EXHIBIT 99.(c)(2)
CONFIDENTIALITY AND STANDSTILL AGREEMENT
This Confidentiality and Standstill Agreement (the "Agreement") is entered
into as of this 21st day of August, 1996, by and between Eljer Industries, Inc.,
a Delaware corporation ("ELJ"), and Xxxx Industries, Inc. ("ZRN"), a
Pennsylvania corporation.
WITNESSETH:
WHEREAS, ELJ and ZRN may consider engaging in discussions with respect to a
possible negotiated business combination involving ZRN and ELJ (the
"Transaction") and prior to or during the course of any such discussions ZRN and
ELJ each may have disclosed or may disclose and make available to the other
certain information concerning its business, prospects, financial condition,
operations, assets and liabilities;
WHEREAS, all such information furnished to a party or its Representatives
(as defined below) by or on behalf of the other party (irrespective of the form
of communication and whether such information is so furnished before, on or
after the date hereof), and all analyses, compilations, data, studies, notes,
interpretations, memoranda or other documents prepared by a party or its
Representatives containing or based in whole or in part on any such furnished
information are collectively referred to herein as the "Confidential
Information;" and
WHEREAS, each of ELJ and ZRN hereby agrees to receive such Confidential
Information of the other and to disclose such Confidential Information to the
other subject to the following terms and conditions.
NOW, THEREFORE, for and in consideration of the mutual promises and
obligations contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
1. Non-Disclosure of Confidential Information.
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(a) Each of ZRN and ELJ shall (i) use the Confidential Information
obtained from the other solely for the purpose of evaluating a possible
Transaction and for no other competitive or other purpose; (ii) not disclose the
Confidential Information to any third party, except for disclosures to its
directors, officers and representatives of its advisors (such as independent
accountants, investment bankers, consultants and
attorneys) acting on its behalf (collectively, its "Representatives") who in
each case, in such party's reasonable judgment, need to know such information
for the purpose of evaluating a possible Transaction and who are set forth on
Annex A hereto; provided that prospective financing sources shall not be
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considered "Representatives" to whom Confidential Information may be disclosed
in accordance with this paragraph 1 unless set forth on Annex A hereto, as it
may be amended by the parties from time to time; (iii) inform its
Representatives of the confidential nature of the Confidential Information and
direct its Representatives to treat the Confidential Information confidentially;
(iv) take all additional reasonable precautions necessary to prevent the
disclosure of the Confidential Information by its Representatives to any third
party; and (v) be responsible for any breach of this Agreement by its
Representatives.
(b) If either party is required (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, it is agreed that such party
will provide the other party with prompt notice of such request so that such
other party may seek an appropriate protective order and/or waive the notifying
party's compliance with the provisions of this Agreement. If in the absence of
a protective order either party is nonetheless compelled to disclose
Confidential Information, such party may disclose without liability hereunder
only that portion of the Confidential Information that such party is advised by
outside counsel is legally required to be disclosed; provided that such party
gives to the other party written notice of the information to be disclosed as
far in advance of its disclosure as is practicable and, upon such other party's
request, uses reasonable efforts to obtain assurances that confidential
treatment will be accorded to such information.
2. Non-Disclosure of Negotiations or Agreements. Except as required by
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law, neither ZRN, ELJ nor their respective Representatives shall disclose to any
person (including, without limitation, any director, officer or employee, not
set forth on Annex A) the existence, status or terms of any discussions,
negotiations or agreements between them concerning a possible Transaction,
including without limitation any offer, letter of intent, proposal, price, value
or valuation, or any similar terms, agreements or understandings between ZRN and
ELJ with respect thereto, or that such party has provided to or received from
the other Confidential Information without obtaining the prior written consent
of the other party, which consent will not be unreasonably withheld. The term
"person" as used in this Agreement will be interpreted broadly to include the
media and any corporation, company, group, partnership or other entity or
individual.
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3. Ownership of Confidential Information. All written Confidential
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Information delivered by one party hereto to the other party pursuant to the
Agreement shall be and remain the property of the delivering party, and upon the
written request of the delivering party, the receiving party shall (i) promptly
return such Confidential Information and shall not retain any copies or other
reproductions or extracts thereof, (ii) destroy or have destroyed all memoranda,
notes, reports, analyses, compilations, studies, interpretations, or other
documents derived from or containing Confidential Information, and all copies
and other reproductions and extracts thereof, and (iii) provide a certificate to
the delivering party certifying that the foregoing materials have, in fact, been
destroyed or returned, signed by an authorized officer supervising such
destruction or return. Notwithstanding the return of destruction of the
Confidential Information, each party and its Representatives will continue to be
bound by the confidentiality and other obligations hereunder.
4. Information Not Deemed Confidential Information. The term
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"Confidential Information" does not include information that (i) is or becomes
generally available to the public other than as a result of a disclosure by the
receiving party or its Representatives in violation of this Agreement; (ii) is
or becomes available to the receiving party from a source other than the
delivering party or its Representatives, provided that such source is not known
by the receiving party to be bound by an obligation of confidentiality to such
delivering party or its Representatives; or (iii) was within the receiving
party's possession prior to being furnished to the receiving party by or on
behalf of the delivering party, provided that the person providing such
information to the receiving party was not bound by a confidentiality agreement
with the delivering party or otherwise prohibited from transferring such
information to the receiving party by any contractual, legal or fiduciary
obligation.
5. No Warranty. Neither ZRN, ELJ nor any of their respective officers,
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directors, employees, representatives or agents makes any representation or
warranty, express or implied, as to the accuracy and completeness of any
Confidential Information provided by it, and no liability shall result to the
delivering party from its use, except as forth in a definitive agreement for a
Transaction. Only the representations and warranties that are made in a
definitive agreement for a Transaction, when, as, and if it is executed, and
subject to such limitations and restrictions as may be specified therein, shall
have any legal effect.
6. No Agreement. Unless a definitive agreement regarding a Transaction
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between ZRN and ELJ has been executed and delivered, neither ELJ, ZRN nor any of
their stockholders or affiliates will be under any legal obligation of any kind
whatsoever
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with respect to such a Transaction by virtue of this Agreement or any other
written or oral expression with respect to such Transaction except, in the case
of this Agreement, matters specifically agreed to herein. Each party further
acknowledges and agrees that each party reserves the right, in its sole
discretion, to reject any and all proposals made by the other party or any of
its Representatives with regard to a Transaction, to deny any request for
Confidential Information (regardless of the reasonableness of such request) and
to terminate discussions or negotiations with the other party at any time.
Neither this paragraph nor any other provision in this Agreement can be waived
or amended except by written consent of ZRN and ELJ, which consent shall refer
specifically to this paragraph (or such other provision) and explicitly make
such waiver or amendment.
7. Non Solicitation. Unless a Transaction is consummated, each party
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agrees that, for a period of two years from the date hereof, it will not
directly or indirectly solicit employment of (other than by means of a general
advertisement) any of the (i) employees of the other party with whom it has had
contact during the process contemplated by this Agreement or (ii) management
level personnel or officers of the other party. It is expressly understood that
this Agreement is not intended to preclude the ability of the companies to
compete with one another in the ordinary course and that each party will arrange
with the designated Representative(s) (and no other person) for appropriate
contacts for due diligence purposes. Unless otherwise agreed by either party,
all (i) communications regarding a possible Transaction, (ii) requests for
additional information, (iii) requests for facility tours or management
meetings, or (iv) discussions or questions regarding procedures, will be
submitted or directed only to the designated Representative(s) (and no other
person).
8. Non-public Information. Each of ZRN and ELJ has outstanding publicly-
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held securities and the Confidential Information contains material non-public
information. Each of the parties acknowledges that it is (i) aware, and has
advised or will advise its Representatives, that the United States securities
laws prohibit any person in possession of material non-public information about
a company from purchasing or selling securities of such company, and from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person may purchase or sell such
securities and (ii) familiar with the Securities and Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and each party agree that it
will neither use nor permit any of its Representatives to use any Confidential
Information in violation of such Act or rules or regulations, including without
limitation, Rules 10b-5 and 14e-3.
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9. Standstill. Each of the parties agrees that, until the expiration of
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two years from the date of this Agreement, without the prior written consent of
the Board of Directors of the other party, it and its affiliates will not (i) in
any manner acquire, agree to acquire or make any proposal or offer or otherwise
seek to acquire, directly or indirectly, any securities (or rights in respect
thereof), assets or property of the other party or any of its subsidiaries,
whether such agreements or proposals or offers are made with or to the other
party (or any controlling person or successor thereof) or any of its
subsidiaries; (ii) enter into or agree, offer, seek or propose to enter into or
otherwise be involved in or part of, directly or indirectly, any merger,
acquisition transaction or other business combination involving the other party
or any of its subsidiaries or any of their respective assets; (iii) make, or in
any way participate in, directly or indirectly, any "solicitation" of "proxies"
(as such terms are used in the proxy rules of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) to vote, or seek to advise or influence
any person with respect to the voting of, any voting securities of the other
party or any of its subsidiaries, (iv) form, join or in any way participate in a
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any voting securities of the other party or any of its subsidiaries;
(v) otherwise act, alone or in concert with others, to seek or propose to
control or influence the management, Board of Directors or policies of the other
party; (vi) directly or indirectly enter into any discussions, negotiations,
arrangements or understandings with any other person (except internal
discussions and planning activities involving its Representatives) with respect
to any of the foregoing activities or propose any of such activities to any
other person (other than its Representatives); (vii) publicly disclose any
intention, plan or arrangement inconsistent with the foregoing; (viii) directly
or indirectly advise, encourage, provide assistance (including debt or equity
financial assistance) to or hold discussions with or invest in any other person
in connection with any of the foregoing. Each party also agrees that, during
such two-year period, neither it nor any of its affiliates will: (i) request
the other party or its advisors, directly or indirectly, to (1) amend or waive
any provision of this paragraph (including this sentence) or (2) otherwise
consent to any action inconsistent with any provision of this paragraph
(including this sentence); or (ii) take any initiative with respect to the other
party or any of its subsidiaries that could reasonably be expected to require
the other party to make a public announcement regarding (1) such initiative, (2)
any of the activities referred to in this paragraph, (3) the possibility of a
Transaction or any similar transaction or (4) the possibility of such party or
any other person acquiring control of the other party, whether by means of a
business combination or otherwise. Notwithstanding any other provision hereof,
this Section 9 shall not apply to a party in the event of a bona fide publicly
announced proposal, offer or agreement by a third party not acting in concert
with such party (i) to acquire more than 51% of any class of stock (or rights
in respect
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thereof) of the other party or (ii) to acquire the other party, or all or
substantially all of its assets, by means of a merger, consolidation, asset
purchase or other similar transaction. Additionally, the Chief Executive Officer
of a party may contact the Chief Executive Officer of the other party for the
purpose of expressing continuing or renewed interest in a Transaction, provided
that, unless invited to do so by the Chief Executive Officer of the other party,
no offer or proposal shall be made that would require public disclosure or
formal consideration by such other party or its Board of Directors.
10. No Waiver. No failure or delay by either party in exercising any
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right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof, or the exercise of any right, power or privilege hereunder. Any waiver
of a breach hereof shall be in writing and shall not operate or be construed as
a waiver of any other or subsequent breach.
11. Remedies. It is understood and agreed that money damages would not be
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a sufficient remedy for any breach of this Agreement by either party and that
the non-breaching party shall be entitled to equitable relief, including
specific performance and injunction, as a remedy for any such breach. Each
party agrees to waive, and to use its best efforts to cause its directors,
officers, employees or agents to waive, any requirement for the securing or
posting of any bond in connection with such remedy. Such remedies shall not be
deemed to be the exclusive remedies for a breach of this Agreement by either
party, but shall be in addition to all other remedies available at law or in
equity to the non-breaching party.
12. Governing Law. This Agreement is for the benefit of the parties and
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their respective directors, officers, employees, representatives and agents and
their respective successors and assigns and shall be governed by and construed
in accordance with the internal substantive laws and not the choice of law rules
of the State of Texas.
13. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same agreement.
14. Severability. If any provision of this Agreement is found to violate
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any statute, regulation, rule, order, decision or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed to
affect any other provision hereof or the validity of the remainder of this
Agreement, and such invalid provision
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shall be deemed deleted herefrom to the minimum extent necessary to cure such
violation.
ELJER INDUSTRIES, INC.
By: /s/ X. X. Xxxxxxxx
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X. X. Xxxxxxxx
Vice President
XXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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ANNEX A
ELJER INDUSTRIES, INC.
-- Bear, Xxxxxxx & Co. Inc.
-- Xxxxxx Xxxxxxxx & Co.
XXXX INDUSTRIES, INC.
-- Southwest Securities
-- Ernst & Young LLP
-- Deutsche Xxxxxx Xxxxxxxx/X.X. Xxxxxxxx Inc.
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FIRST AMENDMENT TO
CONFIDENTIALITY AND STANDSTILL AGREEMENT
MADE THIS 5th day of November, 1996, by and between Eljer Industries, Inc.
("ELJ") and Xxxx Industries, Inc. ("ZRN"), amending that certain Confidentiality
and Standstill Agreement between ELJ and ZRN dated as of the 21st day of August,
1996 ("Confidentiality and Standstill Agreement").
FOR GOOD AND VALUABLE CONSIDERATION, the adequacy and receipt of which is
hereby acknowledged, and intending to be legally bound, ELJ and ZRN agree as
follows:
1. Capitalized terms used herein shall have the meanings assigned to them
in the Confidentiality and Standstill Agreement.
2. Annex A of the Confidentiality and Standstill Agreement is amended to
permit ZRN to disclose Confidential Information to participating banks
under ZRN's revolving credit agreement. Those banks include
NationsBank N.A., Chase Manhattan Bank, N.A., KeyCorp Bank, National
City Bank, Bankers Trust Company, PNC Bank, N.A. Societe Generale, and
Xxxxx Brothers Xxxxxxxx & Co.
3. Except as hereby amended, the Confidentiality and Standstill Agreement
remains in full force and effect.
IN WITNESS WHEREOF, each of the parties has set its hand by duly authorized
officers.
ELJER INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Its: Chairman and CEO
XXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Its: Chairmand and CEO
SECOND AMENDMENT TO
CONFIDENTIALITY AND STANDSTILL AGREEMENT
MADE THIS 7th day of November, 1996, by and between Eljer Industries, Inc.
("ELJ") and Xxxx Industries, Inc. ("ZRN"), amending that certain Confidentiality
and Standstill Agreement between ELJ and ZRN dated as of the 21st day of August,
1996 ("Confidentiality and Standstill Agreement").
FOR GOOD AND VALUABLE CONSIDERATION, the adequacy and receipt of which is
hereby acknowledged, and intending to be legally bound, ELJ and ZRN agree as
follows:
1. Capitalized terms used herein shall have the meanings assigned to them
in the Confidentiality and Standstill Agreement.
2. Annex A of the Confidentiality and Standstill Agreement is amended to
permit ELJ to disclose Confidential Information to participating banks
under ELJ's revolving credit agreement. Those banks include
NationsBank of Texas, N.A., Xxxxxx Guaranty Trust Company of New York,
The First National Bank of Chicago, DK Acquisition Partners, Foothill
Capital Group, Third Avenue Value Fund, Inc. and Comac Partners.
3. Except as hereby amended, the Confidentiality and Standstill Agreement
remains in full force and effect.
IN WITNESS WHEREOF, each of the parties has set its hand by duly authorized
officers.
ELJER INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Its: /s/ Vice President
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XXXX INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxx
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Its: /s/ General Counsel and Secretary
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