BTR Dunlop Holdings, Inc. - Page 5




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          purchased wire carrier from Schlegel Ireland and incorporated it            
          into the automotive seals it manufactured.  Schlegel UK purchased           
          approximately 35 to 40 percent of the wire carrier produced by              
          Schlegel Ireland, and those purchases accounted for approximately           
          25 to 30 percent of the total raw material costs in the Schlegel            
          UK automotive division.                                                     
               Schlegel Corporation licensed to Schlegel UK additional                
          technology that was essential to the manufacture of most of the             
          products in the automotive and building products divisions, and             
          Schlegel UK paid royalties to Schlegel Corporation for the use of           
          this technology.  The standard royalty rate was 5 percent of the            
          selling price of products using the technology.                             
          Schlegel GmbH                                                               
               Schlegel GmbH was also a subsidiary of Schlegel Corporation.           
          It was formed under the laws of the former Federal Republic of              
          Germany and was acquired by Schlegel Corporation on August 22,              
          1972.  The business of Schlegel GmbH was divided into two                   
          separate divisions:  75 percent automotive parts manufacturing              
          and 25 percent building products manufacturing.  The automotive             
          division of Schlegel GmbH had five main customers that were the             
          largest German automotive producers.  While most of the market              
          for German automotive seals in 1989 consisted of rubber-based               
          seals, Schlegel GmbH produced only plastic automotive seals.                







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Last modified: May 25, 2011