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EXHIBIT (d)(4)
FINAL
September 9, 1999
Harmon Industries, Inc,
1600 N.E. Coronado Drive
Blue Springs, MO 64014
Ladies and Gentlemen:
In connection with our consideration of a possible combination of
Harmon Industries, Inc. (the "COMPANY") with GE-Harris Railway Electronics,
L.L.C. ("GE HARRIS") or an affiliate of GE Harris, in one or a series of
transactions (each, a "TRANSACTION"), we understand that the Company is prepared
to furnish (or cause to be furnished) to General Electric Company ("GE") certain
confidential, proprietary and material information concerning the business and
properties of the Company. All such information, whether furnished directly or
indirectly on or before or after the date of this letter (this "AGREEMENT") is
collectively referred to in this Agreement as "EVALUATION MATERIAL."
We acknowledge that it is imperative that the existence and subject
matter of these discussions and all Evaluation Material remain confidential.
Accordingly, we agree that we will keep confidential the Evaluation Material
(including Notes, as defined below, to the extent derived from the Evaluation
Material) and that each of our affiliates and the directors, officers,
employees, agents, advisors, and representatives (collectively,
"Representatives") of GE and its affiliates to whom Evaluation Material is
provided will be advised of the confidential nature of the Evaluation Material
and directed to abide by the terms of this Agreement (including, with respect to
disclosure of discussions or negotiations between the parties, in accordance
with paragraph (c) below). We agree to be responsible for any breach of this
Agreement by our affiliates or Representatives. An affiliate of a person means
any other person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such person.
GE further agrees:
(a) not to use any Evaluation Material (including, for the avoidance
of doubt, the use of any margin information in connection with supply or
other commercial arrangements between the parties), including any notes,
summaries, reports, analyses, or other material derived by us, our
affiliates, or our Representatives in whole or in part from the Evaluation
Material in whatever form maintained (collectively, "NOTES"), in
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September 9, 1999
Page 2
each case except for the purpose of evaluating a possible Transaction and
the terms thereof;
(b) to use the same degree of care as with our own confidential
information to prevent disclosure of any Evaluation Material except to our
affiliates or to our Representatives (but not to News or the financial
services businesses of any affiliate of GE to the extent described below),
in each case only to the extent necessary to permit them to assist us in
making the evaluations referred to in clause (a) above; and
(c) except as may be required by law, not to disclose to any person,
other than those persons described in clause (b) above, that the
Evaluation Material has been made available to us or our affiliates and
Representatives or that we are having any discussions or negotiations with
the Company with respect thereto.
The obligations to keep Evaluation Material confidential and those
set forth in paragraph (c) above will not be deemed to be breached by any
disclosure by National Broadcasting Company, Inc. or any other GE affiliate in
the ordinary course of their business of disseminating news and information
(collectively, "NEWS"), PROVIDED that such disclosure does not result from a
breach of the obligations of GE or any of its other affiliates or
Representatives under this Agreement.
The Company may elect at any time by written notice to us to
terminate further access to the Evaluation Material. In that case we will
promptly return or destroy (with such destruction to be certified to the Company
upon request) all Evaluation Material and Notes, without retaining any copy
thereof, except that one copy of the Evaluation Material and all Notes may be
retained solely in the files of our legal counsel for compliance purposes or for
the purpose of defending or maintaining any litigation (including any
administrative proceeding) relating to this Agreement. No such termination or
return of the Evaluation Material will affect our obligations under this
Agreement, all of which will continue in effect.
This Agreement shall be inoperative as to particular portions of the
Evaluation Material if such information (i) becomes generally available to the
public, other than as a result of a disclosure by us, our Representatives, or
our affiliates in contravention of this Agreement, (ii) was available to us or
our affiliates or Representatives on a non-confidential basis prior to its
disclosure to us by the Company or its Representatives, (iii) becomes available
to us or our affiliates or Representatives on a non-confidential basis from a
source other than the Company or its Representatives who to the best of our
knowledge is not subject to a confidentiality agreement with, or other
obligation of secrecy to, the Company prohibiting such source to make such
disclosure, or (iv) was independently developed by us or our affiliates or
Representatives without reference to the Evaluation Material.
If we, our affiliates, or our Representatives are requested or
required (by subpoena, civil investigative demand, or similar legal process) to
make any disclosure prohibited by this Agreement, we agree to provide the
Company with prompt notice of each such request, so that the Company may seek an
appropriate protective order or waive compliance with the
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September 9, 1999
Page 3
provisions of this Agreement or both. If after providing the Company with such
prompt notice (as provided above) and absent the entry of a protective order or
the receipt of a waiver under this Agreement, we, our affiliates, or our
Representatives are, on the written advice of counsel, legally compelled to
disclose Evaluation Material to avoid liability for legal sanction, we may
disclose such information to the extent required without liability under this
Agreement.
With respect to all Evaluation Material furnished hereunder, we
understand and agree that neither the Company nor any of its Representatives
makes any representation or warranty, express or implied, as to the accuracy or
completeness thereof or otherwise. Only those representations and warranties
that may be made in a definitive written agreement for a Transaction, when, as,
and if executed, shall have any legal effect.
We agree that without the written consent of the Company, for a
period of one year from the date of this Agreement, neither GE Transportation
Systems nor GE-Harris (including, for the avoidance of doubt, any subsidiary of
GE or GE-Harris that is part of GE's Transportation Systems business) will
solicit the employment of or hire any current executive officer of the Company
or any current employee of the Company performing an engineering function, so
long as such officer or employee is employed by the Company (including any of
its affiliates); PROVIDED, HOWEVER, that a solicitation (and any resulting
hiring) shall not be deemed a breach of this Agreement if (i) the person who
performs such solicitation has no access to the Evaluation Material and (ii) no
person who has access to the Evaluation Material has actual advance knowledge of
such solicitation; and, PROVIDED FURTHER, HOWEVER, that the prohibitions against
solicitation or hiring of an executive or covered employee as provided above
shall not be deemed breached if a search was initiated prior to the date of this
Agreement or if at any time an executive or covered employee shall initiate a
search for employment within GE. "Solicit for employment" and "hire" shall not
be deemed to include general solicitations of employment not specifically
directed toward employees of the Company or any hiring resulting from such
solicitation.
We agree that for a period of 18 months following the date of this
Agreement, neither GE nor any of its subsidiaries will, except in connection
with a Negotiated Transaction (as defined below), directly or indirectly, (i)
acquire or agree, or publicly offer, seek or propose, to acquire any voting
securities or all or substantially all of the assets of the Company and its
subsidiaries or options to acquire such securities or assets or publicly offer,
seek or propose, to enter into any merger, consolidation, recapitalization,
business combination or similar transaction involving the Company, (ii) publicly
seek or propose to influence or control the management or policies of the
Company or to obtain representation on the Company's Board of Directors, or
solicit or participate in the solicitation of any proxies or consents with
respect to the securities of the Company, (iii) enter into any discussions,
negotiations, arrangements or understandings, or form or participate in any
"group", with any third party, with respect to any of the foregoing, or (iv)
except as provided below, make any public announcement with respect to any of
the foregoing or take any action that is likely to, in the reasonable judgment
of counsel to GE, legally compel the Company to make a public announcement with
respect to this Agreement or the foregoing. For purposes of this paragraph,
"NEGOTIATED TRANSACTION" shall mean a transaction that has been approved by the
Board of Directors of the Company. For the avoidance
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September 9, 1999
Page 4
of doubt, nothing in this Agreement shall preclude initiation of discussions
between the parties regarding a potential Transaction by one of the parties.
Notwithstanding the foregoing, nothing in this paragraph shall be construed to
limit the activities in the ordinary course of business of the financial
services business of any affiliate of GE, including ordinary brokerage,
discretionary money management, financial advisory, arbitrage, sales, trading
and passive market making activities, so long as (i) GE has established a
"Chinese Wall" between individuals working on the Transaction or otherwise
reviewing the Evaluation Material and those employees of such financial services
businesses involved in such activities, and (ii) such activities are undertaken
in accordance with such "Chinese Wall" policies and procedures and applicable
law.
Notwithstanding any provision of this Agreement, GE and its
subsidiaries, or GE and its affiliates and Representatives, as the context
requires, will be released from (i) the obligations of the preceding paragraph
and (ii) the other obligations under this Agreement, in the case of such other
obligations to the extent necessary to comply with any requirements of law in
making a competing offer, upon the occurrence of any event that is reasonably
likely, in the reasonable judgment of the Company, to lead to a Transfer of
Control of the Company. For purposes of this Agreement, "Transfer of Control of
the Company" shall mean (x) the sale by the Company of equity securities of, or
a merger, consolidation, share exchange or similar transaction involving, the
Company, immediately after the consummation of which the shareholders of the
Company (as determined immediately prior to the consummation) would hold less
than 80% of the equity securities of the surviving entity; PROVIDED that GE and
its subsidiaries, affiliates and Representatives, as the case may be, shall not
be released from such obligations in the event such transaction is for the
purpose of an acquisition by the Company of another entity (or all or
substantially all of the assets of such entity) if the shareholders of the
Company (as determined immediately prior to the consummation) would hold at
least 50% of the equity securities of the surviving entity; (y) the sale or
other transfer of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole (including in connection with a joint venture or
similar transaction); or (z) a tender offer for more than 20% of the outstanding
equity securities of the Company and the Board of Directors of the Company
endorses the tender offer or fails to utilize the provisions of the Company's
Rights Plan to oppose such tender offer.
In furtherance of the preceding two paragraphs and for so long as GE
remains obligated thereunder, the Company agrees to notify GE promptly, and as
soon as practicable but in no event later than 48 hours, after the Company
becomes aware of the occurrence of any event that is reasonably likely, in the
reasonable judgment of the Company, to lead to a Transfer of Control of the
Company, including, but not limited to, commencement by a third party, within
the meaning of Rule 14d-2 of the Exchange Act, of an unsolicited tender offer to
acquire more than 20% of the outstanding equity interests of the Company or the
initiation of a proxy contest, for the purpose of gaining control of the
Company, in connection with any special or annual meeting of the Company's
shareholders. Notwithstanding the preceding sentence, the Company shall not be
obligated to notify GE regarding any such event if after the date of this
Agreement, following good faith negotiations, the discussions regarding a
potential Transaction have been terminated.
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September 9, 1999
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Each party acknowledges that money damages may not be a sufficient
remedy for any breach of its obligations under this Agreement. Accordingly, in
the event of any such breach or threatened breach, each party, in addition to
any other remedy at law or in equity that it may have, shall be entitled to
equitable relief, including injunctive relief or specific performance or both.
Neither party shall be entitled to any special, consequential, indirect,
punitive or exemplary damages, including loss of profits, as a result of any
breach of this Agreement, regardless of whether a claim is asserted under
contract, tort or other theory, except in the event of a willful breach by the
other party, but only to the extent the non-breaching party is able to
demonstrate that it has suffered damages as a result of such willful breach.
Except as otherwise set forth herein, this Agreement shall (i) be
binding upon GE and the Company and our respective affiliates and
Representatives, (ii) be governed by and construed in accordance with the laws
of the State of New York, and (iii) expire on the second anniversary of the date
hereof. If you are in agreement with the foregoing, please sign and return one
copy of this letter, which thereupon will constitute our agreement with respect
to the subject matter hereof.
Very truly yours,
GENERAL ELECTRIC COMPANY
By: /s/ John G. Rice
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Name: John G. Rice
Title: Vice President
Agreed:
HARMON INDUSTRIES, INC.
By: /s/ Robert E. Harmon 9-14-99
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Name: Robert E. Harmon
Title: Chairman
