United States v. VA Partners I, LLC et al

Filing 51

FINAL JUDGMENT 50 by Hon. William Alsup. (whalc2, COURT STAFF) (Filed on 11/1/2016)

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Kathleen S. O’Neill
Joseph Chandra Mazumdar
Brian E. Hanna
Robert A. Lepore
U.S. Department of Justice
Antitrust Division
450 Fifth Street, NW, Suite 8000
Washington, DC 20530
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Email: [e-mail]
Email: [e-mail]
Email: [e-mail]
Tai Milder
U.S. Department of Justice
Antitrust Division
450 Golden Gate Avenue
Box 36046, room 10-0101
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Attorneys for Plaintiff United States of America

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UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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UNITED STATES OF AMERICA,

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Plaintiff,
v.

[PROPOSED] FINAL
JUDGMENT

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Case No. 16-cv-01672 (WHA)

VA PARTNERS I, LLC, et al.,
Defendants.

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Case No. 16-cv-01672 (WHA)
[PROPOSED] FINAL JUDGMENT

WHEREAS, Plaintiff, the United States of America (“United States”) filed its Complaint

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on April 4,2016, alleging that VA Partners I, LLC, ValueAct Capital Master Fund, L.P., and

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ValueAct Co-Invest International, L.P. (collectively, “ValueAct” or “Defendants”) violated

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Section 7A of the Clayton Act, 15 U.S.C. § 18a, commonly known as the Hart-Scott-Rodino

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Antitrust Improvements Act of 1976 (the “HSR Act”), and Plaintiff and Defendants, by their

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respective attorneys, having consented to the entry of this Final Judgment without trial or

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adjudication of any issue of fact or law, and without this Final Judgment constituting any

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evidence against, or an admission by, the Defendants with respect to any such issue of fact or

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law;

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AND WHEREAS Defendants agree to be bound by the provisions of this Final Judgment
pending its approval by the Court;

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NOW, THEREFORE, before any testimony is taken, and without trial or adjudication of

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any issue of fact or law, and upon consent of the parties, it is hereby ORDERED, ADJUDGED,

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AND DECREED:
I. Jurisdiction

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The Court has jurisdiction over the subject matter of this action. The Defendants consent

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solely for the purpose of this action and the entry of this Final Judgment that this Court has

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jurisdiction over each of the parties to this action and that the Complaint states a claim upon

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which relief can be granted against the Defendants under Section 7A of the Clayton Act,

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15 U.S.C. § 18a.
II. Definitions

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As used in this Final Judgment:

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(A) “Covered Acquisition” means an acquisition of Voting Securities of an Issuer that

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is subject to the reporting and waiting requirements of the HSR Act, 15 U.S.C. § 18a, and that is

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not otherwise exempt from the requirements of the HSR Act, but for which Defendant have not

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reported under the HSR Act, in reliance on the exemption pursuant to Section (c)(9) of the HSR

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Act, 15 U.S.C. § 18a(c)(9).

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(B) “Issuer” means a legal entity that issues Voting Securities.
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(C) “Officer or Director” means (1) the members of the Issuer’s board of directors;

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(2) those persons whose positions are designated by the bylaws or articles of incorporation of the

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Issuer, its parent, or any subsidiary of the Issuer; or (3) those persons whose positions are

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appointed by the board of the Issuer, its parent, or any subsidiary of the Issuer. If there are no

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persons who meet the criteria listed above, “Officer or Director” means those individuals whose

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capacities and duties are similar to the officers or directors of a corporation, including deciding

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whether to make the acquisition or sale of a business. Notwithstanding the foregoing, Officer or

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Director shall not include any persons whose job responsibilities primarily relate to investor

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relations.
(D) The terms “Person(s)” and “Voting Securities” have the meanings as defined in

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the HSR Act and Regulations promulgated thereunder, 16 C.F.R. §§ 801-803.
(E) “Propose” means communicating a plan of action for consideration, discussion or

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adoption.
(F) “ValueAct Partners I, LLC” means Defendant ValueAct Partners I, LLC, a

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limited liability company and general partner of Defendants ValueAct Master Capital Fund, L.P.

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and ValueAct Co-Invest International, L.P., organized under the laws of Delaware, with its

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principal place of business at One Letterman Drive, San Francisco, CA 94129.

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(G) “ValueAct Master Capital Fund, L.P.” means Defendant ValueAct Master Capital

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Fund, L.P., an offshore fund organized under the laws of the British Virgin Islands, with its

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principal place of business at One Letterman Drive, San Francisco, CA 94129.

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(H) “ValueAct Co-Invest International, L.P.” means Defendant ValueAct Co-Invest

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International, L.P., an offshore fund organized under the laws of the British Virgin Islands, with

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its principal place of business at One Letterman Drive, San Francisco, CA 94129.
III. Applicability

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This Final Judgment applies to all Defendants, including each of their directors, officers,

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general partners, managers, agents, parents, subsidiaries, successors, and assigns, all in their

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capacities as such, and to all other Persons and entities that are in active concert or participation

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with any of the foregoing with respect to conduct prohibited in Section IV when the relevant
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Persons or entities have received actual notice of this Final Judgment by personal service or

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otherwise.

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IV. Prohibited Conduct

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Each Defendant is enjoined from making a Covered Acquisition, without filing and

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observing the waiting period as required by the HSR Act, 15 U.S.C. § 18a, if at the time of such

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Covered Acquisition (i) the Defendant intends to take any of the below actions, or (ii) the

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Defendant’s investment strategy specific to such Covered Acquisition identifies circumstances in

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which the Defendant may take any of the below actions:

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(A) Propose to an Officer or Director of the Issuer that the Issuer merge with, acquire,
or sell itself to another Person;

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(B) Propose to an Officer or Director of any other Person in which the Defendant

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owns Voting Securities or an equity interest the potential terms on which that

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Person might merge with, acquire, or sell itself to the Issuer;

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(C) Propose to an Officer or Director of the Issuer new or modified terms for any

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publicly announced merger or acquisition to which the Issuer is a party;

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(D) Propose to an Officer or Director of the Issuer an alternative to a publicly

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announced merger or acquisition to which the Issuer is a party, either before

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consummation of the publicly announced merger or acquisition or upon its

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abandonment;

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(E) Propose to an Officer or Director of the Issuer changes to the Issuer’s corporate
structure that require shareholder approval; or,

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(F) Propose to an Officer or Director of the Issuer changes to the Issuer’s strategies

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regarding the pricing of the Issuer’s product(s) or service(s), its production

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capacity, or its production output.
V. Compliance

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(A)

Defendants shall maintain a compliance program that shall include designating,

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within thirty (30) days of the entry of this Final Judgment, a Compliance Officer with

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responsibility for achieving compliance with this Final Judgment. The Compliance Officer shall,
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on a continuing basis, supervise the review of current and proposed activities to ensure

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compliance with this Final Judgment. The Compliance Officer shall be responsible for

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accomplishing the following activities:

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(1) Distributing, within thirty (30) days of the entry of this Final Judgment, a

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copy of this Final Judgment to any Person who has responsibility for or authority

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over acquisitions by Defendants of Voting Securities;

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(2) Distributing, within thirty (30) days of succession, a copy of this Final

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Judgment to any Person who succeeds to a position described in Section V.A.1;

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and

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(3) Obtaining within sixty (60) days from the entry of this Final Judgment, and

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once within each calendar year after the year in which this Final Judgment is

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entered during the term of this Final Judgment, and retaining for the term of this

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Final Judgment, a written certification from each Person designated in Sections

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V.A.1 and V.A.2 that he or she: (a) has received, read, understands, and agrees to

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abide by the terms of this Final Judgment; (b) understands that failure to comply

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with this Final Judgment may result in conviction for criminal contempt of court;

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and (c) is not aware of any violation of the Final Judgment.

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(B)

Within sixty (60) days of the entry of this Final Judgment, Defendants shall

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certify to Plaintiff that they have (1) designated a Compliance Officer, specifying his or her

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name, business address and telephone number; and (2) distributed the Final Judgment in

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accordance with Section V.A.1.

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(C)

If any of Defendants’ directors or officers or the Compliance Officer learns of any

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violation of this Final Judgment, Defendants shall within ten (10) business days make a

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corrective filing under the HSR Act.
VI. Plaintiff’s Access and Inspection

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(A)

For the purpose of determining or securing compliance with this Final Judgment,

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and subject to any legally recognized privilege, duly authorized representatives of the United

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States Department of Justice shall, upon written request of a duly authorized representative of the
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Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to

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Defendants, be permitted:

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(1) Access during Defendants’ office hours to inspect and copy, or at Plaintiff’s

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option, to require Defendants to provide copies of all records and documents in

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their possession or control relating to any matters contained in this Final

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Judgment; and

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(2) To interview, informally or on the record, Defendants’ directors, officers,

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employees, agents or other Persons, who may have their individual counsel

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present, relating to any matters contained in this Final Judgment. The interviews

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shall be subject to the reasonable convenience of the interviewee and without

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restraint or interference by Defendants.

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(B)

Upon written request of a duly authorized representative of the Assistant Attorney

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General in charge of the Antitrust Division, Defendants shall submit written reports, under oath

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if requested, relating to any of the matters contained in this Final Judgment as may be requested.

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(C)

No information or documents obtained by the means provided in this Final

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Judgment shall be divulged by the Plaintiff to any person other than an authorized representative

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of the executive branch of the United States or of the Federal Trade Commission, except in the

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course of legal proceedings to which the United States is a party (including grand jury

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proceedings), or for the purpose of securing compliance with this Final Judgment, or as

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otherwise required by law.

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(D)

If, at the time information or documents are furnished by Defendants to Plaintiff,

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Defendants represent and identify in writing the material in any such information or documents

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to which a claim of protection may be asserted under Rule 26(c)(1) of the Federal Rules of Civil

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Procedure, and Defendants mark each pertinent page of such material, “Subject to claim of

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protection under Rule 26(c)(1) of the Federal Rules of Civil Procedure,” then the United States

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shall give ten (10) calendar days’ notice prior to divulging such material in any legal proceeding

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(other than a grand jury proceeding) to which Defendants are not a party.

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VII. Civil Penalty

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Judgment is hereby entered in this matter in favor of Plaintiff United States of America

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and against Defendants, and, pursuant to Section 7A(g)(1) of the Clayton Act, 15 U.S.C. §

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18a(g)(1), the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub.

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L. 114-74 § 701 (amending the Federal Civil Penalties Inflation Adjustment Act of 1990), and

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Federal Trade Commission Rule 1.98, 16 C.F.R. 1.98, 81 Fed. Reg. 42,476 (June 30, 2016),

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Defendants are hereby ordered to pay a civil penalty in the amount of eleven million dollars

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($11,000,000). Payment of the civil penalty ordered hereby shall be made by wire transfer of

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funds or cashier’s check. If the payment is made by wire transfer, Defendants shall contact Janie

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Ingalls of the Antitrust Division’s Antitrust Documents Group at [phone] for instructions

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before making the transfer. If the payment is made by cashier’s check, the check shall be made

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payable to the United States Department of Justice and delivered to:

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Janie Ingalls

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United States Department of Justice

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Antitrust Division, Antitrust Documents Group

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450 5th Street, NW, Suite 1024

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Washington, D.C. 20530

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Defendants shall pay the full amount of the civil penalties within thirty (30) days of entry

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of this Final Judgment. In the event of a default in payment, interest at the rate of eighteen (18)

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percent per annum shall accrue thereon from the date of default to the date of payment.

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VIII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final Judgment to apply to this

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Court at any time for such further orders and directions as may be necessary or appropriate to

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carry out or construe this Final Judgment, to modify or terminate any of its provisions, to enforce

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compliance, and to punish any violations of its provisions.

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IX. Expiration of Final Judgment
This Final Judgment shall expire ten (10) years from the date of its entry.

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X. Costs

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Each party shall bear its own costs.
XI. Public Interest Determination

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The entry of this Final Judgment is in the public interest. The parties have complied with

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the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, including making

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copies available to the public of this Final Judgment, the Competitive Impact Statement, and any

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comments thereon and the United States’ responses to comments. Based upon the record before

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the Court, which includes the Competitive Impact Statement and any comments and response to

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comments filed with the Court, entry of this Final Judgment is in the public interest.

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November 1, 2016.
DATED: __________________

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Court approval subject to the
Antitrust Procedures and Penalties Act,
15 U.S.C. § 16

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____________________________
Hon. William Alsup
United States District Judge

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