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Exhibit 5
Elco Industries, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
September 1, 1995
PRIVATE AND CONFIDENTIAL
Xx. Xxxxxxx X. Xxxxxx
President - Industrial Products Group
Textron Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Dear Xx. Xxxxxx:
This letter agreement is in regard to our discussions concerning
possible negotiated business arrangements in our mutual interest involving Elco
Industries, Inc. (the "Company"). In connection therewith you may receive
certain written or oral information concerning the Company and its subsidiaries
from officers, directors, employees, agents or advisors of the Company. All
such information furnished to you, your officers, directors, employees, agents,
advisors, lenders or representatives (collectively, "Representatives") and all
analyses, compilations, computer disks, forecasts, studies or other documents
prepared by you or your Representatives based on any such information are
hereinafter referred to as the "Information." In consideration of our entering
into such discussions, you agree that:
The Information will be used by you and your Representatives solely for
the purpose of exploring possible negotiated business arrangements and not for
any other business or competitive purpose. The Information will be kept
confidential by you and your Representatives. Without the prior written consent
of the Company, neither you nor your Representatives nor the Company and its
Representatives will disclose to any person the fact that the Information has
been made available to you or that discussions between the parties hereto
concerning possible business arrangements or involving the Company are taking
place or any term, condition or other fact relating to any such business
arrangement between the parties (except as required by law and then only after
compliance with the next paragraph hereof).
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In the event that you or any of your Representatives are required by
law to disclose any of the Information, you will notify us promptly so that we
may seek a protective order or other appropriate remedy or, in our sole
discretion, waive compliance with certain terms of this letter agreement. In
the event that no such protective order or other remedy is obtained, or that we
waive compliance with certain terms of this letter agreement, you will furnish
only that portion of the Information which you are advised by counsel is
legally required and will exercise all reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded the Information.
If we do not proceed with any business arrangement, or upon the
Company's request (i) all Information furnished to you will be promptly
returned to the Company and (ii) all other Information will be destroyed with
any such destruction confirmed by you in writing to the Company; provided, that
all Information (including, oral Information) will remain subject to the terms
of this Agreement. This letter agreement does not apply to such portions of the
Information which you demonstrate (i) are or become generally available to the
public (other than as a result of a disclosure by you or your Representatives),
(ii) are or become available to you from a source other than the Company or one
of its Representatives unless you have knowledge that such source is prohibited
by an agreement with the Company from disclosing such information to you or
(iii) was known to you prior to its being furnished to you by or on behalf of
the Company.
You understand that the Company, its agents and its Representatives
make no representations or warranties as to the accuracy or completeness of the
Information. You also agree that the Company, its agents and its
Representatives shall have no liability to you or any of your Representatives
resulting from the use of the Information by you or your Representatives.
For a period of two years after the date hereof, without the prior
written consent of the Company, you and your Subsidiaries (as defined below)
will not, singly or as part of a group, in any manner, directly or indirectly;
(i) own or acquire or publicly propose to acquire, by purchase or otherwise,
any equity securities of the Company ("Equity Securities"), except for Equity
Securities or any rights to acquire Equity Securities representing not more
than 5% of the outstanding Equity Securities of the Company acquired for
investment purposes only by or on behalf of your pension plans or insurance
companies, or any assets of the Company other than in the ordinary course of
business, (ii) participate in any solicitation of proxies or become a
participant in any election contest with respect to the Company, (iii) form,
join or in any way participate in a "group" (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934) with respect to any voting
securities of the Company or (iv) otherwise act, alone or in concert with
others, to seek or offer to control, in any manner, the management, Board of
Directors or policies of the Company. For a period of two years after the date
hereof, unless such shall have been specifically invited in writing by the
Company, you will not, and will cause each of your Subsidiaries not to,
directly or indirectly, make any public statement or publicly-
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announced proposal to the Company, its Representatives or any stockholder of
the Company, or otherwise make any public announcement with respect to (i) any
form of business combination or similar transaction involving the Company, (ii)
any form of restructuring, recapitalization or similar transaction with respect
to the Company, (iii) any request to amend waive or terminate the provisions of
this letter agreement or (iv) any proposal, or other statement inconsistent
with the terms of this letter agreement. For the purposes of this letter
agreement, the term "Subsidiaries" shall mean both your wholly-owned
subsidiaries as well as any corporation in which you have any ownership
interest and which you control.
Notwithstanding the immediately preceding paragraph, if (a) the Board
of Directors of the Company approves a transaction with any person (other than
the Company or any employee benefit plan of the Company) and such transaction
could result in such person beneficially owning more than 50% of the
outstanding Equity Securities or all or substantially all of the assets of the
Company, (b) any person or group commences a tender offer for the outstanding
Equity Securities of the Company, and such transaction could result in such
person or group beneficially owning more than 50% of the outstanding Equity
Securities of the Company, or (c) if any party or group mails to shareholders
of the Company a solicitation for proxies to elect one or more persons to the
Board of Directors of the Company who were not nominated by the current Board
of Directors of the Company, then the provisions of the immediately preceding
paragraph shall terminate and be of no further force and effect.
You acknowledge and agree that (a) we and our Representatives are free
to conduct the process leading up to a possible business arrangement as we and
our Representatives, in our sole discretion, determine (including, without
limitation, by negotiating with any prospective buyer and entering into a
preliminary or definitive agreement without prior notice to you or any other
person), (b) we reserve the right, in our sole discretion, to change the
procedures relating to our consideration of a business arrangement at any time
without prior notice to you or any other person, to reject any and all
proposals made by you and any of your Representatives with regard to any
business arrangement, and to terminate discussions and negotiations with you at
any time and for any reason and (c) unless and until a written definitive
agreement concerning a business arrangement has been executed, neither we nor
any of our Representatives will have any liability to you with respect to any
business arrangement, whether by virtue of this letter agreement, any other
written or oral expression with respect to any business arrangement or
otherwise except as specifically set forth in this letter agreement. The
Company agrees that neither you nor any of your representatives will have any
obligation to enter into any business arrangement with respect to the Company
except pursuant to a written definitive agreement concerning a business
arrangement executed by you, nor will you or any of your representatives have
any liability to the Company or any other party for not entering into a written
definitive agreement concerning any business arrangement with respect to the
Company. Notwithstanding the foregoing, the Company agrees that if, prior to
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entering into a definitive agreement with respect to an acquisition of the
Company, it agrees in writing to grant any prospective purchaser of Equity
Securities or substantially all of the assets of the Company any right to
review, match or outbid agreements with, offers by, or negotiations with other
prospective purchasers of Equity Securities or substantially all of the assets
of the Company, then the Company shall grant the same right to you. It is the
intention of the parties that the right granted to such prospective purchaser
shall be construed broadly to cover rights of first refusal, rights of last
view, and the like.
You further agree that for a period of two years from the date hereof,
those of your officers and employees who have knowledge of the Information will
not, without the Company's prior written consent, directly or indirectly
solicit for employment by you or your subsidiaries any person now employed by
the Company or its subsidiaries at the level of vice president or higher who
first became known to such person as a result of the process contemplated by
this letter, provided that the foregoing shall not apply to any general
employment searches not directed specifically at such individual or
individuals. It is understood that the Company will arrange for appropriate
contacts for due diligence purposes.
You acknowledge that, in the event of any breach of this letter
agreement by either party hereto, the other party would be irreparably and
immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that in the event of such breach, the non-breaching party,
in addition to any other remedy to which it may be entitled, shall be entitled
to an injunction to prevent breaches of, and to compel specific performance of
this letter agreement, provided, however, that nothing in the foregoing shall
preclude the party allegedly in breach from asserting any defenses available to
it at law or in equity other than the defense that money damages would
constitute an adequate remedy.
Any proceeding relating to this letter agreement shall be brought in a
federal or state court of Delaware. You and the Company hereby consent to
personal jurisdiction in any such action and to service of process by mail, and
waive any objection to venue in any such Delaware court. This letter agreement
shall be governed by the internal laws of the State of Delaware and shall
inure to the benefit of and be binding upon the Company and you and our
respective affiliates, successors and assigns, including any successor to the
Company or you or substantially all of the Company's or your assets or business.
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If you are in agreement with the foregoing, please sign and return one
copy of this letter which thereupon will constitute an agreement with respect
to the subject matter hereof.
Very truly yours,
ELCO INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx
--------------------------------
Title
Confirmed and agreed to as of
the date first above written:
TEXTRON INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
President
Industrial Products Group
