-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKM0sb7js4CzzOpGd6G/R323ssrnBSHjVmvgnFpQnyUNxMmPQxB5LjcdCQUstmgO CQ05GAjXT9w7KPdGQZUv4w== 0000903423-97-000129.txt : 19970731 0000903423-97-000129.hdr.sgml : 19970731 ACCESSION NUMBER: 0000903423-97-000129 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970730 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ZILOG INC CENTRAL INDEX KEY: 0000319450 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 133092996 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-44777 FILM NUMBER: 97647854 BUSINESS ADDRESS: STREET 1: 210 E HACIENDA AVE CITY: CAMPBELL STATE: CA ZIP: 95008-6600 BUSINESS PHONE: 4083708000 MAIL ADDRESS: STREET 1: 210 EAST HACIENDA AVE CITY: CAMPELL STATE: CA ZIP: 95008-6600 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TPG PARTNERS II LP CENTRAL INDEX KEY: 0001043167 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 752698246 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 201 MAIN ST STE 2420 CITY: FT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8178714000 MAIL ADDRESS: STREET 1: 201 MAIN ST STE 2420 CITY: FT WORTH STATE: TX ZIP: 76102 SC 13D 1 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 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. 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 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. 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 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. 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 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. EX-7.2 2 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 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 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 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 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 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 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 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----