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IN-HOUSE COUNSEL: Alan Graham, Pilkington North America Inc. TITLE: General counsel, secretary and vice president, legal and corporate affairs AGE: 43 ORGANIZATION: Pilkington North America, the Toledo, Ohio-based subsidiary of England’s Pilkington PLC, is the leading manufacturer in the world of automotive and architectural glass products. The $4.3 billion, 28,000-employee multinational corporation has nearly 6,000 employees in the United States, Canada and Mexico. DEPARTMENT: Graham has broad supervisory power over Pilkington’s North American operations as the head of a two-attorney legal department that includes Associate General Counsel Thomas Petko. The company recently underwent a major change by reducing the number of in-house attorneys from six to two and farming out routine legal work in the following areas: environmental regulations, immigration, real estate, employment and creditors’ rights. GRAHAM ET AL.: Graham and Associate General Counsel Thomas Petko handle all of Pilkington’s transactional work, including acquisitions, divestitures and financings; they oversee major complex litigation; and they handle labor and legislative matters. “We provide direction — strategic and tactical — and manage the matters,” says Graham. “Outside counsel prepares and files the pleadings.” As a rule, legal affairs take up about 70 percent of Graham’s time, he says, while the remaining 30 percent is primarily devoted to doing corporate work — human resources, communications, environmental and health and safety issues. LITIGATION: Graham has had two top priorities in his three-year tenure: to clean up the legal mess he inherited, the so-called legacy cases, and to devise a money-saving efficiency strategy to cut legal costs. When he arrived at Pilkington as general counsel in 1998, from his former post at Michelin North America Inc., the automobile-windshield producer was still reeling from allegations of high-level fraud and misconduct that had surfaced in a 274-count federal criminal indictment five years earlier. Although a federal jury in 1997 acquitted three former top executives of a predecessor company, Libbey-Owens-Ford, on charges that they had defrauded their employer of $9 million, the company was trying to recoup $14 million in a federal civil suit from the executives, who had been fired after an internal investigation. The failure of the criminal case weakened the company’s civil case. So, rather than drag it out and risk having to pay the defendants’ $7.7 million legal tab, Graham decided to settle the civil suit before U.S. District Judge James Carr of Toledo, Ohio, in February 2000. As the settlement agreement was confidential, Graham would not disclose its details. Another legacy case, which was resolved in November, involved a big antitrust matter filed by direct glass purchasers in the Western District of Pennsylvania against Pilkington and other flat glass manufacturers in North America, alleging that they set prices from the late ’80s through the mid-’90s. Graham, who enlisted Philadelphia’s Pepper Hamilton in 1999 to work on the case, settled the antitrust claims, as did Pilkington’s co-defendants, to “avoid the expense, inconvenience and burden of protracted litigation,” as well as its risks and uncertainties. The settlement was sealed. ONGOING LITIGATION: The price-fixing case led to several derivative suits by indirect purchasers, as well as by direct purchasers who had opted out of last year’s settlement. Most of the suits are in state courts in Tennessee, California, Arizona and Kansas, although one case involving an indirect purchaser from Wisconsin is before U.S. District Judge Donald E. Ziegler of the Western District of Pennsylvania in Pittsburgh. Concerning ongoing litigation, Graham says that Pilkington is now a defendant in 23 cases, all of which he considers “insignificant legal matters that barely register on my radar screen.” Aside from the derivative antitrust cases, the roster includes several employment cases involving wrongful discharge and Equal Employment Opportunity Commission claims, a small environmental matter and claims involving contractor performance and allegedly defective raw materials. “There’s nothing to speak of due to our proactive approach to resolving conflicts,” Graham says. “My biggest accomplishment has been disposing of the legacy cases on favorable terms. We gave them a fresh look. The focus had been on managing cases; now it’s on managing business.” OUTSIDE COUNSEL: Graham had good reason to get proactive: When he came on board, the glassmaker was using 100 different firms to handle its serious litigation. Not only did Graham decide, as a cost-cutting measure, to outsource most of the company’s legal work, but he also decided to form an exclusive partnership with one firm. Rather than follow the oft-used “convergence model” — DuPont’s practice of choosing a handful of outside firms based on their expertise — Graham exclusively engaged Pepper Hamilton, which has a substantial roster of clients in the automotive industry. Graham was impressed by the firm’s handling of Pilkington’s big antitrust case, which it had helped to settle. In choosing a firm, Graham says, he first put together a Request for Proposals, then identified five firms that met his criteria, interviewed three of them and chose Pepper, which has a Detroit office close to Pilkington’s Toledo base. Now Pepper has 50 of its 400 lawyers from its Philadelphia, Detroit and Washington, D.C., offices assigned to Pilkington matters, who work on a “discounted fixed-fee arrangement.” What did he like about Pepper? “The breadth and depth of experience of its lawyers, their good business judgment and the fact that they don’t take a scorched-earth approach to everything,” says Graham. “We work well with them.” Enlisting Pepper lawyers as instructors, Graham designed a legal education program for Pilkington executives. Recently, Pepper partners Laurence Z. Shiekman and Barbara T. Sicalides ran two seminars on the statutory and regulatory scheme for antitrust compliance. “Our solution isn’t for every company,” says Graham. “But not only are we getting comprehensive legal services, we’re getting them for less — we’ve reduced our costs by 40 percent. And the legal education component for businesspeople sensitizes them to what the issues are and gives them a competitive advantage.” DEALS: So far, Graham has been involved in only one proposed Pilkington acquisition involving Visteon Corp., Ford Motor Co.’s component parts and auto glass spin-off. He led an extensive legal and business review of the Ford glass business last year. But after months of consideration, Pilkington decided against the deal. “We haven’t been in the growth mode,” says Graham. “In this case, deciding not to do the deal was as involved as deciding to do one would have been. We put an awful lot of work into it — due diligence and strategic work. It enabled us to come to the right conclusion. Some of best deals you don’t do.” LEGISLATIVE ACTION: Graham and Petko are helping to draft federal rules to explain and implement the Transportation Recall Enhancement Accountability and Documentation Act, the legislation passed last fall in the wake of the recall of Firestone tires used on Ford Explorers. On most such issues, Pilkington uses the Washington lobbying firm William Sellery & Associates. ROUTE TO THE TOP: After graduating from the University of Detroit in 1979 and Detroit College of Law in 1983, Graham went into private practice at Birmingham, Mich.’s Colombo and Colombo to do corporate work. He developed strong ties with clients in the automotive industry before going in-house in 1984 at American Motors Corp., which was acquired by Chrysler in 1987. Graham joined Michelin North America in 1989, where he stayed for 10 years and became a senior attorney, before joining Pilkington. FAMILY: Graham and his wife, Margaret, a former financial consultant at Merrill Lynch, have two children: William, 3, and Alexandria, 2 months. LAST BOOK READ: “Beyond Winning: Negotiating to Create Value in Deals and Disputes,” by Robert Mnookin.

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