EXHIBIT 10.49
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA )
) Criminal No. 98-
v. )
)
UCAR INTERNATIONAL INC. )
)
Defendant. )
PLEA AGREEMENT
--------------
The United States of America and UCAR International Inc. (hereinafter UCAR
International) hereby enter into the following Plea Agreement pursuant to Rule
11(c)(l)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANT
-------------------
1. UCAR International understands its right:
(a) to be represented by an attorney;
(b) to be charged by Indictment;
(c) to plead not guilty to any criminal charge brought againstit;
(d) 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;
(e) to confront and cross-examine witnesses against it and to
subpoena witnesses in its defense at trial;
(f) to appeal its conviction if it is found guilty at trial; and
(g) to appeal the imposition of sentence against it.
AGREEMENT TO PLEAD GUILTY
AND WAIVE CERTAIN RIGHTS
------------------------
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 (c)(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. ss. 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 CHARGED
---------------------------------
4. Had this case gone to trial, the United States would have presented
evidence to prove the following facts.
(a) 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
2
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.
(b) 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
elsewhere.
(c) 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
3
were within the flow of, and substantially affected, interstate and foreign
trade and commerce.
(d) Substantial quantities of graphite electrodes affected by this
conspiracy were sold by UCAR International and other conspirators to customers
in the Eastern District of Pennsylvania.
POSSIBLE MAXIMUM SENTENCE
-------------------------
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:
(a) $10 million (15 U.S.C. ss. 1);
(b) twice thc gross pecuniary gain derived from the crime; or
(c) twice the gross pecuniary loss caused to the victims of the
crime (18 U.S.C.ss. 3571(d)).
6. In addition, UCAR International understands that:
(a) pursuant to ss. 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;
(b) pursuant to 18 U.S.C. ss. 3013(a)(2)(B) the Court is
required to order the defendant to pay a $400.00 special assessment upon
conviction for the charged crime; and
(c) a term of probation of at least one year, but not more than
five years, may be imposed (18 U.S.C. ss. 3561(c)(l)).
4
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.
ss. 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.
SENTENCING AGREEMENT
--------------------
8. Pursuant to Rule 11 (e)(l)(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. ss.
3571(d), a sentence requiring UCAR International to pay a fine to the United
States in the amount of $110 million.
(a) The $110 million shall be payable as follows:
(1) the first payment in the amount of $20 million will be due
within ninety days from the date of imposition of sentence; and
(2) 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.
(b) Pursuant to 18 U.S.C. ss. 3612(f)(3)(A), interest shall be
waived due to UCAR International's inability to pay.
5
(c) UCAR International understands that the Court will order it to
pay a $400.00 special assessment pursuant to 18 U.S.C. ss. 3013(a)(2)(B) and
U.S.S.G. ss. 8E1.1 in addition to any fine imposed.
(d) 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. ss. 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. ss. 6A1.1.
(e) 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 (c)(6)).
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
6
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.
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. ss. 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. ss. 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.
UCAR INTERNATIONAL'S COOPERATION
--------------------------------
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:
7
(a) 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
(b) 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
George 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.
12. The full and truthful cooperation of any person subject to
Paragraph 11(b) above shall include, but not be limited to:
(a) 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;
(b) 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 States;
(c) 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;
8
(d) otherwise giving the United States access to knowledge or
information he may have relevant to any such Federal Proceeding; and
(e) 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. ss.
1621), making false statements or declarations in grand jury or court
proceedings (18 U.S.C. ss. 1623) and contempt (18 U.S.C. ss.ss. 401-402), in
connection with any such Federal Proceeding.
GOVERNMENT'S AGREEMENT
----------------------
13. The United States agrees to the following.
(a) 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 Offense").
(b) 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
9
individual is not known by the United States to be represented, to the
undersigned counsel for UCAR
International.
(c) 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.
(d) Except as provided in Paragraph 13(e), information provided
to the United States pursuant to the terms of this Plea Agreement pertaining to
any Relevant Offense 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. ss. 1621), making a false
statement or declaration in grand jury or court proceedings (18 U.S.C. ss.
1623), or obstruction of justice (18 U.S.C. ss. 1503).
(e) In the event a person who provides information to the United
States pursuant to this Plea Agreement fail 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.
(f) The non-prosecution terms of this paragraph do not apply to
any civil liability to the United States, to any violation of thc federal tax or
securities laws, or to any crime of violence.
10
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. ss.
1621), making a false statement or declaration in grand jury or court
proceedings (18 U.S.C. ss. 1623), obstruction of justice (18 U.S.C. ss. 1503),
or contempt (18 U.S.C. ss.ss. 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
11
UCAR International, as described herein, as a matter for such agency to consider
before determining what administrative actions, if any, to take with regard to
UCAR International.
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.
VOLUNTARY PLEA
--------------
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 thc Court will accept or reject this Plea Agreement.
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
12
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.
DATED: Respectfully submitted,
/s/ Kevin R. Sullivan /s/ Wendy Bostwick Norman
- --------------------------- --------------------------
KEVIN R. SULLIVAN WENDY BOSTWICK NORMAN
WILLIAM BLUMENTHAL LUCY P. MCCLAIN
GRACE M. RODRIGUEZ ROGER L. CURRIER
Counsel for UCAR JOSEPH MUOIO, R.
International Inc.
Attorneys, Antitrust Division
/s/ Peter B. Mancino U.S. Department of Justice
- -------------------- Philadelphia Office
PETER B. MANCINO 170 S. Independence Mall West
Vice President, General Counsel Philadelphia, PA 19106
and Secretary Tel.: (215) 597-7401
UCAR International Inc.
13