EX-99.D.3 12 y42082ex99-d_3.txt CONFIDENTIALITY AGREEMENT 1 Exhibit (d)(3) HARCOURT GENERAL, INC. 27 Boylston Street Chestnut Hill, Massachusetts 02467 June 28, 2000 Reed Elsevier PLC 25 Victoria Street London SW1H OEX United Kingdom Attn: Sybella Stanley Dear Sirs: You have expressed an interest in a possible negotiated transaction involving Harcourt General, Inc. (the "Company", which term as used herein shall include all subsidiaries of the Company). In connection with your analysis of a possible negotiated transaction with the Company (a "Transaction"), you have requested certain oral and written information concerning the Company from directors, officers, employees, representatives and/or agents of the Company and its subsidiaries (the Company's "Representatives"). All such information furnished to you or your Representatives (as defined below) by or on behalf of the Company or its subsidiaries (irrespective of the form of communication and whether such information is so furnished before, on or after the date hereof), and all analyses, compilations, data, studies, notes, translations, memoranda or other documents prepared by you or your Representatives containing or based in whole or in part on any such furnished information are collectively referred to herein as the "Information." In consideration of furnishing you with the Information, the Company requests your agreement to the following: 1. The Information will be used solely for the purpose of evaluating a Transaction and will not be used in any other way, and the Information will be kept strictly confidential and will not be disclosed by you or your Representatives, except (a) as you may be advised in writing by your outside counsel that it is required by applicable law, regulation or legal process, and only after compliance with Section 3 below, and (b) that you may disclose the Information or portions thereof to those of your officers and employees and representatives of your legal, accounting and financial advisors (the persons to whom such disclosure is permissible being collectively referred to herein as your 2 2 "Representatives") who need to know such information for the purpose of evaluating such Transaction; provided, that your Representatives are informed of the confidential and proprietary nature of the Information; and provided, further, that prospective financing sources shall not be considered "Representatives" to whom Information may be disclosed in accordance with this paragraph without the prior written consent of the Company, which consent shall not be unreasonably withheld. You agree to be responsible for any breach of this agreement by your Representatives (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company may have against such Representatives with respect to any such breach). 2. Except as may be required by law or the applicable rules of any stock exchange on which your securities may be listed, without the prior written consent of the Company, neither you nor your Representatives will disclose to any person (except to the extent otherwise required in the written opinion of your outside counsel by applicable law, regulation or legal process, and only after compliance with Section 3 below), either the fact that any investigations, discussions or negotiations are taking place concerning a possible Transaction, or that you have received Information from the Company or Information has been made available by the Company or any of the terms, conditions or other facts with respect to any such possible Transaction, including the status thereof. The term "person" as used in this agreement will be interpreted broadly to include the media and any corporation, company, group, partnership or other entity or individual. 3. If you or any of your Representatives become legally compelled (including by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any of the Information or the information referred to in Section 2 above, you shall provide the Company with prompt prior written notice of such requirement so that the Company may seek a protective order or other appropriate remedy. If such protective order or other remedy is not obtained, you and your Representatives agree to disclose only that portion of the Information which you are advised in writing by outside counsel is legally required to be disclosed and to take all reasonable steps to preserve the confidentiality of the Information and the information referred to in Section 2 above (including by obtaining an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Information and the information referred to in Section 2 above). In addition, you and your Representatives will not oppose any action (and will, if and to the extent requested by the Company, cooperate with, assist and join with the Company, at the Company's expense, in any reasonable action) by the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Information and the information referred to in Section 2 above. 4. The term "Information" does not include any information which (i) at the time of disclosure or thereafter is generally available to the public (other than as a result of a disclosure directly or indirectly by you or your Representatives in violation hereof), (ii) is or becomes available to you on a nonconfidential basis from a source other than the 3 3 Company or its advisors, provided that, to your knowledge after reasonable inquiry, such source was not prohibited from disclosing such information to you by a legal, contractual or fiduciary obligation owed to the Company, (iii) you can establish is already in your possession (other than information furnished by or on behalf of the Company), or (iv) you can establish was developed by you or others independently of, and without reference to, the Information. 5. If you determine not to pursue a Transaction, you will promptly notify the Company of your determination. At the time of such notice, or if, at any earlier time, the Company so directs (whether or not you determine to pursue a Transaction), you and your Representatives will, at your expense, promptly return to the Company or destroy, all Information and all copies, extracts or other reproductions in whole or in part thereof, as well as any analyses, compilations, studies or other documents prepared by you or for your use containing or reflecting Information. Compliance by you and your Representatives with any direction of the Company or election by you to destroy Information pursuant to this Section 5 shall be certified in writing to the Company by your authorized officer supervising such destruction. Notwithstanding the return or destruction of the Information, you and your Representatives will continue to be bound by your confidentiality and other obligations hereunder. 6. You agree that, for a period of two years from the date of this letter agreement, neither you nor any of your affiliates will, unless invited to do so (on an unsolicited basis) by the Board of Directors of the Company in writing: (i) acquire, offer or propose to acquire, or agree or seek to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights or options to acquire any securities of the Company or any subsidiary thereof, or of any successor to or person in control of the Company, or any assets of the Company or any subsidiary or division thereof or of any such successor or controlling person; (ii) enter into or agree, offer, propose or seek to enter into, or otherwise be involved in or part of, directly or indirectly, any acquisition transaction, merger or other business combination relating to all or part of the Company or any of its subsidiaries or any acquisition transaction for all or part of the assets of the Company or any subsidiary of the Company or any of their respective businesses; (iii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are defined under Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to vote, or seek to advise or influence any person or entity with respect to the voting of, any voting securities of the Company or any of its subsidiaries; (iv) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations thereunder) with respect to any voting securities of the Company or any of its subsidiaries; (v) seek, propose or otherwise act alone or in concert with others, to influence or control the management, board of directors or policies of the Company or any of its subsidiaries; (vi) directly or indirectly enter into any discussions, negotiations, arrangements or understandings with any other person with respect to any of the foregoing activities or propose any of such activities to any other person; (vii) advise, assist, encourage, act as a financing source for or otherwise invest in any other person in connection with any of the 4 4 foregoing activities; or (viii) disclose any intention, plan or arrangement inconsistent with any of the foregoing. You will promptly advise the Company of any inquiry or proposal made to you with respect to any of the foregoing. You also agree that, during the two-year period referred to in the second preceding sentence, neither you nor any of your affiliates will: (i) request the Company or its Representatives, directly or indirectly, to (1) amend or waive any provision of this paragraph (including this sentence) or (2) otherwise consent to any action inconsistent with any provision of this paragraph (including this sentence); or (ii) take any initiative with respect to the Company or any of its subsidiaries which could require the Company to make a public announcement regarding (1) such initiative, (2) any of the activities referred to in the second preceding sentence, (3) the possibility of a Transaction or any similar transaction or (4) the possibility of you or any other person acquiring control of the Company, whether by means of a business combination or otherwise. This paragraph shall also apply with respect to any of the foregoing activities with respect to any holding company that may subsequently be formed to hold the Company and/or its assets. 7. You agree that, for a period of two years from the date of this letter agreement, without the prior written consent of the Company, you will not, directly or indirectly, solicit to hire or hire (or cause or seek to cause to leave the employ of the Company): (a) any management-level employee of the Company; or (b) any other employee of the Company or any subsidiary of the Company with whom you have had contact or who (or whose performance) became known to you in connection with the process contemplated by this agreement; provided, however, that the foregoing provision will not prevent you from hiring any such person (i) who contacts you on his or her own initiative without any direct or indirect solicitation by or encouragement from you (it being understood that a bona fide public advertisement for employment placed by you and not specifically targeted at the Company's employees shall not constitute direct or indirect solicitation or encouragement), (ii) who has been terminated by the Company or (iii) who has not been employed by the Company during the preceding six months. 8. You understand and acknowledge that neither the Company nor any of its Representatives is making any representation or warranty, express or implied, as to the accuracy or completeness of the Information, and neither the Company nor any of its Representatives will have any liability to you or any other person resulting from your use of the Information. Only those representations or warranties that are made to you in a definitive agreement executed by the Company regarding a Transaction (a "Definitive Agreement") when, as, and if it is executed, and subject to such limitations and restrictions as may be specified in such Definitive Agreement, will have any legal effect. The term "Definitive Agreement" does not include an executed letter of intent or any other preliminary written agreement, nor does it include any written or oral acceptance of any offer or bid on your part. 9. You and the Company understand and agree that no contract or agreement providing for a Transaction shall be deemed to exist unless and until a Definitive Agreement has been executed and delivered by the Company and you, and each of you hereby waives, in 5 5 advance, any claims (including breach of contract) in connection with a Transaction unless and until you shall have entered into a Definitive Agreement. You also agree that unless and until a Definitive Agreement between the Company and you with respect to a Transaction has been executed and delivered, neither the Company, you or any of its or your subsidiaries, stockholders, affiliates or Representatives has any legal obligation of any kind whatsoever with respect to such Transaction by virtue of this agreement or any other written or oral expression with respect to such Transaction except, in the case of this agreement, for the matters specifically agreed to herein. You understand that (i) the Company and its Representatives shall be free to conduct any process for any Transaction as they in their sole discretion shall determine (including negotiating with any of the prospective parties to such Transaction and entering into a Definitive Agreement without prior notice to you or any other person) and (ii) any procedures relating to such Transaction may be changed at any time without notice to you or any other person. You hereby confirm that you are not acting as a broker for or Representative of any person and are considering the Transaction only for your own account. Except as set forth in Section 16, neither this paragraph nor any other provision in this agreement can be waived, amended or assigned except by written consent of the Company, which consent shall specifically refer to this paragraph (or such other provision) and explicitly make such waiver or amendment. 10. You hereby acknowledge that you are aware, and that you will advise your affiliates and Representatives, that the United States securities laws prohibit any person who has material, non-public information concerning the matters which are the subject of this agreement from purchasing or selling securities of a company which may be a party to a transaction of the type contemplated by this agreement 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. 11. You agree that money damages would not be a sufficient remedy for any breach of this agreement by you and that the Company shall be entitled to, and you shall not oppose the granting of, equitable relief, including injunction and specific performance, in the event of any such breach, in addition to all other remedies available to the Company at law or in equity. You further agree to waive, and to use your best efforts to cause your officers, employees and agents to waive, any requirement for the securing or posting of any bond in connection with such remedy. You agree to indemnify the Company for, and to hold the Company harmless against, any and all liabilities, costs, expenses, losses, damages and claims (collectively, "Costs") arising out of your or any of your Representatives' breach of this agreement. 12. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the Southern District of New York and of the United States of America located in the Southern District of New York for any actions, suits or proceedings arising out of or relating to this agreement and the transactions contemplated hereby (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, 6 6 notice or document by U.S. registered mail to the respective addresses set forth above, in your case, and to 27 Boylston Street, Chestnut Hill, Massachusetts 02467, in the case of the Company shall be effective service of process for any action, suit or proceeding brought against the parties in any such court. The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this agreement or the transactions contemplated hereby, in the courts of the Southern District of New York or the United States of America located in the Southern District of New York, 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. 13. You agree that no failure or delay by the Company 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 or the exercise of any right, power or privilege hereunder. 14. If any provision of this agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation. 15. You agree that all (a) contacts by you or your Representatives with the Company regarding the Information or the Transaction, (b) requests for additional Information, (c) requests for facility tours or management meetings and (d) discussions or questions regarding procedures shall be made through Goldman, Sachs & Co., or as any representative of such firm may otherwise direct. 16. This agreement is for the benefit of the Company and its directors, officers, employees, representatives and agents and their respective successors and assigns and will be governed by and construed in accordance with the laws of the State of New York. This agreement may be assigned to any person that acquires all or any portion of the Company to the extent it relates to such portion of the Company. 7 7 If you agree with the foregoing, please sign and return a copy of this letter, which will constitute our agreement with respect to the subject matter of this letter. Very truly yours, HARCOURT GENERAL, INC. By: /s/ Erik P. Geller ---------------------------- Name: Erik P. Geller Title: Senior VP and General Counsel CONFIRMED AND AGREED as of the date first above written: REED ELSEVIER PLC By: /s/ Sybella Stanley ---------------------------------------- Name: Sybella Stanley Title: Director of Corporate Finance