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EXHIBIT 99.(d)(2)
[LETTERHEAD]
Litton
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Corporate Litton Industries, Inc.
21240 Burbank Boulevard
Woodland Hills, California
91367-5575
June 23, 2000
Tel 818-598-5955
Fax 818-598-3313
Mr. Kent Kresa [email protected]
Chairman, President and CEO
Northrop Grumman Corporation Michael R. Brown
1840 Century Park East Chairman and
Los Angeles, CA 90067 Chief Executive Officer
CONFIDENTIALITY AGREEMENT
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Dear Mr. Kresa:
Each of our corporations (each, a `Party") Is engaged in the development,
manufacture and sale of various products, services and systems. In connection
with our possible mutual interest In exploring a transaction (a "Transaction")
Involving some form of teaming arrangement, Joint endeavor or other combination,
we have agreed to exchange certain Information about our respective businesses
(the "Businesses) that is necessary or useful in evaluating the advisability of
consummating a Transaction.
All such information (whether written or oral) that either Party (the
"Disclosing Party") furnishes (whether before or after the date hereof) to the
other (the "Receiving Party"), all copies thereof and all analyses,
compilations, forecasts, studies or other documents prepared by the Receiving
Party in connection with its or their review of, or its interest in, a
Transaction that contain or reflect any such information are hereinafter
referred to as the "Information." The term Information will not, however,
Include information that (i) is or becomes publicly available other than as a
result of a disclosure by the Receiving Party, (ii) is or becomes available to
the Receiving Party on a non-confidential basis from a source (other than the
Disclosing Party or its directors, officers, or employees) that is not
prohibited from disclosing such information to the Receiving Party by a legal,
contractual or fiduciary obligation to the Disclosing Party, or (iii) is already
in the Receiving Party's possession or known by the Receiving Party prior to the
above date, provided such Information is not known by the Receiving Party to be
subject to another confidentiality agreement with or other obligation of secrecy
to the Disclosing Party or another party. It is the intent of the Parties that,
absent further agreement on this subject, the Information to be provided in
accordance with the terms of this Agreement
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Mr. Kent Kresa
June 23, 2000
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shall be disclosed only to a limited group of each Parties' directors, officers
and senior employees and shall not be disclosed to any outside accountants,
attorneys or other advisors or representatives. Each party shall notify the
other of the identity of those persons included in the limited group for such
disclosures.
By signing this letter, each Party agrees that:
1. The Receiving Party (i) will keep the Information confidential and will not
(except as required by applicable law, regulation or legal process, and only
after compliance with paragraph 3 below), without the prior written consent of
the Disclosing Party, disclose any Information in any manner whatsoever, and
(ii) will not use any Information other than in connection with its
consideration, evaluation, negotiation or consummation of a Transaction.
2. Each Party agrees not to disclose (except as required by applicable law,
regulation or legal process, and only after compliance with paragraph 3 below),
without the prior written consent of the other Party to any person the fact
that the Information exists or has been made available, that a Transaction is
being considered or that discussions or negotiations are taking or have taken
place concerning a Transaction. If either Party is requested (whether by the
press, by any stock exchange or otherwise) to confirm, deny or otherwise comment
on the pendency of a Transaction which is subject to the terms of this
Agreement, the Parties agree that their responses with respect to such
Transaction will be limited to a statement that it is the company's policy not
to comment on merger and acquisition matters; provided, however, that if either
Party is advised by legal counsel that such a response will not satisfy any
applicable disclosure obligation, it will promptly advise the other Party and
the Parties will work in good faith to coordinate a response to such disclosure
obligation.
3. In the event that a Party is requested pursuant to, or required by,
applicable law, regulation or legal process to disclose any of the Information,
it will promptly so notify the other Party so that a protective order or other
appropriate remedy may be sought by the other Party. In the event that no such
protective order or other remedy is obtained, or that the other Party waives
compliance with the terms of this Confidentiality Agreement, such Party will
furnish only that portion of the Information that it is advised by legal counsel
is legally required and will exercise all reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded the Information.
4. If either Party decides not to proceed with a Transaction, it will promptly
inform the other Party of that decision and both Parties will either destroy all
written Information or return it to the Disclosing Party; provided however, that
the both parties
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Mr. Kent Kresa
June 23, 2000
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shall be entitled to retain one copy of any such information in their respective
legal departments for the sole purpose of evaluating any claim of non-compliance
with this agreement. Any oral Information will continue to be subject to the
terms of this Confidentiality Agreement.
5. Each Party acknowledges that neither the other Party, nor any of its
officers, directors, employees, representatives, agents or controlling persons
within the meaning of Section 20 of the Securities Exchange Act of 1934 as
amended ("Affiliates") make any express or implied representation or warranty as
to the accuracy or completeness of the Information, and each Party agrees that
no such person will have any liability relating to the Information or for any
errors therein or omissions therefrom. Each Party further agrees that it is not
entitled to rely on the accuracy or completeness of the Information and that it
will be entitled to rely solely on such representations and warranties as may be
included in any definitive agreement with respect to the Transaction, subject to
such limitations and restrictions as may be contained therein.
6. Each Party will advise its officers, directors and employees who are
informed of the matters that are the subject of this Confidentiality Agreement
of the restrictions imposed by the United States securities laws on the
purchase or sale of securities by any person who has received material,
non-public Information from the issuer of such securities and on the
communication of such information to any other person when it is reasonably
foreseeable that such other person is likely to purchase or sell such securities
in reliance upon such Information.
7. Each Party will designate in writing a point of contact for all (i)
communications regarding a Transaction, (ii) requests for additional
Information, facility tours or management meetings, and (iii) discussions or
questions regarding procedures with respect to evaluation or negotiation of a
Transaction. Except for contacts specifically authorized in accordance with the
preceding sentence, each party agrees not to have any other contacts with the
other Party, or any of its officers, directors, employees or agents concerning
the consideration, evaluation, negotiation or consummation of a Transaction.
8. Unless and until a written definitive agreement that provides for a
Transaction has been executed, neither Party nor any Affiliate of a Party will
have any liability to the other Party with respect to a Transaction, whether by
virtue of this Confidentiality Agreement or any other written or oral expression
with respect to a Transaction or otherwise. Without limiting the generality of
the foregoing, the Parties acknowledge that, prior to the execution of such a
written definitive agreement providing for a
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Mr. Kent Kresa
June 23, 2000
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Transaction, each of them may freely investigate, negotiate, commit to, and take
any other actions which they may in their sole discretion determine, with
respect to any type of business arrangement or transaction, regardless of
whether such actions or arrangements would be inconsistent with, or render
impractical, a Transaction between the Parties hereto and that either Party may
at any time terminate discussion of a Transaction with the other Party.
9. Each Party acknowledges that remedies at law are inadequate to protect the
Disclosing Party against any actual or threatened breach of this Confidentiality
Agreement by the Receiving Party and, without prejudice to any other rights and
remedies otherwise available to the Disclosing Party, the Receiving Party agrees
to the granting of injunctive relief in favor of the Disclosing Party without
proof of actual damages. In the event of litigation relating to this
Confidentiality Agreement, the prevailing Party will be entitled to recover from
the other Party its costs and expenses (including, without limitation,
reasonable legal fees and expenses) incurred in connection with all such
litigation.
10. Each Party agrees that no failure or delay by the other Party in exercising
any right, power, or privilege hereunder will operate as a waiver thereof, nor
will any single or partial exercise thereof preclude any other or further
exercise thereof of the exercise of any right, power or privilege hereunder.
11. In consideration of each Party providing the Information to the other,
without the other Party's prior written consent, for a period of two years from
the date hereof neither Party will solicit for employment any of the directors,
officers or employees of the other Party with whom they have had dealings under
the terms of this Agreement; provided, however, that each Party shall have the
right to hire any of the directors, officers or employees of the other Party who
may approach such Party on their own Initiative or in response to a newspaper
advertizement or similar general solicitation.
12. For a period of two (2) years from the date of this letter agreement,
unless specifically consented to in advance at the direction of the other Party,
neither Party shall, directly or indirectly: (i) in any manner acquire or offer
to acquire, or agree to acquire, directly or indirectly more than one percent
(1%) of any securities of the other Party or any of its subsidiaries or any
direct or indirect rights, options or interests with respect to any securities
or material assets of the other Party or any of its subsidiaries (provided,
however, that this subsection (I) shall not limit the exercise of fiduciary
duties with respect to either Parties' pension and employee savings plans by the
investment managers of such plans over whom the Parties' management exercises no
discretion and with whom the Parties' management has had, and will have, no
communications
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Mr. Kent Kresa
June 23, 2000
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Whatsoever with respect to the subject matter of this Confidentiality
Agreement); (ii) solicit proxies or consents or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the,Securities
Exchange Act of 1934, as amended (the "Exchange Act") of proxies or consents
with respect to securities of the other Party or any of its subsidiaries or
initiate any stockholder proposal with respect to the other Party or any of its
subsidiaries; (iii) seek to advise, control or influence the management, Board
of Directors or policies of the other Party or any of its subsidiaries(other
than with respect to matters and Issues not relating to the subject matter of
this paragraph), or take action for the purpose of convening a stockholders
meeting of the other Party; (iv) make any proposal or any public announcement
relating to a tender or exchange offer for securities of the other Party or any
of its subsidiaries or a merger, business combination, sale of substantially all
assets, liquidation, consolidation or other extraordinary corporate transaction
relating to the other Party or any of its subsidiaries or take action which
might require the other Party to make a public announcement regarding any of the
foregoing; (v) form, join or in any way participate in a "group" within the
meaning of Section 13 (d)(3) of the Exchange Act for the purpose of acquiring,
holding, voting or disposing of securities of the other Party or any of its
subsidiaries or taking any other actions restricted or prohibited under clauses
(i) through (iv) of this paragraph, or take any steps in connection therewith;
(vi) enter into any discussions, negotiations, arrangements or understandings
with any third party with respect to any of the foregoing; (vii) disclose any
Intention, plan or arrangements inconsistent with the foregoing; or (viii)
advise, assist or encourage any other person in connection with any of the
foregoing. If, in the absence of a violation of this paragraph 12 by either of
the Parties, any other person or entity undertakes, with respect to one of the
Parties (the "Target Party") an action or combination of actions which would
constitute a violation of this paragraph 12 if undertaken by either of the
Parties, then the non-Target Party shall be released from its obligations under
this paragraph 12 with respect to the Target Party.
13. This Confidentiality Agreement will be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between residents of that State and executed in and to be performed in that
State without regard to its conflicts of laws or choice of laws rules.
14. This Confidentiality Agreement contains the entire agreement between the
Parties with respect to the subject matter hereof, and no modification of this
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Mr. Kent Kresa
June 23, 2000
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Confidentiality Agreement or waiver of the terms and condition hereof will be
binding upon either, unless approved in writing by both Parties.
15. Unless a shorter period is specified in a particular paragraph or section
of this Confidentiality Agreement with respect to the obligations set forth in
that paragraph or section, all obligations herein shall terminate three years
from the above date. Please confirm your agreement with the foregoing by
signing and returning the duplicate copy of this letter enclosed herewith.
Very truly yours,
/s/ Michael R. Brown
Michael R. Brown
Chairman and Chief Executive Officer
Litton Industries, Inc.
Accepted and Agreed as of the date
first written above:
Northrop Grumman Corporation
By: /s/ Kent Kresa
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Its: Chairman / Pres. & CEO
