-----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, PX1Jiov9FsiHANYb0hF+VVaacfx0ASSGEW5b1AVVl1M0G5xJr5ceai8BIStln7uO Wb7ZzRGoCyA/qQYo83wmeg== 0000903423-97-000206.txt : 19971121 0000903423-97-000206.hdr.sgml : 19971121 ACCESSION NUMBER: 0000903423-97-000206 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19971120 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/A SEC ACT: SEC FILE NUMBER: 005-44777 FILM NUMBER: 97725220 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/A 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/A 1 AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 1)* 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) November 18, 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 16 Pages CUSIP NO. 98952410 13D Page 2 of 16 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 8. Shared Voting Power: 5,477,504* Beneficially Owned By 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 16 Pages This Amendment No. 1 amends and supplements the Schedule 13D filed on July 30, 1997 (the "Schedule") by TPG Partners II, L.P., a Delaware limited partnership ("TPG") with respect to the Common Stock, no par value (the "Stock"), of Zilog, Inc. (the "Issuer"). All capitalized terms used in this Amendment and not otherwise defined herein have the meanings ascribed to such terms in the Schedule. Item 4. Purpose of Transaction. On November 18, 1997, the Issuer and TPG entered into an amendment to the Merger Agreement (the "Merger Agreement Amendment") and TPG and the Stockholders entered into an amendment to the Stockholders Voting Agreement (the "Stockholders Voting Agreement Amendment"), which are filed as Exhibit 7.3 and Exhibit 7.4 hereto, respectively and incorporated by reference herein. The Merger Agreement Amendment amended the Merger Agreement to provide, among other things, that (i) each outstanding share of Stock, other than Retained Shares, will be converted into the right to receive an amount equal to $20.00 in cash and (ii) 375,000 Retained Shares will be converted into one share of Surviving Corporation Common Stock. The Merger Agreement Amendment also amended certain of the other rights and obligations of the parties to the Merger Agreement. Pursuant to the terms of the Stockholders Voting Agreement, as amended by the Stockholders Voting Agreement Amendment, Warburg, Pincus Capital Company, L.P. has agreed to elect to retain that number of shares of stock equal to 375,000 less the aggregate number of Shares covered by effective elections to retain Shares made by holders of Shares other than Warburg, Pincus Capital Company have, L.P. The foregoing summaries of the Merger Agreement Amendment and the Stockholders Voting Agreement Amendment are qualified in their entirety by reference to the full agreements which are filed as exhibits. Item 7. Material to be Filed as Exhibits. Exhibit 7.3 Amendment Number One to the Agreement and Plan of Merger, by and among TPG Partners II, L.P., TPG Zeus Acquisition Corporation and Zilog, Inc. dated as of November 18, 1997. Exhibit 7.4 Amendment to the Stockholders Voting Agreement among TPG Partners II, L.P., Warburg, Pincus Capital Company, L.P. and Warburg, Pincus & Co. dated as of November 18, 1997. CUSIP NO. 98952410 13D Page 4 of 16 Pages After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment is true, complete and correct. DATED: November 20, 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 5 of 16 Pages EXHIBIT INDEX EXHIBIT DESCRIPTION PAGE - ----------- --------------------------------------------- -------- 7.3 Amendment Number One to the Agreement and 6 Plan of Merger, by and among TPG Partners II, L.P., TPG Zeus Acquisition Corporation and Zilog, Inc. dated as of November 18, 1997. 7.4 Amendment to the Stockholders Voting Agreement 15 among TPG Partners II, L.P., Warburg, Pincus Capital Company, L.P. and Warburg, Pincus & Co. dated as of November 18, 1997. EX-7.3 2 CUSIP NO. 98952410 13D Page 6 of 16 Pages CONFORMED COPY AMENDMENT NUMBER ONE TO THE AGREEMENT AND PLAN OF MERGER THIS AMENDMENT NUMBER ONE TO THE AGREEMENT AND PLAN OF MERGER (this "Amendment"), dated as of November 18, 1997, by and between TPG PARTNERS II, L.P., a Delaware limited partnership ("Parent"), TPG ZEUS ACQUISITION CORPORATION, a Delaware corporation ("Sub") and ZILOG, INC., a Delaware corporation (the "Company"), W I T N E S S E T H: WHEREAS, Parent and the Company are parties to that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 20, 1997; and WHEREAS, pursuant to Section 8.3 of the Merger Agreement, the parties hereto wish to amend the Merger Agreement as provided herein: NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained, the parties hereto hereby agree as follows: SECTION 1. Definitions. Capitalized terms used but not defined herein shall the meanings set forth in the Merger Agreement. SECTION 2. Amendments to the Merger Agreement. SECTION 2.1. The Preamble to the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "AGREEMENT AND PLAN OF MERGER, dated as of July 20, 1997 (as amended by Amendment Number One, dated November 18, 1997, this "Agreement"), between TPG PARTNERS II, L.P., a Delaware limited partnership ("Parent"), and ZILOG, INC., a Delaware corporation (the "Company")," SECTION 2.2. Section 1.5(a) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(a) The Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be amended as of the Effective Time so that Article IV of such Certificate of Incorporation is amended to read in its entirety as follows: FOURTH: The Corporation shall be authorized to issue 10,000,000 shares of common stock and 5,000,000 shares of preferred stock. There shall be two classes of common stock of the Corporation. The first class of common stock of CUSIP NO. 98952410 13D Page 7 of 16 Pages the Corporation shall have a par value of $0.01 and shall be designated "Common Stock" and the number of shares constituting such class shall be 4,000,000. The second class of stock of the Corporation shall have a par value of $0.01 and shall be designated "Class A Non-Voting Common Stock" and the number of shares constituting such class shall be 6,000,000. Holders of shares of Common Stock shall be entitled to one vote for each share of such stock held on all matters as to which stockholders may be entitled to vote pursuant to the Delaware General Corporation Law. Holders of shares of Class A Non-Voting Common Stock shall not have any voting rights, except that the holders of shares of Class A NonVoting Common Stock shall have the right to vote as a class to the extent required by the Delaware General Corporation Law. In all other respects the rights, powers, preferences and limitations of the Common Stock and Class A NonVoting Common Stock shall be identical. The preferred stock shall have a par value of $100.00 and the board of directors may authorize the issuance from time to time of the preferred stock in one or more classes and/or series and with such powers, designations, preferences, rights and qualifications, limitations or restrictions (which may differ with respect to each such class and/or series) as the board may fix by resolution." "As so amended, such Certificate of Incorporation shall be the Certificate of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law." SECTION 2.3. Section 2.1(a) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(a) Conversion (or Retention) of Shares. Except as otherwise provided herein and subject to Section 2.1(d), each Share issued and outstanding immediately prior to the Effective Time, other than Shares to be canceled pursuant to Section 2.1(b) ("Excluded Shares") and any Dissenting Shares, shall be converted into the following (the "Merger Consideration"): (i) for each Share with respect to which an election to retain pursuant to Section 2.1(c) has been effectively made, and not revoked or lost ("Electing Shares"), the right to retain one fully paid and nonassessable Share (a "Non-Cash Election Share"); and (ii) for each Share (other than Electing Shares), the right to receive in cash from the Company following the Merger an amount equal to $20.00 (the "Cash Election Price")." -2- CUSIP NO. 98952410 13D Page 8 of 16 Pages SECTION 2.4. Section 2.1(d)(i) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(i) Notwithstanding anything in this Agreement to the contrary (but subject to the provisions of Section 2.4), the aggregate number of Shares to be converted into the right to retain Shares at the Effective Time (the "Non-Cash Election Number") shall equal 375,000 Shares." SECTION 2.5. Section 2.1(f) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(f) Capital Stock of Sub. The shares of capital stock of Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become in the aggregate 3,375,000 shares of Common Stock of the Surviving Corporation, 1,250,000 shares of Class A Non-Voting Common Stock of the Surviving Corporation and 250,000 shares of a new series of Non-Voting 13.5% Pay-in-Kind Preferred Stock, stated value $100.00 per share, of the Surviving Corporation." SECTION 2.6. Section 3.7 of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "SECTION 3.7 Absence of Material Adverse Change. Except as disclosed in items 3.7 or 3.12(a) of the Company Letter or in the Company SEC Documents filed and publicly available prior to the date of this Agreement (the "Company Filed SEC Documents"), since December 31, 1996, the Company and its Subsidiaries have conducted their respective businesses in all material respects only in the ordinary course consistent with past practice, and there has not been (i) any declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock or any redemption, purchase or other acquisition of any of its capital stock, (ii) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iii) (x) any granting by the Company or any of its Subsidiaries to any officer of the Company or any of its Subsidiaries of any increase in compensation, except in the ordinary course of business (including in connection with promotions) consistent with past practice or as was required under employment agreements in effect as of December 31, 1996, (y) any material change to the Company's or any of its Subsidiaries' severance or termination plans, agreements or arrangements with any of their employees, except as part of a standard employment package to any person promoted or hired (but not including the five most senior officers), or as was required under employment, severance or termination agreements in effect as of December 31, 1996, or (z) except for employment agreements in the ordinary course of business consistent with past practice with employees other than any executive officer of the Company, any entry by the Company or any of its Subsidiaries into any employment, consulting, severance, termination or indemnification agreement with any such employee or executive officer, (iv) any damage, destruction or loss, whether or not covered by -3- CUSIP NO. 98952410 13D Page 9 of 16 Pages insurance, that would reasonably be expected to have a Material Adverse Effect on the Company, (v) any revaluation by the Company of any of its material assets, (vi) any material change in accounting methods, principles or practices by the Company or (vii) any other action that occurred prior to the date hereof that, if it occurred after the date of this Agreement and prior to the Closing Date, would be prohibited by paragraphs (a), (b) (only with respect to the Company's Subsidiaries), (c), (f), (g) or (p) of Section 5.1 of this Agreement. SECTION 2.7. Section 4.7 of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "SECTION 4.7 Financing. Parent has binding written commitments, addressed to Parent or Sub, from one or more financially responsible financial institutions, dated as of November 18, 1997, true and complete copies of which have been furnished to the Company (collectively, the "Commitments") to obtain, together with the other funds to be provided by Parent, the financing necessary to pay the Cash Election Price with respect to each Share outstanding at the Effective Time (other than Electing Shares), to pay (or provide the funds for the Company to pay) all amounts contemplated by Section 2.2 when due, to refinance any indebtedness or other obligation of the Company and its Subsidiaries which may become due as a result of this Agreement or any of the transactions contemplated hereby, to pay all related fees and expenses and to provide for the anticipated working capital needs of the Surviving Corporation following the Merger (the financing necessary to provide such funds being hereinafter referred to as the "Financing"), which Commitments are in full force and effect as of November 18, 1997. There are no conditions precedent or other contingencies related to the funding of the full amount of the Financing other than as set forth in the Commitments. Subject to the terms and conditions of this Agreement and receipt of the proceeds of the Financing as set forth in the Commitments (or on other terms reasonably satisfactory to Parent), at the closing of the Merger, Parent will capitalize Sub with an aggregate equity contribution of at least $117.5 million. Parent will be under no obligation pursuant to the preceding sentence unless and until the proceeds of the Financing are received as set forth in the Commitments. In addition, Parent will be under no obligation under any circumstances to capitalize Sub with equity of more than $117.5 million." SECTION 2.8. Section 5.2(a) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(a) The Company shall, and shall direct and cause its officers, directors, employees, representatives and agents to, immediately cease any discussions or negotiations with any parties that may be ongoing with respect to a Takeover Proposal (as hereinafter defined). The Company shall not, nor shall it permit any of its Subsidiaries to, nor shall it authorize or permit any of its officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative or agent retained by it or any of its Subsidiaries to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing information) any inquiries or the -4- CUSIP NO. 98952410 13D Page 10 of 16 Pages making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal or (ii) participate in any discussions or negotiations regarding any Takeover Proposal; provided, however, that if, at any time prior to the receipt of the Company Stockholder Approval, the Board of Directors of the Company determines in good faith, after consultation with outside counsel, that it would be consistent with its fiduciary responsibilities to the Company's stockholders under applicable law, the Company may, in response to a Takeover Proposal which was not solicited subsequent to the date hereof, (x) furnish information with respect to the Company to any person pursuant to a confidentiality agreement substantially identical to the Confidentiality Agreement (as defined in Section 6.2 hereof) and (y) participate in discussions, investigations and/or negotiations regarding such Takeover Proposal. The Company will promptly notify Parent in the event of the occurrence of any matter referred to in the foregoing proviso. For purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal or offer from any person relating to any direct or indirect acquisition or purchase of 25% or more of the aggregate assets of the Company and its Subsidiaries, taken as a whole, or 25% or more of the voting power of the shares of Common Stock then outstanding or any tender offer or exchange offer that if consummated would result in any person beneficially owning 25% or more of the voting power of the shares of Common Stock then outstanding or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company, other than the transactions contemplated by this Agreement." SECTION 2.9. Section 5.2(b) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(b) Except as set forth in this Section 5.2, neither the Board of Directors of the Company nor any committee thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the approval or recommendation by such Board of Directors or such committee of the Merger or this Agreement; provided that, the Board of Directors may, (A) in response to any Takeover Proposal, suspend such recommendation pending its analysis of such Takeover Proposal or (B) at any time prior to the receipt of the Company Stockholder Approval, modify or withdraw such recommendation if the Board of Directors of the Company determines in good faith that a Takeover Proposal is a Superior Proposal (as hereinafter defined) and, after consultation with outside counsel, that it would be consistent with its fiduciary responsibilities to so modify or withdraw such recommendation, (ii) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal or (iii) cause the Company to enter into any acquisition agreement or other similar agreement (an "Acquisition Agreement") related to any Takeover Proposal. Notwithstanding the foregoing, in the event that prior to the receipt of the Company Stockholder Approval, the Board of Directors of the Company determines in good faith, after consultation with outside counsel, that it would be consistent with its fiduciary responsibilities to the Company's stockholders under applicable law, the Board of Directors of the Company may approve or recommend a Superior Proposal or -5- CUSIP NO. 98952410 13D Page 11 of 16 Pages terminate this Agreement, but in each case, subject to the provisions of Section 6.3 hereof and only at a time that is after the second business day following Parent's receipt of written notice (a "Notice of Superior Proposal") advising Parent that the Board of Directors of the Company has received a Takeover Proposal that may constitute a Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal. For purposes of this Agreement, a "Superior Proposal" means any proposal determined by the Board of Directors of the Company in good faith, after consultation with outside legal counsel, to be a bona fide proposal and made by a third party to acquire, directly or indirectly, for consideration consisting of cash, property and/or securities, more than 50% of the combined voting power of the shares of Common Stock then outstanding or all or substantially all the assets of the Company and otherwise on terms which the Board of Directors of the Company determines in its good faith judgment, after consultation with outside counsel and with a financial advisor of nationally recognized reputation, to be more favorable to the Company's stockholders than the Merger." SECTION 2.10. Section 5.3 of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "SECTION 5.3 Third Party Standstill Agreements. During the period from the date of this Agreement through the Effective Time, the Company shall not, except in connection with the making of a Takeover Proposal, terminate, amend, modify or waive any provision of any confidentiality or standstill agreement to which the Company or any of its Subsidiaries is a party (other than any involving Parent) unless the Company's Board of Directors shall have determined in good faith, after consultation with outside counsel, that such release of any third party or amendment, modification or waiver of such provisions is necessary in order to comply with its fiduciary duties to the Company's stockholders under applicable law." SECTION 2.11. Section 6.12(a) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(a) With respect to any officer or employee who is covered by a severance policy or plan separate from the standard severance policy for the Company's employees (all of which separate severance policies or plans are incorporated in the terms of the employment agreements listed in item 6.12 of the Company Letter), the Surviving Corporation shall maintain (or shall cause to be maintained) such separate policy or plan as in effect as of the date hereof, and, as to all other officers and employees, the Surviving Corporation shall maintain (or shall cause to be maintained) the Company's standard severance policy as in effect as of the date hereof until at least June 30, 1998; provided, however, that with respect to any severance policy maintained pursuant to any statutory requirement, such policy shall continue to be maintained in compliance with the applicable statute." -6- CUSIP NO. 98952410 13D Page 12 of 16 Pages SECTION 2.12. A new Section 6.20 shall be added to the Merger Agreement, which shall read in its entirety as follows: "SECTION 6.20 Surviving Corporation Preferred Stock. Immediately after the Effective Time, the Board of Directors of the Surviving Corporation shall adopt a resolution providing for the creation of the series of Non-Voting 13.5% Pay-in-Kind Preferred Stock, stated value $100.00 per share, of the Surviving Corporation into which the shares of capital stock of Sub are to be converted in the Merger." SECTION 2.13. Section 8.1(b)(i) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(b) by either Parent or the Company: (i) if the Merger shall not have been consummated by February 28, 1998; provided that the terminating party shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the failure to consummate the Merger by February 28, 1998;" SECTION 2.14. Section 8.1(c) of the Merger Agreement shall be amended and restated in its entirety, and shall be replaced by the following: "(c) by Parent or Sub if: (A) as of such time of determination, any of the representations or warranties of the Company set forth in this Agreement that are qualified as to materiality shall not be true and correct in any respect or any such representations or warranties that are not so qualified shall not be true and correct in any material respect, or (B) the Company shall have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or covenant of the Company to be performed or complied with by it under this Agreement and, in the case of (A) such untruth or incorrectness cannot be or has not been cured within 60 days after the giving of written notice to the Company, and, in the case of (B) such failure cannot be or has not been cured within 20 days after the giving of written notice to the Company;" SECTION 3. Sub. Pursuant to Section 6.18 of the Merger Agreement, each of Parent, Sub and the Company hereby agree that by execution and delivery of this Amendment, Sub will be deemed to have signed and become a party to the Merger Agreement as of the date hereof and shall be entitled to all of the rights and subject to all of the obligations and otherwise bound by all of the provisions thereof, in each case applicable to Sub. SECTION 4. Representations and Warranties. (a) The Company. The execution, delivery and performance of this Amendment by the Company have been duly authorized by the Board of Directors of the Company and by all other necessary corporate action on the part of the Company. This Amendment has been duly executed -7- CUSIP NO. 98952410 13D Page 13 of 16 Pages and delivered by the Company and (assuming the valid authorization, execution and delivery of this Amendment by Parent and Sub) constitutes the valid and binding obligation of the Company enforceable against the Company 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. (b) Parent and Sub. The execution, delivery and performance of this Amendment by each of Parent and Sub have been duly authorized by the General Partner of Parent and the Board of Directors of Sub, respectively, and by all other necessary partnership or corporate action on the part of Parent or Sub, respectively. This Amendment has been duly executed and delivered by each of Parent and Sub and (assuming the valid authorization, execution and delivery of this Amendment by the Company) constitutes the valid and binding obligation of each of Parent and Sub enforceable against them 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. SECTION 5. Miscellaneous. (a) Other than as set forth in Section 2.1 through Section 2.8 and Section 3 hereof, this Amendment does not modify, change or delete any other addendum, term, provision, representation, warranty or covenant (the "Provisions") relating to or contained in the Merger Agreement, and all such Provisions remain in full force and effect. For the avoidance of doubt, all references in the Merger Agreement to "the date hereof" or "the date of this Agreement" shall be deemed to be references to the date July 20, 1997. (b) This Amendment 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 laws thereof. This Amendment may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. (c) This Amendment and any of the provisions hereof may not be amended, altered or added to in any manner except by a document in writing and signed by each party. IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Amendment -8- CUSIP NO. 98952410 13D Page 14 of 16 Pages to be signed by their respective officers thereunto duly authorized all 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 ---------------------------------- Title: Vice President TPG ZEUS ACQUISITION CORPORATION By /s/ David M. Stanton ---------------------------------- Title: President ZILOG, INC. By /s/ Edgar A. Sack ---------------------------------- Name: Edgar A. Sack Title: President and CEO -9- EX-7.4 3 CUSIP NO. 98952410 13D Page 15 of 16 Pages CONFORMED COPY TPG Partners II, L.P. 345 California Street San Francisco, CA 94104 November 18, 1997 Warburg, Pincus Capital Company, L.P. Warburg, Pincus & Co. 466 Lexington Avenue New York, New York 10017 Gentlemen and Ladies: Reference is made to the Stockholders Voting Agreement (the "Voting 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., on the other hand, and to the Agreement and Plan of Merger, dated as of July 20, 1997, between Zilog, Inc. and Parent, as amended through the date hereof (the "Merger Agreement"). Capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement. The purpose of this letter agreement is to amend, pursuant to Section 9(a) of the Voting Agreement, Section 4 of the Voting Agreement. The parties hereto hereby agree to amend and restate Section 4 of the Voting Agreement to read in its entirety as follows: 4. Election to Retain Company Stock and Stockholders Agreement. Warburg, Pincus Capital Company, L.P. hereby agrees that it will make and not revoke an effective Non-Cash Election with respect to and otherwise cause the Requisite Number (subject to adjustment in accordance with Section 2.4 of the Merger Agreement) of Subject Shares to be "Electing Shares" under the Merger Agreement. For purposes of this Agreement, the "Requisite Number" shall mean 375,000 less the aggregate number of Electing Shares, if any, held by holders of Shares other than Warburg, Pincus Capital Company, L.P.; provided, however, that in no event shall the Requisite Number be less than zero. Parent shall cause the Exchange Agent to provide Warburg, Pincus Capital Company, L.P., Parent and the Company with the information necessary as of the Election Date to determine the Requisite Number and to permit Warburg, Pincus Capital Company, L.P. to make the Non-Cash Election called for hereby. Each of the Stockholders hereby agrees that, except for the election required to be made by Warburg, Pincus Capital Company, L.P., neither Stockholder will make a Non-Cash Election with respect to any of the Subject Shares. Prior to the Effective Time, each of Warburg, Pincus Capital Company, L.P. and Parent agrees that it and the Company will enter into a Stockholders Agreement consistent with the provisions of Schedule B hereto (all of the material terms of which are summarized therein). * * * CUSIP NO. 98952410 13D Page 16 of 16 Pages If the foregoing accurately sets forth your understandings and agreements with Parent, please execute this letter agreement in the space indicated below, whereupon this letter agreement will constitute a binding agreement among the signatories hereto. 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 Accepted and Agreed to as of the date first above written: 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 Acknowledged as of the date first above written: ZILOG, INC. By: /s/ Richard R. Pickard ------------------------------- Name: Richard R. Pickard Title: Vice President, General Counsel and Secretary 2 -----END PRIVACY-ENHANCED MESSAGE-----