UNITED STATES DISTRICT COURT|
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,
UCAR INTERNATIONAL INC.
|Criminal No. 98-177|
The United States of America and UCAR International Inc. (hereinafter UCAR
International) hereby enter into the following Plea Agreement pursuant to Rule
11(e)(1)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANT
1. UCAR International understands its right:
AGREEMENT TO PLEAD GUILTY AND WAIVE CERTAIN
- to be represented by an attorney;
- to be charged by Indictment;
- to plead not guilty to any criminal charge brought against it;
- 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 it guilty beyond a reasonable doubt;
- to confront and cross-examine witnesses against it and to subpoena witnesses in
its defense at trial;
- to appeal its conviction if it is found guilty at trial; and
- to appeal the imposition of sentence against it.
2. UCAR International waives the rights set out in Paragraph 1(b)-(f) above. UCAR
International 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 Rule 7(b), Fed. R. Crim. P., UCAR International
will waive indictment and plead guilty pursuant to Fed. R. Crim. P. 11(e)(1)(C) to a
one-count Information, to be filed in the United States District Court for the Eastern
District of Pennsylvania. The Information will charge UCAR International with
participating in a conspiracy to suppress and eliminate competition by fixing the price
and allocating the volume of graphite electrodes sold in the United States and
elsewhere, beginning at least as early as July 1992 and continuing until at least June
1997, in violation of the Sherman Antitrust Act,
15 U.S.C. § 1.
3. Pursuant to the terms of this Plea Agreement, the defendant will plead guilty at
arraignment to the criminal charge described in Paragraph 2 above, and will make a
factual admission of guilt to the Court in accordance with Rule 11, Fed. R. Crim. P., as
set forth in Paragraph 4 below.
FACTUAL BASIS FOR OFFENSE
4. Had this case gone to trial, the United States would have presented evidence to
prove the following facts.
- For purposes of this Plea Agreement, the "relevant period" is that period beginning
at least as early as July 1992 and continuing until at least June 1997. Throughout the
relevant period, UCAR Carbon Company was a corporation organized and existing
under the laws of Delaware. UCAR International was formed in November 1993 and
exists under the laws of Delaware as a holding company and the parent of UCAR
Carbon Company and its affiliates. UCAR Carbon Company and UCAR International
have their principal places of business in Danbury, Connecticut. During the relevant
period, UCAR International, through UCAR Carbon Company and its other subsidiaries,
was a manufacturer of graphite electrodes. Graphite electrodes are large columns used
to conduct electricity in electric arc furnace steel making in the United States and
elsewhere. During the relevant period, UCAR International, through UCAR Carbon
Company and its other subsidiaries, was engaged in the sale of graphite electrodes in
the United States and elsewhere.
- During the relevant period, UCAR International, through several of its officers and
employees, participated in a conspiracy among the major graphite electrode
manufacturing companies, the primary purposes of which were to fix the price and
allocate the volume of graphite electrodes sold in the United States and elsewhere. In
furtherance of the conspiracy, UCAR International, through several of its officers and
employees, engaged in conversations and attended meetings with representatives of
the other major graphite electrode producing firms. During such meetings and
conversations, agreements were reached as to the prices the firms would charge for,
and the volumes the firms would sell of, graphite electrodes in the United States and
- During the relevant period, graphite electrodes sold by one or more of the
conspirator firms, and equipment and supplies necessary to the production and
distribution thereof, as well as payments therefor, traveled in interstate and foreign
commerce. The business activities of UCAR International and co-conspirators in
connection with the production and sale of graphite electrodes affected by this
conspiracy were within the flow of, and substantially affected, interstate and foreign
trade and commerce.
- Substantial quantities of graphite electrodes affected by this conspiracy were sold
by UCAR International and other conspirators to customers in the Eastern District of
5. UCAR International understands that the maximum penalty which may be imposed
against it upon conviction for a violation of the Sherman Antitrust Act is a fine in an
amount equal to the largest of:
6. In addition, UCAR International understands that:
- $10 million (15 U.S.C. § 1);
- twice the gross pecuniary gain derived from the crime; or
- twice the gross pecuniary loss caused to the victims of the crime (18 U.S.C.
- pursuant to § 8B1.1(a)(2) of the United States Sentencing
Commission Guidelines ("U.S.S.G."), the Court may order it to pay restitution to the
victims of the offense;
- pursuant to 18 U.S.C. § 3013(a)(2)(B), the Court is required to order
the defendant to pay a $400.00 special assessment upon conviction for the charged
- a term of probation of at least one year, but not more than five years, may be
imposed (18 U.S.C. § 3561(c)(1)).
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. § 1B1.8,
self-incriminating information provided to the United States pursuant to this Plea
Agreement will not be used to increase the volume of affected commerce attributable to
UCAR International or in determining the applicable Guidelines range.
8. Pursuant to Rule 11(e)(1)(C), Fed. R. Crim. P., the United States and UCAR
International agree that the appropriate disposition of the case is, and agree jointly to
recommend that the Court impose, pursuant to 18 U.S.C. § 3571(d), a sentence
requiring UCAR International to pay a fine to the United States in the amount of $110
9. Subject to the full and continuing cooperation of UCAR International
described in Paragraph 11 of this Plea Agreement, and prior to sentencing in the case,
the United States will fully advise the Court of the fact, manner, and extent of UCAR
International's ongoing cooperation and its commitment to prospective cooperation with
the United States' investigation and prosecutions, all facts relating to UCAR
International's involvement in the charged offense, and all other relevant conduct.
- The $110 million shall bepayable as follows:
- the first payment in the amount of $20 million will be due within ninety days from
the date of imposition of sentence; and
- thereafter, the defendant shall make five payments, each on the yearly
anniversary of the date of sentencing, according to the following schedule: $15 million
on the first anniversary of the date of sentencing; $15 million on the second anniversary
of the date of sentencing; $18 million on the third anniversary of the date of sentencing;
$21 million on the fourth anniversary of the date of sentencing; and $21 million on the
fifth anniversary of the date of sentencing.
- Pursuant to 18 U.S.C. § 3612(f)(3)(A), interest shall be waived due to UCAR
International's inability to pay.
- UCAR International understands that the Court will order it to pay a $400.00
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;
- The United States and UCAR International jointly submit that this Plea Agreement,
together with the record that will be created by the United States and UCAR
International at sentencing and the further disclosure described in Paragraph 9 of this
Plea Agreement, provides sufficient information concerning UCAR International, the
offense charged in this case, and UCAR International's role in the offense to enable the
meaningful exercise of sentencing authority by the Court under 18 U.S.C. §
3553. The United States and UCAR International will jointly request that the Court
accept UCAR International's guilty plea and immediately impose sentence on the day of
arraignment pursuant to the provisions of Rule 32(b)(1), Fed. R. Crim. P., and
U.S.S.G. § 6A1.1.
- The United States and UCAR International understand that the Court retains
complete discretion to accept or reject the agreed-upon recommendation provided for in
this Plea Agreement. If the Court does not accept the recommended sentence, this
Plea Agreement will be void and UCAR International will be free to withdraw its guilty
plea (Fed. R. Crim. P. 11(e)(4)). If UCAR International does withdraw its plea of guilty,
this Plea Agreement, the guilty plea, and any statements made in connection with or in
furtherance of the plea or this Plea Agreement, or in the course of discussions leading
to the plea or the Plea Agreement, shall not be admissible against UCAR International
in any criminal or civil proceeding (Fed. R. Crim. P. 11(e)(6)).
10. The United States and UCAR International agree that the Guidelines fine range
exceeds the agreed-upon recommended fine. The United States agrees that, based on
UCAR International's ongoing cooperation, the United States would have moved the
court for a downward departure pursuant to U.S.S.G. § 8C4.1, but for the fact that
the amount of the fine that the United States would have recommended as a downward
departure for substantial assistance provided still would have exceeded UCAR
International's ability to pay. The United States and UCAR International further agree
that the agreed-upon recommended fine is appropriate pursuant to U.S.S.G. §
8C3.3(b) due to the inability of UCAR International to pay a fine greater than that
recommended without jeopardizing its continued viability. The United States agrees that
it will not seek a restitution order with respect to the offense charged in the Information
since civil actions seeking damages on behalf of victims have already been filed.
11. UCAR International, including its subsidiaries, will fully and truthfully cooperate with
the United States in the prosecution of this case, the conduct of the current federal
investigation of violations of the federal antitrust and related criminal laws in the sale of
graphite and carbon products, any other federal investigation resulting therefrom, and
any litigation or other proceeding arising or resulting from any such investigation to
which the United States is a party ("Federal Proceeding"). Such cooperation shall
include, but not be limited to:
12. The full and truthful cooperation of any person subject to Paragraph 11(b)
above shall include, but not be limited to:
- the production to the United States of all documents (except documents qualified
as privileged under the laws of the United States) and other materials relevant to any
Federal Proceeding in the possession, custody, or control of UCAR International or its
subsidiaries, wherever located, requested by the United States in connection with any
Federal Proceeding; and
- the use of its best efforts to secure the ongoing full and truthful cooperation, as
defined in Paragraph 12 of this Plea Agreement, of current directors, officers,
and employees of UCAR International and its subsidiaries (excluding Robert P. Krass,
Robert J. Hart, Raymond Pelletier, and Georges Schwegler), including making
such persons available upon reasonable notice in the United States and elsewhere at
UCAR International's expense for interviews, grand jury and trial testimony, and other
judicial proceedings in connection with any Federal Proceeding.
- making available, in the United States, all relevant non-privileged documents
(including claimed personal documents) and other materials to attorneys and agents of
the United States;
- upon reasonable notice by the United States, making himself available in the
United States and elsewhere for interviews with attorneys and agents of the United
- 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;
- otherwise giving the United States access to knowledge or information he may
have relevant to any such Federal Proceeding; and
- when called upon to do so by the United States, testifying in trial and grand jury or
other proceedings in the United States 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) and contempt
(18 U.S.C. §§ 401-402), in connection with any such Federal
13. The United States agrees to the following.
- Subject to the exceptions noted in Paragraph 13(c), the United States will
not bring criminal charges against any current director, officer, or employee of UCAR
International and its subsidiaries (excluding Robert P. Krass, Robert J. Hart, Raymond
Pelletier, and Georges Schwegler) for any act or offense committed prior to the date of
this Plea Agreement and while such person was employed by UCAR International or its
subsidiaries, that was undertaken in furtherance of any attempted or completed
antitrust conspiracy involving the sale of graphite or carbon products ("Relevant
- Should the United States determine that any current director, officer, or employee
of UCAR International or its subsidiaries may have information relevant to any Federal
Proceeding,the United States may request such person's cooperation pursuant
to the terms of this Plea Agreement by written request delivered to counsel for the
individual (with a copy to the undersigned counsel for UCAR International) or, if the
individual is not known by the United States to be represented, to the undersigned
counsel for UCAR International.
- In the event that any person requested to provide cooperation pursuant to
Paragraph 13(b) fails to comply with such person's obligations under Paragraph 12 of
this Plea Agreement, then the terms of this Plea Agreement as they pertain to such
person shall be rendered null and void, and the agreement not to prosecute such
person granted in this Plea Agreement shall be void.
- Except as provided in Paragraph 13(e), information provided to the United States
pursuant to the terms of this Plea Agreement pertaining to any
RelevantOffense committed prior to the date of this Plea Agreement, and while
such person was employed by and acting as an employee of UCAR International or its
subsidiaries, or any information directly or indirectly derived from such information, may
not be used against such person in a criminal case, except a prosecution for perjury (18
U.S.C. § 1621), making a false statement or declaration in grand jury or
court proceedings (18 U.S.C. § 1623), or obstruction of justice (18 U.S.C.
- In the event a person who provides information to the United States pursuant to
this Plea Agreement fails to comply fully with his obligations under Paragraph 12
of this Plea Agreement, the agreement in Paragraph 13(d) not to use such information,
or any information directly or indirectly derived from such information, against such
person in a criminal case shall be void.
- The non-prosecution terms of this paragraph do not apply to any civil liability to the
United States, to any violation of the federal tax or securities laws, or to any crime of
14. Upon tender of the guilty plea called for by this Plea Agreement, and subject to the
cooperation requirements of Paragraph 11 of this Plea Agreement, the United States
agrees that it will not bring further criminal charges against UCAR International or its
subsidiaries for any Relevant Offense committed prior to the date of this Plea
Agreement. The non-prosecution terms of this paragraph do not apply to any civil
liability to the United States, to any violation of the federal tax or securities laws, or to
any crime of violence.
15. The United States agrees that when any person travels to the United States for
interviews, court appearances, or grand jury appearances pursuant to this Plea
Agreement, the United States will take no action, based upon any offense subject to
this Plea Agreement, to subject such person to arrest, service of process, or prevention
from departing the United States. This paragraph does not apply to an individual's
commission of perjury (18 U.S.C. § 1621), making a false statement or
declaration 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 provided in trial, grand jury, or other judicial
proceedings in the United States.
16. UCAR International understands that it may be subject to administrative action by
federal or state agencies other than the United States Department of Justice, Antitrust
Division, based upon any conviction resulting from this Plea Agreement, and that this
Plea Agreement in no way controls whatever action, if any, such other agencies may
take. However, the United States Department of Justice, Antitrust Division, agrees that,
if requested, it will advise the appropriate officials of any governmental agency
considering administrative action against UCAR International, based upon any
conviction resulting from this Plea Agreement, of the fact, manner, and extent of the
cooperation of UCAR International, as described herein, as a matter for such agency to
consider before determining what administrative action, if any, to take with regard to
REPRESENTATION BY COUNSEL
17. UCAR International has been represented by counsel and is fully satisfied that its
attorneys have provided competent legal representation. UCAR International has
thoroughly reviewed this Plea Agreement and acknowledges that counsel has advised
it of the nature of the charges, any possible defenses to the charges, and the nature
and range of possible sentences.
18. UCAR International's decision to enter into this Plea Agreement and UCAR
International's decision to tender a plea of guilty are freely and voluntarily made and are
not the result of force, threats, assurances, promises, or representations other than the
representations contained in this Plea Agreement. There have been no promises or
representations to UCAR International as to whether the Court will accept or reject this
VIOLATION OF PLEA AGREEMENT
19. UCAR International agrees that, should the United States determine in good faith,
during the period any Federal Proceeding is pending that UCAR International has failed
to provide full cooperation (as described in Paragraph 11 of this Plea Agreement) or
otherwise has violated any other provision of this Plea Agreement, the United States
may notify counsel for UCAR International in writing by personal or overnight delivery or
facsimile transmission of its intention to void any of its obligations under this Plea
Agreement (except its obligations under this paragraph). UCAR International may seek
court review of any determination made by the United States under this paragraph.
ENTIRETY OF AGREEMENT
20. This Plea Agreement constitutes the entire agreement between the United States
and UCAR International concerning the disposition of the criminal charges in this case.
This Plea Agreement cannot be modified except in writing signed by the United States
and UCAR International.
21. The undersigned Vice President, General Counsel, and Secretary of UCAR
International is authorized to enter this Plea Agreement on behalf of UCAR International
as evidenced by the Resolution of the Board of Directors of UCAR International
attached hereto and incorporated herein by reference.
22. A facsimile signature shall be deemed an original signature for the purpose of
executing this Plea Agreement.
KEVIN R. SULLIVAN
GRACE M. RODRIGUEZ
Counsel for UCAR International Inc.
PETER B. MANCINO
Vice President, General Counsel,and Secretary
UCAR International Inc.
WENDY BOSTWICK NORMAN
LUCY P. MCCLAIN
ROGER L. CURRIER
JOSEPH MUOIO, JR.
Attorneys, Antitrust Division
U.S. Department of Justice
170 S. Independence Mall West
Philadelphia, PA 19106