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

FEDERAL TRADE COMMISSION

[File No. 951-0013]

Reckitt & Colman plc; Proposed Consent Agreement With Analysis To

Aid Pubic Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

allow, among other things, Reckitt & Colman to acquire L&F Products

Inc. with the required prior approval on the condition that it sells

its own rug cleaning assets, within six months, to a Commission

approved acquirer. If the divestiture is not completed on time, the

consent agreement would permit the Commission to appoint a trustee to

complete the transaction. In addition, the consent agreement would

require the respondent to obtain Commission approval, for ten years,

before acquiring any interest in the carpet-deodorizer business in the

United States.

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

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th Street and Pennsylvania Avenue NW., Washington, D.C.

20580.

FOR FURTHER INFORMATION CONTACT: Ann Malester, FTC/S-2224, Washington,

D.C. 20580. (202) 326-2682.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the following consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. Public comments is invited. Such

comments or views will be considered by the Commission and will be

available for inspection and copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order

Commissioners: Janet D. Steiger, Chairman, Mary L. Azcuenaga,

Roscoe B. Starek, III, Christine A. Varney.

The Federal Trade Commission (``Commission''), having initiated an

investigation of the proposed acquisition by Reckitt & Colman plc

(``Reckitt & Colman''), a United Kingdom corporation, of substantially

all of the assets and liabilities of L&F Products Inc., a Delaware

corporation, from Eastman Kodak Company, and it now appearing that

Reckitt & Colman, hereinafter sometimes referred to as ``proposed

respondent,'' is wiling to enter into an agreement containing an order

to divest certain assets and cease and desist from making certain

acquisitions, and providing for certain other relief:

It is hereby agreed by and between proposed respondent, by its duly

authorized officers and attorneys, and counsel for the Commission that:

1. Proposed respondent Reckitt & Colman is a corporation organized,

existing, and doing business under and by virtue of the laws of England

and Wales with its principal executive offices located at One

Burlington Lane, London, England W4 2RW. Reckitt & Colman does business

in the United States through its wholly-owned subsidiary Reckitt &

Colman Inc., with its offices and principal place of

[[Page 3237]] business at 1655 Valley Road, Wayne, New Jersey 07474-

0943.

2. Proposed respondent admits all the jurisdictional facts set

forth in the draft of complaint.

3. Proposed respondent waives:

(a) any further procedural steps;

(b) the requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law;

(c) all rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement;

and

(d) any claims under the Equal Access to Justice Act.

4. This agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

agreement is accepted by the Commission it, together with the draft of

complaint contemplated thereby, will be placed on the public record for

a period of sixty (60) days and information in respect thereto publicly

released. The Commission thereafter may either withdraw its acceptance

of this agreement and so notify the proposed respondent, in which event

it will take such action as it may consider appropriate, or issue and

serve its complaint (in such form as the circumstances may require) and

decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondent that the law has been

violated as alleged in the draft of complaint, or that the facts as

alleged in the draft complaint, other than jurisdictional facts, are

true.

6. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Section 2.34 of the

Commission's Rules, the Commission may, without further notice to

proposed respondent, (1) issue its complaint corresponding in form and

substance with the draft of complaint and its decision containing the

following order to divest and to cease and desist, in disposition of

the proceeding, and (2) make information public with respect thereto.

When so entered, the order shall have the same force and effect and may

be altered, modified, or set aside in the same manner and within the

same time provided by statute for other orders. The order shall become

final upon service. Delivery by the U.S. Postal Service of the

complaint and decision containing the agreed-to order to 1655 Valley

Road, Wayne, New Jersey 07474-0943 shall constitute service. Proposed

respondent waives any right it may have to any other manner of service.

The complaint may be used in construing the terms of the order, and no

agreement, understanding, representation, or interpretation not

contained in the order or the agreement may be used to vary or

contradict the terms of the order.

7. Proposed respondent has read the proposed complaint and order

contemplated hereby. Proposed respondent understands that once the

order has been issued, it will be required to file one or more

compliance reports showing that it has fully complied with the order.

Proposed Respondent further understands that the Commission's approval,

pursuant to the Commission's Order in Docket No. C-3306, of the

Acquisition, as defined in the following order, is conditioned upon the

proposed respondent's compliance with the terms of the following order.

Proposed respondent further understands that it may be liable for civil

penalties in the amount provided by law for each violation of this

order after it becomes final, or of the Commission's Order in Docket

No. C-3306.

Order

I.

Definitions

It is ordered that, as used in this order, the following

definitions shall apply:

A. ``Reckitt & Colman'' means Reckitt & Colman plc, its

predecessors, successors and assigns, the divisions, subsidiaries,

affiliates, companies, groups, partnerships and joint ventures that

Reckitt & Colman controls, directly or indirectly, and their directors,

officers, employees, agents and representatives, and their respective

successors and assigns.

B. ``Kodak'' means Eastman Kodak Company, its predecessors,

successors and assigns, the divisions, subsidiaries, affiliates,

companies, groups, partnerships and joint ventures that Kodak controls,

directly or indirectly, and their directors, officers, employees,

agents and representatives and their respective successors and assigns.

C. ``L&F''means the United States Assets and Businesses acquired by

Reckitt & Colman in the Acquisition.

D. ``Respondent'' means Reckitt & Colman.

E. ``Commission'' means the Federal Trade Commission.

F. ``Acquisition'' means Reckitt & Colman's acquisition of

substantially all of the assets and liabilities of the household

products, professional products and personal products businesses of L&F

Products Inc. pursuant to an asset purchase agreement dated September

26, 1994, with Eastman Kodak Company, L&F Products Inc., a wholly-owned

subsidiary of Kodak, and Sterling Winthrop Inc., a wholly-owned

subsidiary of L&F Products Inc.

G. ``Carpet Deodorizer Products'' means powder products designed to

combat and eliminate offensive odors in rugs and carpets that are

distributed to consumers primarily through grocery, drug, and mass

merchandise stores. Carpet Deodorizer Products does not include Rug

Cleaning Products.

H. ``Carpet Deodorizer Assets'' means all of Reckitt & Colman's

United States rights, title and interest in and to:

(1) Carpet Deodorizer Products, including, but not limited to, the

brands, trademarks and tradedress ``Carpet Fresh'', ``Rug Fresh''; and

(2) All of Reckitt & Colman's Carpet Deodorizer Products assets and

businesses delineated in Schedule A, attached hereto and made a part

hereof.

Carpet Deodorizer Assets excludes any assets or businesses acquired

in the Acquisition.

I. ``Rug Cleaning Products'' means products designed to clean rugs

and carpets that are applied by aerosol spray, or in liquid, foam or

other forms and that are distributed to consumers primarily through

grocery, drug, and mass merchandise stores. Rug Cleaning Products does

not include Carpet Deodorizer Products.

J. ``Rug Cleaning Assets'' means all of Reckitt & Colman's United

States rights, title and interest in and to:

(1) Rug Cleaning Products, including, but not limited to, the right

to use the brands, trademarks and tradedress ``Woolite Heavy Traffic

Carpet Cleaner'', ``Woolite One Step Carpet Cleaner'', ``Woolite Spot &

Stain Carpet Cleaner'', ``Woolite Fabric and Upholstery Cleaner'', and

``Woolite Pet Stain Carpet Cleaner'' in connection with the production,

marketing and sale of Rug Cleaning Products; and

(2) all of Reckitt & Colman's Rug Cleaning Products assets and

businesses delineated in schedule B, attached hereto and made a part

hereof.

Rug Cleaning Assets excludes any assets or businesses acquired in

the Acquisition.

K. ``Woolite Fabric Care Products'' means products designed to

clean fabric and clothing that are applied by aerosol spray, or in

liquid, foam or other forms and that are distributed to consumers

primarily through grocery, drug, and mass merchandise stores. Woolite

[[Page 3238]] Fabric Care Products excludes Rug Cleaning Products.

L. ``Woolite Assets'' means all of Reckitt & Colman's United States

rights, title and interest in and to:

(1) Woolite Fabric Care Products, including, but not limited to,

the brand and trademark ``Woolite''; and

(2) all of Reckitt & Colman's Woolite Fabric Care Products assets

and businesses delineated in Schedule C, attached hereto and made a

part hereof.

Woolite Assets excludes any assets or businesses acquired in the

Acquisition.

M. ``Air Freshener Products'' means products that are specifically

designed to scent the air in the home that are applied by aerosol

spray, or in liquid, solid, wick or other forms and that are

distributed to consumers primarily through grocery, drug, and mass

merchandise stores.

N. ``Air Freshener Assets'' means all of Reckitt & Colman's United

States rights, title and interest in and to:

(1) Air Freshener Products, including, but not limited to, the

brands and trademarks ``Airwick'', ``Stick Ups'', ``Air Waves'',

``Wizard'', ``Botanicals'', and ``Airwick Neutra Air''; and

(2) all of Reckitt & Colman's Air Freshener Products assets and

businesses delineated in Schedule D, attached hereto and made a part

hereof.

Air Freshener Assets excludes any assets or businesses acquired in

the Acquisition.

II

Divestiture of Carpet Deodorizer Assets

It is ordered that:

A. Reckitt & Colman shall divest the Carpet Deodorizer Assets,

absolutely and in good faith, within six (6) months of the date this

order becomes final, and shall also divest such additional ancillary

assets and effect such arrangements as are necessary to assure the

marketability, viability, and competitiveness of the Carpet Deodorizer

Assets; provided, however, that Reckitt & Colman is not required to

divest nay of the Carpet Deodorizer Assets identified in Schedule A,

Part 2, if such assets are not required by the acquirer.

B. Reckitt & Colman shall divest the Carpet Deodorizer Assets only

to an acquirer that receives the prior approval of the Commission, and

only in a manner that receives the prior approval of the Commission.

The purpose of the divestiture of the Carpet Deodorizer Assets is to

ensure the continuation of the assets as an ongoing, viable enterprise

engaged in the same businesses in which the Carpet Deodorizer Assets

presently are employed, and to remedy the lessening of competition

resulting from the Acquisition as alleged in the Commission's

complaint.

C. Upon reasonable notice from the acquirer of the Carpet

Deodorizer Assets to Reckitt & Colman, for a period of six (6) months

following the date of the divestiture, Reckitt & Colman shall provide

such personnel, information, assistance, advice and training to the

acquirer as is necessary to transfer the Carpet Deodorizer Assets

pursuant to Paragraph II.A. of this order and establish such business

as a viable, ongoing concern. Such assistance shall include reasonable

consultation with knowledgeable employees of Reckitt & Colman as

necessary to satisfy the acquirer's management that its personnel are

appropriately trained in the manufacture, distribution and marketing of

Carpet Deodorizer Products. Reckitt & Colman shall not charge the

acquirer a rate more than its own direct costs for providing such

assistance.

D. Reckitt & Colman shall cooperate and assist the acquirer in

obtaining approvals for the transfer of all registrations, leases,

licenses, certifications, permits, or similar documents relating to the

Carpet Deodorizer Assets.

E. Reckitt & Colman shall take such actions as are necessary to

maintain the viability and marketability of the Carpet Deodorizer

Assets and to prevent the destruction, removal, wasting, deterioration

or impairment of any of the Carpet Deodorizer Assets except in the

ordinary course of business and except for ordinary wear and tear.

III

Rug Cleaning Divestiture

It is further ordered that:

A. Reckitt & Colman shall divest, absolutely and in good faith,

within six (6) months of the date the Commission approves the

Acquisition pursuant to Paragraph V of the order in Docket No. C-3306,

the Rug Cleaning Assets, and shall also divest such additional

ancillary assets and effect such arrangements as are necessary to

assure the marketability, viability, and competitiveness of the Rug

Cleaning Assets; provided, however, that Reckitt & Colman is not

required to divest any of the Rug Cleaning Assets identified in

Schedule B, Part 2, if such assets are not required by the acquirer.

B. Reckitt & Colman shall divest the Rug Cleaning Assets only to an

acquirer that receives the prior approval of the Commission, and only

in a manner that receives the prior approval of the Commission. The

purpose of the divestiture of the Rug Cleaning Assets is to ensure the

continuation of the assets as an ongoing, viable enterprise engaged in

the same businesses in which the Rug Cleaning Assets presently are

employed, and to remedy the lessening of competition resulting from the

Acquisition as described in the Commission's letter approving the

Acquisition.

C. Upon reasonable notice from the acquirer of the Rug Cleaning

Assets to Reckitt & Colman, for a period of six months following the

date of the divestiture, Reckitt & Colman shall provide such personnel,

information, assistance, advice and training to the acquirer as is

necessary to transfer the Rug Cleaning Assets pursuant to Paragraph

III.A. of this order and establish such business as a viable, ongoing

concern. Such assistance shall include reasonable consultation with

knowledgeable employees of Reckitt & Colman to satisfy the acquirer's

management that its personnel are appropriately trained in the

manufacture, distribution and marketing of Rug Cleaning Products.

Reckitt & Colman shall not charge the acquirer a rate more than its own

direct costs for providing such assistance.

D. Reckitt & Colman shall cooperate and assist the acquirer in

obtaining approvals for the transfer of all registrations, leases,

licenses, certifications, permits, or similar documents relating to the

Rug Cleaning Assets.

E. Reckitt & Colman shall take such actions as are necessary to

maintain the viability and marketability of the Rug Cleaning Assets to

prevent the destruction, removal, wasting, deterioration or impairment

of any of the Rug Cleaning Assets except in the ordinary course of

business and except for ordinary wear and tear.

IV

Trustee provisions

It is further ordered that:

A. (1) If Reckitt & Colman has not divested, absolutely and in good

faith and with the Commission's prior approval the Carpet Deodorizer

Assets within six (6) months of the date this order becomes final, the

Commission may appoint a trustee to divest the Carpet Deodorizer Assets

and the Air Freshener Assets; provided, however, that the trustee is

not required to divest any of the Carpet Deodorizer Assets identified

in Schedule A, Part 2, or any of the Air Freshener Assets identified in

Schedule D, Part 2, if such assets are not required by the

acquirer. [[Page 3239]]

(2) If Reckitt & Colman has not divested, absolutely and in good

faith and with the Commission's prior approval the Rug Cleaning Assets

within six (6) months of the date the Commission approves the

Acquisition pursuant to the order in Docket No. C-3306, the Commission

may appoint a trustee to divest the Rug Cleaning Assets and the Woolite

Assets; provided, however, that the trustee is not required to divest

any of the Rug Cleaning Assets identified in Schedule B, Part 2, or any

of the Woolite Assets identified in Schedule C, Part 2, if such assets

are not required by the acquirer.

B. In the event the Commission or the Attorney General brings an

action pursuant to Sec. 5(1) of the Federal Trade Commission Act, 15

U.S.C. Sec. 45(1), or any other statute enforced by the Commission,

Reckitt & Colman shall consent to the appointment of a trustee in such

action. Neither the appointment of a trustee nor a decision not to

appoint a trustee under this Paragraph shall preclude the Commission or

the Attorney General from seeking civil penalties or any other relief

available to it, including a court-appointed trustee, pursuant to

Section 5(1) of the Federal Trade Commission Act, or any other statute

enforced by the Commission, for any failure by Reckitt & Colman to

comply with this order, or the order in Docket No. C-3306.

C. If a trustee is appointed by the Commission or a court pursuant

to Paragraph IV.A.(1) or Paragraph IV.A.(2) of this order, Reckitt &

Colman shall consent to the following terms and conditions regarding

the trustee's powers, duties, authorities, and responsibilities.

1. The Commission shall select the trustee, subject to the consent

of Reckitt & Colman, which consent shall not be unreasonably withheld.

The trustee shall be a person with experience and expertise in

acquisitions and divestitures. If Reckitt & Colman has not opposed, in

writing, including the reasons for opposing, the selection of any

proposed trustee within ten (10) days after notice by the staff of the

Commission to Reckitt & Colman of the identity of any proposed trustee,

Reckitt & Colman shall be deemed to have consented to the selection of

the proposed trustee.

2. Subject to the prior approval of the Commission and under the

terms and conditions described in Paragraph IV.A. of this order, the

trustee shall have the exclusive power and authority to divest the

Carpet Deodorizer Assets and the Air Freshener Assets, and/or the Rug

Cleaning Assets and the Woolite Assets, together with any additional,

incidental assets of Reckitt & Colman that may be reasonably necessary

to assure the viability and competitiveness of the Carpet Deodorizer

Assets and the Air Freshener Assets, and/or the Rug Cleaning Assets and

the Woolite Assets.

3. Within ten (10) days after the appointment of the trustee,

Reckitt & Colman shall execute a trust agreement that, subject to the

prior approval of the Commission, and, in the case of a court-appointed

trustee, of the court, transfers to the trustee all rights and powers

necessary to effect the divestiture(s) require by this order.

4. The trustee shall have twelve (12) months from the date the

Commission approves the trust agreement described in Paragraph IV.C.3.

of this order to accomplish the divestiture(s). If, however, at the end

of the twelve-month period, the trustee has submitted a plan of

divestiture or believes that divestiture(s) can be accomplished within

a reasonable time, the divestiture period may be extended by the

Commission or, in the case of a court-appointed trustee, by the court;

provided, however, the Commission may only extend the divestiture

period two (2) times.

5. The trustee shall have full and complete access (subject to the

terms and conditions described in Paragraph IV.A. of this order) to the

personnel, books, records, and facilities related to the Carpet

Deodorizer Assets, Air Freshener Assets, Rug Cleaning Assets and

Woolite Assets and to any other relevant information, as the trustee

may reasonably request. Reckitt & Colman shall develop such financial

or other information as such trustee may request and shall cooperate

with the trustee. Reckitt & Colman shall take no action to interfere

with or impede the trustee's accomplishment of the divestiture(s). Any

delays in the divestiture(s) caused by Reckitt & Colman shall extend

the time for divestiture under this Paragraph in an amount equal to the

delay, as determined by the Commission or, for a court-appointed

trustee, by the court.

6. Subject to Reckitt & Colman's absolute and unconditional

obligation to divest at no minimum price the assets described in

Paragraph IV.A. of this order (and subject to the terms and conditions

described in Paragraph IV.A. of this order), and to remedy the

lessening of competition resulting from the Acquisition as alleged in

the Commission's complaint and as described in the Commission's letter

approving the Acquisition, the trustee shall use his or her best

efforts to negotiate the most favorable price and terms available with

each acquirer for each divestiture described in Paragraph IV.A of this

order. If the trustee receives bona fide offers from more than one

acquirer for each divestiture, and if the Commission determines to

approve more than one such acquirer, the trustee shall divest the

assets described in Paragraph IV.A. of this order to each acquirer

selected by Reckitt & Colman from among those approved by the

Commission for each divestiture.

7. The trustee shall serve, without bond or other security, at the

cost and expense of Reckitt & Colman, on such reasonable and customary

terms and conditions as the Commission or a court may set. The trustee

shall have authority to employ, at the cost and expense of Reckitt &

Colman, such consultants, accountants, attorneys, investment bankers,

business brokers, appraisers, and other representatives and assistants

as are reasonably necessary to carry out the trustee's duties and

responsibilities. The trustee shall account for all monies derived from

the sale and all expenses incurred. After approval by the Commission

and, in the case of a court-appointed trustee, by the court, of the

account of the trustee, including fees for his or her services, all

remaining monies shall be paid at the direction of Reckitt & Colman and

the trustee's power shall be terminated. The trustee's compensation

shall be based at least in significant part on a commission arrangement

contingent on the trustee's divesting the assets described in Paragraph

IV.A. of this order.

8. Reckitt & Colman shall indemnify the trustee and hold the

trustee harmless against any losses, claims, damages, liabilities, or

expenses arising out of, or in connection with, the performance of the

trusteeship, including all reasonable fees of counsel and other

expenses incurred in connection with the preparation for, or defense of

any claim, whether or not resulting in any liability, except to the

extent that such liabilities, claims, or expenses result from

misfeasance, negligence, willful or wanton acts, or bad faith by the

trustee.

9. If the trustee ceases to act or fails to act diligently, a

substitute trustee shall be appointed in the same manner as provided in

Paragraph IV.A. of this order.

10. The Commission or, in the case of a court-appointed trustee,

the court, may on its own initiative or at the request of the trustee

issue such additional orders or directions as may be necessary or

appropriate to accomplish each divestiture required by this order.

11. The trustee shall have no obligation or authority to operate or

[[Page 3240]] maintain the assets described in Paragraph IV.A. of this

order.

12. The trustee shall report in writing to Reckitt & Colman and to

the Commission every thirty (30) days concerning the trustee's efforts

to accomplish the divestitures.

V

Hold Separate

It is further ordered that Reckitt & Colman shall comply with all

terms of the Agreement to Hold Separate, attached to this order and

made a part hereof as Appendix I. The Agreement to Hold Separate shall

continue in effect according to its terms until Reckitt & Colman has

divested all of the Rug Cleaning Assets and all of the Carpet

Deodorizer Assets as required by this order.

VI

Prior approval

It is further ordered that, for a ten (10) year period commencing

on the date this order becomes final, Reckitt & Colman shall not,

without the prior approval of the Commission, directly or indirectly,

through subsidiaries, partnerships or otherwise:

(1) acquire any stock, share capital, equity or other interest in

any concern, corporate or non-corporate, engaged in at the time of such

acquisition, or within the two years preceding such acquisition engaged

in the development, production, distribution, or sale for resale of

Carpet Deodorizer Products in the United States; or

(2) acquire any assets used or previously used (and still suitable

for use) in the manufacture, distribution, or sale for resale of Carpet

Deodorizer Products in the United States.

Provided, however, that this Paragraph VI shall not apply to the

acquisition of products or services acquired in the ordinary course of

business.

VII

Compliance Reports

It is further ordered that:

A. Within sixty (60) days after the date this order becomes final

and every sixty (60) days thereafter until Reckitt & Colman has fully

complied with the provisions of Paragraphs II, III, IV and V of this

order, Reckitt & Colman shall submit to the Commission a verified

written report setting forth in detail the manner and form in which it

intends to comply, is complying, and has complied with those

provisions. Reckitt & Colman shall include in its compliance reports,

among other things that are required from time to time, a full

description of all substantive contacts or negotiations for each

divestiture, including the identity of all parties contacted. Reckitt &

Colman also shall include in its compliance reports, subject to any

legally recognized privilege, copies of all written communications to

and from such parties, all internal memoranda, and all reports and

recommendations concerning each divestiture.

B. One (1) year from the date this order becomes final and annually

thereafter for nine (9) years on the anniversary date of this order,

Reckitt & Colman shall submit to the Commission a verified written

report setting forth in detail the manner and form in which it has

complied and is complying with this order.

VIII

Access

It is further ordered that, for the purposes of determining or

securing compliance with this order, and subject to any legally

recognized privilege, upon written request and on reasonable notice to

Reckitt & Colman, Reckitt & Colman shall permit any duly authorized

representatives of the Commission:

A. Access, during office hours and in the presence of counsel, to

inspect and copy all books, ledgers, accounts, correspondence,

memoranda and other records and documents in the possession or under

the control of Reckitt & Colman or L&F relating to any matters

contained in this consent order; and

B. Upon five (5) days' notice to Reckitt & Colman, and without

restraint or interference from Reckitt & Colman, to interview officers

or employees of Reckitt & Colman or L&F, who may have counsel present,

regarding such matters.

IX

Corporate Change

It is further ordered that Reckitt & Colman shall notify the

Commission at least thirty (30) days prior to any proposed change in

the corporate respondent such as dissolution, assignment, sale

resulting in the emergence of a successor corporation, or the creation

or dissolution of subsidiaries or any other change in the corporation

that may affect compliance obligations arising out of the order.

Schedule A

Reckitt & Colman shall divest all of the Carpet Deodorizer Products

assets and businesses pursuant to the terms of this order. The assets

and businesses identified in Paragraph I.H.(2) of this order shall

include all assets, properties, business and goodwill, tangible and

intangible, utilized by Reckitt & Colman in the development,

production, distribution and sale of Carpet Deodorizer Products in the

United States, including, but not limited to, the following:

Part 1

(1) all customer lists, vendor lists, catalogs, sales promotion

literature, existing advertising materials, marketing information,

product development information, research materials, technical

information, management information systems, software, inventions,

trade secrets, technology, know-how, specifications, designs, drawings,

processes and quality control data;

(2) intellectual property rights, patents and patent applications

and the formulas, copyrights, trademarks, trade names, tradedress,

service marks, and UPC codes;

(3) all rights, title and interest in and to the contracts entered

in the ordinary course of business with customers (together with

associated bid and performance bonds), suppliers, sales

representatives, brokers and distributors, agents, inventors, product

testing and laboratory research institutions, providers of electronic

data exchange services, personal property lessors, personal property

lessees, licensers, licensees, consignors and consignees;

(4) all rights under warranties and guarantees, express or implied;

(5) all Environmental Protection Agency and all other federal and

state regulatory agency registrations and applications, and all

documents related thereto;

(6) all books, records, files, financial statements, business plans

and supporting documents;

(7) all items of prepaid expense; and

(8) a perpetual license at no royalty to use the brands, trademarks

and tradedress ``Airwick Neutra Air'' and ``Botanicals'' in connection

with the production, marketing and sale of Carpet Deodorizer Products

in the United States.

Part 2

(1) a perpetual license at no royalty to use the brand, trademark

and tradedress ``Airwick'' in connection with the production, marketing

and sale of Carpet Deodorizer Products in the United States;

(2) all machinery, fixtures, equipment, molds, vehicles, furniture,

tools and all other tangible personal property;

(3) inventory; [[Page 3241]]

(4) accounts and notes receivable; and

(5) all rights, title and interest in and to owned or leased real

property, together with appurtenances, licenses and permits.

Schedule B

Reckitt & Colman shall divest all of the Rug Cleaning Products

assets and businesses pursuant to the terms of this order. The assets

and business identified in Paragraph I.J. (2) of this order shall

include all assets, properties, business and goodwill, tangible and

intangible, utilized by Reckitt & Colman in the development,

production, distribution and sale of Rug Cleaning Products in the

United States, including, but not limited to, the following:

Part 1

(1) a perpetual license at no royalty to use the brand, trademark,

and tradedress ``Woolite'' in connection with the production, marketing

and sale of Rug Cleaning Products in or into the United States;

(2) all customer lists, vendor lists, catalogs, sales promotion

literature, existing advertising materials, marketing information,

product development information, research materials, technical

information, management information systems, software, inventions,

trade secrets, technology, know-how, specifications, designs, drawings,

processes and quality control data;

(3) intellectual property rights, patents and patent applications

and the formulas, copyrights, trademarks, trade names, service marks,

and UPC codes;

(4) all rights, title and interest in and to the contracts entered

in the ordinary course of business with customers (together with

associated bid and performance bonds), suppliers, sales

representatives, brokers and distributors, agents, inventors, product

testing and laboratory research institutions, providers of electronic

data exchange services, personal property lessors, personal property

lessees, licensors, licensees, consignors and consignees;

(5) all rights under warranties and guarantees, express or implied;

(6) all Environmental Protection Agency and all other federal and

state regulatory agency registrations and applications, and all

documents related thereto;

(7) all books, records, files, financial statements, business plans

and supporting documents; and

(8) all items of prepaid expense.

Part 2

(1) all machinery, fixtures, equipment, molds, vehicles, furniture,

tools and all other tangible personal property;

(2) inventory;

(3) accounts and notes receivable; and

(4) all rights, title and interest in and to owned or leased real

property, together with appurtenances, licenses and permits.

Schedule C

The trustee shall divest all of the Woolite Fabric Care Products

assets and businesses pursuant to the terms of this order. The assets

and businesses identified in Paragraph I.L.(2) of this order shall

include all assets, properties, business and goodwill, tangible and

intangible, utilized by Reckitt & Colman in the development,

production, distribution and sale of Woolite Fabric Care Products in

the United States, including, but not limited to, the following:

Part 1

(1) all customer lists, vendor lists, catalogs, sales promotion

literature, existing advertising materials, marketing information,

product development information, research materials, technical

information, management information systems, software, inventions,

trade secrets, technology, know-how, specifications, designs, drawings,

processes and quality control data;

(2) intellectual property rights, patents and patent applications

and the formulas, copyrights, trademarks, trade names, tradedress,

service marks, and UPC codes;

(3) all rights, title and interest in and to the contracts entered

in the ordinary course of business with customers (together with

associated bid and performance bonds), suppliers, sales

representatives, brokers and distributors, agents, inventors, product

testing and laboratory research institutions, providers of electronic

data exchange services, personal property lessors, personal property

lessees, licensors, licensees, consignors and consignees;

(4) all rights under warranties and guarantees, express or implied;

(5) all Environmental Protection Agency and all other federal and

state regulatory agency registrations and applications, and all

documents related thereto;

(6) all books, records, files, financial statements, business plans

and supporting documents; and

(7) all items of prepaid expense.

Part 2

(1) all machinery, fixtures, equipment, molds, vehicles, furniture,

tools and all other tangible personal property;

(2) inventory;

(3) accounts and notes receivable, and

(4) all rights, title and interest in and to owned or leased real

property, together with appurtenances, licenses and permits.

Schedule D

The trustee shall divest all of the Air Freshener Products assets

and businesses pursuant to the terms of this order. The assets and

businesses identified in Paragraph I.N.(2) of this order shall include

all assets, properties, business and goodwill, tangible and intangible,

utilized by Reckitt & Colman in the development, production,

distribution and sale of Air Freshener Products in the United States,

including, but not limited to the following:

Part 1

(1) all customer lists, vendor lists, catalogs, sales promotion

literature, existing advertising materials, marketing information,

product development information, research materials, technical

information, management information systems, software, inventions,

trade secrets, technology, know-how, specifications, designs, drawings,

processes and quality control data;

(2) intellectual property rights, patents and patent applications

and the formulas, copyrights, trademarks, trade names, tradedress,

service marks, and UPC codes;

(3) all rights, title and interest in and to the contracts entered

in the ordinary course of business with customers (together with

associated bid and performance bonds), suppliers, sales

representatives, brokers and distributors, agents, inventors, product

testing and laboratory research institutions, providers of electronic

data exchange services, personal property lessors, personal property

lessees, licensors, licensees, consignors and consignees;

(4) all rights under warranties and guarantees, express or implied;

(5) all Environmental Protection Agency and all other federal and

state regulatory agency registrations and applications, and all

documents related thereto;

(6) all books, records, files, financial statements, business plans

and supporting documents; and

(7) all items of prepaid expense. [[Page 3242]]

Part 2

(1) all machinery, fixtures, equipment, molds, vehicles, furniture,

tools and all other tangible personal property;

(2) inventory;

(3) accounts and notes receivable, and

(4) all rights, title and interest in and to owned or leased real

property, together with appurtenances, licenses and permits.

Appendix I--Agreement to Hold Separate

This Agreement to Hold Separate (``Hold Separate'') is by and

between Reckitt & Colman plc (``Reckitt & Colman''), a corporation

organized, existing, and doing business under and by virtue of the laws

of England and Wales, with its office and principal place of business

at One Burlington Lane, London 4W 2RW, England, which does business in

the United States through its wholly-owned subsidiary Reckitt & Colman

Inc., with its offices and principal place of business at 1655 Valley

Road, Wayne, New Jersey 07474-0943; and the Federal Trade Commission

(``the Commission''), an independent agency of the United States

Government, established under the Federal Trade Commission Act of 1914,

15 U.S.C. Sec. 41, et seq. (collectively the ``Parties'').

Premises

Whereas, on September 26, 1994 Reckitt & Colman entered into an

agreement with Eastman Kodak Company (``Kodak'') to acquire

substantially all of the United States assets and liabilities of the

household products, professional products and personal products

businesses of L&F Products Inc. (such assets and businesses hereinafter

referred to as ``L&F''), as well as the voting securities of certain

wholly-owned subsidiaries of L&F or Kodak that sell products outside

the United States (hereinafter ``Acquisition''); and

Whereas, on October 22, 1990, the Commission, with the consent of

Reckitt & Colman, issued its complaint and made final its Order to

settle charges that the acquisition by Reckitt & Colman of the Boyle-

Midway Division of American Home Products Corporation violated Section

7 of the Clayton Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of

the Federal Trade Commission Act (``FTC Act''), as amended, 15 U.S.C.

Sec. 45 (In the Matter of Reckett & Colman plc, FTC Docket No. C-3306);

and

Whereas, the Order in Docket No. C-3306 provides that for a period

of ten (10) years Reckitt & Colman shall not acquire, without the prior

approval of the Commission, directly or indirectly through

subsidiaries, partnerships, or otherwie, any interest in, or the whole

or any part of the stock or share capital of any person or business

that is engaged in the rug cleaning products business in the United

States, or, except in the ordinary course of business, any assets used

or previously used in (and still suitable for use in) the rug cleaning

products business; and

Whereas, Reckitt & Colman products and markets, among other things,

Carpet Deodorizer Products and Rug Cleaning Products, as defined in

Paragraph I of the Agreement Containing Consent Order (``Consent

Agreement'' or ``Consent Order'') to which this Hold Separate is

attached and made a part thereof as Appendix I; and

Whereas, L&F, with its principal office and place of business

located at 225 Summit Avenue, Montvale, New Jersey 07645-1575, produces

and markets, among other things, Carpet Deodorizer Products and Rug

Cleaning Products, as defined in Paragraph I of the Consent Order; and

Whereas, the Commission is now investigating the Acquisition to

determine whether it would violate any of the statutes enforced by the

Commission and whether the Commission should approve the Acquisition

pursuant to the Order in In the Matter of Reckitt & Colman plc, FTC

Docket No. C-3306; and

Whereas, the Commission has determined to grant Reckitt & Colman

the prior approval required for its acquisition of L&F conditioned,

however, upon Reckitt & Colman divesting, as required under the Consent

Agreement, the Carpet Deodorizer Assets and the Rug Cleaning Assets, as

defined in Paragraph I of the Consent Agreement; and

Whereas, if the Commission accepts the Consent Agreement, the

Commission must place it on the public record for a period of at least

sixty (60) days and may subsequently withdraw such acceptance pursuant

to the provisions of Section 2.34 of the Commission's Rules; and

Whereas, the Commission is concerned that if an understanding is

not reached, preserving the status quo ante of the Carpet Deodorizer

Assets and the Rug Cleaning Assets, as defined in Paragraph I of the

Consent Agreement, during the perioid prior to the final acceptance and

issuance of the order by the Commission (after the 60-day public

comment period), divestiture resulting from any proceeding challenging

the legality of the Acquisition might not be possible, or might be less

than an effective remedy; and

Whereas, the Commission is concerned that if the Acquisition is

consummated, it will be necessary to preserve the Commission's ability

to require the divestiture of the Carpet Deodorizer Assets and the Rug

Cleaning Assets, as defined in Paragraph I of the Consent Agreement,

and the Commission's right to have the Carpet Deodorizer Assets and the

Rug Cleaning Assets continue as viable competitors; and

Whereas, the purpose of the Hold Separate and the Consent Agreement

is:

1. to preserve the Carpet Deodorizer Assets, the Air Freshener

Assets, and the Rug Cleaning Assets as viable, independent, ongoing

enterprises, pending the divestiture of the Carpet Deodorizer Assets,

the Air Freshener Assets, and Rug Cleaning Assets required under the

terms of the Consent Agreement;

2. to remedy any anticompetitive effects of the Acquisition; and

3. to preserve the Carpet Deodorizer Assets, the Air Freshener

Assets, and the Rug Cleaning Assets as ongoing and competitive entities

engaged in the same businesses in which they are presently employed

until each of the respective divestitures required under the terms of

the Consent Agreement is achieved; and

Whereas, Reckitt & Colman's entering into this Hold Separate shall

in no way be construed as an admission by Reckitt & Colman that the

Acquisition is illegal; and

Whereas, Reckitt & Colman understands that no act or transaction

contemplated by this Hold Separate shall be deemed immune or exempt

from the provisions of the antitrust laws of the FTC Act by reason of

anything contained in this Consent Agreement.

Now, Therefore, the Parties agree, upon the understanding that the

Commission has not yet determined whether the Acquisition will be

challenged, and in consideration of the Commission's conditional

approval of the Acquisition and its agreement that, at the time it

accepts the Consent Agreement for public comment it will grant early

termination of the Hart-Scott-Rodino waiting period, and unless the

Commission determines to reject the Consent Agreement, it will not seek

further relief from Reckitt & Colman with respect to the Acquisition,

except that the Commission may exercise any and all rights to enforce

this Hold Separate and the Consent Agreement to which it is annexed and

made a part thereof, and the Order in Docket No. C-3306, and in the

event the required divestiture of the Carpet Deodorizer

[[Page 3243]] Assets is not accomplished, to appoint a trustee to seek

divestiture of the Air Freshener Assets as well as the Carpet

Deodorizer Assets, and in the event the required divestiture of the Rug

Cleaning Assets is not accomplished, to appoint a trustee to seek

divestiture of the Woolite Assets as well as the Rug Cleaning Assets,

or to seek civil penalties or a court appointed trust or other

equitable relief, as follows:

1. Reckitt & Colman agrees to execute and be bound by the Consent

Agreement.

2. Reckitt & Colman agrees that from the date this Hold Separate is

accepted until the earlier of the dates listed below in subparagraphs

2.a and 2.b, it will comply with the provisions of paragraph 4 of this

Hold Separate:

a. three (3) business days after the Commission withdraws its

acceptance of the Consent Order pursuant to the provisions of Section

2.34 of the Commission's rules; or

b. the day after the divestiture of the Carpet Deodorizer Assets

required by the Consent Order has been completed.

3. Reckitt & Colman agrees that from the date this Hold Separate is

accepted until the day after the divestiture of the Rug Cleaning Assets

required by the Consent Order has been completed, it will comply with

the provisions of Paragraph 5 of this Hold Separate.

4. Reckitt & Colman agrees to manage and maintain the Carpet

Deodorizer Assets and the Air Freshener Assets, as they are presently

constituted, on the following terms and conditions:

a. Reckitt & Colman shall appoint four individuals, one each from

among Reckitt & Colman's current employees working in Reckitt &

Colman's marketing, sales, materials management, and finance

operations, to manage and maintain the Carpet Deodorizer Assets and the

Air Freshener Assets. These individuals (``the management team'') shall

manage the Carpet Deodorizer Assets and the Air Freshener Assets

independently of the management of Reckitt & Colman's other businesses,

except that these individuals will arrange for the Reckitt & Colman

Carpet Deodorizer Products and the Reckitt & Colman Air Freshener

Products to be marketed and sold by Reckitt & Colman's marketing and

sales forces. The management team shall not thereafter, until the

Carpet Deodorizer Assets are divested pursuant to the Consent Order, be

in any way involved in the marketing, selling or materials management

of any other Reckitt & Colman product.

b. The management team, in its capacity as such, shall report

directly and exclusively to an independent auditor/manager, to be

appointed by Reckitt & Colman. The independent auditor/manager shall

have exclusive control over the operations of the Carpet Deodorizer

Assets and the Air Freshener Assets, with responsibility for the

management of the Carpet Deodorizer Assets and the Air Freshener Assets

and for maintaining the independence of those businesses.

c. Reckitt & Colman shall not exercise direction or control over,

or influence directly or indirectly, the independent auditor/manager or

the management team or any of its operations relating to the operations

of the Carpet Deodorizer Assets and the Air Freshener Assets; provided

however, that Reckitt & Colman may exercise only such direction and

control over the management team and the Carpet Deodorizer Assets and

the Air Freshener Assets as is necessary to assure compliance with this

Hold Separate or the Consent Order.

d. Reckitt & Colman shall maintain the viability and marketability

of the Carpet Deodorizer Assets and the Air Freshener Assets and shall

not cause or permit the destruction, removal, wasting, deterioration,

or impairment of any assets or businesses it may have to divest except

in the ordinary course of business and except for ordinary wear and

tear. Reckitt & Colman shall not sell, transfer, or encumber the Carpet

Deodorizer Assets or the Air Freshener Assets except in the ordinary

course of business, or to effect the divestitures contemplated by the

Consent Order pursuant to the terms of the Consent Order.

e. Except for the management team, Reckitt & Colman shall not

permit any other Reckitt & Colman employee, officer, or director to be

involved in the management of the Carpet Deodorizer Assets or the Air

Freshener Assets except to the extent the services of Reckitt &

Colman's sales, marketing, and materials management personnel are

necessary as set forth in subparagraph 4.a.

f. Except as required by law, and except to the extent that

necessary information is exchanged in the course of evaluating the

Acquisition, defending investigations or defending or prosecuting

litigation, or negotiating agreements to divest assets, Reckitt &

Colman shall not receive or have access to, or the use of, any material

confidential information not in the public domain about the Carpet

Deodorizer Assets or the Air Freshener Assets or the activities of the

management team in managing those businesses, nor shall the management

team receive or have access to, or use of, any material confidential

information not in the public domain about Reckitt & Colman's competing

Carpet Deodorizer Products or Air Freshener Products businesses, or the

activities of Reckitt & Colman in managing its Carpet Deodorizer

Products or Air Freshener Products businesses. Reckitt & Colman may

receive on a regular basis from the management team aggregate financial

information necessary and essential to allow Reckitt & Colman to

prepare United States consolidated financial reports, tax returns, and

personnel reports. Any such information that is obtained pursuant to

this subparagraph shall be used only for the purposes set forth in the

subparagraph. (``Material confidential information'' as used herein,

means competitively sensitive or proprietary information not

independently known to Reckitt & Colman from sources other than the

management team, including, but not limited to, customer lists, price

lists, marketing methods (except to the extent marketing and sales

plans need to be divulged to the Reckitt & Colman marketing and sales

force in the ordinary course of business), patents, technologies,

processes, or other trade secrets).

g. Nothing in this Hold Separate shall prohibit Reckitt & Colman

from providing cash management, tax preparation and/or insurance

functions for the Carpet Deodorizer Assets and the Air Freshener Assets

heretofore provided by Reckitt & Colman. Reckitt & Colman personnel

providing such support services must retain and maintain all material

confidential information relating to the Carpet Deodorizer Assets and

the Air Freshener Assets on a confidential basis and, except as

permitted by this Hold Separate, such persons shall be prohibited from

providing, discussing, exchanging, circulating, or otherwise furnishing

such information to or with any person whose employment involves any

other Reckitt & Colman Carpet Deodorizer Product business or Rug

Cleaning Products business. Reckitt & Colman personnel providing these

support services to the Carpet Deodorizer Assets and the Air Freshener

Assets shall execute a confidentiality agreement prohibiting the

disclosure of any Carpet Deodorizer Assets or Air Freshener Assets

confidential information.

h. Reckitt & Colman shall not change the composition of the

management team, and the independent auditor/manager shall have the

power to remove employees only for cause.

i. All material transactions, out of the ordinary course of

business and not [[Page 3244]] precluded by Paragraph 4 hereof, shall

be subject to a majority vote of the management team. In the case of a

tie, the independent auditor/manager shall cast the deciding vote.

j. Reckitt & Colman shall establish written procedures to be

approved by the independent auditor/manager, covering the management,

maintenance, and independence of the Carpet Deodorizer Assets and the

Air Freshener Assets and the conduct of the management team in

accordance with this Consent Agreement. Reckitt & Colman shall also

circulate to its employees and appropriately display a notice of this

Hold Separate Agreement and Consent Order in the form attached hereto

as Appendix A.

k. All earnings and profits from the Carpet Deodorizer Assets and

the Air Freshener Assets shall be available for use in those businesses

until divestiture. In computing earnings and profits for the Carpet

Deodorizer Assets and the Air Freshener Assets, Reckitt & Colman may

deduct from the revenues generated by the Carpet Deodorizer Assets and

the Air Freshener Assets only direct product costs and indirect

overheads allocated to those businesses.

l. Reckitt & Colman shall make available for use in the Carpet

Deodorizer Assets and the Air Freshener Assets businesses until

divestiture an amount not lower than those budgeted for 1995 and 1996

for advertising, trade promotion, and product development of the

Reckitt & Colman Carpet Deodorizer Products and Air Freshener Products,

and shall increase such spending as deemed reasonably necessary by the

management team in light of competitive conditions. If necessary,

Reckitt & Colman shall provide the management team with any funds to

accomplish the foregoing.

m. Reckitt & Colman shall pay all direct product costs and indirect

overheads for the Carpet Deodorizer Assets and the Air Freshener Assets

businesses. The management team and the independent auditor/manager

shall serve at the cost and expense of Reckitt & Colman, and the Carpet

Deodorizer Assets and the Air Freshener Assets businesses shall not be

charged with the compensation and expenses of the independent auditor/

manager.

n. If the independent auditor/manager ceases to act or fails to act

diligently, a substitute independent auditor/manager shall be appointed

in the same manner as provided in subparagraph 4.b. of this Hold

Separate. Any replacement for independent auditor/manager shall be

appointed with the consent of the Commission.

o. Reckitt & Colman shall indemnify the management team and the

independent auditor/manager against any losses or claims of any kind

that might arise out of involvement under this Hold Separate, except to

the extent that such losses or claims result from misfeasance, gross

negligence, willful or wanton acts, or bad faith by the management team

or the independent auditor/manager.

p. The independent auditor/manager shall report in writing to the

Commission every thirty (30) days concerning the efforts to accomplish

the purposes of this Hold Separate.

5. To ensure the complete independence and viability of L&F and to

assure that no competitive information is exchanged between L&F and

Reckitt & Colman, Reckitt & Colman shall hold L&F as it is presently

constituted separate and apart on the following terms and conditions:

a. L&F, as defined in paragraph I of the Consent Agreement, shall

be held separate and apart and shall be operated independently of

Reckitt & Colman, except to the extent that Reckitt & Colman must

exercise direction and control over L&F to assure compliance with this

Hold Separate Agreement, the Consent Order, or the Order in Docket No.

C-3306.

b. Reckitt & Colman shall assign to L&F its rights under the

transition services agreements and all supply agreements contemplated,

respectively, by Secs. 5.12 and 5.13 of the September 26, 1994, Asset

Purchase Agreement among Eastman Kodak Company, L&F Products Inc.,

Sterling Winthrop Inc., and Reckitt & Colman plc; and, as contemplated

by Secs. 5.12 and 5.13 of the September 26, 1994 Asset Purchase

Agreement, Sterling Winthrop Inc. (``Sterling'') personnel will

continue the support and administrative services being provided by such

Sterling personnel to L&F as of the date this Hold Separate was signed,

and all arrangements, existing on the date this Hold Separate was

signed, that provide for the supply by Sterling of materials to L&F

will remain in place. Reckitt & Colman shall enforce all its rights to

cause such Sterling personnel providing support and administrative

services and maintaining existing supply arrangements to retain and

maintain all material confidential information relating to L&F on a

confidential basis and, except as is permitted by this Hold Separate,

such persons shall be prohibited from providing, discussing,

exchanging, circulating, or otherwise furnishing any such information

to or with any other person whose employment involves any other Reckitt

& Colman business, including the Reckitt & Colman Rug Cleaning Products

business.

c. Reckitt & Colman shall appoint four individuals, one each from

among L&F's current employees working in L&F's marketing, sales,

materials management, and finance operations to manage and maintain

L&F. These individuals, (``the management team'') shall manage L&F

independently of the management of Reckitt & Colman's other businesses.

The management team shall not thereafter, until the Rug Cleaning Assets

are divested pursuant to the Consent Order, be in any way involved in

the marketing, selling or materials management of any competing Reckitt

& Colman products.

d. The management team, in its capacity as such, shall report

directly and exclusively to an independent auditor/manager, to be

appointed by Reckitt & Colman. The independent auditor/manager shall

have exclusive control over the operations of L&F with responsibility

for the management of L&F and for maintaining the independence of those

businesses. Provided, however, that the auditor/manager appointed

pursuant to this Paragraph 5 shall not be the same auditor/manager

appointed pursuant to Paragraph 4.

e. Reckitt & Colman shall not exercise direction or control over,

or influence directly or indirectly, L&F, the independent auditor/

manager or the management team or any of their operations relating to

the operations of L&F; provided however, that Reckitt & Coleman may

exercise only such direction and control over the Management team of

L&F as is necessary to assure compliance with this Hold Separate, the

Consent Order, and the Order in Docket No. C-3306.

f. Except as required by law, and except to the extent that

necessary information is exchanged in the course of evaluating the

Acquisition, defending investigations or defending or prosecuting

litigation, or negotiating agreements to divest assets, Reckitt &

Colman shall not receive or have access to, or the use of, any material

confidential information not in the public domain about L&F or the

activities of the management team in managing L&F; nor shall L&F or the

management team receive or have access to, or use of, any material

confidential information not in the public domain about Reckitt &

Colman's businesses, of the activities of Reckitt & Colman in managing

its businesses. Reckitt & Colman may receive on a regular basis from

L&F aggregate financial information necessary and essential to allow

Reckitt & Colman to [[Page 3245]] prepare United States consolidated

financial reports, tax returns, and personnel reports. Any such

information that is obtained pursuant to this subparagraph shall be

used only for the purposes set forth in this subparagraph. (``Material

confidential information'' as used herein, means competitively

sensitive or proprietary information not independently known to Reckitt

& Colman from sources other than L&F or the management team including,

but not limited to, customer lists, price lists, marketing methods,

patents, technologies, processes, or other trade secrets).

g. Nothing in this Hold Separate shall prohibit Reckitt & Colman

from providing cash management, tax preparation and/or insurance

functions for L&F heretofore provided by Sterling or Kodak. Reckitt &

Colman personnel providing such support services must retain and

maintain all material confidential information relating to L&F on a

confidential basis and, except as permitted by this Hold Separate, such

persons shall be prohibited from providing, discussing, exchanging,

circulating, or otherwise furnishing such information to or with any

person whose employment involves any other Reckitt & Colman Carpet

Deodorizer Product business or Rug Cleaning Products business. Reckitt

& Colman personnel providing these support services to L&F shall not be

involved in any other Reckitt & Colman Carpet Deodorizer Products

business or Rug Cleaning products business, and shall execute a

confidentiality agreement prohibiting the disclosure of any L&F

confidential information.

h. L&F shall be staffed with sufficient employees to maintain the

viability and competitiveness of L&F, which employees shall be selected

from L&F's existing employee base and may also be hired from sources

other than L&F. Each director, officer and management employee of L&F

shall execute a confidentiality agreement prohibiting the disclosure of

any L&F confidential information.

i. Reckitt & Colman shall not change the composition of the

management team and the independent auditor/manager shall have the

power to remove employees only for cause.

j. All material transactions, out of the ordinary course of

business and not precluded by Paragraph 5 hereof, shall be subject to a

majority vote of the management team. In case of a tie, the independent

auditor/manager shall cast the deciding vote.

k. Reckitt & Colman shall establish written procedures to be

approved by the independent auditor/manager, covering the management,

maintenance, and independence of L&F and the conduct of the management

team in accordance with this Consent Agreement.

l. All earnings and profits of L&F shall be retained separately by

L&F. If necessary, Reckitt & Colman shall provided L&F with sufficient

working capital to operate at the rate of operation in effect during

the twelve (12) months preceding the date of this Hold Separate.

m. Reckitt & Colman shall cause L&F to continue to expend funds for

the advertising, trade promotion, and product development of L&F

products at levels not lower than those budgeted for 1995 and 1996, and

shall increase such spending as deemed reasonably necessary by the

management team in light of competitive conditions. If necessary,

Reckitt & Colman shall provide L&F with any funds to accomplish the

foregoing.

n. If the independent auditor/manager ceases to act or fails to act

diligently, a substitute independent auditor/manager shall be appointed

in the same manner as provided in subparagraph 5.d of this Hold

Separate. Any replacement for independent auditor/manager shall be

appointed with the consent of the Commission.

o. The management team and the independent auditor/manager shall

serve at the cost and expense of Reckitt & Colman. Reckitt & Colman

shall indemnify the management team and the independent auditor/manager

against any losses or claims of any kind that might arise out of

involvement under this Hold Separate, except to the extent that such

losses or claims result from misfeasance, gross negligence, willful or

wanton acts, or bad faith by the management team or the independent

auditor/manager.

p. The independent auditor/manager shall report in writing to the

Commission every thirty (30) days concerning the efforts to accomplish

the purposes of this Hold Separate.

6. Should the Commission seek in any proceeding to compel Reckitt &

Colman to divest itself of the Carpet Deodorizer Assets or the Rug

Cleaning Assets or any additional assets, as provided in the Consent

Agreement, or to seek any other equitable relief, Reckitt & Colman

shall not raise any objection based on the expiration of the applicable

Hart-Scott-Rodino Antitrust Improvements Act waiting period or the fact

that the Commission has permitted the Acquisition. Reckitt & Colman

also waives all rights to contest the validity of this Hold Separate.

7. For the purpose of determining or securing compliance with this

Hold Separate, subject to any legally recognized privilege, and upon

written request with reasonable notice to Reckitt & Colman made to its

principal office in the United States, Reckitt & Colman shall permit

any duly authorized representative or representatives of the

Commission:

a. Access, during office hours and in the presence of counsel, to

inspect and copy all books, ledgers, accounts, correspondence,

memoranda, and other records and documents in the possession or under

the control of Reckitt & Colman or L&F relating to compliance with this

Hold Separate; and

b. Upon five (5) days' notice to Reckitt & Colman, and without

restraint or interference from it, to interview officers or employees

of Reckitt & Colman or L&F, who may have counsel present, regarding any

such matters.

8. This Hold Separate shall not be binding until approved by the

Commission.

Appendix A--Divestiture and Requirement for Confidentiality

Reckitt & Colman has entered into a Consent Order and Hold Separate

Agreement with the Federal Trade Commission relating to the divestiture

of certain Reckitt & Colman carpet deodorizer assets and products,

including Carpet Fresh, Rug Fresh, Botanicals, and Airwick Neutra Air;

or alternatively, if that divestiture is not accomplished within six

months, the additional divestiture of certain Reckitt & Colman air

freshener assets and products, including Airwick, Stick Ups, Air Waves,

Wizard, Botanicals, and Airwick Neutra Air. Until such divestitures as

are required by the Consent Order are accomplished, the Reckitt &

Colman carpet deodorizer assets and products, including Carpet Fresh,

Rug Fresh, Botanicals, and Airwick Neutra Air, and the Reckitt & Colman

air freshener assets and products, including Airwick, Stick Ups, Air

Waves, Wizard, Botanicals, and Airwick Neutra Air must be managed and

maintained as a separate, ongoing business, independent of all other

competing lines of Reckitt & Colman as provided by the Agreement to

Hold Separate. All competitive information relating to these product

lines must be retained and maintained by the persons responsible for

the management of these products on a confidential basis and such

persons shall be prohibited from providing, discussing, exchanging,

circulating or otherwise furnishing any such information to or with any

other [[Page 3246]] person whose employment involves any competing

Reckitt & Colman carpet deodorizer or air freshener product. Similarly,

all persons responsible for the management of any competing Reckitt &

Colman carpet deodorizer product or air freshener product shall be

prohibited from providing, discussing, exchanging, circulating or

otherwise furnishing any such information to or with any other person

responsible for the Carpet Fresh, Rug Fresh, Botanicals, or Airwick

Neutra Air carpet deodorizer products, or Airwick, Stick Ups, Air

Waves, Wizard, Botanicals, and Airwick Neutra Air air freshener

products.

Any violation of the Consent Order or the Hold Separate Agreement,

incorporated by reference as part of the Consent Order, subjects the

violator to civil penalties and other relief as provided by law.

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission (``Commission'') has accepted subject

to final approval an agreement containing a proposed consent order from

Reckitt & Colman plc (``Reckitt & Colman'') to resolve competitive

concerns with the proposed acquisition of certain assets and

liabilities of the household products, professional products and

personal products businesses of L&F Products Inc. Under the proposed

order, Reckitt & Colman would divest assets relating to its carpet

deodorizer products business and its rug cleaning products business

(respectively, the ``Carpet Deodorizer Assets'' and the ``Rug Cleaning

Assets'').

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will review the agreement

and the comments received and will decide whether to withdraw from the

agreement or make final the agreement's proposed order.

The draft complaint alleges that the proposed acquisition, if

consummated, would violate Section 7 of the Clayton Act, 15 U.S.C.

Sec. 18, as amended, and Section 56 of the FTC Act, 15 U.S.C. Sec. 45,

as amended, in the market for carpet deodorizers. Additionally, Reckitt

& Colman is already subject to a Commission order issued to settle

charges that its previous acquisition of the Boyle-Midway Division of

American Home Products Corporation violated Section 7 of the Clayton

Act, 15 U.S.C. Sec. 18, as amended, and Section 5 of the FTC Act, 15

U.S.C. Sec. 45, as amended (In the Matter of Reckitt & Colman plc, FTC

Docket No. C-3306). The Order in Docket No. C-3306 provides that for a

period of ten (10) years Reckitt & Colman shall not acquire, without

the prior approval of the Commission, any interest in, stock of, or any

assets used in the rug cleaning products business. The proposed consent

order would remedy the violation alleged in the draft complaint by

requiring the divestiture of the Carpet Deodorizer Assets.

Additionally, the proposed order would allow Reckitt & Colman to

acquire L&F with the required prior approval of the Commission on the

condition that Reckitt & Colman divest the Rug Cleaning Assets.

The proposed order would require Reckitt & Colman to divest the

Carpet Deodorizer Assets within six (6) months after the proposed order

becomes final. The proposed order also would require Reckitt & Colman

to divest the Rug Cleaning Assets within six (6) months after the

Commission approves Reckitt & Colman's acquisition of L&F pursuant to

the Order in Docket No. C-3306.

Reckitt & Colman would also be required to divest, at the option of

the acquirer of the Carpet Deodorizer Assets, the rights to use the

Airwick brand name in connection with the manufacture and sale of

carpet deodorizer products. In addition, Reckitt & Colman would be

required to divest manufacturing equipment and facilities associated

with the Carpet Deodorizer Assets and Rug Cleaning Assets at the

acquirer(s)' option.

To help ensure the viability of the Carpet Deodorizer Assets and

the Rug Cleaning Assets, Reckitt & Colman would be required to provide

such personnel, information, assistance, advice, and training as are

necessary to transfer these assets pursuant to the order and establish

these businesses as viable, ongoing concerns. In addition, Reckitt &

Colman would be required to assist the acquirer(s) in obtaining

approvals for the transfer of all registrations, leases, licenses,

certifications, permits, or other similar documents relating to the

Carpet deodorizer Assets and the Rug Cleaning Assets.

If Reckitt & Colman fails to divest the Carpet Deodorizer Assets

during the allotted time, a trustee could be appointed to divest,

within twelve (12) months, the Carpet Deodorizer Assets and, in

addition, assets relating to Reckitt & Colman's air freshener products

business (``Air Freshener Assets''). If Reckitt & Colman does not

divest the Rug Cleaning Assets within the allotted time, a trustee

could be appointed to divest, within twelve (12) months, the Rug

Cleaning Assets and, in addition, assets relating to Reckitt & Colman's

Woolite fabric care products business (``Woolite Assets''). If, at the

end of twelve months, the trustee submitted a plan of divestiture or

believed that divestiture could be achieved within a reasonable time,

the time period for divestiture could be extended by the Commission,

or, in the case of a court-appointed trustee, by the court. The

Commission, however, may extend this period only two (2) times.

A Hold Separate Agreement signed by a Reckitt & Colman provides

that until divestiture of the Carpet Deodorizer Assets is completed,

the Reckitt & Colman Carpet Deodorizer Assets and Air Freshener Assets

businesses shall be held separate from and operated independently of

Reckitt & Colman. The Hold Separate Agreement also provides that until

the divestiture of the Rug Cleaning Assets required by the proposed

order is completed, the L&F businesses being acquired by Reckitt &

Colman shall be held separate from and operated independently of

Reckitt & Colman.

The proposed order would require Reckitt & Colman, for a period of

ten (10) years, to obtain the prior approval of the Commission before

acquiring any interest in any other company engaged in the development,

production, distribution, or sale for resale of carpet deodorizer

products in the United States.

Under the proposed order, Reckitt & Colman would be required to

provide to the Commission reports of its compliance with the

divestiture provisions of the order sixty (60) days after the order

becomes final and every sixty (60) days thereafter, until the

divestitures have been completed.

Additionally, one year from the date the order becomes final and

annually thereafter for nine (9) years, Reckitt & Colman would be

required to provide to the Commission a report of its compliance with

the order.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 95-759 Filed 1-12-95; 8:45 am]

BILLING CODE 6750-01-M