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Exhibit (e)(3)
October 5, 2000
STRICTLY PRIVATE & CONFIDENTIAL
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Bodycote International plc
Hulley Road
Hurdsfield
Macclesfield
Cheshire, SK10 2SG
Attention: Mr. David Landless
Finance Director
In connection with your consideration of a possible negotiated transaction
by you or one or more of your affiliates (as the term "affiliate" is defined in
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), involving
Lindberg Corporation (the "Company") (a "Transaction"), the Company, Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), acting as the Company's
exclusive financial advisor in connection with the proposed Transaction, and
their respective advisors and agents are prepared to make available to you
certain information which is non-public, confidential or proprietary in nature.
1. By execution of this letter agreement (the "Agreement"), you agree to
treat confidentially all such information whether written, electronic
or oral (the "Evaluation Material"), and to observe the terms and
conditions set forth herein. You also agree that, subject to the
fourth paragraph of this Agreement, prior to giving any of your
directors, officers, employees, partners, affiliates, agents, advisors
or representatives (hereinafter, "Representatives") access to any of
the Evaluation Material you shall provide such Representatives with a
copy of this Agreement. You further agree to be responsible for any
breach of this Agreement that relates to the improper use or
disclosure of Evaluation Material by any of your Representatives as if
they were parties hereto.
2. For purposes of this Agreement, Evaluation Material shall include,
without limitation, all information, data, reports, analyses,
compilations, studies, interpretations, projections, forecasts,
records, and other materials (whether prepared by the Company, DLJ,
their advisers, agents or otherwise and in whatever form maintained,
whether documentary, computerized or otherwise), regardless of the
form of communication, that contain or otherwise reflect information
concerning the Company that you or your Representatives may be
provided by or on behalf of the Company or DLJ in the course of your
evaluation of a possible Transaction. The term "Evaluation Material"
shall also include all information, data, reports, analyses,
computations, studies, interpretations, projections, forecasts,
records, notes, memoranda, summaries or other materials in whatever
form maintained, whether documentary, computerized or otherwise,
whether prepared by you or your Representatives or others, that
contain or otherwise reflect or are based upon, in whole or in part,
any such Evaluation Material or that reflect your review of, or
interest in, all or any portion of the Company (the "Notes"). This
Agreement shall be inoperative as to those particular portions of the
Evaluation Material that (i) are or become generally
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David Landless
Bodycote International plc
Page 2 October 5, 2000
available to the public other than as result of a disclosure by you or
any of your Representatives contrary to the terms of this Agreement,
or, (ii) were available to you on a non-confidential basis prior to
the disclosure of such Evaluation Material to you pursuant to this
Agreement, or become so available to you, provided that the source of
such information was not known by you or any of your Representatives,
after reasonable inquiry, to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of
confidentiality to the Company or any of its affiliates with respect
to such material.
3. You agree that you will not use the Evaluation Material for any
purpose other than determining whether you wish to enter into a
Transaction. You agree not to disclose or allow disclosure to others
of any Evaluation Material; provided that, subject to the second
paragraph of this Agreement, you may disclose Evaluation Material to
your Representatives only to the extent such Representatives need to
know such information to permit them to assist you in making the
determination referred to in the prior sentence. You shall maintain a
list of those of your Representatives to whom Evaluation Material has
been disclosed (which list shall be presented to the Company upon
request) and shall use commercially reasonable best efforts (including
but not limited to court proceedings as such would be commercially
reasonable), at your sole expense, to restrain your Representatives
from prohibited or unauthorized disclosure or use of the Evaluation
Material. In furtherance of the foregoing, you agree that you will not
use the Evaluation Material in any way directly or indirectly
detrimental to the Company. In particular you agree that for a period
of 12 months from the date of the signing of this Agreement you and
your affiliates will not knowingly, as a result of knowledge or
information obtained from the Evaluation Material, employ or attempt
to employ an employee of the Company or any of its subsidiaries whose
annual compensation exceeded $50,000 in the year prior to the earlier
of the date of such solicitation or the date of hire, provided,
however, that you will not be precluded from hiring any such employee
who (i) responds to a public advertisement placed by you, (ii) has
terminated employment with the Company or its subsidiary prior to the
commencement of solicitation of such employee, or (iii) who seeks
employment with you without solicitation by you. You acknowledge that
the Evaluation Material is and at all times remains the sole and
exclusive property of the Company, and the Company has the exclusive
right, title and interest to such Evaluation Material. No right or
license, by implication or otherwise, is granted by the Company as a
result of disclosure of Evaluation Material hereunder.
4. In addition, each of you and the Company agree not to make any
disclosure (i) that the Company or you are considering a possible
Transaction or that you, DLJ or the Company are having or have had
discussions, or that you have received Evaluation Material from the
Company or DLJ concerning a Transaction or (ii) concerning any
discussions related to a possible Transaction, including the status
thereof, any termination thereof, any decision on your part to no
longer consider any such Transaction or any of the terms, conditions
or other facts with respect thereto; provided that you and the Company
may make such disclosure if the disclosing party has been advised by
its counsel, that such disclosure must be made by the disclosing party
in order that the disclosing party not commit a violation of law
(including without limitation, any requirement or policy of the
NASDAQ, a stock exchange or other regulatory authority) and, prior to
such disclosure, the disclosing party promptly advises and consults
with the other party and its legal counsel concerning the information
the disclosing party proposes to disclose. Without limiting the
generality of the foregoing, you further agree that, without the prior
consent
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David Landless
Bodycote International plc
Page 3 October 5, 2000
of the Company, you will not, directly or indirectly, for a period of
12 months from the date of this Agreement, enter into any agreement,
arrangement or understanding with any person regarding a possible
Transaction, whether or not negotiated. The term "person" as used in
this Agreement shall be broadly interpreted to include, without
limitation, the media and any corporation, partnership, group,
individual or other entity.
5. Although the Company and DLJ have endeavored to include in the
Evaluation Material information known to them which they believe to be
relevant for the purpose of your investigation, you understand and
agree that none of the Company, DLJ or any of their employees,
partners, affiliates, agents, advisors or representatives (i) have
made or make any representation or warranty, expressed or implied, as
to the accuracy or completeness of the Evaluation Material or (ii)
except to the extent, if any, provided in any subsequent agreement
with any such person, shall have any liability whatsoever to you or
your Representatives relating to or resulting from the use of the
Evaluation Material or any errors therein or omissions therefrom.
6. Without limiting the generality of the immediately preceding
paragraph, the Evaluation Material may include certain statements,
estimates and projections provided by the Company or DLJ with respect
to the anticipated future performance of the Company. Such statements,
estimates and projections reflect various assumptions made by the
Company concerning anticipated results, which assumptions may or may
not prove to be correct. No representations are made as to the
accuracy of such assumptions, statements, estimates or projections,
including the budget. The only information that will have any legal
effect will be the subject of representations in a definitive
agreement; in no event will such definitive agreement contain any
representation as to the projections.
7. In the event that you or anyone to whom you transmit any Evaluation
Material in accordance with this Agreement is requested or required
(by deposition, interrogatories, requests for information or documents
in legal proceedings, subpoenas, civil investigative demand, or
similar process or otherwise), to disclose any Evaluation Material,
you will give the Company prompt written notice of such request or
requirement so that the Company may seek an appropriate protective
order or other remedy and/or waive compliance with the provisions of
this Agreement, and you will cooperate with the Company to obtain such
protective order; provided however that, the Company shall bear your
out-of-pocket expenses, other than legal expenses, in connection with
such cooperation. In the event that such protective order or other
remedy is not obtained or the Company waives compliance with the
relevant provisions of this Agreement, you (or such other persons to
whom such request is directed) will furnish only that portion of the
Evaluation Material which, in the judgment of your counsel, is legally
required to be disclosed. It is further agreed that, if in the absence
of a protective order you (or such other persons to whom such request
is directed) are nonetheless legally compelled to disclose such
information, you may make such disclosure without liability hereunder,
provided that you give the Company notice of the information to be
disclosed as far in advance of its disclosure as is reasonably
practicable and, upon the Company's request, use commercially
reasonable best efforts to obtain assurances that confidential
treatment will be accorded to such information and, provided further,
that such disclosure was not caused by and did not result from a
previous disclosure by you or any of your Representatives not
permitted hereunder.
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David Landless
Bodycote International plc
Page 4 October 5, 2000
8. If you decide that you do not wish to proceed with a Transaction, you
will promptly notify DLJ of that decision. In that case, or if the
Company shall elect at any time to terminate further access by you to
the Evaluation Material for any reason, you will, within five business
days after receiving a request therefor, return to us all copies of
the tangible Evaluation Material (other than Notes) in the possession
of you or your affiliates or your Representatives, will destroy all
Notes and will further deliver to DLJ and the Company a certificate
executed by one of your duly authorized executive officers indicating
that the requirements of this sentence have been satisfied in full.
Notwithstanding the return or destruction of Evaluation Material and
Notes, you and your Representatives will continue to be bound by your
obligations of confidentiality and other obligations hereunder.
9. You hereby acknowledge that you are aware, and will advise your
Representatives who are informed of the subject matter of this
Agreement, that the securities laws of the United States prohibit any
person who has material, non-public information concerning the Company
or a possible Transaction involving the Company from purchasing or
selling securities in reliance upon such information or from
communicating such information to any other person or entity under
circumstances in which it is reasonably foreseeable that such person
or entity is likely to purchase or sell such securities in reliance
upon such information.
10. You agree that, for a period of one year from the date of this
agreement, unless such shall have been specifically invited in writing
by the Board of Directors of the Company, neither you nor any of your
Representatives on your behalf will in any manner, directly or
indirectly, (a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist
any other person to effect or seek, offer or propose (whether publicly
or otherwise) to effect or participate in, (i) any acquisition of any
securities (or beneficial ownership thereof) or assets of the Company
or any of its subsidiaries; (ii) any tender or exchange offer or
merger or other business combination involving the Company or any of
its subsidiaries; (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with
respect to the Company or any of its subsidiaries; or (iv) any
"solicitation" of "proxies" (as such terms are used in the proxy rules
of the Securities and Exchange Commission) or consents to vote any
voting securities of the Company, (b) form, join or in any way
participate in a "group" (as defined under the Exchange Act) which
seeks to control or influence the management, the Board of Directors
or policies of the Company, (c) otherwise act, alone or in concert
with others, to seek or offer to control or influence the management,
Board of Directors or policies of the Company, (d) except for
disclosure permitted by paragraph 4, take any action which might force
the Company to make a public announcement regarding any of the types
of matters set forth in (a) above, or (e) enter into any discussions
or arrangements with any third party with respect to any of the
foregoing. You also agree during any such period not to request the
Company (or its directors, officers, employees or agents), directly or
indirectly, to amend or waive any provision of this paragraph
(including this sentence).
Notwithstanding the previous paragraph, if (a) the Board of Directors
of the Company approves a transaction with any person (other than the
Company or any employee benefit plans of the Company), and (b) such
transaction would 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, then you shall be permitted to take any
action otherwise
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David Landless
Bodycote International plc
Page 5 October 5, 2000
prohibited by this section 10 provided that such actions are taken in
connection with an offer by you to the Company's stockholders of a
transaction which is financially equal to or superior to such
transaction.
11. You understand that (i) the Company and DLJ shall conduct the process
for a possible Transaction as they in their sole discretion shall
determine (including, without limitation, negotiating with any
prospective buyer and entering into definitive agreements without
prior notice to you or any other person), (ii) any procedures relating
to such a Transaction may be changed at any time without notice to you
or any other person, (iii) the Company shall have the right to reject
or accept any potential buyer, proposal or offer, for any reason
whatsoever, in its sole discretion, and (iv) unless and until a
definitive agreement between you and the Company with regard to any
Transaction has been executed and delivered, the Company (and its
directors, officers, employees, affiliates, agents, DLJ or any other
representatives or its advisers or representatives thereof), shall not
be under any legal obligation of any kind to you or your
Representatives with respect to such a Transaction by virtue of this
Agreement or any written or oral expression with respect to such a
Transaction except, in the case of this Agreement, for the matters
specifically agreed to herein.
12. It is further understood and agreed that DLJ will arrange for
appropriate contacts for due diligence purposes. It is also understood
and agreed that all (i) communications regarding a possible
Transaction, (ii) requests for additional information, (iii) requests
for facility tours or management meetings and (iv) discussions or
questions regarding procedures, will be submitted or directed
exclusively to DLJ, and that none of you or your Representatives who
are aware of the Evaluation Material and/or the possibility of a
Transaction will initiate or cause to be initiated any communication
with any director, officer or employee of the Company concerning the
Evaluation Material or a Transaction.
13. You agree that money damages would not be a sufficient remedy for any
breach of this Agreement by you or your Representatives, that in
addition to all other remedies the Company shall be entitled to
specific performance and injunctive or other equitable relief as a
remedy for any such breach. In the event of litigation relating to
this Agreement, if a court of competent jurisdiction determines that
you have breached this Agreement, you shall be liable and pay to the
Company the reasonable legal fees incurred by the Company in
connection with such litigation, including any appeal therefrom.
14. This Agreement shall not be assignable except by operation of law to a
successor by merger; provided, however, that such successor shall be
bound by all the terms of this Agreement.
15. All modifications of, waivers of and amendments to this Agreement or
any part hereof must be in writing signed on behalf of you and the
Company or by you and DLJ, as agent for the Company. You acknowledge
that the Company is intended to be benefited by this Agreement and
that the Company shall be entitled, either alone or together with DLJ,
to enforce this Agreement and to obtain for itself the benefit of any
remedies that may be available for the breach hereof.
16. It is further understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor
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David Landless
Bodycote International plc
Page 6 October 5, 2000
shall any single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege hereunder.
17. You hereby irrevocably and unconditionally submit to the exclusive
jurisdiction of any State or Federal court sitting in Chicago,
Illinois over any suit, action or proceeding arising out of or
relating to this Agreement. You hereby agree that service of any
process, summons, notice or document by U.S. registered mail or
courier addressed to you shall be effective service of process for any
action, suit or proceeding brought against you in any such court. You
hereby irrevocably and unconditionally waive any right to trial by
jury and any objection to the laying of venue of any such suit, action
or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. You agree that a final judgment in any such
suit, action or proceeding brought in any such court shall be
conclusive and binding upon you and may be enforced in any other
courts to whose jurisdiction you are or may be subject, by suit upon
such judgment.
18. In the event that any provision or portion of this Agreement is
determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by applicable law.
19. This Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois applicable
to contracts made and to be enforced therein.
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David Landless
Bodycote International plc
Page 7 October 5, 2000
If you are in agreement with the foregoing, please so indicate by signing,
dating and returning one copy of this Agreement, which will constitute our
agreement with respect to the matters set forth herein.
Very truly yours,
LINDBERG CORPORATION
By: /s/ Todd L. Noffke
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Todd L. Noffke
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
as Exclusive Agent
Agreed and Accepted:
BODYCOTE INTERNATIONAL PLC
By: /s/ David Landless
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Title: Finance Director
Date: October 6, 2000
cc: Chris Treneman - Dresdner Kleinwort Benson (London)
Jon Lamont - Dresdner Kleinwort Benson (New York)
John H. Bitner - Bell, Boyd & Lloyd (Lindberg Counsel)
Christopher C. McMahon - Donaldson, Lufkin & Jenrette
Stephen S. Penley - Executive Vice President, Chief Financial Officer -
Lindberg Corporation
