Exhibit 4 to
Debtors' Joint Reorganization Plan
Non-Solicitation and Non-Hire Agreement
NON-SOLICITATION AND NON-HIRE AGREEMENT
This NON-SOLICITATION AND NON-HIRE AGREEMENT (this
"Agreement"), is entered into as of January 28, 2002, by and between ZiLOG,
Inc., a Delaware corporation ("ZiLOG"), and TPG Partners II, L.P., a
Delaware limited partnership (together with Affiliates (as defined herein),
"TPG"). Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings ascribed to them in the Plan (as defined herein).
RECITALS:
A. ZiLOG and ZiLOG-MOD III, Inc., a Delaware corporation
and currently wholly-owned subsidiary of ZiLOG ("MOD III Subsidiary" and
together with ZiLOG, the "Companies"), intend to effect a restructuring
through a filing a joint plan of reorganization (the "Plan") with United
States Bankruptcy Court for the Northern District of California. A copy of
the Plan is attached hereto as Exhibit A.
B. As a condition to the effectiveness of the Plan, TPG
Partners II, L.P. and ZiLOG are entering into this Agreement.
NOW, THEREFORE, for valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
Section 1. Definitions. For the purposes of this
Agreement, except as otherwise expressly provided, capitalized terms shall
have the meanings ascribed to them in this Section 1.
1. "Affiliate" shall mean from time to time (i)
any corporation, general partnership, limited partnership, limited
liability partnership, trust, company (including, without limitation, any
limited liability company or joint stock company) or other organization
that, directly or indirectly, through one or more intermediaries, controls,
is controlled by or is under common control with TPG Partners II, L.P.; and
(ii) any individual in his or her capacity as an officer, director,
employee or agent of, or acting for the benefit of the entities referred to
in clause (i) above. For purposes hereof, control of any entity by any
party shall be deemed to exist only if that party owns more than 50% of the
voting securities or other interests of that entity or otherwise has the
power to elect or appoint more than 50% of the governing body of that
entity.
(a) "Cause" shall have the meaning set forth in
the Employment Agreement.
(b) "Change in Control" shall have the meaning
set forth in the Employment Agreement.
(c) "Employment Agreement" means the Employment
Agreement between Xxxxx X. Xxxxxxxx and ZiLOG dated January 7, 2002.
(d) "Good Reason" shall have the meaning set
forth in the Employment Agreement.
(e) "TPG Related Parties" shall have the meaning
set forth in the Mutual Release between ZiLOG, MOD III Subsidiary and TPG
Partners II, L.P., dated the date hereof.
Section 2. Covenant Not to Solicit or Hire.
(a) TPG covenants that, during the term of this
Agreement, it shall not, and shall not permit any of its respective
Affiliates to, directly or indirectly, personally or through other entities
or recruiters: (i) solicit Xx. Xxxxxxxx for employment purposes; (ii) hire
Xx. Xxxxxxxx or engage Xx. Xxxxxxxx in any type of employment; or (iii) in
any way interfere with or induce Xx. Xxxxxxxx to breach the Employment
Agreement; provided, however, that Xx. Xxxxxxxx may devote up to any
average of two days per five-day work week providing part-time services on
matters involving TPG, so long as such services do not interfere with the
performance of his responsibilities at ZiLOG in any material respect and
are not detrimental to ZiLOG in any material respect and Xx. Xxxxxxxx
ceases providing such services no later than April 1, 2002; provided,
further, that so long as such services do not interfere with the
performance of his responsibilities at ZiLOG in any material respect and
are not detrimental to ZiLOG in any material respect, subject to prior
approval of the Board of Reorganized ZiLOG, Xx. Xxxxxxxx may serve on up to
two boards of directors, including companies affiliated with TPG.
(b) ZiLOG may not exercise any power, right,
privilege or remedy under this Agreement or otherwise on account of a
breach by TPG under this Section 2 unless it has first delivered written
notice to TPG Partners II, L.P., specifying the nature of the breach and
then, only if the breach has not been cured within 5 days from the date of
delivery of notice.
Section 3. Term and Termination.
(a) This Agreement shall be effective upon
execution by the parties and continue for the two year period following the
effective date under a Conforming Plan; provided that this Agreement shall
terminate earlier upon the termination of Xx. Xxxxxxxx'x employment (x) by
ZiLOG other than for Cause, (y) by Xx. Xxxxxxxx for Good Reason, or (z) by
Xx. Xxxxxxxx if he terminates his employment agreement in connection with a
Change in Control in accordance with the terms of the Employment Agreement.
(b) TPG Partners II, L.P. may terminate this
Agreement by written notice to ZiLOG:
(i) any time after March 31, 2002, if a plan
of reorganization, which includes (w) the provisions (the
"Provisions") of paragraph 8 of the ZiLOG, Inc. Restructuring Term
Sheet dated November 16, 2001, a copy of which is attached hereto
as Exhibit B (the "Term Sheet"), (x) an agreement by ZiLOG (of
which agreement each TPG Related Party shall be a stated
third-party beneficiary) that neither of the Companies will assert
a claim for preference, fraudulent conveyance or the like against
Xxxxxx X. Xxxxxxxx, or his successors or assigns, to the extent
that the assertion of that claim gives rise to a claim by Xx.
Xxxxxxxx, or his successors or assigns, as the case may be,
against any one or more of the TPG Related Parties, (y) a
provision that, if Xx. Xxxxxxxx, or his successors or assigns, if
appropriate, offers to execute a mutual release of the type called
for in the Provisions, such mutual release will include each TPG
Related Party as a third-party beneficiary, and (z) payments of
cash to shareholders of ZiLOG on substantially the terms outlined
in the Plan (together with an appropriate disclosure statement, a
plan with such terms in subsections (w) through (z) above, a
"Conforming Plan"), --------------- is not filed with the United
States Bankruptcy Court on or before March 31, 2002, provided that
ZiLOG and the Informal Committee may agree in writing to extend
such deadline for an additional thirty days;
(ii) any time after June 9, 2002, if the
effective date under a Conforming Plan has not occurred on or
before June 9, 2002; or
(iii) at any time after the filing of a plan
of reorganization with the United States Bankruptcy Court, if
either ZiLOG or more than 50% of the outstanding principal amount
of Senior Notes fail to support a Conforming Plan (by voting
against, or withdrawing their respective acceptance of, that
plan).
Section 4. Specific Performance. The parties hereto agree
that if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist and
damages would be difficult to determine, and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
Section 5. Severability. In the event that any provision
of this Agreement, or the application of any such provision to any set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to circumstances other than those as to which
it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and
enforceable to the fullest extent permitted by law.
Section 6. Governing Law; Venue.
(a) This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
California without regard to conflict of laws principles thereof.
(b) Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this
Agreement shall be brought or otherwise commenced in any state or federal
court located in the Northern District of California. Each party to this
Agreement: (i) expressly and irrevocably consents and submits to the
exclusive jurisdiction of each state and federal court located in the
Northern District of California, and each appellate court located in the
State of California, in connection with any such legal proceeding; (ii)
agrees that each state and federal court located in the Northern District
of California shall be deemed to be a convenient forum; and (iii) agrees
not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the
Northern District of California any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding
has been brought in an inconvenient forum, that the venue of such
proceeding is improper or that this Agreement or the subject matter of this
Agreement may not be enforced in or by such court.
(c) This Section 6 shall survive the termination
of this Agreement.
Section 7. No Waiver. No failure by any of the parties to
this Agreement to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of the parties in exercising any power,
right, privilege or remedy under this Agreement, shall operate as a waiver
of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any
other or further exercise thereof or of any other power, right, privilege
or remedy. The parties shall not be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it
is given.
Section 8. Non-Assignability. This Agreement shall not be
assigned, except by operation of law, and shall be binding upon and inure
to the benefit of the parties hereto.
Section 9. Notices. Any and all notices, demands or other
communications required or desired to be given hereunder by any party shall
be in writing and shall be validly given or made to another party if served
personally, sent via overnight courier (fare prepaid), sent via facsimile,
or if deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested, and delivered to a party hereto as
follows (or to such other address as a party hereto shall identify to the
other in a like notice):
(a) If to ZiLOG, at:
ZiLOG, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
(b) If to TPG, at:
Texas Pacific Group
000 Xxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Section 10. No Third Party Beneficiaries. This Agreement
is solely for the benefit of the parties to the Agreement, and has no third
party beneficiaries.
Section 11. Captions. The captions contained in this
Agreement are for convenience of reference only, shall not be deemed to be
a part of this Agreement and shall not be referred to in connection with
the construction or interpretation of this Agreement.
Section 12. Amendment. This Agreement may not be amended,
modified, altered or supplemented other than by means of a written
instrument duly executed and delivered on behalf of the parties sought to
be bound by any such amendment, modification, alteration or supplement.
Section 13. Counterparts. This Agreement may be executed
in any number of counterparts, each of which may shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ZiLOG, INC.
By: /s/
---------------------------------------
Name:
Title:
TPG PARTNERS II, L.P.
By: TPG GENPAR II, L.P.
By: TPG ADVISORS II, INC.
By: /s/
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Name:
Title:
Agreed and Acknowledged:
/s/
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Xxxxx X. Xxxxxxxx
