any third party, whichever is 
later, DOJ and DoD shall each provide written notice to Raytheon and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If DOJ and DoD provide written notice to Raytheon 
and the trustee that they do not object, then the divestiture may be 
consummated, subject only to Raytheon's limited right to object to the 
sale under Section V(B) of this Final Judgment. Absent written notice 
that DOJ and DoD do not object to the proposed purchaser or upon 
objection by DOJ or DoD, a divestiture proposed under Section IV or 
Section V may be consummated. Upon objection by Raytheon under the 
provision in Section V(B), a divestiture proposed under Section V shall 
not be consummated unless approved by the Court.

VII. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter and every thirty (30) calendar days thereafter until the 
divestiture has been completed whether pursuant to Section IV or 
Section V of this Final Judgment, Raytheon shall deliver to DOJ and DoD 
an affidavit as to the fact and manner of compliance with Sections IV 
or V of this Final Judgment. Each such

[[Page 39546]]

affidavit shall include, inter alia, the name, address, and telephone 
number of each person who, at any time after the period covered by the 
last such report, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the business to be 
divested, and shall describe in detail each contact with any such 
person during that period. Each such affidavit shall also include a 
description of the efforts that Raytheon has taken to solicit a buyer 
for the relevant assets and to provide required information to 
prospective purchasers including the limitations, if any, on such 
information. Assuming the information set forth in the affidavit is 
true and complete, any objection by DOJ to information provided by 
Raytheon, including limitations on information, shall be made within 
fourteen (14) days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Raytheon shall deliver to DOJ and DoD an affidavit 
which describes in detail all actions Raytheon has taken and all steps 
Raytheon has implemented on an on-going basis to preserve the MMIC 
Business pursuant to Section VIII of this Final Judgment and the Hold 
Separate and Partition Order entered by the Court. The affidavit also 
shall describe, but not be limited to, Raytheon's efforts to maintain 
and operate the MMIC Business as an active competitor, maintain the 
management, staffing, research and development activities, sales, 
marketing and pricing of the MMIC Business, and maintain the MMIC 
Business in operable condition at current capacity configurations. 
Raytheon shall deliver to DOJ and DoD an affidavit describing any 
changes to the efforts and actions outlined in Raytheon's earlier 
affidavit(s) filed pursuant to this Section within fifteen (15) 
calendar days after the change is implemented.
    C. Until one year after such divestiture has been completed, 
Raytheon shall preserve all records of all efforts made to preserve the 
business to be divested and effect the divestiture.

VIII. Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, Raytheon shall take all steps necessary to comply with 
the Hold Separate and Partition Plan Stipulation and Order entered by 
this Court and to preserve the assets of the Module Business. 
Defendants shall take no action that would jeopardize the divestiture 
ordered by this Court.

IX. Financing

    Raytheon is ordered and directed not to finance all or any part of 
any purchase by an acquirer made pursuant to Sections IV or V of this 
Final Judgment without prior written consent of DOJ.

X. Compliance Inspection

    For purposes of determining or securing compliance with the Final 
Judgment and subject to any legally recognized privilege, from time to 
time:
    A. Duly authorized representatives of the United States Department 
of Justice, upon written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to Raytheon made to its principal offices, shall be 
permitted:
    1. Access during office hours of Raytheon to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of Raytheon, who 
may have counsel present, relating to the matters contained in this 
Final Judgment and the Hold Separate Stipulation and Order; and
    2. Subject to the reasonable convenience of Raytheon and without 
restraint or interference from it, to interview, either informally or 
on the record, its officers, employees, and agents, who may have 
counsel present, regarding any such matters.
    B. Upon the written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division, made to 
Raytheon's principal offices, Raytheon shall submit such written 
reports, under oath if requested, with respect to any matter contained 
in the Final Judgment and the Hold Separate and Partition Order.
    C. No information or documents obtained by the means provided in 
Sections VII or X of this Final Judgment shall be divulged by a 
representative of the plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If at the time information or documents are furnished by 
Raytheon to DOJ or DoD, Raytheon represents and identifies in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Raytheon marks each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice 
shall be given by DOJ or DoD to Raytheon prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding) 
to which Raytheon is not a party.

XI. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further order and directions as may be necessary or 
appropriate for the construction or carrying out this Final Judgment, 
for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XII. Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the date of its entry.

XIII. Public Interest

    Entry of this Final Judgment is in the public interest.

    Dated__________, 1997.
    __________, United States District Judge.

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On July 2, 1997, the United States filed a civil antitrust 
Complaint alleging that the proposed acquisition by Raytheon Company 
(``Raytheon'') of the Defense Systems and Electronics Unit (``DS&E'') 
of Texas Instruments (``TI'') would violate Section 7 of the Clayton 
Act, 15 U.S.C. Sec. 18. The Complaint alleges that Raytheon and TI are 
the only two firms that are now in a position to develop and produce an 
essential input required in state-of-the-art military radar systems 
that will cost the Department of Defense about $10 billion. These 
inputs are X-band high power amplifier monolithic microwave integrated 
circuits (``MMICs''). Raytheon is also a leading producer of radar 
systems. TI, on the other hand, is an independent supplier of MMICs, 
often supplying them to Raytheon's radar system competitors.

[[Page 39547]]

    As described in the Complaint, since X-band high power amplifier 
MMICs are purchased by domestic radar producers for inclusion in weapon 
systems sold to the Department of Defense, and there are no foreign 
producers to which domestic radar producers could reasonably turn to 
purchase these MMICs, the relevant geographic market is the United 
States.
    The prayer for relief in the Complaint seeks: (1) a judgment that 
the proposed acquisition would violate Section 7 of the Clayton Act; 
and (2) a permanent injunction preventing Raytheon from acquiring DS&E.
    When the Complaint was filed, the United States also filed a 
proposed settlement that would permit Raytheon to complete its 
acquisition of DS&E, but require a divestiture and other terms that 
will preserve competition in the relevant market. This settlement 
consists of a Stipulation and Order, Hold Separate and Partition Plan 
Stipulation and Order, and a proposed Final Judgment.
    The proposed Final Judgment orders Raytheon to divest, within one 
hundred and eighty (180) calendar days after the filings of the 
Complaint in this matter, or five (5) days after notice of the entry of 
the Final Judgment by the Court, whichever is later, the MMIC Business 
(as defined in the Final Judgment) of DS&E to an acquirer acceptable to 
the Antitrust Division of the Department of Justice (``DOJ'') and the 
Department of Defense (``DoD''). TI's MMIC Business includes its 
commercial and defense MMICs, a gallium arsenide foundry, and all 
tangible and intangible assets used by TI in the operation of its MMIC 
Business. Raytheon is also required to divest the Module Business (as 
defined in the Final Judgment) of DS&E if a trustee deems the sale of 
this business is necessary to perfect a sale of the MMIC Business.
    Until such divestiture is completed, the terms of the Hold Separate 
and Partition Plan Stipulation and Order entered into by the parties 
apply to ensure that the MMIC Business of DS&E shall be maintained as 
an independent competitor from Raytheon.
    The plaintiff and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate the action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction
    Raytheon is a Delaware corporation headquartered in Lexington, 
Massachusetts. Raytheon produces aircraft, guided missiles, space 
vehicles, and defense electronics equipment. It develops and produces 
high power amplifier MMICs for military radars as its Advanced Device 
Center in Andover, Massachusetts. In 1996, Raytheon reported total 
sales of about $12 billion. Raytheon is also a leading designer and 
producer of radar systems.
    TI is a Delaware corporation headquartered in Dallas, Texas. In 
1996, TI reported total sales of about $13 billion. Its DS&E unit 
produces guided missiles, electro-optical systems, and defense 
electronics equipment. DS&E develops and produces high power amplifier 
MMICs for military radars through its R/F Microwave Business Unit at a 
facility in Dallas, Texas. In 1996, DS&E reported total sales of about 
$1.3 billion.
    On January 4, 1997, Raytheon entered into an agreement with TI to 
purchase DS&E. This transaction, which would, in part, take place in 
the highly concentrated high power amplifier MMIC market, precipitated 
the government's suit.
B. MMIC Market
    High power amplifier MMICs are solid state semiconductor components 
(commonly referred to as ``chips'') made of gallium arsenide and used 
in active electronically scanned array (``AESA'') radars MMICs are 
designed to operate within specified frequency ranges or bands of the 
microwave spectrum. Military AESA radars demand the highest performance 
MMICs typically those operating in that part of the spectrum called the 
X-band, because this band offers the best combination of all-weather 
capability and ability to detect low-level targets. Because of the 
importance of the X-band high power amplifier MMIC to the performance 
of an AESA radar, the performance of these MMICs is important selection 
criterion among competing radar systems.
    Raytheon has produced more high power amplifier MMICs and modules 
than any other firm, and TI is the recognized leader in developing high 
power amplifier MMICs. The two companies are the only firms capable of 
developing and producing the high power amplifier MMICs required for 
military radar bids scheduled for the next two to three years. In the 
next two to three years, radar programs worth over $10 billion will be 
competed. The radars for these programs will all require X-band high 
power amplifier MMICs. TI and Raytheon are the only firms that have 
established production processes and proven manufacturing capability 
for these high power amplifier MMICs.
    Raytheon's acquisition of TI's DS&E, including the MMICs Business, 
would have eliminated competition in the development, production, and 
sale of X-band high power amplifier MMICs for military radars being 
developed over the next two to three years. The proposed acquisition 
would have resulted in a single supplier with the incentive and ability 
to raise prices and little or no incentive to minimize cost.
    The acquisition also likely would have resulted in a lessening of 
competition in the market for military radars. Raytheon is not only a 
supplier of high power amplifier MMICs but is also a major supplier of 
the radar systems of which these devices are critical components. Prior 
to announcement of the acquisition. TI had teamed with other radar 
systems suppliers to develop MMICs that met the required specifications 
for DoD weapon systems. If it acquired the MMIC Business, Raytheon 
would have controlled access to all currently viable high power 
amplifier MMICs. Without access to the latest high power amplifier 
MMICs, a radar manufacturer would be at a serious disadvantage for 
upcoming military radar competitions.
    Successful entry into the production and sale of high power 
amplifier MMICs is difficult, time consuming, and costly. Entry 
requires advanced technology, skilled engineers, and costly customized 
equipment. A new gallium arsenide foundry costs $50-100 million and 
takes at least two years to construct. A potential entrant would have 
to engage in difficult, expensive, and time consuming research to 
develop designs and production processes that can economically and 
reliably produce high power amplifier MMICs. These designs and 
production processes must be perfected in order to bid successfully for 
a military radar program.
    Because the high power amplifier MMIC is a crucial input of the 
radar system, there are no reasonable substitutes to which customers 
could switch in the event of a small, but significant and non-
transitory price increase.
C. Harm to Competition As A Consequence of the Acquisition
    Raytheon's acquisition of DS&E's MMIC Business would eliminate

[[Page 39548]]

competition in the research, development, and production of high power 
amplifier MMICs necessary to military weapons systems in the United 
States.
    If Raytheon acquired the MMIC Business of DS&E, the current two 
producers of high power amplifier MMICs in the United States would be 
reduced to one. Entry by a new company would not be timely, likely or 
sufficient to prevent harm to competition.
    The Complaint alleges that the transaction would have the following 
effects, among others: competition generally in the innovation, 
development, production, and sale of high power amplifier MMICs for 
military radars in the United States would be lessened substantially; 
actual and future competition between Raytheon and TI in the 
development, production and sale of high power amplifier MMICs for 
military radars in the United States will be eliminated; prices for 
high power amplifier MMICs for military radars in the United States 
would likely increase; and competition generally in development, 
production and sale of military radars in the United States would be 
lessened substantially.

III. Explanation of the Proposed Final Judgment

    The provisions of the proposed Final Judgment are designed to 
eliminate the anticompetitive effects of the acquisition of DS&E's MMIC 
Business by Raytheon.
    The proposed Final Judgment provides that Raytheon must divest, 
within one hundred and eighty (180) calendar days after the filing of 
the Complaint in this matter, or five (5) days after notice of the 
entry of the Final Judgment by the Court, whichever is later, the MMIC 
Business of DS&E to an acquirer acceptable to the DOJ and DoD. If 
defendants fail to divest the MMIC Business, a trustee (selected by DOJ 
in consultation with DoD) will be appointed. The trustee will be 
authorized to sell, in his or her sole discretion, the MMIC Business. 
In addition, the trustee shall have the right, in his or her sole 
discretion, to include in the package of assets to be divested the 
Module Business, if sale of the Module Business is necessary to perfect 
a sale of the MMIC Business.
    The Final Judgment provides that Raytheon will pay all costs and 
expenses of the trustee. After his or her appointment becomes 
effective, the trustee will file monthly reports with the parties and 
the Court, setting forth the trustee's efforts to accomplish 
divestiture. At the end of six months, if the divestiture has not been 
accomplished, the trustee and the parties will make recommendations to 
the Court, which shall enter such orders as appropriate in order to 
carry out the purpose of the trust, including extending the trust or 
the term of the trustee's appointment.
    Divestiture of the MMIC Business preserves competition because it 
will restore the high power amplifier MMIC market to a structure that 
existed prior to the acquisition and will preserve the existence of an 
independent competitor. Divestiture will keep at least two producers of 
high power amplifier MMICs in the market competing for upcoming AESA 
radar programs, which will preserve and encourage ongoing competition 
in product innovation and development, production, and sales. 
Divestiture will also prevent radar system manufacturers from being 
foreclosed from a critical input and thus will preserve competition in 
upcoming military radar programs.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C. 
16(a)), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty (60) days of the date of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the Department of Justice, which remains free to withdraw its 
consent to the proposed Judgment at any time prior to entry. The 
comments and the response of the United States will be filed with the 
Court and published in the Federal Register. Written comments should be 
submitted to: J. Robert Kramer II, Chief, Litigation II Section, 
Antitrust Division, United States Department of Justice, 1401 H Street, 
NW., Suite 3000, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against defendants Raytheon 
and TI. The United States could have brought suit and sought 
preliminary and permanent injunctions against Raytheon's acquisition. 
The United States also considered a settlement involving the licensing 
of MMIC technology to one or more firms. The United States determined, 
however, that such a proposal would not fully protect competition for 
important radar projects over the next several years.
    United States is satisfied that the divestiture of the described 
assets and the other terms specified in the proposed Final Judgment 
will encourage viable competition in the research, development, and 
production of high power amplifier MMICs. The United States is 
satisfied that the proposed relief will prevent the acquisition from 
having anticompetitive effects in this market. The divestiture of the 
MMIC Business and the other proposed terms will restore the high power 
amplifier MMIC market to a structure that existed prior to the 
acquisition and will preserve the existence of an independent 
competitor.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgment in antitrust cases 
brought by the United States be subject to a sixty-day comment period, 
after which the court shall determine whether entry of the proposed 
Final Judgment ``is the public interest.'' In making that 
determination, the court may consider--

[[Page 39549]]

    (1) the competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration or relief sought, anticipated effects of alternative remedies 
actually considered, and any other considerations bearing upon the 
adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public generally 
and individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if any, 
to be derived from a determination of the issues at trail.
15 U.S.C. Sec. 16(e) (emphasis added). As the Court of Appeals for the 
District of Columbia Circuit recently held, the APPA permits a court to 
consider, among other things, the relationship between the remedy 
secured and the specific allegations set forth in the government's 
complaint, whether the decree is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the decree may 
positively harm third parties. See United States v. Microsoft, 56 F.3d 
1448 (D.C. Cir. 1995).
    In conduction this injury, ``the Court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' \1\ Rather, absent a showing of 
corrupt failure of the government to discharge its duty, the Court, in 
making its public interest finding, should . . . carefully consider the 
explanations of the government in the competitive impact statement and 
its responses to comments in order to determine whether those 
explanations are reasonable under the circumstances.
---------------------------------------------------------------------------

    \1\ 119 Cong. Rec. 24598 (1973). See also United States v. 
Gillete Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public 
interest'' determination can be made properly on the basis of the 
Competitive Impact Statement and Response to Comments filed pursuant 
to the APPA. Although the APPA authorizes the use of additional 
procedures, 15 U.S.C. Sec. 16(f), those procedures are 
discretionary. A court need not invoke any of them unless it 
believes that the comments have raised significant issues and that 
further proceedings would aid the court in resolving those issues. 
See H.R. 93-1463, 93rd Cong. 2d Sess. 8-9, reprinted in (1974) U.S. 
Code Cong. & Ad. News 6535, 6538.
---------------------------------------------------------------------------

United States v. Mid-America Dairymen, Inc., 1977-1 Trace Cas 
para.61.508, at 71.980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel 
Corp., 648 F.2d 660,666 (9th Cir.), cert. denied, 454 U.S. 1083 (1981); 
see also, Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent requires 
that

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the pubic in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is `within the reaches of the public 
interest,' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\2\

    \2\ United States v. Bechtel, 648 F.2d at 666 (internal 
citations omitted) (emphasis added); see United States v. BNS, Inc., 
858 F.2d at 463; United States v. National Broadcasting Co., 449 F. 
Supp. 1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 
406 F. Supp. at 716. See also United States v. American Cyanamid 
Co., 719 F.2d 558, 565 (2d Cir. 1983).
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainly of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' (citations 
omitted).\3\
---------------------------------------------------------------------------

    \3\ United States v. American Tel. and Tel Co., 552 F. Supp. 
131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 
460 U.S. 1001 (1983), quoting United States v. Gillette Co., supra, 
406 F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F. 
Supp. 619, 622 (W.D. Ky 1985).
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.
    For Plaintiff United States of America:
    J. Robert Kramer II, Chief, Litigation II Section, PA Bar # 
23963; William L. Hudgins, Assistant Chief, Litigation II Section, 
DC Bar # 37127; and
Janet Adams Nash, Kevin C. Quin, Stacy Nelson, Laura M. Scott, Nancy 
Olson, Tara M. Higgins, Charles R. Schwidde, Robert W. Wilder, 
Melanie Sabo,
    Trail Attorneys, U.S. Department of Justice, Antitrust Division, 
1401 H St., N.W., Suite 3000, Washington, D.C. 20530, 202-307-0924, 
202-307-6283 (Facsimile).

    Dated: July 2, 1997.

[FR Doc. 97-19315 Filed 7-22-97; 8:45 am]
BILLING CODE 4410-11-M