Xxxxx-Xxxxxx Company
000 Xxxxxxxxx Xxxxxx
Xxx 0000
Xxxxx Xxxxxxx, XX 00000
March 26, 1999
PRIVATE AND CONFIDENTIAL
Precision Castparts Corporation
4650 X.X. Xxxxxxx Avenue
Portland, OR 97201
Attention: Xx. Xxxxxxx X. Xxxxxxx
Ladies and Gentlemen:
Re: CONFIDENTIALITY AND STANDSTILL AGREEMENT
In connection with your consideration of a possible transaction (the
"Transaction") with Xxxxx-Xxxxxx Company and/or its subsidiaries, affiliates
and divisions (collectively, with such subsidiaries, affiliates and
divisions, the "Company"), the Company is prepared to make available to you
certain information concerning the business, financial condition, operations,
assets and liabilities of the Company. As a condition to our furnishing such
information to you and your directors, officers, employees, agents or
advisors (including, without limitation, attorneys, accountants, consultants,
bankers and financial advisors) (collectively, "Representatives"), you agree
to treat such information in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
1. DEFINITION OF EVALUATION MATERIAL. The term "Evaluation Material"
means any and all information concerning the Company (whether prepared by the
Company, its advisors or otherwise and irrespective of the form of
communication) that is furnished to you or to your Representatives now or in
the future by or on behalf of the Company. In addition, "Evaluation
Material" shall be deemed to include all notes, analyses, compilations,
studies, interpretations and other documents prepared by you or your
Representatives which contain, reflect, are based upon or are generated from,
in whole or in part, the information furnished to you or your Representatives
pursuant hereto. The term "Evaluation Material" does not include information
which (a) is or becomes available to the public generally (other than as a
result of
Precision Castparts Corporation
March 26, 1999
Page 2
a disclosure by you or one of your Representatives), (b) was within your
possession prior to the date hereof, provided that the source of such
information was not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company
or any other party with respect to such information, or (c) becomes available
to you on a non-confidential basis from a source other than the Company or
one of its Representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect
to such information.
2. USE OF EVALUATION MATERIAL AND CONFIDENTIALITY.
(a) You hereby agree that you and your Representatives will use
the Evaluation Material solely for the purpose of evaluating the Transaction,
that the Evaluation Material will be kept confidential and that neither you
nor any of your Representatives will disclose any of the Evaluation Material
in any manner whatsoever; provided, however, that you may disclose Evaluation
Material (i) to such of your Representatives who need such information for
the sole purpose of evaluating the Transaction, who agree in writing to keep
such information confidential and who are provided with a copy of this letter
agreement and agree in writing to be bound by the terms hereof to the same
extent as if they were parties hereto, and (ii) in all other cases, to the
extent that the Company gives its prior written consent to such disclosure.
You agree that you will be responsible for any breach of this letter
agreement by any of your Representatives and you agree to take, at your sole
expense, all necessary measures to restrain your Representatives from
prohibited or unauthorized disclosure or use of the Evaluation Material
(including, without limitation, the initiation of court proceedings).
(b) The Evaluation Material may contain material information about
the Company that has not been disclosed to the public generally. You
understand that you and your Representatives could be subject to fines,
penalties and other liabilities under applicable securities laws if you or
any of your Representatives trades in the Company's common stock while in
possession of any material, non-public information concerning the Company.
You agree not to trade, and not to allow any of your Representatives who have
access to the Evaluation Material to trade, in the Company's common stock,
until such time as you or the Representatives, as applicable are no longer
prohibited from trading in the Company's common stock under all applicable
securities laws (whether because the Company has publicly disclosed all
material information in the Evaluation Material, the Evaluation Material no
longer
Precision Castparts Corporation
March 26, 1999
Page 3
contains material, non-public information or otherwise).
(c) In addition, you agree that, without the prior written consent
of the Company, neither you nor any of your Representatives will disclose to
any other person (including, without limitation, by issuing a press release
or otherwise making any public statement) the fact that the Evaluation
Material has been made available to you, the fact that discussions or
negotiations are taking place concerning the Transaction, or any of the
terms, conditions or other facts with respect thereto (including the status
thereof); provided, however, that you may make such disclosure as is required
by law (in which event, to the extent practicable, you will consult with, and
exercise in good faith all reasonable efforts to mutually agree with, the
Company regarding the nature, extent and form of such disclosure). Subject
to the second to last paragraph of Section 5, no request or proposal to
amend, modify or waive any provision of this agreement shall be made or
solicited except in a non-public and confidential manner. The term "person"
as used in this letter agreement shall be interpreted broadly to include the
media and any corporation, partnership, group, individual or other entity.
(d) In the event that you or any of your Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose (a) any of the Evaluation
Material, (b) any information relating to your or any of your
Representatives' opinion, judgment or recommendation concerning the Company,
or (c) any other information supplied to you or any of your Representatives
in the course of your or your Representatives' dealings with the Company, you
shall provide the Company with prompt notice of any such request or
requirement so that the Company may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this letter
agreement. If the Company waives compliance with the provisions of this
letter agreement with respect to a specific request or requirement, you and
your Representatives shall disclose only that portion of the Evaluation
Material that is covered by such waiver and which is necessary to disclose in
order to comply with such request or requirement. If, in the absence of a
protective order or other remedy or a waiver by the Company, you or one of
your Representatives is nonetheless, in the opinion of counsel, legally
compelled to disclose Evaluation Material or else stand liable for contempt
or suffer other censure or penalty, you or such Representative may, without
liability hereunder, disclose only that portion of the Evaluation Material
which such counsel advises you is legally required to be disclosed.
Notwithstanding the foregoing, in the event that you or one of your
Representatives discloses Evaluation Material under the terms of this
subsection,
Precision Castparts Corporation
March 26, 1999
Page 4
you and your Representatives shall exercise your best efforts to preserve the
confidentiality of the Evaluation Material, including, without limitation, by
cooperating with the Company to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Evaluation Material.
(e) If you decide that you do not desire to proceed with the
Transaction, you shall inform the Company of that decision immediately. In
that case, or at any other time upon the request of the Company for any
reason whatsoever, you shall deliver promptly to the Company all Evaluation
Material furnished to you or any of your Representatives by or on behalf of
the Company, together with all copies of such Evaluation Material in your
possession or control or in the possession or control of any of your
Representatives. In the event of such a decision not to proceed or request
by the Company for the return of the Evaluation Material, you agree to
destroy all other Evaluation Material prepared by you or any of your
Representatives, together with all copies thereof (including, without
limitation, electronic copies). Notwithstanding the return or destruction of
the Evaluation Material, you and your Representatives will continue to be
bound by your obligations of confidentiality and other obligations hereunder.
3. ACCURACY OF EVALUATION MATERIAL. You understand and acknowledge
that neither the Company nor any of its officers, directors, employees,
agents or advisors, including Xxxxxxx, Xxxxx & Co.("Xxxxxxx Xxxxx"), makes
any representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material. You agree that neither the Company
nor any of its officers, directors, employees, agents or advisors, including
Xxxxxxx Xxxxx, shall have any liability to you or to any of your
Representatives relating to or resulting from the use of the Evaluation
Material or any errors therein or omissions therefrom. Only those
representations and warranties that are made in a final definitive agreement
regarding the Transaction, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.
4. ACCESS TO AND SOLICITATION OF EMPLOYEES. In consideration of the
Company's provision of the Evaluation Material to you, you agree not to
initiate or maintain contact with any officer, director, employee or agent of
the Company regarding its business, operations, prospects or finances, except
with the express written permission of the Company. It is understood that
Xxxxxxx Xxxxx will arrange for appropriate contacts for due diligence
purposes. You agree to submit or direct all (a) communications regarding the
Transaction, (b) requests for additional information, (c) requests for
facility tours or management meetings
Precision Castparts Corporation
March 26, 1999
Page 5
and (d) discussions or questions regarding procedures, to Xxxxxxx Xxxxx. You
further agree that, for a period of eighteen months from the date hereof, (a)
without obtaining the prior written consent of the Company you and your
affiliates will not employ or solicit to employ any individual currently
serving as a director, officer, employee or agent of the Company, and who is
identified by you as a result of your evaluation or otherwise in connection
with the possible transactions; provided however that you shall not be
prohibited from employing any such person who contacts you on his or her own
initiative or through any general advertisements, and (b) none of you, your
affiliates or your Representatives shall knowingly divert any business,
customers or suppliers from the Company except under normal competitive
conditions not involving use of the Evaluation Material.
5. STANDSTILL. You hereby acknowledge that the Evaluation Material is
being furnished to you in consideration of your agreement that neither you
nor any person or entity directly or indirectly, through one or more
intermediaries, controlling you or controlled by you or under common control
with you, acting alone or as part of any group, will, for a period of
eighteen months from the date of this agreement, directly or indirectly,
unless specifically requested to do so in writing in advance by the Company:
(a) acquire or agree, offer, seek or propose to acquire, or cause
to be acquired, ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-1 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) of any of the assets or businesses of the
Company or of any securities of the Company, or any rights or options to
acquire any such ownership (including from a third party), or
(b) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are used in the Exchange Act) to vote or seek to
advise or influence in any manner whatsoever any person or entity with
respect to the voting of any securities of the Company, or
(c) form, join, or in any way participate in a "group" (within the
meaning of Section 13d(3) of the Exchange Act) with respect to any voting
securities of the Company, or
(d) arrange, or in any way participate in, any financing for the
purchase of any voting securities or securities convertible or exchangeable
into or exercisable for any voting securities or assets of the Company, or
Precision Castparts Corporation
March 26, 1999
Page 6
(e) otherwise act, whether alone or in concert with others, to
seek to propose to the Company or any of its stockholders any merger,
business combination, restructuring, recapitalization or similar transaction
to or with the Company or otherwise act, whether alone or in concert with
others, to seek to control, change or influence the management, Board of
Directors or policies of the Company, or nominate any person as a Director of
the Company who is not nominated by the then incumbent Directors, or propose
any matter to be voted upon by the stockholders of the Company, or
(f) solicit, negotiate with, or provide any information to, any
person with respect to a merger, exchange offer or liquidation of the Company
or any other acquisition of the Company, any acquisition or voting securities
of or all or any portion of the assets of the Company, or any other similar
transaction, or
(g) announce an intention to, or enter into any discussion,
negotiations, arrangements or understandings with any third party with
respect to, any of the foregoing, or
(h) disclose any intention, plan or arrangement inconsistent with
the foregoing, or
(i) advise, assist or encourage any other person in connection
with any of the foregoing.
In addition, you also agree during such eighteen month period not to (i)
request that the Company (or any of its Representatives), directly or
indirectly, amend or waive any provision of this Paragraph 5 (including this
sentence) or (ii) take any action that might require the Company to make a
public announcement regarding a possible transaction.
If at any time during such eighteen month period you are approached by
any third party concerning your or their participation in a transaction
involving the assets or businesses of the Company or securities issued by the
Company, you will promptly inform the Company of the nature of such
transaction and the parties thereto.
Notwithstanding anything in this section (5) to the contrary, in the event
there is a Competing Transaction with respect to the Company (or the Company
enters into an agreement with respect to a Competing Transaction), the
provisions of this paragraph (5) shall no longer apply to you. "Competing
Transaction" shall mean with respect to the Company, (i) a merger or
consolidation,
Precision Castparts Corporation
March 26, 1999
Page 7
or any similar transaction, involving the Company, (ii) a purchase, lease or
other acquisition or assumption of all or a substantial portion of the assets
of the Company and its subsidiaries taken as a whole, (iii) a purchase or
other acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 50% or more of the voting power of
the Company, (iv) commencement of a tender offer or exchange offer with
respect to securities representing 20% or more of the voting power of the
Company, or (v) any transaction in which there would be a change in the
majority of the Board of Directors of the Company.
6. NO DEFINITIVE AGREEMENT/FREEDOM TO CHANGE PROCESS. You
understand and agree that no contract or agreement providing for the
Transaction shall be deemed to exist between you and the Company unless and
until a final definitive agreement with respect thereto has been executed and
delivered by you and the Company, and you hereby waive, in advance, any
claims (including, without limitation, breach of contract) in connection with
the Transaction unless and until you and the Company shall have entered into
such a final definitive agreement. You also agree that, except for the
matters specifically agreed to in this letter agreement, unless and until
such a final definitive agreement regarding the Transaction has been executed
and delivered, neither the Company nor you will be under any legal obligation
of any kind whatsoever with respect to the Transaction. You further
acknowledge and agree that the Company reserves the right, in its sole
discretion, to reject any and all proposals made by you or any of your
Representatives with regard to the Transaction, and to terminate discussions
and negotiations with you at any time. You further understand that (a) the
Company and its Representatives shall be free to conduct any process for any
transaction involving the Company, if and as they in their sole discretion
shall determine (including, without limitation, negotiating with any other
interested parties and entering into a definitive agreement without prior
notice to you or any other person), (b) the Company may change any procedures
relating to such process or transaction at any time without notice to you or
any other person, and (c) you shall have no claims whatsoever against the
Company, its Representatives or any of their respective directors, officers,
stockholders, owners, affiliates or agents arising out of or relating to any
such transaction involving the Company.
7. REMEDIES. It is understood and agreed that money damages would not
be a sufficient remedy for any breach of this letter agreement by you or any
of your Representatives, and that in addition to all other remedies available
at law or equity, the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such
breach, and you and your Representatives further agree to waive any
requirement for the securing or posting of any bond in connection with such
remedy. In the
Precision Castparts Corporation
March 26, 1999
Page 8
event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines that you or any of your Representatives has
breached this letter agreement in a material respect, the court may, in its
discretion, require you to, pay to the Company on demand the legal fees and
expenses incurred by the Company in connection with such litigation,
including any appeal therefrom.
8. WAIVERS AND AMENDMENTS. No failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other
or future exercise thereof or the exercise of any other right, power or
privilege hereunder. No provision of this letter agreement can be amended
without the specific written consent of the Company.
9. CHOICE OF LAW/CONSENT TO JURISDICTION. The validity,
interpretation, performance and enforcement of this letter agreement shall be
governed by the laws of the Commonwealth of Massachusetts. You hereby
irrevocably and unconditionally consent to the sole and exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for any
action, suit or proceeding arising out of or relating to this letter
agreement or the Transaction, and you agree not to commence any action, suit
or proceeding related thereto except in such courts. You further hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of or relating to this letter
agreement in the courts of the Commonwealth of Massachusetts or the United
States District Court for the District of Massachusetts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. You further agree that service of
any process, summons, notice or document by U.S. registered mail to your
address set forth above shall be effective service of process for any action,
suit or proceeding brought against you in any such court.
10. SUCCESSORS AND ASSIGNS. This letter agreement shall inure to the
benefit of and be enforceable by the Company and its successors.
11. SEVERABILITY. In case provisions of this letter agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions of the letter agreement shall not in any way be
affected or impaired thereby.
Precision Castparts Corporation
March 26, 1999
Page 9
12. COUNTERPARTS. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute the same agreement.
Precision Castparts Corporation
March 26, 1999
Page 10
Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned, whereupon
this letter agreement shall become a binding agreement between you and the
Company.
Very truly yours,
XXXXX-XXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: General Counsel
Accepted and agreed as of
March 26, 1999.
Precision Castparts
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Chief
Financial Officer
