Exxon Corporation

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IN THE MAHER OF EXXON CORPORATION, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLA TION OF SEe. 7 OF THE CLAYTON ACT AND SEe. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3833. Complaint, Oct. 30, 1998--Decision, Oct. 30, 1998 This consent order, among other things, requires Exxon to sell its viscosity index improver (an essential motor oil additive) business to Chevron Chemical Company or another Commission-approved buyer.

Participants For the Commission: Philip Eisenstat, Joseph Krauss, William Baer, Leslie Farber, and Jonathan Baker. For the respondents: Robert Paul, White Case Washington e. and Jim Egan, Rogers Wells Washington, D. COMPLAINT The Federal Trade Commission ("Commission ), having reason to believe that respondents Exxon Corporation, The Shell Petroleum Company Limited, and Shell Oil Company, a1l corporations subject to the jurisdiction of the Commission, have agreed to form a joint venture, in violation of the provisions of Section 7 of the Clayton Act as amended, 15 U. e. 18 , and Section 5 of the Federal Trade Commission Act ("FTC Act"), as amended, 15 US. C. 45 , and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows:

I. THE RESPONDENTS 1. Respondent Exxon Corporation ("Exxon ) is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, having its principal offces at 5959 Las Colinas Boulevard, Irving, Texas.

2. Respondent The Shell Petroleum Company Limited is a corporation organized, existing and doing business under and by virtue of the laws of England, having its principal offces at Shell Centre, London SE1 7NA, England.

632 FEDERAL TRADE COMMISSION DECISIOJ\S Complaint 126 F.TC. 3. Respondent Shell Oil Company is a corporation organized existing and doing business under and by virtue of the laws of the State of Delaware, having its principal offces at One Shell Plaza Houston, Texas.

II. JURISDICTION 4. At all times relevant here, respondents have been, and are now, corporations as "corporation" is defined in Section 4 of the FTC Act, 15 U. C. 44; and at all times relevant herein, the respondents " ishave been, and are now, engaged in commerce as "commerce C. 12defined in Section 1 of the Clayton Act, as amended, 15 U. and in Section 4 of the FTC Act, 15 U. C. 44. II THE PROPOSED JOINT VENTURE 5. On or about July 10, 1996, Exxon Chemical Company, a division of Exxon, The Shell Petroleum Company Limited, and Shell Oil Company announced an intention to form ajoint venture to own and operate the businesses of Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company, engaged in the development, manufacture, marketing and sale of additives used in the production of fuels and lubricants (the "Joint Venture ). The value of the businesses to be combined in the Joint Venture is around $1.5 billion.

IV. THE RELEVANT MARKETS A. Relevant Product Market 6. The development, manufacture, marketing and sale of viscosity index improver or viscosity modifiers for motor oil for automobiles and trucks ("VI improver ) is the relevant line of commerce within which to analyze the competitive effects of the proposed acquisition.

7. VI improvers are synthetic rubber compounds, either polymers or styrenics, that are blended with refined oil to enhance the viscosity properties of the oil for use in motor oil. 8. The viscosity of a fluid is its internal resistance to flow. The higher the viscosity, the more resistance to flow. Lubricating oils must have enough viscosity to maintain a film ofthe proper thickness on the surfaces that they are intended to protect. Temperatures affect the viscosity of oil, higher temperatures lowering the viscosity. Motor oil, which is used to lubricate the interior of an engine, must EXXON CORPORATION, ET AL. 633 631 Complaint have suffcient viscosity to adhere to the internal surfaces of the engine even after the engine gets hot and reduces the oil's viscosity. At the same time, motor oil must have low enough viscosity to flow through the engine when the engine is cold, particularly in winter weather.

9. Refined oil by itself does not have both the needed high viscosity when the engine is warm and the low viscosity when the engine is cold. An oil with low viscosity which will flow well at low temperatures will lack the required viscosity to protect the engine at high temperatures. An oil with a high viscosity which will protect the engine at high temperatures will not flow well at low temperatures. The " viscosity index" of an oil is the relationship between the viscosity of the oil at two different temperatures, one low and one high. The higher the viscosity index, the smaller the relative change in viscosity with temperature. VI improvers are added to refined oil by companies that blend and market motor oil to give the resulting motor oil more consistent viscosity across changes in temperature and increase the viscosity index.

10. Consumers rely on motor oil containing VI improver to protect their car engines. There are no economic substitutes for VI Improver.

11. Exxon Chemical Company and The Shell Petroleum Company Limited and Shell Oil Company develop, manufacture market, and sell VI improver.

B. Relevant Geographic Market 12. The relevant geographic area in which to analyze the effects of the Joint Venture in the relevant line of commerce is North America.

13. Automobile and truck engine manufacturers, oil companies that produce motor oil, and companies that produce chemical additives to enhance the performance of motor oil jointly develop industry standards for the minimum performance of motor oil. These industry standards vary in different parts of the world. The VI improver marketed in North America is designed so that when combined with motor oil and other chemical additives, the motor oil will meet industry minimum standards for North America. VI improver marketed in other parts of the world may not allow motor oil to meet the minimum industry standards for North America. Complaint 126 FTC. 14. The relatively low value to weight ratio of VI improver makes it generally uneconomic to transport VI improver from other parts of the world to North America for use in motor oil. V. MARKET STRCCTURE 15. As measured by current sales to customers in North America the relevant market is highly concentrated, whether measured by the Herfindahl-Hirschmann Index (or "HHI") or by two-firm or four-firm concentration ratios. Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company collectively account for over one-halfofthe sales of VI improver for use in motor oil in North America. Thc proposed Joint Venture, if consummated, would significantly increase the HHls in an already highly concentrated market. VI. ENTRY CONDITONS 16. Entry into the development, manufacture, markcting, and sale of VI improver requires more than two years. Entry into the VI improver market is difficult and would not be timely to prevent anti competitive effccts in the relcvant markets. 17. The development ofa VI improver that will enable motor oil to meet the applicable industry standards is very diffcult and time consuming. It takes over two years to develop a marketable VI improver product.

18. The economies of scale in the manufacturing of synthetic rubbers of the type that can be used for VI improver require a manufacturing facility that is much larger than is needed to compete in the VI improver market. A new entrant into the market for VI improver must either build a plant for the production of synthetic rubber many times the size that is needed to compete in the VI improver market and simultaneously enter other markets to market the remaining production of the plant, or find an existing supplier of synthetic rubbcrs who will provide a supply of synthetic rubber of the design needed to make VI improvcr. Many ofthe current producers of VI improver have exclusive supply arrangements with suppliers of synthetic rubber to manufacture the synthetic rubber that the producer of the VI improver uses.

19. Building a new manufacturing facility for the production of synthetic rubber of the type that can be used in the production of VI improver is time consuming. It would take over two years to build a new synthetic rubber facility. There are few, if any, producers of EXXO;- CORPORATION, ET AL. 635 631 Complaint synthetic rubber of the types that can be used for VI improver that do not already have an exclusive supply arrangement with a producer of VI improver that precludes that producer of synthetic rubber from supplying another VI improver producer.

VII. ACTUAL COMPETITION 20. Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company are actual competitors in the relevant Jines of commerce in the relevant area. vm EFFECTS OF THE PROPOSED MERGER ON COMPETITION 21. The effect of the Joint Venture, if consummated, may be substantially to lessen competition and to tend to create a monopoly in the relevant market in violation of Section 7 ofthe Clayton Act, as amended, 15 U. e. 18, and Section 5 of the FTC Act, as amended 15 U. e. 45 , in the following ways, among others: A. By eliminating actual, direct, and substantial competition between Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company in the relevant markets; B. By increasing the likelihood of or facilitating collusion or coordinated interaction between the Joint Venture and the remaining competitors;

C. By increasing the likelihood that customers of VI improver would be forced to pay higher prices; and D. By reducing innovation, quality, service, and product availability in the relevant markets.

IX. VIOLATIONS CHARGED 22. The proposed formation ofajoint venture by Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company violates Section 5 of the FTC Act, as amended, 15 U. , and would, if consummated, violate Section 7 of the Clayton Act as amended, 15 U. e. J 8, and Section 5 of the FTC Act, as amended, 15 U. e. 45.

Decision and Order 126 F.T. DECISION AND ORDER The Federal Trade Commission ("Commission ), having initiated an investigation of the proposed formation ofajoint venture between Exxon Chemical Company, a division of Exxon Corporation, The Shell Petroleum Company Limited and Shell Oil Company, hereinafter sometimes referred to as the "respondents " and having been furnished thereafter with a copy of a draft of complaint which the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with a violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U. C. 45, and a violation of Section 7 of the Clayton Act, as amended, 15 U. e. 18; and The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said 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, 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 the respondents have violated the said Acts, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Exxon Corporation is a corporation organized and existing under the laws of the State of New Jersey, having its principal offces at 5959 Las Colinas Boulevard, Irving, Texas. 2. Respondent The Shell Petroleum Company Limited is a corporation organized under the laws of England, having its principal offices at Shell Centre, London SE1 7NA, England. 3. Respondent Shell Oil Company is a corporation organized and existing under the laws of the State of Delaware, having its principal offces at One Shell Plaza, Houston, Texas. EXXON CORPORATION, ET AL. 637 631 Decision and Order 4. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That, as used in this order, the following definitions shall apply:

A. Exxon Corporation means Exxon Corporation, its directors offcers, employees, agents and representatives, predecessors successors, and assigns; its subsidiaries, divisions, groups and affliates controlled by Exxon Corporation, and the respective directors, offcers, employees, agents, and representatives, successors and assigns of each. For purposes of this order, Exxon Corporation does not include the Joint Venture (as defined below). B. The Shell Petroleum Company Limited' means The Shell Petroleum Company Limited, its directors, offcers, employees agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by The Shell Petroleum Company Limited, and the respective directors, offcers employees, agents, representatives, successors, and assigns of each. e. Shell Oil Company means Shell Oil Company, its directors officers, employees, agents and representatives, predecessors successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by Shell Oil Company, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

D. Respondents means Exxon Corporation, The Shell Petroleum Company Limited, and Shell Oil Company, individually and collectively.

E. Commission means the Federal Trade Commission. F. Chevron means Chevron Chemical Company LLC, a subsidiary of Chevron Oil Company. Chevron is a limited liability company organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal place of business located at 600 J Bollinger Canyon Road, San Ramon California.

Decision and Order 126 FTC. G. Chevron Agreement means the Purchase and Sale Agreement By And Between Chevron Chemical Company LLC, As Purchaser, And Exxon Chemical Company, A Division Of Exxon Corporation, As Seller, Regarding The Crankcase OCP VII Business ofECC's Paramins Division dated May 14, 1998. H. Assets Identifedin the Chevron Agreement means the assets that Exxon Chemical Company, a division of Exxon Corporation, has agreed to sell, and Chevron has agreed to buy, as embodied in the Chevron Agreement.

1. Vistalon means the business unit of Exxon Chemical Company whose principal business is the design, manufacture marketing, and sale of polymers, including, among other products OCP Polymer for Viscosity Index Improver Applications. J. Joint Venture means the joint venture or ventures to be formed between Exxon Corporation, The Shell Petroleum Company Limited and Shell Oil Company pursuant to the Additives Joint Venture Agreement Among Exxon Chemical Company, A Division of Exxon Corporation, the Shell Petroleum Company Limited, and Shell Oil Company, dated May 15 , 1998.

K. Consummation of the Joint Venture means the earlier of (I) the closing date of the Joint Venture in the United States or (2) the commencement of joint manufacturing by the Joint Venture anywhere in the world.

L. "Viscosity Index Improver" means products made from polymers or styrenics, including olefin co-polymers, that are added to lubricants, including motor oils, to modify the impact of changes in temperature on the viscosity of the lubricants. M. OCP-based Viscosity Index Improver means Viscosity Index Improver products for crankcase applications that are made from olefin co-polymers (OCP).

N. OCP Polymer for Viscosity Index Improver Applications means commercially viable grades of olefin co-polymer manufactured by Vistalon, a business unit of Exxon Chemical Company, a division of Exxon Corporation, which have utility in Viscosity Index Improvers, including, without limitation, current grades of olefin copolymers designated Vista Jon grades 457 785 703 , 878P, and 878 MDV 91- , and Exxelor grades 8900 and 8950. O. Paramins means the business unit of Exxon Chemical Company, whose principal business is in the design, manufacture EXXON CORPORATION, ET AL. 639 631 Decision and Order marketing, and sale offuel and lubricant additive products, including without limitation, Viscosity Index Improvers. P. Paratone means the OCP-based Viscosity Index Improvers designed, manufactured, marketed and sold by Paramins. Q. Non-public Information means material proprietary commercial or technical information related to Chevron s Oronite Division, Vistalon products for OCP-based Viscosity Index Improvers, OCP-based Viscosity Index Improvers, or OCP Polymer for Viscosity Index Improver Applications. Non-public Information docs not include: (I) information that falls within the public domain through no violation of this order by any respondent, (2) information to be retained by Exxon Corporation or to be transfeaed to the Joint Venture as permitted by the Chevron Agreement, (3) the residual knowledge offormer Paramins employees who become employees of the Joint Venture, or (4) information relating to OCP polymer to the extent the polymer is used for applications other than Viscosity Index Improver.

R. Chevron s Gronite Division means the division of Chevron Chemica! Company LLC that manufactures and markets lubricant additives worldwide, with principal offces in Houston, Paris, and Singapore.

S. Viscosity Index Improver Business means Exxon Corporation s business of developing and selling OCP-based Viscosity Index Improvers, and includes all assets used by Paramins in the research development, manufacturing, marketing and sale of OCP-based Viscosity Index Improvers in North America and Europe, regardless of where the assets are located in the world, and regardless of whether included in the Chevron Agreement, including, without limitation, the following:

1. All trademarks, including the Paratone trademark, brand names, customer lists, vendor lists catalogs, sales promotion literature, and advertising materials;

2. All research materials, technical information, management information systems, software, inventions, trade secrets, intellectual property, patents, technology, know-how, specifications, designs drawings, processes and quality control data; 3. All inventory of raw materials and finished goods; 4. All rights, titles and interests in and to the contracts entered into in the ordinary course of business with customers (together with Decision and Order 126 F. associated bid and performance bonds), suppliers, sales representatives, distributors, agents, personal property lessors, personal property lessees, licensors, licensees, consignors and consignees to the extent that they apply to the Viscosity Index Improver Business; 5. All rights under warranties and guarantees, express or implied; 6. All books, records, files;

7. All items of prepaid expense; and 8. A supply of OCP Polymer for Viscosity Index Improver Applications on commercially reasonable terms; provided that the Viscosity Index Improver Business shall not include (I) any manufacturing facilities owned and operated by either Vistalon or Paramins or (2) Paramins Lube Oil Flow Improver Paraflow ) and stabilizer ("Parabar ) products. II.

It is filrther ordered That:

A. Exxon Corporation shall divest, within 6 months from the signing of this Agreement, absolutely and in good faith, either: 1. The Assets Identified in the Chevron Agreement, to Chevron in accordance with the Chevron Agreement, prior to the Consummation of the Joint Venture; or 2. The Viscosity Index Improver Business to an acquirer that receives the prior approval of the Commission and only in a manner that receives the prior approval of the Commission, prior to the Consummation of the Joint Venture.

The Joint Venture may be consummated upon the closing of the Chevron Agreement in the United States and in Europe. B. Pending divestiture ofthe Viscosity Index Improver Business Exxon Corporation shall take such actions as are necessary to maintain the viability, competitiveness, and marketability of the Viscosity Index Improver Business and to prevent the destruction removal, wasting, deterioration, or impairment of any assets or business of the Viscosity Index Improver Business except for ordinary wear and tear.

C. In the event that the Commission notifies respondents that Chevron is not an acceptable acquirer or that the Chevron Agreement is not an acceptable manner of divestiture, Exxon Corporation must EXXON CORPORATION, ET AL. 641 631 Decision and Order rescind the Chevron transaction as provided in paragraph ten of this Agreement, and shall:

1. Divest the Assets Identified in the Chevron Agreement to Chevron in a manner approved by the Commission; 2. Divest the Viscosity Index Improver Business to an acquirer that receives the prior approval of the Commission and only in a manner that receives the prior approval of the Commission; or 3. Abandon Consummation of the Joint Venture pursuant to paragraph VIII.B.

D. In the event that the Commission notifies respondents that Chevron is not an acceptable acquirer or that the Chevron Agreement is not an acceptable manner of divestiture, and the respondents consummate the Joint Venture, Exxon Corporation shall comply with al1 terms of the Agreement to Hold Separate, attached to this order and made a part hereof as Appendix I. The Agreement to Hold Separate shall continue in effect until such time as Exxon Corporation has divested all the Viscosity Index Improver Business as required by this order or until such other time as the Agreement to Hold Separate provides.

E. If Exxon Corporation complies with its obligations under this part by selling the assets identified in the Chevron Agreement to Chevron, Exxon Corporation shall comply with al1 the terms of the Chevron Agreement, including al1 the ancilary agreements thereto. Respondents shall assure that the Joint Venture complies with the ancillary agreements that purport to bind the Joint Venture. F. Except as permitted pursuant to the Chevron Agreement or the agreement between Exxon Corporation and the acquirer of the Viscosity Index Improver Business, as approved by the Commission Exxon shall not sell OCP Polymer for Viscosity Index Improver Applications to other customers including the Joint Venture. It is further ordered That:

A. If Exxon Corporation has not divested, absolutely and in good faith and with the Commission s prior approval, the Viscosity Index Improver Business within 6 months of the signing ofthis Agreement then the Commission may appoint a trustee to divest the Viscosity Index Improver Business. The trustee shall have al1 rights and powers Dccision and Order 126 F. necessary to permit the trustee to effect the divestiture of the Viscosity Index Improver Business and to divest such ancillary assets and to effect such arrangements, as necessary to assure the viability, competitiveness, and marketability of the Viscosity Index Improver Business so as to expeditiously accomplish the remedial purposes of this order. In the event the Commission or the Attorney General brings an action pursuant to Section 5(1 of the Federal Trade Commission Act, 15 U. e. 45(1, or any other statute enforced by the Commission, Exxon Corporation shall consent to the appointment of a trustec in such action. Neither the appointment of a trustee nor a decision not to appoint a trustee under this paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief (including, but not limited to, a court-appointcd trustee) pursuant to the Federal Trade Commission Act or any other statute enforced by the Commission, for any failure by any of the respondents to comply with this order.

B. Ifa trustee is appointed by the Commission or a court pursuant to paragraph III.A of this order, Exxon Corporation shah consent to the following terms and conditions regarding the trustee s powers duties, authority, and responsibilities:

1. The Commission shah select the trustee, subject to the consent of Exxon Corporation, which consent shah not be unreasonably withheld. The trustee shall be a person with experience and expertise in acquisitions and divestitures. If Exxon Corporation has not opposed, in writing, including the reasons for opposing, the selection of any proposed trustee within ten (10) days after notice by the staff of the Commission to Exxon Corporation of thc identity of any proposed trustee, Exxon Corporation shall be deemed to have consented to the selection of the proposed trustee. 2. Subject to the prior approval of the Commission, the trustcc shall have the exclusive power and authority to divest the Viscosity Index Improver Business, and shall have the power to divest such ancillary assets, and to effect such arrangements, as necessary to assure the viability, competitiveness, and marketability of the Viscosity Index Improver Business so as to expeditiously accomplish the divestiture required by this order.

3. Within ten (10) days after appointment of the trustee, Exxon Corporation shall executc a trust agreement that, subject to the prior approval of the Commission (and, in the case of a court-appointed EXXON CORPORATION, ET AL. 643 631 Decision and Order trustee, of the court), transfers to the trustee all rights and powers necessary to permit the trustee to effect the divestiture required by this order.

4. The trustee shall have twelve (12) months from the date the Commission approves the trust agreement described in paragraph III.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 (12) month period, the trustee has submitted a plan of divestiture or believes that 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) for an additional period not to exceed twelve (12) months; provided however, the Commission may extend this period for no more than two (2) additional periods.

5. The trustee shall have full and complete access to the personnel, books, records, and facilities related to the Viscosity Index Improver Business, or to any other relevant information, as the trustee may request. Exxon Corporation shall develop such financial or other information as such 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 1I in an amount equal to the delay, as determined by the Commission (or, in the case of 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 Exxon Corporation s absolute and unconditional obligation to divest expeditiously at no minimum price. The divestiture shall be made in the manner, and to the acquirer or acquirers, as set out in paragraph II.A.2 of this order; provided however, if the trustee receives bona fide offers from more than one acquiring entity, and ifthe Commission approves more than one such acquiring entity, then the trustee shall divest to the acquiring entity or entities selected by Exxon Corporation from among those approved by the Commission.

7. The trustee shall serve, without bond or other security, at the cost and expense of Exxon Corporation, on such reasonable and customary terms and conditions as the Commission or a court may Decision and Order J26FTC. set. The trustee shall have the authority to employ, at the cost and expense of Exxon Corporation, 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 ofthe trustee, including fees for his or her services, all remaining monies shall be paid at the direction of Exxon Corporation and the trustee s power shall be terminated. The trustee s compensation shall be based at least in significant part on a commission arrangement contingent on the trustee s accomplishing the divestiture required by this order. 8. Exxon Corporation shall indemnify the trustee and hold the trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, thc 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 liabilities, losses, damages, claims, or expenses result from misfeasance, gross negligence, recklessness, 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 II of this order.

10. The Commission (or, in the case ofa 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. In the event that the trustee determines that he or she is unable to divest thc Viscosity Index Improver Business in a manner consistent with the Commission s purpose as described in paragraph , the trustee may divest additional ancillary assets of Exxon Corporation and effect such arrangements as are necessary to satisfy the requirements of this order.

12. The trustee shall have no obligation or authority to operate or maintain the Viscosity Index Improver Business. 13. The trustee shall report in writing to Exxon Corporation and the Commission every thirty (30) days concerning the trustee s efforts to accomplish the divestiture.

EXXON CORPORATION, ET AL. 645 631 Decision and Order IV.

It is further ordered That:

A. Exxon Corporation shall not provide, disclose, or otherwise make available to The Shell Petroleum Company Limited, Shell Oil Company, or the Joint Venture, any Non-public Information. B. Exxon Corporation shall use any Non-public Information only for the purpose of fulfilling its obligations to supply current and future OCP Polymer for Viscosity Index Improver Applications to the Viscosity Index Improver Business, to Chevron under the Chevron Agreement, or to a purchaser of the Viscosity Index Improver Business; provided that such information may be used internally by Exxon Corporation for analyzing the business performance of Vistalon.

e. The Shell Petroleum Company Limited and Shell Oil Company shall not seek, obtain, or use, directly or indirectly, through the Joint Venture or otherwise, any Non-public Information that originates with Vistalon, Chevron, or the acquirer of the Viscosity Index Improver Business.

Provided that nothing in this order shall prohibit the Joint Venture, Chevron and its successors and assigns, or the acquirer of the Viscosity Index Improver Business and its successors and assigns from selling Viscosity Index Improver to respondents' finished oil manufacturing and marketing business units, or from exchanging information, as is necessary for such sales, with those business units regarding respondents' use of such viscosity index improver products. Provided further that nothing in this order shall prohibit Exxon Corporation from selling OCP Polymer for Viscosity Index Improver Applications pursuant to paragraph II.F.

It is further ordered That within thirty (30) days after the date this order becomes final, and every thirty (30) days thereafter until the divestiture has occurred, respondents shall submit to the Commission verified written reports setting forth in detail the manner and form in which respondents intend to comply, are complying, and have complied with their individual any, under obligations, if paragraphs II, II, and IV ofthis order. Respondents shall include in their compliance reports, among other things that are required from 646 FEDERAL TRADE COMMISSIOJ\ DECISIO:.S Dccision and Order 126 F. time to time, a full description of the efforts being made to comply with their individual obligations, if any, under paragraphs II and II the order, including a description of al1 substantive contacts or negotiations for the divestiture and the identity of all parties that have contacted respondents or that have been contacted by respondents. Respondents shall include in their compliance reports copies of al1 written communications to and from such parties, al1 internal memoranda, and all reports and recommendations concerning the divestiture.

VI.

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 Exxon Corporation that may affect compliance obligations arising out of the order. VIJ.

It is filrther ordered That, for the purpose of determining or securing compliance with this order, respondents shall permit any duly authorized representatives of the Commission: A. During office hours and in the presence of counsel, access to , ledgersall facilities and access to inspect and copy all books accounts, correspondence, memoranda and other records and documents in the possession or under the control of respondents relating to any matters contained in this order; and B. Upon five (5) days' notice to respondents, and without restraint or interference, to interview offcers, employees, or agents of respondents.

VII.

It is further ordered That this order shall terminate upon the earliest of:

A. October 30 2018;

B. Thirty (30) days after respondents (a) abandon the Consummation of the Joint Venture, (b) gives the Commission written notification that respondents have abandoned the Consummation of EXXON CORPORATION, ET AL. 647 631 Decision and Ordcr the Joint Venture, and (c) withdraw their notification under 16 CFR 803. 1 with respect to the Joint Venture; or e. At any time following ten (10) years after the date on which the order becomes final if Chevron or the purchaser of the Viscosity Index Improver Business has ceased its purchases of OCP Polymer for Viscosity Index Improver from Exxon Corporation. APPENDIX I AGREEMENT TO HOLD SEP ARA This Agreement to Hold Separate ("Hold Separate Agreement" is by and between Exxon Corporation ("Exxon ), a corporation organized, existing, and doing business under and by virtue of the laws of New Jersey, having its principal offces at 5959 Las Colinas Boulevard, Irving, Texas, and the Federal Trade Commission (the Commission ), an independent agency of the United States Government, established undcrtheFederal Trade Commission Act of 1914 15 U. e. 41 et seq. (collectively, the "Parties PREMISES Whereas on July 10, 1996, Exxon Chemical Company, a division of Exxon Corporation, The Shell Petroleum Company Limited, and Shell Oil Company announced an intention to form a joint venture to own and operate the businesses of Exxon Chemical Company, The Shell Petroleum Company Limited, and Shell Oil Company engaged in the development, manufacture, and sale of additives used in the production of fuels and lubricants (the "Joint Venture ); and Whereas the Commission is now investigating the formation of the Joint Venture to determine whether it would violate any of the statutes enforced by the Commission; and Whereas if the Commission accepts the attached Agreement Containing Consent Order, which would require the divestiture of either the Assets Identified in the Chevron Agreement to Chevron or the Viscosity Index Improver Business, the Commission must place the Consent Order on the public record for a period of at least sixty (60) days and may subsequently withdraw such acceptance pursuant to the provisions of Section 2.34 of the Commission s Rules; and Whereas the Commission is concerned that if Exxon Corporation does not sell the Assets Identified in the Chevron Agreement to Chevron, and that if an understanding is not reached, preserving the Decision and Order 126F.TC. status quo ante of the Viscosity Index Improver Business as defined in paragraph I of the Consent Order during the period prior to the final acceptance and issuance of the Consent Order by the Commission (after the 60-day public comment period), divestiture resulting from any proceeding challenging the legality of the Joint Venture might not be possible, or might be less than an effective remedy; and Whereas the Commission is concerned that if the Joint Venture is consummated, it will be necessary to preserve the Commission ability to require the divestiture of the Viscosity Index Improver Business, as described in paragraph I of the Consent Order, and the Commission s right to have the Viscosity Index Improver Business continue as a viable competitor independent ofthe Joint Venture; and Whereas ifpending a divestiture acceptable to the Commission it is necessary to hold separate the Viscosity Index Improver Business to protect interim competition pending divestiture or other relief; and Whereas the purpose of the Hold Separate Agreement and the Consent Order is to:

i. Preserve, pending a divestiture acceptable to the Commission the Viscosity Index Improver Business as an ongoing, viable competitive, and independent entity engaged in the same business in which it is presently engaged;

2. Prevent interim harm to competition pending divestiture and other relief; and 3. Remedy any anti competitive effects of the formation of the Joint Venture; and Whereas Exxon Corporation s entering into this Hold Separate Agreement shall in no way be construed as an admission by Exxon Corporation that the formation of the Joint Venture is illegal; and Whereas Exxon Corporation understands that no act or transaction contemplated by this Hold Separate Agreement shall be deemed immune or exempt from the provisions of the antitrust laws or the Federal Trade Commission Act by reason of anything contained in this Hold Separate Agreement. Now, therefore upon the understanding that the Commission has not yet determined whether the formation of the Joint Venture will be challenged, and in consideration of the Commission s agreement that at the time it accepts the Consent Order for public comment it will EXXON CORPORATION, ET AL. 649 631 Decision and Order grant early termination of the Hart-Scott-Rodino waiting period Exxon Corporation agrees as follows:

1. Exxon Corporation agrees to execute and be bound by the attached Consent Order.

2. Exxon Corporation agrees that from the date Exxon Corporation, The Shell Petroleum Company Limited and Shell Oil Company consummate the Joint Venture ("Acquisition Date ), Exxon Corporation and the Viscosity Index Improver Business each will comply with the provisions of this Agreement until the day after the divestiture required by the Consent Order has been completed. 3. Exxon Corporation agrees to execute and be bound by the attached Consent Order and to comply, from the date this Hold Separate Agreement is accepted by the Commission for public comment, with the provisions of the Consent Order as if it were final. 4. The terms capitalized herein shall have the same definitions as in the Consent Order.

5. To assure the complete independence and viability of the Viscosity Index Improver Business, and to assure that no Material Confidential Information ("Material Confidential Information " as used herein, means competitively sensitive or proprietary information not independently known to an entity from sources other than the entity to which the information pertains, and includes, but is not limited to, customer lists, price Jists, marketing methods, patents technologies, processes, or other trade secrets.) is exchanged between the Viscosity Index Improver Business and Exxon Corporation, The Shell Petroleum Company Limited, Shell Oil Company, or the Joint Venture, Exxon Corporation shall hold the Viscosity Index Improver Business separate and apart on the following terms and conditions: a. The Viscosity Index Improver Business shall be held separate and apart and shall be managed and operated independently of Exxon Corporation (meaning here and hereinafter, Exxon Corporation and the Joint Venture, excluding the Viscosity Index Improver Business), except to the extent that Exxon Corporation must exercise direction and control over such assets to assure compliance with this Hold Separate Agreement or the Consent Order, and except as otherwise provided in this Hold Separate Agreement. Decision and Order 126 F. b. Exxon Corporation will appoint, prior to the Consummation of the Joint Venture, an individual to manage and maintain the Viscosity Index Improver Business who wil make no changes to the Viscosity Index Improver Business other than changes in the ordinary course of business. This individual Manager ) shall manage the Viscosity Index Improver Business independently of the management of Exxon Corporation s other businesses. The Manager shall not be involved in any way in the operations or management of any other Exxon Corporation business.

c. The Manager shall have exclusive control over the Viscosity Index Improver Business with responsibility for the management of the Viscosity Index Improver Business and for maintaining the independence of that business. d. Exxon Corporation shall not exercise direction or control over, or influence directly or indirectly the Manager relating to the operation of the Viscosity Index Improver Business; provided, however, that Exxon Corporation may exercise only such direction and control over the Manager and the Viscosity Index Improver Business as is necessary to assure compliance with this Hold Separate Agreement and with all applicable laws.

e. Exxon Corporation shall maintain the marketability, viability, and competitiveness of the Viscosity Index Improver Business, and shall not sell, transfer, encumber it (other than in the normal course of business or to assure compliance with the Consent Agreement), or otherwise impair its marketability, viability or competitiveness.

f. Exxon Corporation shall continue to provide the same support services to the Viscosity Index Improver Business as are being provided to such assets by Exxon Corporation as of the date this Hold Separate Agreement is signed by Exxon Corporation.

g. Except for the Manager, employees of the Viscosity Index Improver Business, and support service employees involved in the Viscosity Index Improver Business, such as Human Resources, Legal, Tax, Accounting, Insurance, and Internal Audit employees, Exxon Corporation shall not permit any other Exxon Corporation employee, offcer, or director to be involved in the management of the Viscosity Index Improver EXXON CORPORA TION, ET AL. 651 631 Decision and Order Business. Employees ofthe Viscosity Index Improver Business shall not be involved in any other Exxon Corporation business. h. Except as required by law, and except to the extent that necessary information is exchanged in the course evaluating the Joint Venture, defending investigations or litigation, or negotiating agreements to divest the Viscosity Index Improver Business, Exxon Corporation, other than employees of the Viscosity Index Improver Business, or support services employees involved in the Viscosity Index Improver Business, shall not receive or have access to, or the use of, Non-public Viscosity Index Improver Business information or any Material Confidential Information about the Viscosity Index Improver Business or the activities of the Manager or support service employees involved in the Viscosity Index Improver Business, not in the public domain. 1. Exxon Corporation shall circulate to all of its Vistalon and Paramins employees involved in the Viscosity Index Improver Business, and appropriately display, a copy of this Hold Separate Agreement and Consent Agreement. J. If the Manager ceases to act or fails to act diligently and consistently with the purposes of this Hold Separate Agreement, Exxon Corporation shall appoint a substitute Manager.

k. Exxon Corporation shall require the Manager to sign a confidentiality agreement prohibiting the disclosure of any Material Confidential Information gained as a result of his or her roJe as the Manager to anyone other than the Commission , as required in managing the Viscosity Index Improver Business, to the Viscosity Index Improver Business employees, customers, or suppliers.

I. The Manager shall report in writing to the Commission every thirty (30) days concerning his or her efforts to accomplish the purposes of this Hold Separate Agreement. 6. Should the Commission seek in any proceeding to compel Exxon Corporation to divest any of the Viscosity Index Improver Business, as provided in the Consent Order, or seek any other injunctive or equitable relief for any failure to comply with the Consent Order or this Hold Separate Agreement, or in any way relating to the Joint Venture, as defined in the draft complaint, Exxon Decision and Order 126 FTC. Corporation shall not raise any objection based upon the fact that the Commission has permitted the Consummation of the Joint Venture. Exxon Corporation also waives all rights to contest the validity ofthis Hold Separate Agreement.

7. To the extent that this Hold Separate Agreement requires Exxon Corporation to take, or prohibits Exxon Corporation from taking, certain actions that otherwise may be required or prohibited by contract, Exxon Corporation shall abide by the terms ofthis Hold Separate Agreement or the Consent Order and shall not assert as a defense such contract requirements in a civil action brought by the Commission to enforce the terms ofthis Hold Separate Agreement or Consent Order.

8. For the purposes of determining or securing compliance with this Hold Separate Agreement, and subject to any legally recognized privilege, and upon written request with reasonable notice to Exxon Corporation made to its principal office, Exxon Corporation shall permit any duly authorized representatives of the Commission: a. During the offce hours of Exxon Corporation, and in the presence of counsel, access to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence memoranda, and other records and documents in the possession or under the control of Exxon Corporation relating to compliance with this Agreement; and b. Upon five (5) days' notice to Exxon Corporation and without restraint or interference from it, to interview offcers or employees of Exxon Corporation, who may have counsel present, regarding any such matters.

9. This Hold Separate Agreement shall not be binding on the Commission until it is approved by the Commission. KAL VIN P. SCHMIDT 653 653 Complaint