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Category Certificate/Licence In Respect of Agreements between Suppliers and Resellers [1998] IECA 528 (4th December, 1998)

COMPETITION AUTHORITY

CATEGORY CERTIFICATE/LICENCE

In Respect of Agreements between Suppliers and Resellers.

DECISION No 528

Date: December 4 1998

Price: £1.40

£1.90 include postage

CATEGORY CERTIFICATE/LICENCE

In Respect of Agreements between Suppliers and Resellers.

Introduction

1. Section 4(1) of the Competition Act, 1991 states that “all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void.” Section 4(4), as amended by Section 5 of the Competition (Amendment) Act, 1996, provides that:

“4(a) The Authority may certify that in its opinion, on the basis of the facts in its possession:

(i) an agreement, decision or concerted practice, or

(ii) a category of agreements, decisions or concerted practices,

does not contravene subsection (1).

(b) Where a certificate under this subsection covers a category of agreements, decisions or concerted practices, any agreements, decisions or concerted practices (as the case may be) within that category need not be notified under Section 7 to benefit from the certificate.”

2. Under Section 4(2), the Authority may grant a licence in the case of any agreement or category of agreements which,

“having regard to all relevant market conditions, contributes to improving the production of goods or provision of services or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit and which does not:-

(i) impose on the undertakings concerned terms which are not indispensable to the attainment of those objectives;

(ii) afford undertakings the possibility of eliminating competition in respect of a substantial part of the products or services in question”.

3. Since October 1991, a large number of agreements involving exclusive and non-exclusive distribution, exclusive purchasing, franchising and selective distribution have been notified to the Authority. The Authority has previously dealt with many of these notified agreements through a combination of category licences and individual certificates and licences. The Authority has reviewed its existing category licences and individual certificates and licences for non-price vertical restraints. The Authority has concluded that, in certain circumstances, non-price vertical restraints are not anti-competitive and has identified a category of such agreements which, in its opinion, do not contravene Section 4(1) of the Competition Act, 1991. The Authority has identified a second category of such agreements which may normally be regarded as satisfying the conditions for the grant of a licence laid down in Section 4(2).

The Subject of the Decision

4. This decision applies to vertical agreements between undertakings which operate at different stages in the supply chain in respect of the same product or service, whereby one party supplies the products concerned to the other for resale. It therefore includes, for example, agreements between manufacturers, importers and suppliers (referred to collectively hereafter as ‘suppliers’) on the one hand and distributors, wholesalers and retailers on the other (referred to collectively hereafter as ‘resellers’). The vertical agreements concerned include exclusive and non-exclusive distribution, exclusive purchasing, franchising and selective distribution. Such commercial agreements apply to a wide range of goods and services.

5. Exclusive distribution incorporates an obligation, either explicit or implicit, on the supplier to sell a good or service only to one particular distributor in a certain territory. Exclusive purchasing is an obligation on the buyer, or an incentive scheme agreed between the supplier and the buyer, which makes the latter, by the express language of the contract or its practical effect, purchase a particular good or service exclusively from the supplier or third party designated by that supplier.

6. A franchise agreement consists essentially of an agreement, whereby one party grants to the other the right to exploit a package of intellectual property rights relating to trade marks, trade names, shop signs, utility models, designs, copyrights, know-how or patents, for the resale of goods or the provisions of services to end users. “Know-how” means a package of non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified. The agreement usually includes restrictions in relation to the assignment or use of intellectual property rights, and the agreement usually involves also the exclusive distribution or exclusive purchasing of goods and/or services. The term “franchise agreement” includes master franchise agreements, whereby one undertaking, the franchisor, grants the other, the master franchisee, in exchange for direct or indirect financial consideration, the right to exploit a franchise for the purposes of concluding franchise agreements with third parties, the franchisees.

7. In selective distribution agreements , a manufacturer usually agrees to supply only to dealers satisfying certain professional or technical requirements, while the approved dealers undertake not to purchase or sell the contract goods and/or services from wholesalers or retailers outside the territory. As a general rule, the establishment of a selective distribution agreement depends on the nature of the product; for example, with qualitative selection agreements, the manufacturer may define the professional or technical criteria required by the dealer; with quantitative distribution agreements, the manufacturer limits the number of dealers purely on quantitative grounds. Selective distribution agreements may involve a combination of both qualitative and quantitative features.

8. Non-exclusive distribution consists of agreements between suppliers and resellers for the distribution of goods and services which do not either implicitly or explicitly allocate specific territories to the reseller, involve any restriction on the reseller dealing in competing products, or any exclusive purchasing obligations.

Agreement Between Undertakings

9. Section 3(1) of the Competition Act defines an undertaking as “a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service.” The Supreme Court has ruled that the phrase for gain is to be interpreted as “for a charge or payment.” Thus the definition of undertaking is quite wide ranging and it is clear that firms come within this definition. This decision relates to agreements between parties whereby one party supplies goods or services to the other for resale, so that, in effect, both parties to such agreements are engaged for gain either in the production, supply or distribution of goods and/or the provision of services and are therefore undertakings.

Applicability of Section 4(1)

10. There has been much economic analysis of non-price vertical restraints. The main conclusions of such analysis are that such restraints may or may not have anti-competitive effects, depending on the particular circumstances in which they operate. From the point of view of competition policy, it is best to distinguish cases in which vertical restraints have an overall positive effect from those which are not welfare enhancing. The Authority notes that vertical agreements facilitate the promotion of sales of a product and lead to intensive marketing and to continuity of supplies while at the same time rationalising distribution. For example, the use of own transport facilities allows larger distributors to rationalise their deliveries, while reducing costs. Vertical restraints in many cases facilitate inter-brand competition between the products of different manufacturers. The appointment of an exclusive distributor, for example, who will take over sales promotion, customer services and carrying of stocks, is often the most effective way, and sometimes indeed the only way, for the manufacturer to enter a market and compete with other manufacturers who are already present.

11. The Authority is also of the view that vertical agreements generally lead to an improvement in distribution because the supplier is able to concentrate his sales activities and he does not need to maintain numerous business relations with a large number of dealers. In the case of domestic firms, it is often preferable for the supplier to concentrate on production and to delegate the distribution function to a specialist distributor who already possesses the necessary organisation and dealer contacts. Particularly in the case of international trade, difficulties resulting from linguistic, legal and other differences are more easily overcome by the appointment of a distributor located in the territory.

12. The Authority considers that, on the basis of current economic thinking, vertical restraints in general should not be considered to be a priori anti-competitive. While negative effects can arise, these are unlikely to have any significant economic effects in the absence of any significant degree of market power at either supplier or distributor/retailer level. The Authority is of the view that where neither the supplier nor the reseller have a market share in excess of 20% of the relevant market, they are extremely unlikely to have a sufficient degree of market power for any non-price vertical restraints to have an adverse effect on competition. Nor in such circumstances does the agreement create the possibility of foreclosing a significant share of the market to competitors at either the upstream or the downstream level. In such circumstances, non-price vertical restraints may generally be considered to have neither the object nor the effect of preventing, restricting or distorting competition and therefore do not, in the opinion of the Authority, contravene Section 4(1). Where either party has more than 20% of the relevant market, it may enjoy a degree of market power. Economic analysis suggests that, in those circumstances, non-price vertical agreements may have anti-competitive effects and may therefore contravene Section 4(1).

Non Exclusive Distribution

13. In many instances, suppliers supply goods and/or services to resellers on foot of non-exclusive distribution agreements. Such agreements do not either implicitly or explicitly allocate specific territories to the reseller, involve any restriction on the reseller dealing in competing products, or any exclusive purchasing obligations. Such non-exclusive arrangements, whereby the supplier simply supplies goods and/or services for resale to a reseller without any restriction on the commercial freedom of either party, do not, in the Authority’s opinion, prevent, restrict or distort competition and do not, therefore, contravene Section 4(1). For the avoidance of doubt, the Authority believes that where de facto the supplier enters an agreement with only a single reseller within the territory, such an agreement constitutes an exclusive agreement.

Clauses which Contravene Section 4(1)

14. In the Authority’s opinion, the following restrictions are likely to have an adverse effect on competition and therefore contravene Section 4(1):

Resale price maintenance (RPM).
Clauses which provide absolute territorial protection.
Post-term non-compete clauses. An exception is made in the case of franchise agreements for durations not greater than one year.

(a) Resale Price Maintenance

15. A limitation on a distributor in a vertical agreement in determining his own resale prices constitutes a restriction on competition. In particular, the distributor might be required to sell at a price fixed by the supplier, or at a price not less than nor more than that indicated by the supplier. The Authority regards such limitations on the reseller's freedom to determine his own prices, as representing the enforcement of, or being conducive to, resale price maintenance. As RPM prevents price competition between resellers in respect of the products in question, and given that it may also be used to facilitate cartel arrangements at either the supplier or distributor level, such arrangements, in the Authority’s opinion, contravene Section 4(1).

16. The Authority has considered the validity of the argument that suppliers should be allowed to impose maximum resale prices. Maximum prices may boost sales volumes by lowering prices to consumers and protect brand reputation by preventing price increases. The Authority is also of the view that maximum prices would enable franchisors to encourage outlets to engage in price promotions nation-wide. On the other hand, the Authority is also aware of the view that maximum pricing may lead to collusion amongst manufacturers to raise prices and may, effectively, amount to fixed-price RPM. The Authority believes that, while prices may be specified as maximum prices, there may be a tacit understanding, or it may be the customary practice, that such prices are the prices charged by resellers so that, in effect, the arrangements have the effect of fixing resale prices. Consequently, in the Authority’s opinion, maximum RPM may be anti-competitive in certain circumstances and it is unable to conclude that, in general, it does not contravene Section 4(1).

17. Suppliers may recommend prices and, provided retailers are free to set their resale prices, the recommending of prices by suppliers does not, in the Authority’s opinion, contravene Section 4(1). However, the Authority believes that any covert or tacit understanding that resellers must adhere to the prices recommended by the supplier would amount to RPM, would be anti-competitive and contravene Section 4(1).

For the Category Certificate to apply, any price recommendation must:

(i) inform the reseller that he is free to set his own prices;

(ii) contain no reference to the margins resulting from applying any recommended price;

(iii) involve no requirement to display such a recommended price; and

(iv) provide that no measures are taken to secure adherence to such price.

(b) Absolute Territorial Protection

18. In the Authority’s view, any provisions or combination of provisions which prevent resellers outside a territory allocated to a particular reseller from supplying customers in that territory in response to requests from such customers, restrict competition. This may also take the form of requiring the distributor not to supply anyone who might resell the products outside the territory. Where the agreement is one of a number for different territories, each with the same requirement, this provides each (exclusive) distributor with absolute territorial protection. They are assured that they are the only source of supply of the products in the territory, and that other resellers and users are unable to obtain the products from any source whatsoever outside the territory. This effectively eliminates any competition to a distributor in respect of the contract products i.e. it eliminates any possibility of intra-brand competition.

(c) Post-term limitations

19. Any restrictions which apply after the termination of the agreement also, in the Authority’s opinion, generally contravene Section 4(1). In the case of franchise agreements, however, a limited post-term non-compete clause of one year or less does not, in the Authority’s opinion, contravene Section 4(1), as it is an ancillary restriction needed to protect the goodwill of the franchisor. It is an essential feature of a franchise agreement that the franchisor provides the franchisee with the necessary information, training, intellectual property and other technical know-how to operate the business. Clearly, it would not be in the franchisor’s interests to provide such know-how if the franchisee could simply terminate the agreement and use the information provided to compete with the business - this would effectively prevent the operation of franchise type arrangements. A post-term restriction on the franchisee is necessary to protect the goodwill of the franchisor. In the Authority’s opinion, a post-term non-compete restriction limited to 12 months from the termination of a franchise agreement does not contravene Section 4(1).

Special Rules for Particular Sectors.

20. The Authority has concluded, in the case of various forms of non-price vertical restraint, that, as a general rule, where the relevant market share held by both parties to the agreement is below 20%, the agreement is not anti-competitive. However, in markets where such arrangements between suppliers and resellers are the norm, so that a large part of the products in question are supplied for resale on the basis of such agreements, certain types of arrangements may restrict competition. In particular, where all, or the majority of, potential resellers have entered into exclusive purchase commitments, such arrangements could prevent new suppliers from entering the market by blocking access to all or most of the possible resellers, resulting in the foreclosure of the market. The Authority has identified motor fuels as a particular area where this problem arises. In the case of motor fuels, the vast majority of non-company owned outlets are supplied on foot of 10-year exclusive purchase agreements with the major oil companies. The Authority believes that such agreements have resulted in a degree of foreclosure in that market, since they impede the entry of new suppliers to the market, and that they therefore restrict competition and contravene Section 4(1). The Authority has also identified the market for liquefied petroleum gas (LPG) supplied for resale in cylinders as a market where similar foreclosure problems arise. It believes that exclusive purchase agreements for such cylinder LPG also result in a degree of market foreclosure and therefore contravene Section 4(1).

Applicability of Section 4(2).

21. The Authority believes that, although a vertical agreement may have some anti-competitive effect where either party has a market share in excess of 20%, such arrangements nevertheless lead to improvements in efficiency in the distribution of goods and services, by enabling suppliers to concentrate their sales activities and removing the need for them to maintain numerous business relations with a large number of retailers. They enable manufacturers to concentrate on production, while delegating distribution functions to specialist resellers who already possess the necessary organisation and dealer contacts. Such arrangements also facilitate the promotion of sales, development of intensive marketing and continuity of supplies and they result in a rationalisation of distribution. They also provide an effective way-and are sometimes the only way for a supplier to enter the market and compete with existing suppliers.

22. As a rule, non-price vertical restraints allow consumers a fair share of the resulting benefit, as they gain directly from any improvements in distribution and because they lead to a wider choice of products being available to consumers.

23. The various non-price vertical restraints incorporated in exclusive distribution, exclusive purchasing, franchising and selective distribution agreements are normally indispensable to the attainment of these objectives. Economic analysis shows that such measures provide strong incentives for resellers to devote the necessary time and resources to promoting and selling the products of the manufacturer in circumstances where it would otherwise be difficult to monitor the activities of the reseller. Such arrangements are therefore essential to maximise efficiencies in distribution.

24. Where either party to the arrangement has a market share in excess of 40% of the relevant market, however, such arrangements may afford it the possibility of eliminating competition in respect of a substantial part of the goods or services in question. The Authority therefore considers that, where either party’s market share exceeds 40%, such arrangements do not necessarily satisfy all four of the requirements for a licence and the Category Licence does not apply in such circumstances. The Authority recognises, however, that an individual agreement might satisfy this requirement, although the party’s market share may exceed this level.

(a) RPM Clauses

25. The Authority considers that while, in some circumstances, RPM might produce some improvements in efficiency, in many instances it will not do so. In such circumstances, consumers will not benefit from such arrangements and are likely to pay higher prices for products. RPM cannot therefore be considered to be indispensable to the attainment of such objectives. Where RPM operates as part of a horizontal price-fixing arrangement between either suppliers or resellers, it would result in the elimination of price competition in respect of a substantial part of the products in question. Consequently, it does not satisfy the requirements for a licence.

(b) Absolute Territorial Protection

26. In the Authority’s view, any provisions or combination of provisions which prevent resellers outside a territory allocated to a particular reseller from supplying customers in that territory in response to requests from such customers, do not lead to any improvements in efficiency or contribute to technical or economic progress. Consumers do not therefore receive any benefit from such arrangements. Such provisions are not therefore indispensable to achieving these objectives.

(c) Post-term Non-Compete Restrictions

27. Except in the case of franchise agreements, post-term restrictions on competition which continue after the termination of the agreement produce no benefits and are not indispensable, and so they fail to fulfil the conditions of Section 4(2), and do not benefit from this Category Licence. While this does not apply to any provisions requiring either party not to use or disclose confidential information regarding the business of the other, this is the case only if they are not used to prevent competition. If they were to be used in this way, this would produce no benefit and would not be indispensable and would not fulfil the conditions of Section 4(2). Such provisions cannot benefit from this Category Licence.

(d) Special Cases

28. As noted above, the Authority considers that exclusive purchasing agreements for motor fuels restrict competition in that sector. However, the Authority considers that such agreements contribute to improvements in the distribution of motor fuels. In return for such restrictions on the reseller, suppliers invest heavily in the development of filling stations, leading to improved levels of services and safety. Consumers benefit both from the efficiencies achieved in distribution and from the investment in garage forecourt facilities. The Authority believes that an exclusive purchase obligation is essential to achieve these objectives. However, it considers that this is only true where that obligation applies only for a limited period of time, i.e. an unlimited exclusive purchasing requirement is not indispensable for such objectives. The Authority has decided, therefore, that the Category Licence will only apply to such exclusive purchasing obligations which do not exceed ten years in duration and do not include any first option on renewal on the expiry of the agreement. Exclusive purchase agreements for cylinder LPG are the subject of a separate licence and are excluded from the scope of this Category Licence.

The Decision

29. The Competition Authority has issued the following decision in relation to vertical agreements between suppliers and resellers of goods and services:

(i) In the opinion of the Authority, on the basis of the facts in its possession, vertical agreements between suppliers and distributors, of a kind described in the attached Category Certificate for Non-Price Vertical Restraints, do not contravene Section 4(1) of the Competition Act, 1991, as amended. In accordance with Section 4(4) of the Competition Act, 1991, as amended, it hereby issues a certificate in respect of the category of agreements defined in Article 2 of the attached Certificate.

(ii) The Authority hereby grants a licence, in accordance with Section 4(2) of the Competition Act, 1991, as amended, in respect of the category of agreements defined in Article 2 of the attached Licence, on the basis that, in its opinion, having regard to all relevant market conditions, the category of agreements identified therein satisfy the requirements of the said Section 4(2). This licence shall apply from January 1 1999 until December 31 2003.

Competition Authority Certificate

In Respect of Agreements Between Suppliers and Resellers

Article 1.

1. This Certificate is issued by the Competition Authority, pursuant to Section 4(4) of the Competition Act, 1991, as amended, in respect of agreements (as defined in Article 2 below), to which only two undertakings are party and whereby one party, the supplier, agrees with the other, the reseller, to supply certain goods and/or services for resale within the State or any part of the State.

Article 2 .

2. Subject to the provisions of Articles 5 to 7 this Certificate applies to the following categories of agreement:-

(a) exclusive distribution, whereby the supplier agrees with the reseller to supply the goods and services for resale within the State or a defined area of the State only to that reseller;

(b) exclusive purchasing, whereby the reseller agrees with the supplier to purchase the products concerned only from the supplier, or another undertaking specified by the supplier;

(c) franchising, whereby one party grants to the other the right to exploit a package of industrial or intellectual property rights relating to trade marks, trade names, shop signs, utility models, designs, copyrights, know-how or patents, for the resale of goods or the provision of services to end users. “Know-how” means a package of non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified;

(d) selective distribution, whereby the supplier agrees with the reseller to supply goods and services only to those resellers satisfying certain professional or technical requirements, while the reseller agrees not to purchase such goods from, or sell them to, wholesalers or retailers outside the territory. Such agreements may include quantitative limits on the numbers of resellers to be appointed within the State or a defined part thereof;

(e) non-exclusive distribution, whereby the supplier agrees with the reseller to supply the goods and services for resale within the State or a defined area of the State to the reseller but without any restriction on supplying other resellers within that territory. Where de facto the supplier enters an agreement with only a single reseller within the territory, such an agreement does not constitute a non-exclusive agreement.

Article 3.

3. Subject to the provisions of Articles 5 to 7 , the Competition Authority certifies that, in its opinion, on the basis of the facts in its possession, non-exclusive distribution agreements as defined in Article 2(e) do not contravene Section 4(1) of the Competition Act, 1991, as amended.

Article 4.

4. Subject to the provisions of Articles 5 to 7 , the Competition Authority certifies that, in its opinion, on the basis of the facts in its possession, an agreement in any of the categories defined in Article 2(a), (b), (c) and (d) does not contravene Section 4(1) of the Competition Act, 1991, as amended, provided neither party to the agreement has a share in excess of 20% of the relevant market.

Article 5 .

5. Notwithstanding the provisions of Article 2 , this Certificate does not apply to any agreement which involves:-

(a) any restriction on the freedom of the reseller to determine his own resale prices. However, suppliers may recommend resale prices, provided:

i) such recommendations indicate that the reseller is free to set his own resale prices;

ii) the recommendation makes no references to margins arising from applying the recommended price;

iii) there is no requirement to display the recommended price; and

iv) no inducements are offered to secure compliance with the recommended price.

(b) any provision or combination of provisions which prevent resellers outside a territory allocated to a particular reseller from supplying customers in that territory in response to requests from such customers;

(c) any non-compete restrictions which apply after the termination of the agreement, other than the keeping of confidential and secret business information. An exception is made in the case of franchise agreements, provided that the duration of such non-compete restrictions does not exceed one year after the termination of the agreement.

Article 6.

6. Notwithstanding the provisions of Article 2, this Certificate does not apply to exclusive purchasing agreements in respect of (a) liquefied petroleum gas for resale in cylinders, or (b) motor fuels.

Article 7 .

7. Notwithstanding the provisions of Article 2, this Certificate does not apply to agreements between suppliers of identical goods or services, or of goods or services which are considered by users as equivalent in view of their characteristics, price and intended use.

Article 8 .

8. The Authority may amend this certificate, in particular, to exclude a particular category of goods or services, where, in its opinion, the cumulative effects of any existing agreements is such as to prevent effective entry to the market by a new supplier.

For the Competition Authority

______________________

Professor Patrick McNutt

Chairperson

December 4 1998

Competition Authority Licence

In Respect of Agreements Between Suppliers and Resellers.

Article 1.

Pursuant to Section 4(2) of the Competition Act, 1991, as amended, the Competition Authority grants this Licence to the categories of agreements defined in Article 2 , to which only two undertakings are party and whereby one party, the supplier, agrees with the other, the reseller, to supply certain goods and/or services for resale within the State or any part of the State.

Article 2 .

9. Subject to the provisions of Articles 3 to 5 this Licence applies to the following categories of agreement, provided that neither party to an agreement as defined herein holds a share in excess of 40% of the relevant market:-

(a) exclusive distribution, whereby the supplier agrees with the reseller to supply the goods and services for resale within the State or a defined area of the State only to that reseller;

(b) exclusive purchasing whereby the reseller agrees with the supplier to purchase the products concerned only from the supplier, or another undertaking specified by the supplier;

(c) franchising, whereby one party grants to the other the right to exploit a package of industrial or intellectual property rights relating to trade marks, trade names, shop signs, utility models, designs, copyrights, know-how or patents, for the resale of goods or the provisions of services to end users. “Know-how” means a package of non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified;

(d) selective distribution, whereby the supplier agrees with the reseller to supply goods and services only to those resellers satisfying certain professional or technical requirements while the reseller agrees not to purchase such goods from or sell them to wholesalers or retailers outside the territory. Such agreements may include quantitative limits on the numbers of resellers to be appointed within the State or a defined part thereof.

Article 3.

10. Notwithstanding the provisions of Article 2, this Licence shall not apply in respect of any agreement which involves:-

(a) any restriction on the freedom of the reseller to determine his own resale prices. However, suppliers may recommend resale prices provided:

i) such recommendations indicate that the reseller is free to set his own resale prices;

ii) the recommendation makes no references to margins arising from applying the recommended price;

iii) there is no requirement that the reseller display the recommended price; and

iv) no inducement is offered to secure compliance with the recommended price;

Article 4 .

(i) Notwithstanding the provisions of Article 2, this Licence does not apply to any exclusive purchasing agreement in respect of motor fuels which:

(a) exceeds 10 years in duration, and

(b) provides for any first option to renew upon termination.

(ii) Notwithstanding the provisions of Article 2, this Licence does not apply to exclusive purchasing agreements in respect of liquefied petroleum gas for resale in cylinders.

Article 5.

11. Notwithstanding the provisions of Article 2, this Licence does not apply to agreements between suppliers of identical goods or services, or of goods or services which are considered by users as equivalent in view of their characteristics, price and intended use.

Article 6

12. The Authority may amend this Licence, in particular, to exclude a particular category of goods or services, where, in its opinion, the cumulative effects of any existing agreements is such as to prevent effective entry to the market by a new supplier.

Article 7

13. The licence shall apply from January 01 1999 until December 31 2003.

For the Competition Authority

______________________

Professor Patrick McNutt

Chairperson

December 4 1998