SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )*
ZILOG, INC.
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
- -----------------------------------------------------------------
(Title of Class of Securities)
98952410
----------------------------
(Cusip Number)
James J. O'Brien
2420 Texas Commerce Tower
Fort Worth, Texas 76102
(817) 871-4000
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 20, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b) (3) or (4), check the following box [ ].
(Continued on following pages)
_____________________
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
Page 1 of 18 Pages
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CUSIP NO. 98952410 13D Page 2 of 18 Pages
______________________________________________________________________
1. Name of Reporting Person: TPG Partners II, L.P.
______________________________________________________________________
2. Check the Appropriate Box if a Member of a Group:
(a) |_|
(b) |X|
______________________________________________________________________
3. SEC Use Only
______________________________________________________________________
4. Source of Funds: 00 - Contributions from Partners
______________________________________________________________________
5. Check box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e):
|_|
______________________________________________________________________
6. Citizenship or Place or Organization: Delaware
_____________________________________________
7. Sole Voting Power: -0-
Number of Shares _____________________________________________
Beneficially Owned By 8. Shared Voting Power: 5,477,504*
Each Reporting Person
With _____________________________________________
9. Sole Dispositive Power: -0-
_____________________________________________
10. Shared Dispositive Power: 5,477,504*
______________________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
5,477,504
______________________________________________________________________
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain
Shares:
|_|
______________________________________________________________________
13. Percent of Class Represented by Amount in Row (11): 27.1%(1)
______________________________________________________________________
14. Type of Reporting Person: PN
___________________
* The Reporting Person disclaims beneficial ownership of all shares of
Zilog Common Stock.
(1) Assumes, pursuant to Rule 13d-1(e) under the Act, that
there are 20,229,412 shares of Zilog Common Stock
outstanding.
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CUSIP NO. 98952410 13D Page 3 of 18 Pages
Item 1. Security and Issuer.
This statement relates to shares of Common Stock, no par
value (the "Stock"), of Zilog, Inc. (the "Issuer"). The principal
executive offices of the Issuer are located at 210 East Hacienda
Avenue, Campbell, California 95008.
Item 2. Identity and Background.
(a) This Schedule 13D Statement under the Securities
Exchange Act of 1934, as amended (the "Act"), is hereby filed by
TPG Partners II, L.P., a Delaware limited partnership ("TPG").
(b) - (c)
TPG is a Delaware limited partnership, formed in 1997 to
invest in securities of entities to be selected by its general
partner. The principal business address of TPG, which also serves
as its principal office, is 201 Main Street, Suite 2420, Fort
Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of
the Act, information with respect to TPG GenPar II, L.P.
("GenPar"), the sole general partner of TPG, is set forth below.
GenPar is a Delaware limited partnership, the principal
business of which is serving as the sole general partner of TPG.
The principal business address of GenPar, which also serves as
its principal office, is 201 Main Street, Suite 2420, Forth
Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of
the Act, information with respect to TPG Advisors II, Inc.
("Advisors"), the sole general partner of GenPar, is set forth
below.
Advisors is a Delaware corporation, the principal business
of which is serving as the sole general partner of GenPar. The
principal business address of Advisors, which also serves as its
principal office, is 201 Main Street, Suite 2420, Fort Worth,
Texas 76102. Pursuant to Instruction C to Schedule 13D of the
Act, the name, residence or business address, and present
principal occupation or employment of each director, executive
officer and controlling person of Advisors are as follows:
NAME RESIDENCE OR PRINCIPAL OCCUPATION
TITLE BUSINESS ADDRESS OR EMPLOYMENT
----- ---------------- -------------
David Bonderman 201 Main Street, Managing Partner of TPG
Chairman of the Board, Suite 2420
President and Director Fort Worth, TX 76102
of Advisors
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CUSIP NO. 98952410 13D Page 4 of 18 Pages
NAME RESIDENCE OR PRINCIPAL OCCUPATION
TITLE BUSINESS ADDRESS OR EMPLOYMENT
----- ---------------- -------------
James G. Coulter 600 California Street Managing Partner of TPG
Executive Vice President Suite 1850
and Director of Advisors San Francisco, CA 94108
William S. Price 600 California Street Managing Partner of TPG
Executive Vice President Suite 1850
and Director of Advisors San Francisco, CA 94108
Richard P. Schifter 1133 Connecticut Avenue, Executive Vice
Executive Vice President N.W. President of TPG
and Director of Advisors Washington, D.C. 20036
James J. O'Brien 201 Main Street, Chief Financial Officer
Vice President and Treasurer Suite 2420 of TPG
of Advisors Fort Worth, TX 76102
Richard A. Ekleberry 201 Main Street, General Counsel of TPG
Vice President and Secretary Suite 2420
of Advisors Fort Worth, TX 76102
(d) None of the entities or persons identified in this Item
2 has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the entities or persons identified in this Item
2 has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
securities laws or finding any violation with respect to such
laws.
(f) All of the natural persons identified in this Item 2
are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
See Item 4 herein.
Item 4. Purpose of Transaction.
On July 20, 1997, the Issuer and TPG entered into an
Agreement and Plan of Merger (the "Merger Agreement"), which is
filed as Exhibit 7.1 and incorporated by reference herein.
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CUSIP NO. 98952410 13D Page 5 of 18 Pages
Pursuant to the terms of the Merger Agreement, TPG has formed a
wholly owned Delaware corporation ("Sub") and, subject to certain
conditions being satisfied or waived, Sub will merge with and
into the Issuer (the "Merger") with the Issuer being the
surviving corporation (the "Surviving Corporation").
Subject to the conditions of the Merger Agreement, in the
Merger, (i) each outstanding share of Stock, other than certain
shares for which an election to retain is made (each a "Retained
Share"), will be converted into the right to receive an amount
equal to $25.00 in cash and (ii) each Retained Share will be
converted into one share of voting common stock of the Surviving
Corporation ("Surviving Corporation Common Stock").
Notwithstanding the foregoing, the aggregate number of Retained
Shares will equal 400,000 shares of Stock. Pursuant to the terms
of the Stockholder Voting Agreement (as defined below), Warburg,
Pincus Capital Company, L.P. has agreed to elect to retain
400,000 shares of stock. In the event that holders of Stock elect
to retain more than 400,000 shares of Stock in the Merger, the
number of shares elected shall be reduced pro rata so that there
are no more than 400,000 Retained Shares.
In addition, subject to the conditions of the Merger
Agreement, pursuant to the Merger, the outstanding shares of
capital stock of Sub will be converted into and become in the
aggregate 3,600,000 shares of Surviving Corporation Common Stock
and 2,000,000 shares of Class A non-voting common stock of the
Surviving Corporation.
In the Merger Agreement, the Issuer, TPG and Sub have each
agreed to take all action necessary to delist the Stock from the
New York Stock Exchange, Inc. following the effective time of the
Merger and have each acknowledged that it is TPG's intent that
the Surviving Corporation Common Stock will not be quoted on
NASDAQ or listed on any national securities exchange.
The Merger Agreement also provides that the directors of
Sub immediately prior to the effective time of the Merger shall
be the directors of the Surviving Corporation following
consummation of the Merger until the next annual meeting of
stockholders (or the earlier of their resignation or removal) and
until their respective successors are duly elected.
Also on July 20, 1997, TPG entered into a Stockholders
Voting Agreement (the "Stockholders Voting Agreement") with
Warburg, Pincus Capital Company, L.P. and Warburg, Pincus & Co.
(the "Stockholders"), pursuant to which, in consideration of the
covenants and agreements of TPG contained therein and in the
Merger Agreement, and as an inducement to TPG to enter into the
Merger Agreement, each Stockholder agreed to vote at any meeting
of the Issuer's stockholders (or by written consent) all of each
such Stockholder's shares of the Issuer (i) in favor of approving
the Merger Agreement and the transactions contemplated thereby,
(ii) against any other merger agreement or merger, consolidation,
combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by
the Issuer, or any other takeover proposal, and (iii) against any
amendment to the Issuer's certificate of incorporation or bylaws
or other proposal or transaction that would in any manner impede,
frustrate, delay, prevent, or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the
Merger Agreement. In the Stockholders Voting
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CUSIP NO. 98952410 13D Page 6 of 18 Pages
Agreement, each Stockholder also agreed to grant to TPG upon
request a proxy and full power of attorney to vote such
Stockholder's shares of the Issuer in connection with the matters
in the preceding sentence. The Stockholders Voting Agreement also
imposes restrictions upon the transfer of the shares subject to
the Stockholders Voting Agreement. A copy of the Stockholders
Voting Agreement is included as Exhibit 7.2 to this Schedule 13D
and is incorporated herein by reference.
THE FOREGOING SUMMARIES OF THE MERGER AGREEMENT AND THE
STOCKHOLDERS VOTING AGREEMENT ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO THE FULL AGREEMENTS WHICH ARE FILED AS EXHIBITS.
Other than the transactions contemplated by the Merger
Agreement and Stockholders Voting Agreement, TPG has no plans or
proposals required to be disclosed in this Item 4.
Item 5. Interest in Securities of the Issuer.
(a) - (c) By reason of the Stockholders Voting Agreement,
TPG may be deemed to be the beneficial owner of 5,477,504 shares
of Stock (the "Securities"). These Securities represent
approximately 27.1% of the outstanding shares of Stock. Except as
described in this Schedule 13D, neither TPG nor, to the best of
its knowledge, any of the persons listed in Item 2 above
beneficially owns any shares of the Stock. Except as described in
this Schedule 13D, neither TPG nor, to the best of its knowledge,
any of the persons listed in Item 2 above has effected any
transactions in the Stock during the past 60 days. By virtue of
the limited nature of the Stockholders Voting Agreement, TPG
expressly disclaims beneficial ownership of the Securities.
(d) Not applicable.
(e) Not applicable.
Item. 6 Contracts, Arrangements, Understandings or
Relationship with Respect to Securities of the Issuer.
See Item 4 with respect to the Merger Agreement and the
Stockholders Voting Agreement.
Item 7. Material to be Filed as Exhibits.
Exhibit 7.1 Agreement and Plan of Merger between TPG
Partners II, L.P. and Zilog, Inc. dated as of July 20, 1997
(incorporated by reference from the Issuer's Report of Form 8-K
dated July 22, 1997 (file no. 1-13748)).
Exhibit 7.2 Stockholders Voting Agreement among TPG
Partners II, L.P., Warburg, Pincus Capital Company, L.P. and
Warburg, Pincus & Co. dated as of July 20, 1997.
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CUSIP NO. 98952410 13D Page 7 of 18 Pages
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
DATED: July 30, 1997
TPG PARTNERS II, L.P.,
a Delaware limited partnership
By: TPG GenPar II, L.P.,
a Delaware limited partnership,
General Partner
By: TPG Advisors II, Inc.,
a Delaware corporation,
General Partner
By: /s/ James J. O'Brien
James J. O'Brien
Vice President
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CUSIP NO. 98952410 13D Page 8 of 18 Pages
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
7.1 Agreement and Plan of Merger between TPG Partners II, n/a
L.P. and Zilog, Inc. dated as of July 20, 1997
(incorporated by reference from the Issuer's Report of
Form 8-K dated July 22, 1997 (file no. 1-13748)).
7.2 Stockholders Voting Agreement among TPG Partners II, 9
L.P., Warburg, Pincus Capital Company, L.P. and
Warburg, Pincus & Co. dated as of July 20, 1997.
<PAGE>
Page 9 of 18 Pages
CONFORMED COPY
STOCKHOLDERS VOTING AGREEMENT
STOCKHOLDERS VOTING AGREEMENT (this "Agreement") dated
as of July 20, 1997, among TPG Partners II, L.P, ("Parent"), on
the one hand, and Warburg, Pincus Capital Company, L.P. and
Warburg, Pincus & Co. (each a "Stockholder" and, collectively,
the "Stockholders"), on the other hand.
WHEREAS Parent, TPG and Zilog, Inc., a Delaware
corporation (the "Company"), propose to enter into an Agreement
and Plan of Merger dated as of the date hereof (as the same may
be amended or supplemented, the "Merger Agreement"; capitalized
terms used but not defined herein shall have the meanings set
forth in the Merger Agreement) providing for the merger (the
"Merger") of a to-be formed Delaware corporation and wholly owned
subsidiary of Parent ("Sub") with and into the Company with the
Company being the surviving corporation (hereinafter sometimes
referred to as the "Surviving Corporation"), upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS each Stockholder owns beneficially and (except
as set forth on Schedule A attached hereto) of record the number
of shares of Common Stock, par value $.01 per share, of the
Company (the "Common Stock") set forth opposite its name on
Schedule A attached hereto (such shares of Common Stock, together
with any other shares of capital stock of the Company acquired
(including, without limitation, through the exercise of any
option or by reason of any split, reclassification, stock
dividend or other distribution with respect to the capital stock
of the Company) by such Stockholder after the date hereof and
during the term of this Agreement, being collectively referred to
herein as the "Subject Shares");
WHEREAS, as a condition to its willingness to enter
into the Merger Agreement, Parent has required that each
Stockholder enter into this Agreement.
NOW, THEREFORE, to induce Parent to enter into, and in
consideration of its entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties
and agreements contained herein, the parties agree as follows:
1. Representations and Warranties of each Stockholder.
Each Stockholder hereby, severally and not jointly, represents
and warrants to Parent as of the date hereof in respect of itself
as follows:
(a) Authority. The Stockholder has all requisite power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder (or in the
case of a Stockholder which is a partnership, by a general
partner on behalf of such partnership) and constitutes a valid
and binding obligation of the Stockholder enforceable in
accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium
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Page 10 of 18 Pages
or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general
principles of equity. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any
provision of, any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Stockholder or to the Stockholder's
property or assets the effect of which, in any case, would be
material and adverse to the ability of the Stockholder to
consummate the transactions contemplated hereby or to comply with
the terms hereof.
(b) The Subject Shares. The Stockholder is the
beneficial and (except as set forth on Schedule A attached
hereto) record owner of, and has good and marketable title to,
the Subject Shares set forth opposite such Stockholder's name on
Schedule A attached hereto, free and clear of any claims, liens,
encumbrances and security interests whatsoever. The Stockholder
does not own, of record or beneficially, any shares of capital
stock of the Company other than the Subject Shares set forth
opposite such Stockholder's name on Schedule A attached hereto.
The Stockholder has the sole right to vote such Subject Shares,
and none of such Subject Shares is subject to any voting trust or
other agreement, arrangement or restriction with respect to the
voting of such Subject Shares, except as contemplated by this
Agreement.
2. Representations and Warranties of Parent. Parent
hereby represents and warrants to each Stockholder that Parent
has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent, and the
consummation of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of Parent.
This Agreement has been duly executed and delivered by Parent and
constitutes a valid and binding obligation of Parent enforceable
in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general
principles of equity. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any
provision of, any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or
regulation applicable to Parent or to Parent's property or assets
the effect of which, in any case, would be material and adverse
to the ability of Parent to consummate the transactions
contemplated hereby or to comply with the terms hereof.
3. Covenants of each Stockholder. Until the
termination of this Agreement in accordance with Section 8, each
Stockholder, severally and not jointly, agrees as follows:
(a) Vote for the Merger. At any meeting of stockholders of
the Company called to vote upon the Merger and the Merger Agreement
or at any adjournment thereof or in any other circumstances upon
which a vote, consent or other approval (including by written
2
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Page 11 of 18 Pages
consent) with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted), or
execute a written consent in respect of, the Subject Shares in
favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the terms thereof and each of the
other transactions contemplated by the Merger Agreement. The
Stockholder hereby waives any appraisal rights granted pursuant
to Section 262 of the General Corporation Law of the State of
Delaware (the "DGCL") (or any successor provision) to which it
may otherwise be entitled as a result of the Merger or the other
transactions contemplated by the Merger Agreement.
(b) Vote Against Takeover Proposals. At any meeting of
stockholders of the Company or at any adjournment thereof or in
any other circumstances upon which the Stockholder's vote,
consent or other approval is sought, the Stockholder shall be
present (in person or by proxy) and shall vote (or cause to be
voted) the Subject Shares against (and shall not execute any
written consent in favor of) (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by
the Company or any other Takeover Proposal or (ii) any amendment
of the Company's certificate of incorporation or by-laws or other
proposal or transaction involving the Company or any of its
subsidiaries, which amendment or other proposal or transaction
would in any manner impede, frustrate, delay, prevent or nullify
the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement. The Stockholder further
agrees not to commit or agree to take any action inconsistent
with the foregoing.
(c) Transfer of Subject Shares. Except pursuant to
this Agreement and except as provided in the immediately
succeeding sentence of this Section 3(c), the Stockholder agrees
not to (i) transfer, sell, pledge, assign or otherwise dispose of
(including by gift) (collectively, "Transfer"), or enter into any
contract, option or other arrangement (including any profit
sharing arrangement) with respect to the Transfer of, any of the
Subject Shares to any person other than pursuant to the terms of
the Merger or (ii) enter into any voting arrangement, whether by
proxy, power-of-attorney, voting agreement, voting trust or
otherwise, in connection with, directly or indirectly, any
Takeover Proposal, and agrees not to commit or agree to take any
of the foregoing actions.
(d) No Solicitation. During the term of this
Agreement, the Stockholder shall not (i) directly or indirectly
solicit, initiate or encourage the submission of, any Takeover
Proposal or (ii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person
any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Takeover Proposal.
(f) The Stockholders shall each execute and deliver an
"affiliate letter" in the form attached as an exhibit to the
Merger Agreement as contemplated by the Merger Agreement.
4. Election to Retain Company Stock and Stockholders
Agreement. Each Stockholder hereby agrees that it will make and
not revoke an effective Non-Cash Election with
3
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Page 12 of 18 Pages
respect to and otherwise cause that number of Subject Shares
specified as "Number of Pre-Closing Electing Shares" on Schedule
A hereof (subject to adjustment in accordance with the adjustment
mechanism set forth in Section 2.4 of the Merger Agreement) to be
"Electing Shares" under the Merger Agreement. Each of the
Stockholders and Parent agrees that it and the Company will prior
to the Effective Time enter into a Stockholders Agreement
consistent with the provisions of Schedule B hereto (all of the
material terms of which are summarized therein).
5. Grant of Irrevocable Proxy.
(a) Existing Proxies Revoked. The Stockholders represent
that any proxies heretofore given in respect of the Subject
Shares are not irrevocable, and that any such proxies are hereby
revoked.
(b) Grant of Irrevocable Proxy to Parent. Upon
Parent's request, each Stockholder hereby agrees to irrevocably
grant to, and appoint, Parent, and any person who may hereafter
be designated by Parent as permitted under applicable law, and
each of them individually, the Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in
the name, place and stead of the Stockholder, to vote the
Stockholder's Subject Shares, or grant a consent or approval in
respect of such Subject Shares, in favor of or against, as the
case may be, the matters set forth in Sections 3(a) and 3(b), and
to execute and deliver an appropriate instrument irrevocably
granting such proxy. The proxy granted herein shall terminate
upon any termination of this Agreement in accordance with its
terms.
(c) Affirmations. Each Stockholder hereby affirms that
any irrevocable proxy granted pursuant to Section 5(b) will be
given in connection with the execution of the Merger Agreement,
and that such irrevocable proxy will be given to secure the
performance of the duties of the Stockholder under this
Agreement. If so granted, the Stockholder hereby ratifies and
confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue thereof. Such irrevocable proxy, if and when
executed, is intended to be irrevocable in accordance with the
provisions of Section 212(e) of the DGCL.
6. Further Assurances. Each Stockholder will, from
time to time, execute and deliver, or cause to be executed and
delivered, such additional or further consents, documents and
other instruments as Parent may reasonably request for the
purpose of effectively carrying out the transactions contemplated
by this Agreement.
7. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties without the prior written consent of the other
parties, except that Parent may assign, in its sole discretion,
any or all of its rights, interests and obligations hereunder to
any direct or indirect wholly owned subsidiary of Parent or Sub
or to any affiliate of Parent or Sub. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
successors and assigns.
4
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Page 13 of 18 Pages
8. Termination. This Agreement shall terminate upon the
earlier of (a) the termination of the Merger Agreement (for any
any reason, including a termination pursuant to Section 8.1(d) or
Section 8.1(e) thereof) and (b) the Effective Time of the Merger.
9. General Provisions.
(a) Amendments. This Agreement may not be amended
except by an instrument in writing signed by each of the parties
hereto.
(b) Notice. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to Parent in
accordance with the notification provision contained in the
Merger Agreement and to the Stockholders at their respective
addresses set forth on Schedule A attached hereto (or at such
other address for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section to
this Agreement unless otherwise indicated. The headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation".
(d) Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or
more of the counterparts have been signed by each of the parties
and delivered to the other party, it being understood that each
party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred
to herein) (i) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any person other than the
parties hereto and other than Sub, which is an express
beneficiary of this Agreement, any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
Delaware regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
(g) Severability. If any term, provision, covenant or
restriction herein, or the application thereof to any circumstance,
shall, to any extent, be held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions herein and the application
thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and
5
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Page 14 of 18 Pages
shall be enforced to the fullest extent permitted by law, and the
parties hereto shall reasonably negotiate in good faith a
substitute term or provision that comes as close as possible to
the invalidated and unenforceable term or provision, and that
puts each party in a position as nearly comparable as possible to
the position each such party would have been in but for the
finding of invalidity or unenforceability, while remaining valid
and enforceable.
10. Stockholder Representatives. Each Stockholder
signs solely in its capacity as the record holder and beneficial
owner of, or the general partner of a partnership which is the
beneficial owner of, such Stockholder's Subject Shares and
nothing contained herein shall limit or affect any actions taken
by any officer, director, partner, affiliate or representative of
a Stockholder who is or becomes an officer or a director of the
Company in his or her capacity as an officer or director of the
Company and none of such actions in such capacity shall be deemed
to constitute a breach of this Agreement.
11. Enforcement. The parties agree, and the
beneficiaries of each trust which is a party hereto have agreed,
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State
of Delaware or in a Delaware state court, this being in addition
to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to
submit such party to the personal jurisdiction of any Federal
court located in the State of Delaware or any Delaware state
court in the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such
court, (iii) agrees that such party will not bring any action
relating to this Agreement or the transactions contemplated
hereby in any court other than a Federal court sitting in the
state of Delaware or a Delaware state court, (iv) waives any
right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the
transactions contemplated hereby, and (v) appoints The
Corporation Trust Company as such party's agent for service of
process in the state of Delaware.
6
<PAGE>
Page 15 of 18 Pages
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first written above.
TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P.
its General Partner,
By: TPG Advisors II, Inc.
its General Partner
By: s/ David M. Stanton
Name: David M. Stanton
Title: Vice President
STOCKHOLDERS:
WARBURG, PINCUS CAPITAL COMPANY,
L.P.
By: Warburg, Pincus & Co.,
its General Partner,
By: s/ William H. Janeway
Name: William H. Janeway
Title: A General Partner
WARBURG, PINCUS & CO.
By: s/ William H. Janeway
Name: William H. Janeway
Title: A General Partner
7
<PAGE>
Page 16 of 18 Pages
SCHEDULE A
Name
Shares Number of
of Common Pre-Closing
Stock Electing Shares
- -------------------------------------------------------------------
WARBURG, PINCUS CAPITAL 5,378,004 400,000
COMPANY, L.P.
466 Lexington Avenue
New York, New York 10017
WARBURG, PINCUS & CO 99,500 0
466 Lexington Avenue
New York, New York 10017.
---------- --------
Total 5,477,504 400,000
A-1
<PAGE>
Page 17 of 18 Pages
SCHEDULE B
SUMMARY OF PRINCIPAL TERMS
OF
SHAREHOLDERS AGREEMENT
Parties The Company, TPG Partners II, L.P., together
with its affiliates ("TPG"), Warburg, Pincus
Capital Company, L.P. ("Warburg") and other
shareholders who receive Shares in the Merger
(the "Investors").
Right of First Offer Warburg and the Investors will grant
to the Company (or an affiliate thereof)
a right of first offer with respect
to any proposed sales by them of Shares.
Reasonable and customary procedures
concerning this right of first offer will be
set forth in the Shareholders Agreement.
Right to Cause Sale If TPG decides to sell all of its
remaining Shares received in the Merger
(other than a sale to an affiliate), and
holds at that time (prior to giving effect of
the proposed sale) more than 40% of such
Shares, then TPG shall have the right to
require Warburg and the Investors to sell
their remaining Shares as part of that sale
on the same price and terms (or to vote in
favor of any merger or other transaction
which would effect such a sale).
Right to Participate In the event that, during the period
in Sale beginning immediately after the closing of
the Merger and ending upon a Public Offering,
TPG holds 40% or more of the voting power of the
Company and proposes to engage in a sale of
equity interests which would result in a
transfer of 40% or more of the voting power
of the Company to an unaffiliated purchaser,
then Warburg and the Investors shall have the
right to participate pro rata in such sale
transaction on the same price and terms as
TPG. (As used herein, "Public Offering" shall
mean a registered offering of equity
securities of the Company or an institutional
private placement or 144A offering of such
equity securities with or without
registration rights.)
B-1
<PAGE>
Page 18 of 18 Pages
Registration Rights In the Shareholders Agreement (or by
separate registration rights agreement) the
Company will grant to Warburg and the
Investors "piggyback" registration rights at
the Company's expense (other than
underwriting discounts and selling
commissions), with customary provisions
regarding notice of intent to file a
registration statement, cutbacks in the event
of an underwritten offering, indemnification
and other customary provisions.
Warburg and the Investors will, if requested
by the underwriters for an underwritten public
offering of equity securities of the Company,
agree not to sell or transfer any equity
securities of the Company (other than equity
securities, if any, including in such
offering), without the consent of the
underwriters, for a period of not more than
180 days following effectiveness of the
registration statement relating to a Public
Offering.
Facilitation of If a Public Offering shall have not occurred
Disposition within five years of the Closing of the Merger,
the Company will reimburse Warburg for the
cost of investment banking fees, in an amount
not to exceed $50,000, in connection with an
analysis of Warburg's ownership position and
disposition strategies.
Affiliate Transactions The Shareholders Agreement will
provide that agreements or transactions
between the Company and TPG or any of its
affiliates shall require the prior approval
of the holders of a majority of the voting
common stock of the Company (excluding stock
held by TPG and its affiliates) other than
agreements or transactions which are on
arms-length terms or consulting fees with
terms which are customary as between TPG and
its portfolio companies.
B-2
<PAGE>
