UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:

Robert Pitofsky, Chairman

Sheila F. Anthony

Mozelle W. Thompson

Orson Swindle

Thomas B. Leary

In the Matter of

Pfizer Inc., a corporation; and
Warner-Lambert Company, a corporation.

Docket No.

DECISION AND ORDER

The Federal Trade Commission ("Commission") having initiated an investigation of the proposed merger of Respondent Warner-Lambert Company ("Warner") and Respondent Pfizer Inc. ("Pfizer"), hereinafter referred to as "Respondents," and Respondents having been furnished thereafter with a copy of a draft of Complaint that the Bureau of Competition presented to the Commission for its consideration and which, if issued by the Commission, would charge Respondents with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and

Respondents, their attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Orders ("Consent Agreement"), containing an admission by Respondents of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondents that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondents have violated the said Acts, and that a Complaint should issue stating its charges in that respect, and having thereupon issued its Complaint and an Order to Maintain Assets, and having accepted the executed Consent Agreement and placed such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby makes the following jurisdictional findings and issues the following Order:

1. Respondent Pfizer is a corporation organized, existing and doing business under and by virtue of the laws of the state of Delaware, with its office and principal place of business located at 235 East 42nd Street, New York, New York 10017.

 

2. Respondent Warner is a corporation organized, existing and doing business under and by virtue of the laws of the state of Delaware, with its office and principal place of business located at 201 Tabor Road, Morris Plains, New Jersey 07950.

 

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of Respondents, and the proceeding is in the public interest.

ORDER

I.

IT IS ORDERED that, as used in this order, the following definitions shall apply:

A. "Pfizer" means Pfizer Inc., its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; its joint ventures, subsidiaries, divisions, groups and affiliates controlled by Pfizer Inc. and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

 

B. "Warner" means Warner-Lambert Company, its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; its joint ventures, subsidiaries, divisions, groups and affiliates controlled by Warner-Lambert Company (including, but not limited to, the Parke-Davis Division), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

 

C. "Respondents" means Pfizer and Warner, individually and collectively.

 

D. "Merger" means the proposed merger of Pfizer and Warner by means of an Agreement and Plan of Merger dated as of February 6, 2000 among Pfizer, Seminole Acquisition Sub. Corp., and Warner.

E. "Commission" means the Federal Trade Commission.

 

F. "Forest" means Forest Laboratories, Inc., a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its offices and principal place of business located at 909 Third Avenue, New York, New York 10022.

 

G. "First Horizon" means First Horizon Pharmaceutical Corporation, a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its offices and principal place of business located at 660 Hembree Parkway, Suite 106, Roswell, Georgia 30076.

 

H. "Bayer" means Bayer Corporation, a corporation organized, existing and doing business under and by virtue of the laws of the State of Indiana, with its offices and principal place of business located at 36 Columbia Road, Morristown, New Jersey 07962-1910.

 

I. "OSI" means OSI Pharmaceuticals, Inc., a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its offices and principal place of business located at 106 Charles Lindbergh Boulevard, Uniondale, New York, 11553-3649.

 

J. "Celexa" means any pharmaceutical preparation containing the drug substance citalopram HBr that is the subject of the Celexa Co-Promotion Agreement and the Celexa Amendment. Celexa includes any and all of its constituent elements, active ingredients or intermediaries, and all rights relating to the research, development, manufacture and sale of Celexa.

 

K. "Celexa Co-Promotion Agreement" means the Agreement dated March 27, 1998 by and between Forest and the Parke-Davis Division of Warner attached hereto as non-public Appendix I.

 

L. "Celexa Amendment" means the Amendment to the Celexa Co-Promotion Agreement between Forest and the Parke-Davis Division of Warner, dated September 1, 1999, attached hereto as non-public Appendix II.

M. "Celexa Assets" mean all rights granted to Warner pursuant to the Celexa Co-Promotion Agreement and Celexa Amendment.

 

N. "Celexa Termination Agreement" means the Amendment No. 2 and Termination Agreement terminating the Celexa Co-Promotion Agreement and Celexa Amendment by and between Forest and Warner, dated May 11, 2000, attached hereto as non-public Appendix III.

 

O. "Know-how" means all technological, technical, scientific, chemical, biological, pharmacological, toxicological, regulatory and marketing materials and information used to develop, make, use, sell, offer for sale, import or seek regulatory approval in any country to market a Product, including without limitation all: formulae; trade secrets; inventions; techniques; intellectual property (including patents and patent applications) whether or not patentable; discoveries; compounds; compositions of matter, assays, reagents, and biological materials; trademarks; research data; technical data and information; testing data; preclinical and clinical data; toxicological and pharmacological data; regulatory files; statistical analyses; analytical data; clinical protocols; specifications; designs; drawings; processes; testing and quality assurance/quality control data; manufacturing data and information; regulatory submissions; and any other information and experience, whether recorded on paper or electronically.

 

P. "Celexa Know-how" means all Confidential Business Information and Know-how in the possession or control of Warner as of the date Warner signed the Celexa Termination Agreement that relates in whole or in part to Celexa, including without limitation information and documents stored on all computer files and management information systems; written, recorded and graphic materials of every kind; proprietary software used in connection with Celexa; all data, contractual rights, materials, documents and information relating to obtaining FDA approvals and other government or regulatory approvals for Celexa; and any other information, documents and experience relating to Celexa. Celexa Know-how shall be deemed to include all information comprised by Celexa Assets. Celexa Know-how includes, but is not limited to:

 

1. notes, minutes and other documents relating to speaker programs, "lunch and learn" programs, and meetings with medical advisers to Forest or Warner in connection with the Celexa Co-Promotion Agreement (and Celexa Amendment), including plans for future programs and meetings, market research data and proposals relating to Celexa;

2. all marketing plans including written fiscal year and contract year marketing plans, media placement plans, public relations plans, convention plans, symposia plans, publication plans, pricing plans, and line extension plans related to Celexa;

3. minutes of all Celexa meetings, and intracompany and intercompany correspondence related to such meetings;

 

4. all advisory board and consultants' correspondence related to Celexa;

 

5. all correspondence with advertising, public relations and medical education agencies related to Celexa;

 

6. speaker training materials and all other medical education materials related to Celexa;

 

7. all market research, including both primary and secondary, whether conducted by Forest or Warner's Parke-Davis Division related to Celexa;

 

8. all forecasts and assumptions, including sample production forecasts related to Celexa;

 

9. all presentation materials used at national sales meetings or manager meetings related to Celexa;

 

10. all physician targeting data and call plans including reach and frequency plans related to Celexa;

 

11. all communications with the FDA and DDMAC related to Celexa;

12. all Phase IV clinical study plans and protocols provided to Warner related to Celexa;

 

13. all regulatory and development information including information on Celexa line extensions, tablet strengths and SKUs related to Celexa;

 

14. any and all information provided from the Celexa NDA, investigators' brochures or study reports;

 

15. all professional affairs letters related to Celexa utilized to respond to physician inquiries; and

 

16. all information related to Celexa pertaining to managed care, government accounts, hospitals, long-term care and other channels. This includes all contracts and contracting templates and strategies.

 

Provided, however, that Celexa Know-how does not include information which becomes or became available to Respondents on a non-confidential basis from a source other than Forest, if such source is not under obligation (whether contractual, legal or fiduciary) to Forest to keep such information confidential.

 

Q. "Confidential Business Information" means all information that is not in the public domain concerning the research, development, marketing, distribution, cost, pricing, sale and commercialization of a Product or of a Product in development.

 

R. "Celexa Material Confidential Information" means any information not in the public domain obtained by Respondents directly or indirectly from Forest pursuant to the Celexa Co-Promotion Agreement and Celexa Amendment prior to the date this Order becomes final, and includes, but is not limited to, Celexa Know-how and Confidential Business Information relating to Celexa.

 

S. "FDA" means the United States Food and Drug Administration.

T. "DDMAC" means the Division of Drug Marketing, Advertising and Communication of the FDA.

 

U. "NDA" means a New Drug Application filed or to be filed with the FDA, any preparatory work, drafts and data necessary for the preparation thereof, and Know-how, and includes without limitation both supplemental and abbreviated NDAs.

 

V. "Zoloft" means any pharmaceutical preparation containing the drug substance sertraline hydrochloride, any of its constituent elements, active ingredients or intermediaries, and all rights relating to the research, development, manufacture and sale of Zoloft, which is manufactured, marketed and distributed by Pfizer.

 

W. "SSRI/SNRI" means any selective serotonin reuptake inhibitor/serotonin norepinephrine reuptake inhibitor, including, but not limited to, branded, generic or isomer forms of the following drugs: Paxil, Prozac, Zoloft, Luvox, Effexor, and Celexa.

 

X. "Cognex" means any pharmaceutical preparation containing the drug substance tacrine hydrochloride. Cognex includes any of its constituent elements, active ingredients, intermediaries, and all rights relating to the research, development, manufacture and sale of Cognex and the once daily controlled release formulation containing Tacrine as the HCl salt and using the gastrointestinal therapeutic system technology from ALZA Corporation.

 

Y. "Tacrine" means the active pharmaceutical ingredient produced at Warner's chemical manufacturing facility in Holland, Michigan.

 

Z. "Cognex Divestiture Assets" mean all assets relating to Cognex and Tacrine as defined in the Cognex Divestiture Agreement.

 

AA. "Cognex Divestiture Agreement" means the asset purchase agreement between Warner and First Horizon relating to the sale of the Cognex Divestiture Assets, dated April 14, 2000, attached hereto as non-public Appendix IV.

BB. "EGFr-tk" means any pharmaceutical preparation containing the drug substance Epidermal Growth Factor receptor tyrosine kinase inhibitor, CP 358,774. EGFr-tk shall also include all salts and prodrug forms of CP 358,774.

CC. "EGFr-tk Assets" means all assets relating to EGFr-tk to be licensed or transferred to OSI pursuant to the EGFr-tk Divestiture Agreement. Provided, however, that if OSI requests such assets, the EGFr-tk Assets shall also include intellectual property and technology (including Joint Technology) arising under the OSI/Pfizer Collaboration Research Agreements and OSI/Pfizer License Agreements which relate to CP 358,774 and to salts and prodrug forms of CP 358,774, and which are reasonably necessary to research, develop, manufacture, or sell EGFr-tk.

 

DD. "OSI/Pfizer Collaboration Research Agreements" means the Agreement dated April 1, 1986, the Agreement dated April 1, 1991 and the Agreement dated April 1, 1996, by and between OSI and Pfizer, attached hereto as non-public Appendix V.

 

EE. "OSI/Pfizer License Agreements" means the Agreements dated December 14, 1990 and April 1, 1996, by and between OSI and Pfizer, attached hereto as non-public Appendix VI.

 

FF. "EGFr-tk Divestiture Agreement" means the Agreement between Pfizer and OSI dated May 23, 2000, attached hereto as non-public Appendix VII.

 

GG. "Joint Technology" means all technology and technical information relating to EGFr-tk pursuant to the OSI/Pfizer Collaboration Research Agreements.

HH. "Ownership Interest" means any right(s), present or contingent, to hold voting or nonvoting interest(s), equity interest(s), and/or beneficial ownership(s) in the capital stock of OSI.

 

II. "RID" means Pfizer's rights and assets relating to any Product containing the active ingredient pyrethrum that is a lice treatment or related Product, including all rights relating to the research, development, manufacture and sale of lice treatments or related Products, including but not limited to individual, kit, advance systems and bulk SKUs containing RID spray, shampoo, egg loosener gel, mousse or comb.

 

JJ. "RID Assets" means all assets relating to RID as defined in the RID Divestiture Agreement.

 

KK. "RID Divestiture Assets" means:

 

1. all intellectual property, including pending patent applications, licenses, inventions, technology, Know-how, patents, trademarks, brand names, trade names, trade dress, trade secrets, and copyrights;

2. all research materials, formulations, new product formulations, line extensions, patent rights, trade secrets, specifications, protocols, technical information, regulatory information and approvals, manufacturing information, management information systems, software, specifications, designs, drawings, processes and quality control data;

 

3. all customer lists, vendor lists, medical marketing lists, catalogs, sales promotion literature, promotional materials, displays, tokens, advertising materials, marketing plans and strategies, price and discount strategies, price lists, sales forecasts, distribution information, trade booths, medical marketing convention floor space and related items, telephone and facsimile numbers, as well as other customer support materials (including, without limitation, web sites);

 

4. inventory and storage capacity;

 

5. all third party agreements and contracts that are related to the research, development, manufacture, marketing, sale or use of RID, including but not limited to contract manufacturing arrangements;

 

6. inventories, including finished goods inventory of RID, works in progress, raw material and packaging materials for RID, including but not limited to the active ingredient pyrethrum;

 

7. all rights, titles and interests in and to the contracts entered into in the ordinary course of business with customers (together with associated bid and performance bonds), suppliers, sales representatives, distributors, agents, personal property lessors, personal property lessees, licensors, licensees, consignors and consignees;

8. all rights under warranties and guarantees, express or implied;

9. all books, records and files; and

 

10. all items of prepaid expense.

 

Provided, however, that the RID Divestiture Assets shall also include all research, development and manufacturing assets necessary to produce RID in a government-approved facility if the person acquiring the RID Divestiture Assets requests such assets.

 

LL. "RID Divestiture Agreement" means the asset purchase agreement between Bayer and Pfizer dated April 11, 2000, attached hereto as non-public Appendix VIII.

 

MM. "Product" means any finished pharmaceutical composition containing any formulation or dosage of a compound as its pharmaceutically active ingredient.

 

NN. "RID Closing" means the date that Bayer acquires the RID Assets from Pfizer.

 

OO. "Public Record Date" means the date that the Commission places the Consent Agreement on the public record pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34.

 

PP. "EPA" means the United States Environmental Protection Agency.

 

QQ. "SKU" means stock keeping unit.

RR. "Key Employees" means the individuals identified in public Appendix IX attached hereto.

II.

IT IS FURTHER ORDERED that:

A. Not later than (10) days after the Public Record Date, Respondents shall terminate, absolutely and in good faith, the Celexa Co-Promotion Agreement and Celexa Amendment, pursuant to and in accordance with the terms of the Celexa Termination Agreement. The Celexa Termination Agreement is incorporated by reference into this Order and made a part hereof as non-public Appendix III. Failure to comply with all of the terms of the Celexa Termination Agreement shall constitute a failure to comply with this Order.

 

B. Respondents shall return and submit to Forest at its New York corporate office, at Respondents' expense, all Celexa Know-how pursuant to the terms of the Celexa Termination Agreement. Respondents shall not retain any copies of Celexa Know-how except as required by law.

 

C. Respondents shall provide Forest with the opportunity to enter into employment contracts with the Key Employees listed in Appendix IX attached to this Order through March 31, 2001. Respondents shall provide Forest an opportunity to inspect the personnel files and other documentation relating to these employees, to the extent permissible under applicable laws, at the request of Forest any time after execution of the Celexa Termination Agreement. Respondents shall not interfere with the employment by Forest of these employees and shall remove any impediments that may deter such employees from accepting employment with Forest, including, but not limited to, any non-compete provisions of employment or other contracts with Respondents that would affect the ability or incentive of those individuals to be employed by Forest.

D. Respondents shall not use, disclose or convey, directly or indirectly, any Celexa Know-how or any Confidential Business Information relating to the research, development, manufacturing or marketing of Celexa to any other person.

E. Respondents shall require each Key Employee to sign a confidentiality agreement pursuant to which such employee shall be required to maintain all Celexa Know-how (including, without limitation, all field experience) strictly confidential, including from all other employees, executives or other personnel of Respondents. (A copy of this confidentiality agreement is appended hereto as public Appendix X). Respondents shall ensure that Key Employees (listed in Appendix IX) shall not be involved in the marketing, sale or promotion of Zoloft or any SSRI/SNRI Product other than Celexa through March 31, 2001.

F. Respondents shall also provide written notification of the restrictions on the use of Celexa Know-how by former Warner personnel and of the restrictions on the Warner personnel from selling Zoloft, or accompanying Pfizer personnel involved with the sale or marketing of Zoloft, for the time periods set forth in the Celexa Termination Agreement, to all Warner employees involved in the sale or marketing of Celexa (other than the Key Employees) and all Pfizer employees involved with the sale or marketing of Zoloft. Respondents shall provide such notification by email with return receipt requested or similar transmission. (A copy of this confidentiality notification is appended hereto as Appendix XI). Respondents shall also obtain from each employee covered by the requirements of this subparagraph an agreement to abide by these restrictions. Respondents shall maintain complete records of all such statements at Respondents' corporate headquarters and shall provide an officer's certificate to the Commission, stating that such acknowledgment program has been implemented and is being complied with. Respondents shall monitor the implementation by their sales forces of these restrictions, including the provision of written reminders to all sales personnel at three (3) month intervals until the expiration of the time periods set forth in the Celexa Termination Agreement, and take corrective actions for the failure of sales personnel to comply with such restrictions or to furnish the written acknowledgments required by this Order.

G. Pending the termination of the Celexa Co-Promotion Agreement and the Celexa Amendment, Respondents shall take such actions as are necessary to maintain the viability and marketability of Celexa and to prevent the destruction, removal, wasting, deterioration, or impairment of any Celexa Assets, except for ordinary wear and tear.

 

H. Except as required by law, Respondents shall not receive or have access to, or use or continue to use, any Celexa Material Confidential Information.

 

I. The purpose of Paragraph II of this Order is to ensure the continued use of the Celexa Assets in the same business in which the Celexa Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.

III.

IT IS FURTHER ORDERED that:

A. Not later than ten (10) days after the Public Record Date, Warner shall divest the Cognex Divestiture Assets to First Horizon pursuant to and in accordance with the Cognex Divestiture Agreement, and such agreement is incorporated by reference into this Order and made part hereof as non-public Appendix IV.

 

B. Failure to comply with all terms of the Cognex Divestiture Agreement shall constitute a failure to comply with this Order.

C. Pending divestiture of the Cognex Divestiture Assets, Respondents shall take such actions as are necessary to maintain the viability and marketability of the Cognex Divestiture Assets and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the Cognex Divestiture Assets except for ordinary wear and tear.

 

D. The purpose of Paragraph III of this Order is to ensure the continued use of the Cognex Divestiture Assets in the same business in which the Cognex Divestiture Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.

IV.

IT IS FURTHER ORDERED that:

A. Not later than ten (10) days after the Public Record Date, Pfizer shall divest the RID Assets to Bayer pursuant to and in accordance with the RID Divestiture Agreement, and such agreement is incorporated by reference into this Order and made part hereof as non-public Appendix VIII. Provided, however, that if Respondents have divested the RID Assets to Bayer prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondents that Bayer is not an acceptable purchaser of the RID Assets or that the manner in which the divestiture was accomplished is not acceptable, then Respondents shall immediately rescind the transaction with Bayer and shall divest the RID Divestiture Assets within six (6) months from the date the Order becomes final, absolutely and in good faith, at no minimum price, to an acquirer that receives the prior approval of the Commission and only in a manner that receives the prior approval of the Commission.

 

B. Failure to comply with all terms of the RID Divestiture Agreement shall constitute a failure to comply with this Order.

 

C. Pending divestiture of the RID Divestiture Assets, Respondents shall take such actions as are necessary to maintain the viability and marketability of the RID Divestiture Assets and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the RID Divestiture Assets except for ordinary wear and tear.

 

D. The purpose of Paragraph IV of this Order is to ensure the continued use of the RID Assets or RID Divestiture Assets in the same business in which the RID Assets or RID Divestiture Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.

V.

IT IS FURTHER ORDERED that:

A. Not later than ten (10) days after the Public Record Date, Respondents shall transfer and surrender, absolutely and in good faith, all of Pfizer's EGFr-tk Assets, pursuant to and in accordance with the EGFr-tk Divestiture Agreement to OSI, and such agreement is incorporated by reference into this Order and made a part hereof as non-public Appendix VII. Failure by Respondents to comply with the requirements of the EGFr-tk Divestiture Agreement shall constitute a failure to comply with this Order.

 

B. Upon reasonable notice and request from OSI to Respondents, Respondents shall provide to OSI, in a timely manner and at no cost to OSI, any assistance, advice or EGFr-tk Assets as may be reasonably necessary for OSI to obtain FDA approvals to manufacture and sell EGFr-tk.

 

C. Respondents shall not, directly or indirectly: (i) exercise dominion or control over, or otherwise seek to influence, the management, direction or supervision of the business of OSI; (ii) seek or obtain representation on the Board of Directors of OSI; (iii) exercise any voting rights attached to any ownership of OSI shares of stock; (iv) seek or obtain access to any Confidential Business Information of OSI relating to EGFr-tk and not otherwise necessary to comply with this Order; or (v) take any action or omit to take any action in a manner that would be incompatible with the status of Respondents as passive investors in OSI. The requirements of Paragraph V.C. shall continue and remain in effect so long as the Respondents retain any Ownership Interest in OSI.

 

D. Pending the completion of the transfer of the EGFr-tk Assets, Respondents shall take such actions as are necessary to maintain the viability and marketability of the EGFr-tk Assets, and to prevent the destruction, deterioration, or impairment of any of the EGFr-tk Assets. Respondents shall also take such actions as are necessary to maintain the viability and marketability of the EGFr-tk Assets, and to prevent the destruction, deterioration, or impairment of any of the EGFr-tk Assets.

E. The purpose of Paragraph V of this Order is to ensure the continued use of the EGFr-tk Assets in the same business in which the EGFr-tk Assets are engaged at the time of the Merger, and to remedy the lessening of competition resulting from the Merger as alleged in the Commission's complaint.

VI.

IT IS FURTHER ORDERED that:

A. At any time after Respondents sign the Consent Agreement in this matter, the Commission may appoint an Interim Trustee to assure that Respondents expeditiously perform their responsibilities as required by this Order and the EGFr-tk Divestiture Agreement.

 

B. If an Interim Trustee is appointed pursuant to Paragraph VI of this Order, Respondents shall consent to the following terms and conditions regarding the powers, duties, authorities, and responsibilities of the Interim Trustee:

 

1. The Commission shall select the Interim Trustee, subject to the consent of Respondents, which consent shall not be unreasonably withheld. If Respondents have 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 Respondents of the identity of any proposed trustee, Respondents shall be deemed to have consented to the selection of the proposed trustee.

2. The Interim Trustee shall have the power and authority to monitor Respondents' compliance with the terms of this Order and with the terms of the EGFr-tk Divestiture Agreement, and shall exercise such power and authority and carry out the duties and responsibilities of the Interim Trustee in a manner consistent with the purposes of this Order and in consultation with the Commission.

 

3. Within ten (10) days after appointment of the Interim Trustee, Respondents shall execute a trust agreement that, subject to the prior approval of the Commission, confers on the Interim Trustee all the rights and powers necessary to permit the Interim Trustee to monitor Respondents' compliance with the terms of this Order and with the terms of the EGFr-tk Divestiture Agreement in a manner consistent with the purposes of this Order.

 

4. The Interim Trustee shall serve until the last obligation under the EGFr-tk Divestiture Agreement has been fully performed; provided, however, the Commission may extend this period as may be necessary or appropriate to accomplish the purposes of this Order.

 

5. The Interim Trustee shall have full and complete access to Respondents' personnel, books, records, documents, facilities and technical information relating to the research, development and manufacture of EGFr-tk, or to any other relevant information, as the Interim Trustee may reasonably request, including, but not limited to, all documents and records kept in the normal course of business that relate to the manufacture of EGFr-tk and all materials and information relating to FDA and other government or regulatory approvals. Respondents shall cooperate with any reasonable request of the Interim Trustee. Respondents shall take no action to interfere with or impede the Interim Trustee's ability to monitor Respondents' compliance with this Order and the EGFr-tk Divestiture Agreement.

 

6. The Interim Trustee shall serve, without bond or other security, at the expense of Respondents, on such reasonable and customary terms and conditions as the Commission may set. The Commission may, among other things, require the Interim Trustee to sign an appropriate confidentiality agreement relating to Commission materials and information received in connection with performance of the Interim Trustee's duties. The Interim Trustee shall have authority to employ, at the expense of Respondents, such consultants, accountants, attorneys and other representatives and assistants as are reasonably necessary to carry out the Interim Trustee's duties and responsibilities. The Interim Trustee shall account for all expenses incurred, including fees for his or her services, subject to the approval of the Commission.

 

7. Respondents shall indemnify the Interim Trustee and hold the Interim Trustee harmless against any losses, claims, damages, liabilities or expenses arising out of, or in connection with, the performance of the Interim Trustee's duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparations for, or defense of, any claim whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the Interim Trustee.

 

8. If the Commission determines that the Interim Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Interim Trustee in the same manner as provided in Paragraph VI.A. of this Order.

 

9. The Commission may on its own initiative or at the request of the Interim Trustee issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of this Order and the EGFr-tk Divestiture Agreement.

 

10. The Interim Trustee shall obtain and evaluate reports submitted to it by OSI with respect to the performance of Respondents' obligations under the EGFr-tk Divestiture Agreement. The Interim Trustee shall report in writing to the Commission every two (2) months from the date the Interim Trustee is appointed concerning compliance by Respondents and OSI with the provisions of this Order and the EGFr-tk Divestiture Agreement until the last obligation under the EGFr-tk Divestiture Agreement has been fully performed.

VII.

IT IS FURTHER ORDERED that:

A. If Respondents have not fully complied with the obligations specified in Paragraph IV of this Order, the Commission may appoint an individual to serve as a trustee to divest the RID Divestiture Assets. In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by the Commission, Respondents shall consent to the appointment of a trustee in such action to divest the RID Divestiture Assets. Neither the appointment of a trustee nor a decision not to appoint a trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed trustee, pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by the Respondents to comply with this Order.

 

B. If a trustee is appointed by the Commission or a court pursuant to Paragraph VII.A. of this Order, Respondents shall consent to the following terms and conditions regarding the trustee's powers, duties, authority, and responsibilities:

1. The Commission shall select the trustee, subject to the consent of Respondents, which consent shall not be unreasonably withheld. The trustee shall be a person with experience and expertise in acquisitions and divestitures. If Respondents have 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 Respondents of the identity of any proposed trustee, Respondents shall be deemed to have consented to the selection of the proposed trustee.

 

2. Subject to the prior approval of the Commission, the trustee shall have the exclusive power and authority to divest the RID Divestiture Assets.

 

3. Within ten (10) days after appointment of the trustee, Respondents shall execute a trust agreement that, subject to the prior approval of the Commission and, in the case of a court-appointed trustee, of the court, transfers to the trustee all rights and powers necessary to permit the trustee to effect the divestiture required by Paragraph IV of this Order.

 

4. The trustee shall have twelve (12) months from the date the Commission approves the trust agreement described in Paragraph VII.B.3. to accomplish the divestiture, which shall be subject to the prior approval of the Commission. If, however, at the end of the twelve-month period, the trustee has submitted a plan of divestiture or believes that the divestiture can be achieved within a reasonable time, the divestiture period may be extended by the Commission, or, in the case of a court-appointed trustee, by the court; provided, however, the Commission may extend the divestiture period only two (2) times.

5. The trustee shall have full and complete access to the personnel, books, records and facilities related to RID or to any other relevant information, as the trustee may request. Respondents shall develop such financial or other information as the trustee may request and shall cooperate with the trustee. Respondents shall take no action to interfere with or impede the trustee's accomplishment of the divestiture. Any delays in divestiture caused by Respondents shall extend the time for divestiture under this Paragraph in an amount equal to the delay, as determined by the Commission or, for a court-appointed trustee, by the court.

 

6. The trustee shall use his or her best efforts to negotiate the most favorable price and terms available in each contract that is submitted to the Commission, subject to Respondents' absolute and unconditional obligation to divest at no minimum price. The divestiture shall be made in the manner and to an acquirer as set out in Paragraph IV of this Order; provided, however, if the trustee receives bona fide offers from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the trustee shall divest to the acquiring entity selected by Respondents from among those approved by the Commission; provided further, however, that Respondents shall select such entity within five (5) business days of receiving notification of the Commission's approval.

 

7. The trustee shall serve, without bond or other security, at the cost and expense of Respondents, on such reasonable and customary terms and conditions as the Commission or a court may set. The trustee shall have the authority to employ, at the cost and expense of Respondents, such consultants, accountants, attorneys, investment bankers, business brokers, appraisers, and other representatives and assistants as are necessary to carry out the trustee's duties and responsibilities. The trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission and, in the case of a court-appointed trustee, by the court, of the account of the trustee, including fees for his or her services, all remaining monies shall be paid at the direction of the Respondents, and the trustee's power shall be terminated. The compensation of the trustee shall be based at least in significant part on a commission arrangement contingent on the divestiture all of Respondents' RID Divestiture Assets.

8. Respondents shall indemnify the trustee and hold the trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the trustee's duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the trustee.

 

9. If the trustee ceases to act or fails to act diligently, a substitute trustee shall be appointed in the same manner as provided in Paragraph VII.B. of this Order.

10. The Commission or, in the case of a court-appointed trustee, the court, may on its own initiative or at the request of the trustee issue such additional orders or directions as may be necessary or appropriate to accomplish the divestiture required by this Order.

 

11. The trustee shall have no obligation or authority to operate or maintain the RID Divestiture Assets.

 

12. The trustee shall report in writing to Respondents and the Commission every sixty (60) days concerning the trustee's efforts to accomplish the divestiture.

VIII.

IT IS FURTHER ORDERED that:

A. Within thirty (30) days after the date this Order becomes final and every sixty (60) days thereafter until Respondents have fully complied with the provisions of Paragraphs II, III, IV, and V.A. of this Order, Respondents shall submit to the Commission a verified written report setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with this Order. Respondents shall submit at the same time a copy of their report concerning compliance with this Order to the Interim Trustee if any Interim Trustee has been appointed. Respondents shall include in their reports, among other things that are required from time to time, a full description of the efforts being made to comply with Paragraphs II through V of the Order, including a description of all substantive contacts or negotiations for the divestitures and the identity of all parties contacted. Respondents shall include in their reports copies of all written communications to and from such parties, all internal memoranda, and all reports and recommendations concerning completing the obligations.

B. One (1) year from the date this Order becomes final, annually for the next five (5) years on the anniversary of the date this Order becomes final, and at other times as the Commission may require, Respondents shall file a verified written report with the Commission setting forth in detail the manner and form in which they have complied and are complying with this Order.

IX.

IT IS FURTHER ORDERED that Respondents shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate Respondents 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.

X.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, and subject to any legally recognized privilege, and upon written request with reasonable notice to Respondents made to their principal United States office, Respondents shall permit any duly authorized representative of the Commission:

A. Access, during office hours of Respondents and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession or under the control of Respondents relating to compliance with this Order; and

 

B. Upon five (5) days' notice to Respondents and without restraint or interference from Respondents, to interview officers, directors, or employees of Respondents, who may have counsel present, regarding such matters.

XI.

IT IS FURTHER ORDERED that this Order shall terminate twenty (20) years after the date on which this Order is issued by the Commission.

By the Commission.

Donald S. Clark
Secretary

SEAL

ISSUED:

APPENDIX I [non-public]

Celexa Co-Promotion Agreement

APPENDIX II. [non-public]

Amendment to Celexa Co-Promotion Agreement

APPENDIX III. [non-public]

Celexa Termination Agreement

APPENDIX IV. [non-public]

Cognex Divestiture Agreement

APPENDIX V. [non-public]

OSI/Pfizer Collaboration Agreements (1986, 1991 and 1996)

Appendix VI [non-public]

OSI/Pfizer License Agreements (1990 and 1996)

Appendix VII (non-public)

EGFr-tk Divestiture Agreement

Appendix VIII (non-public)

RID Divestiture Agreement

Appendix IX (public)

Key Employees

Parke-Davis Celexa™ Team Members