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MICHAEL L. SCOTT (CSBN 165452)
JEANE HAMILTON (CSBN 157834)
VICTOR ALI (CSBN 229544)
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
Telephone: (415) 436-6660
Attorneys for the United States
FILED
Mar 28 2004
RICHARD W. WIEKING
CLERK U.S. DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA



UNITED STATES OF AMERICA,    

                  Plaintiff,

                  v.

CROMPTON CORPORATION,

                  Defendant.


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No. CR 04-0079 MJJ

PLEA AGREEMENT


PLEA AGREEMENT

The United States of America and Crompton Corporation ("defendant"), a corporation organized and existing under the laws of Delaware, hereby enter into the following Plea Agreement pursuant to Rule 1 l(c)(l)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):

RIGHTS OF DEFENDANT

1. The defendant understands its rights:

  1. to be represented by an attorney;
  2. to be charged by Indictment;
  3. to plead not guilty to any criminal charge brought against it;
  4. to have a trial by jury, at which it would be presumed not guilty of the charge and the United States would have to prove every essential element of the charged offense beyond a reasonable doubt for it to be found guilty;
  5. to confront and cross-examine witnesses against it and to subpoena witnesses in its defense at trial;
  6. to appeal its conviction if it is found guilty at trial; and
  7. to appeal the imposition of sentence against it.

AGREEMENT TO PLEAD GUILTY
AND WAIVE CERTAIN RIGHTS

2. The defendant waives the rights set out in Paragraph l(b)-(f) above. The defendant also waives the right to appeal the imposition of sentence against it, so long as the sentence imposed is consistent with the recommendation in Paragraph 8 of this Plea Agreement. Pursuant to Fed. R. Crim. P. 7(b), the defendant will waive indictment and plead guilty at arraignment to a one-count Information to be filed in the United States District Court for the Northern District of California. The Information will charge the defendant with participating in a combination and conspiracy to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the United States and elsewhere, beginning in or about July 1995 and continuing until in or about December 2001, in violation of Section One of the Sherman Act (15 U.S.C. § 1).

3. The defendant, pursuant to the terms of this Plea Agreement, will plead guilty to the criminal charge described in Paragraph 2 above and will make a factual admission of guilt to the Court in accordance with Fed. R. Crim. P. 11, as set forth in Paragraph 4 below.

FACTUAL BASIS FOR OFFENSE CHARGED

4. Had this case gone to trial, the United States would have presented evidence to prove the following facts:

  1. For purposes of this Plea Agreement, the "relevant period" is that period beginning in or about July 1995 and continuing until in or about December 2001. During the relevant period, the defendant was a corporation organized and existing under the laws of Massachusetts and then Delaware. The defendant has its principal place of business in Middlebury, Connecticut. During the relevant period, the defendant or its subsidiaries produced and sold certain rubber chemicals in the United States and elsewhere. Rubber chemicals are a group of additives used to improve the elasticity, strength, and durability of rubber products. Rubber chemicals are used primarily in the manufacture of tires, outdoor furniture, hoses, belts, and footwear.

  2. During the relevant period, the defendant, through its officers and
  3. employees, participated in a conspiracy among major rubber chemical producers, the primary purpose of which was to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the United States and elsewhere. In furtherance of the conspiracy, the defendant, through its officers and employees, engaged in discussions and attended meetings with representatives of other major rubber chemical producers. During these discussions and meetings, agreements were reached to maintain and increase the price of certain rubber chemicals to be sold in the United States and elsewhere.

  4. During the relevant period, rubber chemicals sold by one or more of the
  5. conspirator firms, and equipment and supplies necessary to the production and distribution of rubber chemicals, as well as payments for rubber chemicals, traveled in interstate and foreign commerce. The business activities of the defendant and its co conspirators in connection with the production and sale of rubber chemicals affected by this conspiracy were within the flow of, and substantially affected, interstate and foreign trade and commerce.

  6. Acts in furtherance of this conspiracy were carried out within the Northern District of California. Rubber chemicals affected by this conspiracy were sold by one or more of the conspirators to customers in this District.

POSSIBLE MAXIMUM SENTENCE

5. The defendant understands that the maximum penalty which may be imposed against it upon conviction for a violation of Section One of the Sherman Antitrust Act is a fine in an amount equal to the greatest of:

  1. $10 million (15 U.S.C. § 1);

  2. twice the gross pecuniary gain the conspirators derived from the crime
  3. (18 U.S.C. § 3571(c) and (d)); or

  4. twice the gross pecuniary loss caused to the victims of the crime by the conspirators (18 U.S.C. § 3571(c) and (d)).

6. In addition, the defendant understands that:

  1. pursuant to § 8B1.1 of the United States Sentencing Guidelines ("U.S.S.G."), the Court may order it to pay restitution to the victims of the offense;

  2. pursuant to 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, the Court is
  3. required to order the defendant to pay a $400 special assessment upon conviction for the charged crime; and

  4. pursuant to 18 U.S.C. § 3561(c)(l), the Court may impose a term of
  5. probation of at least one year, but not more than five years.

SENTENCING GUIDELINES

7. Sentencing for the offense to be charged will be conducted pursuant to the U.S.S.G. Manual in effect on the day of sentencing. Pursuant to U.S.S.G. § lB1.8, the United States agrees that self incriminating information that the defendant provides to the United States pursuant to this Plea Agreement will not be used to increase the volume of affected commerce attributable to the defendant or in determining the defendant's applicable sentencing guidelines range, except to the extent provided in U.S.S.G. § lB1.8(b).

SENTENCING AGREEMENT

8. Pursuant to Fed. R. Crim. P. 1 l(c)(l)(C), the United States and the defendant agree that the appropriate disposition of this case is, and agree to recommend jointly that the Court impose a sentence requiring the defendant to pay to the United States a criminal fine of $50 million payable in installments as set forth below, and without interest pursuant to 18 U.S.C. § 3612(f)(3)(A) ("the recommended sentence").

  1. The United States and the defendant agree to recommend, in the interest of justice pursuant to 18 U.S.C. § 3572(d)(l) and U.S.S.G. § 8C3.2(b), that the fine be paid in the following installments: within 30 days of imposition of sentence - $2 million; at the one-year anniversary of imposition of sentence ("anniversary") - $2 million; at the two-year anniversary- $6 million; at the three-year anniversary- $10 million; at the four-year anniversary - $14 million; and at the five-year anniversary- $16 million; provided, however, that the defendant shall have the option at any time before the five-year anniversary of prepaying the remaining balance then owing on the fine.

  2. The defendant understands that the Court will order it to pay a $400
  3. special assessment, pursuant to 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, in addition to any fine imposed.

  4. Neither party will recommend a term of probation, but the defendant
  5. understands that the Court is free to impose a term of probation.

  6. Subject to the ongoing, full, and truthful cooperation of the defendant
  7. described in Paragraph 12 of this Plea Agreement, and before sentencing in the case, the United States will fully advise the Court of the fact, manner, and extent of the defendant's cooperation and its commitment to prospective cooperation with the United States' investigation and prosecutions, all material facts relating to the defendant's involvement in the charged offense, and all other relevant conduct. The United States and the defendant jointly submit that this Plea Agreement, together with the record that will be created by the United States and the defendant at the plea and sentencing hearings, will provide sufficient information concerning the defendant, the crime charged in this case, and the defendant's role in the crime to enable the meaningful exercise of sentencing authority by the Court under 18 U.S.C. § 3553. The United States and defendant agree to request jointly that the Court accept the defendant's guilty plea and impose sentence on an expedited schedule as early as the date of arraignment, based upon the record provided by the defendant and the United States, under the provisions of Fed. R. Crim. P. 32(c)(l)(A)(ii), U.S.S.G. § 6A1.1, and Rule 18(b) of the Local Rules. The Court's denial of the request to impose sentence on an expedited schedule will not void this Plea Agreement.

9. The United States and the defendant agree that the applicable sentencing guidelines fine range exceeds the fine contained in the recommended sentence set out in Paragraph 8 above. Subject to the full and continuing cooperation of the defendant, as described in Paragraph 12 of this Plea Agreement, and prior to sentencing in this case, the United States agrees that it will make a motion, pursuant to U.S.S.G. § 8C4.1, for a downward departure from the guidelines fine range and will request that the Court impose the recommended sentence set out in Paragraph 8 of this Plea Agreement because of the defendant's substantial assistance in the government's investigation and prosecutions of violations of federal criminal law in the rubber chemicals industry and in other chemical industries.

10. The United States and the defendant understand that the Court retains complete discretion to accept or reject the recommended sentence provided for in Paragraph 8 of this Plea Agreement.

  1. If the Court does not accept the recommended sentence, the United States and the defendant agree that this Plea Agreement, except for Paragraph 10(b) below, shall be rendered void. Neither party may withdraw from this Plea Agreement, however, based on the imposition of a term of probation.
  2. If the Court does not accept the recommended sentence, the defendant will be free to withdraw its guilty plea (Fed. R. Crim. P. 11(c)(5) and (d)). If the defendant withdraws its plea of guilty, this Plea Agreement, the guilty plea, and any statement made in the course of any proceedings under Fed. R. Crim. P. 11 regarding the guilty plea or this Plea Agreement or made in the course of plea discussions with an attorney for the government shall not be admissible against the defendant in any criminal or civil proceeding, except as otherwise provided in Fed. R. Evid. 410. In addition, the defendant agrees that, if it withdraws its guilty plea pursuant to this subparagraph of the Plea Agreement, the statute of limitations period for any offense referred to in Paragraph 14 of this Plea Agreement will be tolled for the period between the date of the signing of the Plea Agreement and the date the defendant withdrew its guilty plea or for a period of sixty (60) days after the date of the signing of the Plea Agreement, whichever period is greater.

11. In light of the private civil cases filed, which potentially provide for a recovery of a multiple of actual damages, the United States agrees that it will not seek a restitution order for the offense charged in the Information.

DEFENDANT'S COOPERATION

12. The defendant will cooperate fully and truthfully with the United States in the prosecution of this case, the conduct of the current federal investigation of violations of federal antitrust and related criminal laws involving the manufacture or sale of rubber chemicals, and any litigation or other proceedings arising or resulting from any such investigation to which the United States is a party ("Federal Proceeding"). The ongoing, full, and truthful cooperation of the defendant shall include, but not be limited to:

  1. producing to the United States all documents, information, and other materials, wherever located, in the possession, custody, or control of the defendant, requested by the United States in connection with any Federal Proceeding; and
  2. using its best efforts to secure the ongoing, full, and truthful cooperation, as defined in Paragraph 13 of this Plea Agreement, of the current and former directors, officers, and employees of the defendant as may be requested by the United States, but excluding Vincent A. Calarco, James J. Conway, and Joseph B. Eisenberg, and, including making these persons available in the United States and at other mutually agreed-upon locations, at the defendant's expense, for interviews and the provision of testimony in grand jury, trial, and other judicial proceedings in connection with any Federal Proceeding.

13. The ongoing, full, and truthful cooperation of each person described in Paragraph 12(b) above will be subject to the procedures and protections of this paragraph, and shall include, but not be limited to:

  1. producing in the United States and at other mutually agreed-upon locations all documents, including claimed personal documents, and other materials, wherever located, requested by attorneys and agents of the United States;
  2. making himself or herself available for interviews in the United States and at other mutually agreed-upon locations, not at the expense of the United States, upon the request of attorneys and agents of the United States;
  3. responding fully and truthfully to all inquiries of the United States in connection with any Federal Proceeding, without falsely implicating any person or intentionally withholding any information, subject to the penalties of making false statements (18 U.S.C. § 1001) and obstruction of justice (18 U.S.C. § 1503);
  4. otherwise voluntarily providing the United States with any material or information not requested in (a) - (c) of this paragraph that he or she may have that is related to any Federal Proceeding;
  5. when called upon to do so by the United States in connection with any Federal Proceeding, testifying in grand jury, trial, and other judicial proceedings fully, truthfully, and under oath, subject to the penalties of perjury (18 U.S.C. § 1621), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), contempt (18 U.S.C. §§ 401-402), and obstruction of justice (18 U.S.C. § 1503); and
  6. agreeing that, if the agreement not to prosecute him or her in this Plea Agreement is rendered void under Paragraph 15(c), the statute of limitations period for any Relevant Offense as defined in Paragraph 15(a) will be tolled as to him or her for the period between the date of the signing of this Plea Agreement and six (6) months after the date that the United States gave notice of its intent to void its obligations to that person under the Plea Agreement.

GOVERNMENT'S AGREEMENT

14. Upon acceptance of the guilty plea called for by this Plea Agreement and the imposition of the recommended sentence, and subject to the cooperation requirements of Paragraph 12 of this Plea Agreement, the United States agrees that it will not bring further criminal charges against the defendant for any act or offense committed before the date of this Plea Agreement that was undertaken in furtherance of an antitrust conspiracy involving the manufacture or sale of rubber chemicals. The nonprosecution terms of this paragraph do not apply to civil matters of any kind, to any violation of the federal tax or securities laws, or to any crime of violence.

15. The United States agrees to the following:

  1. Upon the Court's acceptance of the guilty plea called for by this Plea Agreement and the imposition of the recommended sentence and subject to the exceptions noted in Paragraph 15(c), the United States will not bring criminal charges against any current or former director, officer, or employee of the defendant for any act or offense committed before the date of this Plea Agreement and while that person was acting as a director, officer, or employee of the defendant that was undertaken in furtherance of an antitrust conspiracy involving the manufacture or sale of rubber chemicals ("Relevant Offense"), except that the protections granted in this paragraph shall not apply to Vincent A. Calarco, James J. Conway, and Joseph B. Eisenberg;
  2. Should the United States determine that any current or former director, officer, or employee of the defendant may have information relevant to any Federal Proceeding, the United States may request that person's cooperation under the terms of this Plea Agreement by written request delivered to counsel for the individual (with a copy to the undersigned counsel for the defendant) or, if the individual is not known by the United States to be represented, to the undersigned counsel for the defendant;
  3. If any person requested to provide cooperation under Paragraph 15(b) fails to comply with his or her obligations under Paragraph 13, then the terms of this Plea Agreement as they pertain to that person, and the agreement not to prosecute that person granted in this Plea Agreement, shall be rendered void;
  4. Except as provided in Paragraph 15(e), information provided by a person described in Paragraph 15(b) to the United States under the terms of this Plea Agreement pertaining to any Relevant Offense, or any information directly or indirectly derived from that information, may not be used against that person in a criminal case, except in a prosecution for perjury (18 U.S.C. § 1621), making a false statement or declaration (18 U.S.C. §§ 1001, 1623), or obstruction of justice (18 U.S.C. § 1503);
  5. If any person who provides information to the United States under this Plea Agreement fails to comply fully with his or her obligations under Paragraph 13 of this Plea Agreement, the agreement in Paragraph 15(d) not to use that information or any information directly or indirectly derived from it against that person in a criminal case shall be rendered void;
  6. The nonprosecution terms of this paragraph do not apply to civil matters of any kind, to any violation of the federal tax or securities laws, or to any crime of violence; and
  7. Documents provided under Paragraphs 12(a) and 13(a) shall be deemed responsive to outstanding grand jury subpoenas issued to the defendant.

16. The United States agrees that when any person travels to the United States for interviews, grand jury appearances, or court appearances pursuant to this Plea Agreement, or for meetings with counsel in preparation therefor, the United States will take no action, based upon any Relevant Offense, to subject such person to arrest, detention, or service of process, or to prevent such person from departing the United States. This paragraph does not apply to an individual's commission of perjury (18 U.S.C. § 1621), making false statements (18 U.S.C. § 1001), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402) in connection with any testimony or information provided or requested in any Federal Proceeding.

REPRESENTATION BY COUNSEL

17. The defendant has been represented by counsel and is fully satisfied that its attorneys have provided competent legal representation. The defendant has thoroughly reviewed this Plea Agreement and acknowledges that counsel has advised it of the nature of the charge, any possible defenses to the charge, and the nature and range of possible sentences.

VOLUNTARY PLEA

18. The defendant's decision to enter into this Plea Agreement and to tender a plea of guilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or representations other than the representations contained in this Plea Agreement. The United States has made no promises or representations to the defendant as to whether the Court will accept or reject the recommendations contained within this Plea Agreement.

VIOLATION OF PLEA AGREEMENT

19. The defendant agrees that, should the United States determine in good faith, during the period that any Federal Proceeding is pending, that the defendant has failed to provide full and truthful cooperation, as described in Paragraph 12 of this Plea Agreement, or has otherwise violated any provision of this Plea Agreement, the United States will notify counsel for the defendant in writing by personal or overnight delivery or facsimile transmission and may also notify counsel by telephone of its intention to void any of its obligations under this Plea Agreement (except its obligations under this paragraph), and the defendant shall be subject to prosecution for any federal crime of which the United States has knowledge including, but not limited to, the substantive offenses relating to the investigation resulting in this Plea Agreement. The defendant may seek court review of any determination made by the United States under this Paragraph to void any of its obligations under the Plea Agreement. The defendant agrees that, in the event that the United States is released from its obligations under this Plea Agreement and brings criminal charges against the defendant for any offense referred to in Paragraph 14 of this Plea Agreement, the statute of limitations period for such offense will be tolled for the period between the date of the signing of this Plea Agreement and six (6) months after the date the United States gave notice of its intent to void its obligations under this Plea Agreement.

20. The defendant understands and agrees that in any further prosecution of it resulting from the release of the United States from its obligations under this Plea Agreement, because of the defendant's violation of the Plea Agreement, any documents, statements, information, testimony, or evidence provided by it, or current or former directors, officers, or employees of it to attorneys or agents of the United States, federal grand juries, or courts, and any leads derived therefrom, may be used against it in any such further prosecution. In addition, the defendant unconditionally waives its right to challenge the use of such evidence in any such further prosecution, notwithstanding the protections of Fed. R. Evid. 410.

ENTIRETY OF AGREEMENT

21. This Plea Agreement and the Crompton Cooperation Agreement, filed separately with the Court, constitute the entire agreement between the United States and the defendant concerning the disposition of the criminal charge in this case. This Plea Agreement cannot be modified except in writing signed by the United States and the defendant.

22. The undersigned is authorized to enter into this Plea Agreement on behalf of the defendant as evidenced by the Resolution of the Board of Directors of the defendant attached to, and incorporated by reference, in this Plea Agreement.

23. The undersigned attorneys for the United States have been authorized by the Attorney General of the United States to enter this Plea Agreement on behalf of the United States.

24. A facsimile signature shall be deemed an original signature for the purpose of executing this Plea Agreement. Multiple signature pages are authorized for the purpose of executing this Plea Agreement.

DATED: 3/15/2004 Respectfully submitted,


CROMPTON CORPORATION

BY: _____________/s/_____________
John T. Ferguson II
Senior Vice President, General Counsel

 

COUNSEL FOR CROMPTON CORPORATION

BY: _____________/s/_____________
James Walden, Esq.
O'Melveny & Myers LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022

U.S. DEPARTMENT OF JUSTICE
ANTITRUST DIVISION

BY: _____________/s/_____________
Michael L. Scott
Jeane Hamilton
Victor Ali
Attorneys

450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
(415) 436-6660

 


Crompton Corporation

Certificate of Secretary

I, Barry J. Shainman, Secretary of Crompton Corporation, a corporation duly organized and existing under the laws of the State of Delaware, do hereby certify that:

  1. Annexed hereto as Exhibit A is a true and correct copy of resolutions duly adopted by the Board of Directors of Crompton Corporation, at a special meeting of the Board of Directors held on March 11, 2004, at which meeting a quorum was present and acting throughout; and which resolutions have not been revoked, amended, supplemented or modified and are in full force and effect on the date hereof; and

  2. The officer named below is a duly elected and qualified officer of Crompton Corporation, holding the office set forth opposite his name and the signature set forth opposite his name is his genuine signature:
Name Title Specimen Signature
John T. Ferguson II Senior Vice President
and General Counsel
_______________/s/________________

IN WITNESS WEHREOF, I have hereunto signed my name this 15th day of March, 2004.


_______________/s/________________
Barry J. Shainman
Secretary


Exhibit A

Resolutions adopted at a Special Meeting of the Board of Directors of Crompton Corporation Held on March 11, 2004

VOTED: RESOLVED, that the execution, delivery and performance by the Corporation of a Plea Agreement with the United States of America concerning the federal investigation of the rubber chemicals industry, in substantially the form presented, and the provisions of which have been described to the Board at this meeting, are hereby authorized and approved in all respects; and further

RESOLVED, that the Senior Vice President and General Counsel of the Corporation is hereby authorized and empowered to execute and deliver, in the name and on behalf of the Corporation, such Plea Agreement with such changes that ate not materially adverse to the Corporation and that he or she determines to be in the best interests of the Corporation, such changes to be conclusively evidenced by the signature of such authorized officer,


UNITED STATES DISTRICT COURT
FOR THE
NORTHERN DISTRICT OF CALIFORNIA



USA et al,    

                  Plaintiff,

                  v.

CROMPTON CORPORATION,    

                  Defendant.


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Case Number. CR04-00079 MJJ

CERTIFICATE OF SERVICE

 

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Northern District of California.

That on February 1, 2006, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office.

Jeane Hamilton
U.S. Department of Justice
Antitrust Division
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102

Jim Walden
O'Melveny & Myers LLP
Times Square Tower
7 Times Square
New York, NY 10036

Dated: February 1, 2006

_______________/s/________________
Richard W. Wieking, Clerk
By: Monica Tutson, Deputy Clerk