<PAGE> 1
Block Drug Company, Inc.
October 7, 2000
Page 1
EXHIBIT (e)(3)
PERSONAL AND CONFIDENTIAL
July 7, 2000
Smithkline Beecham Corporation
One Franklin Plaza
Philadelphia, PA 19102
Attention: Joe Harris
In connection with your consideration of a possible transaction with Block
Drug Company, Inc. (the "Company"), you have requested information concerning
the Company. As a condition to your being furnished such information, you agree
to treat any information concerning the Company (whether prepared by the
Company, its advisors or otherwise) that is furnished to you by or on behalf of
the Company, whether obtained in written form, oral form, in samples, or by
observation (herein collectively referred to as the "Evaluation Material"), in
accordance with the provisions of this letter and to take or abstain from taking
certain other actions herein set forth. The term "Evaluation Material" does not
include information that (i) is already in your possession, as evidenced by
written records maintained in the ordinary course of business, provided that
such information is not known by you to be subject to another confidentiality
agreement with or other obligation of secrecy to the Company or another party,
or (ii) becomes generally available to the public other than as a result of a
disclosure by you or your directors, officers, employees, agents or advisors, or
(iii) becomes available to you on a non-confidential basis from a source other
than the Company or its advisors, provided that such source is not known by you
to be bound by a confidentiality agreement with or other obligation of secrecy
to the Company or another party. Any communications with the Company in
connection with a possible transaction should be directed solely to Goldman
Sachs, and under no circumstances should you contact individual employees of the
Company.
You hereby agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible transaction between the Company and you, and
that such information will be kept confidential by you and your advisors;
provided, however, that (i) any of such information may be disclosed to your
directors, officers and employees and representatives of your advisors who need
to know such information for the purpose of evaluating any such possible
transaction between the Company and you (it being understood that such
directors, officers, employees and representatives shall be informed by you of
the confidential nature of such information and shall be directed by you to
treat such information confidentially), and (ii) any disclosure of such
information may be made to which the Company consents in writing.
In consideration of the confidential information being furnished to you,
the potential buyer, you hereby agree that, for a period of two (2) years from
the date hereof, neither you nor any of your affiliates will (i) directly or
indirectly, solicit to employ any of the current officers or employees of the
Company with whom you have had contact after the date of this Agreement or who
was specifically identified to you during the period of your consideration of
the transaction referred to in the first paragraph hereof, so long as they are
employed by the Company or any of its subsidiaries, without obtaining the prior
written consent of the Company, or (ii) directly or indirectly maintain contact
(except for those contacts made in the ordinary course of business) with any
officer, director, or employee of the Company, or any of the Company's
subsidiaries, regarding its business, operations, prospects or finances with
respect to the possible transaction between you and the Company except with the
prior written consent of the Company. The term "solicit to employ" shall not be
deemed to include general solicitations of employment not specifically directed
towards employees of the Company.
You hereby acknowledge that you are aware, and that you will advise such
directors, officers, employees and representatives who are informed as to the
matters which are the subject of this letter, that the United
<PAGE> 2
July 7, 2000
Page 2
States securities laws prohibit any person who has received from an issuer
material, non-public information concerning the matters which are the subject of
this letter from purchasing or selling securities of such issuer or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities.
In addition, without the prior written consent of the Company, you will
not, and will direct such directors, officers, employees and representatives not
to, disclose to any person either the fact that discussions or negotiations are
taking place concerning a possible transaction between the Company and you or
any of the terms, conditions or other facts with respect to any such possible
transaction, including the status thereof.
You hereby acknowledge that the Evaluation Material is being furnished to
you in consideration of your agreement that you will not propose to the Company
or any other person any transaction between you and the Company and/or its
security holders or involving any of its securities or security holders unless
the Company shall have requested in writing that you make such a proposal, and
that you will not acquire, or assist, advise or encourage any other persons in
acquiring, directly or indirectly, control of the Company or any of the
Company's securities, businesses or assets for a period of three (3) years from
the date of this letter unless the Company shall have consented in advance in
writing to such acquisition. You also agree that the Company shall be entitled
to equitable relief, including injunction, in the event of any breach of the
provisions of this paragraph and that you shall not oppose the granting of such
relief.
You understand and agree that the Company is free to conduct the process
for any proposed transaction with you in its sole discretion and that any
procedure relating to such proposed transaction may be changed at any time
without prior notice to you. You further understand that no failure or delay by
the Company in exercising any rights or powers under this Agreement will operate
as a waiver of those rights or powers.
Although the Company has endeavored to include in the Evaluation Material
information known to it that it believes to be relevant for the purpose of your
investigation, you understand that neither the Company nor any of its
representatives or advisors have made or make any representation or warranty as
to the accuracy or completeness of the Evaluation Material. You agree that
neither the Company nor its representatives or advisors shall have any liability
to you or any of your representatives or advisors resulting from the use of the
Evaluation Material.
In the event that you do not proceed with the transaction which is the
subject of this letter within a reasonable time, you shall promptly redeliver to
the Company all written Evaluation Material and any other written material
containing or reflecting any information in the Evaluation Material (whether
prepared by the Company, its advisors or otherwise) and will not retain any
copies, extracts or other reproductions in whole or in part of such written
material. All documents, memoranda, notes and other writings whatsoever prepared
by you or your advisors based on the information in the Evaluation Material
shall be destroyed, and such destruction shall be certified in writing to the
Company by an authorized officer supervising such destruction.
You agree that unless and until a definitive agreement between the Company
and you with respect to any transaction referred to in the first paragraph of
this letter has been executed and delivered, neither the Company nor you will be
under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this or any written or oral expression with respect to
such a transaction by any of its directors, officers, employees, agents or any
other representatives or its advisors or representatives thereof except, in the
case of this letter, for the matters specifically agreed to herein. The
agreement set forth in this paragraph may be modified or waived only by a
separate writing by the Company and you expressly so modifying or waiving such
agreement.
<PAGE> 3
July 7, 2000
Page 3
You agree that this Agreement shall be interpreted under the federal and
New York laws and that by entering into this Agreement, you consent to
jurisdiction and venue in New York County, New York, with respect to any actions
arising out of this Agreement.
Very truly yours,
Block Drug Company, Inc.
By: /s/ GOLDMAN, SACHS & CO.
------------------------------------
Goldman, Sachs & Co.
On behalf of Block Drug Company,
Inc.
Confirmed and Agreed to:
Smithkline Beecham Corporation
By: /s/ JOE HARRIS
------------------------------------
Date: July 7, 2000
-----------------------------------
