EXHIBIT 10.1
 
CHANGE IN CONTROL AGREEMENT
 
THIS CHANGE IN CONTROL AGREEMENT ("Agreement") is made and entered into on
December 19, 2007 by and between ZiLOG, Inc. (the "Company") and
Darin G. Billerbeck, the Company's President and Chief Executive Officer
("Executive") (together the "Parties").
 
WHEREAS, Executive is currently employed as the President and Chief Executive
Officer of the Company;
 
WHEREAS, the Company recognizes that there is a possibility that the Company may
become the subject of a Change in Control (defined below), either now or at some
time in the future;
 
WHEREAS, the Company believes that it is in the best interests of the Company
and its stockholders to foster Executive's objectivity in making decisions with
respect to any pending or threatened Change in Control of the Company and to
assure that the Company will have the continued dedication and availability of
Executive as an employee of the Company, notwithstanding the possibility or
occurrence of a Change in Control; and
 
WHEREAS, with these and other considerations in mind, the Board of Directors of
the Company (the "Board"), acting through its Compensation Committee, has
authorized the Company to enter into this Agreement with Executive to provide
the protections set forth herein.
 
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements herein contained, intending to be legally bound, the Parties agree as
follows:
 
1.           Term of Agreement.  This Agreement shall be effective for the
two-year period commencing on December 21, 2007, provided, however, that on each
anniversary of December 21, 2007 the Term of the Agreement shall be
automatically extended for an additional one-year period unless prior to such
date, either party notifies the other of its intention not to so extend the
Agreement (the "Term") and provided further, that if a Change in Control
(defined below) occurs during the Term, the Term shall be extended as necessary
such that the Agreement expires no earlier than the date twelve (12) months
following the Change in Control.
 
2.           Change in Control.  For purposes of this Agreement, a Change in
Control shall mean the first to occur after the date of this agreement of the
following:
 
(a)           dissolution, liquidation or sale of all or substantially all of
the assets of the Company;
 
(b)           the consummation of a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation or
other entity, other than a merger or consolidation that results in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
 

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thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation; or
 
(c)           the acquisition by any person, entity or group within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, or any
comparable successor provisions (excluding any employee benefit plan, or related
trust, sponsored or maintained by the Company or any affiliate of the Company)
of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, or comparable successor rule) of securities
of the Company representing at least 50% of the combined voting power entitled
to vote in the election of directors.
 
3.           Termination in Connection with a Change in Control.  In the event
Executive experiences a Qualifying Termination (defined below) anytime during
the Change in Control Protection Period (defined below), Executive shall be
entitled to the following payments and benefits (collectively, the "Change in
Control Payments"), which shall be in addition to any payments to Executive for
earned but unpaid salary and accrued but unused vacation through the date of
termination, as well as any vested benefits to which Executive is entitled in
accordance with the terms of any applicable employee benefit plan:
 
(a)           a lump sum payment equal to eighteen (18) months of Executive's
base salary, at the rate in effect at the time of termination, payable within
thirty (30) days of Executive's termination;
 
(b)           any and all of Executive's Company stock options that are
outstanding at the time of termination and not yet vested and that would
otherwise vest within 12 months of a Qualifying Termination shall immediately
become exercisable and the exercise period of any stock option shall continue
for the length of the exercise period specified in the applicable stock option
agreement or plan; and
 
(c)           continuation of Executive's Company medical and dental benefits
for the period of one year from the date of termination; provided, however,
that, if such continuation is not permitted under the terms of the Company's
benefit plans, the Company shall reimburse the Executive for the costs and any
premiums paid to the Executive for continuation of coverage required under the
Consolidated Omnibus Budget Reconciliation Act for such one year period; and
provided further that the Company's obligation to provide medical benefits under
this section shall cease prior to the end of one year if Executive becomes
eligible for coverage under another employer's medical plans.  Notwithstanding
the foregoing, the Company shall not be obligated to provide long-term
disability benefits.
 
4.           Restricted Stock in Connection with a Change of Control.  In the
event of a Change in Control, any and all of Executive's Company restricted
stock awards that are outstanding at the time of the Change in Control and not
free from restrictions but which would otherwise become free of restrictions
under the terms of the award within 12 months from the time of the Change of
Control, shall immediately become free from restrictions (other than
 

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restrictions required by applicable law or any national securities exchange upon
which any securities of the Company are then listed).
 
5.           Waiver and Release Required.  The Change in Control Payments
described above are expressly conditioned upon Executive's execution of a valid
waiver and release of any and all claims that Executive may have, or have had,
against the Company and its agents, including but not limited to its officers,
directors and employees, in a form provided by the Company or its successor.
 
6.           Qualifying Termination.  For purposes of this Agreement, a
Qualifying Termination shall mean Executive's termination by the Company or its
successor without Cause (as defined below) or Executive's resignation of his
employment for Good Reason (as defined below).  Executive's termination or
resignation of his employment for any other reason, including without
limitation, death, Disability (defined below) , termination for Cause or
resignation without Good Reason, shall not be deemed a Qualifying Termination
and Executive shall not be entitled to the Change in Control Payments described
above.
 
(a)           For purposes of this Agreement, "Cause" shall mean one or more of
the following:  (i) Executive's failure to reasonably and substantially perform
his employment duties or to observe Company policies in all material respects;
(ii) Executive's willful misconduct or gross negligence which materially injures
the Company; or (iii) Executive's conviction or plea of nolo contendere to a
felony or other serious crime involving moral turpitude.  In all of the
foregoing cases, the Company shall provide written notice to Executive
indicating in reasonable detail the event or circumstances that constitute Cause
under this Agreement, and, if such breach or failure is reasonably susceptible
to cure, the Company will provide Executive with thirty days to cure such breach
or failure prior to termination for Cause.
 
(b)           For purposes of this Agreement, "Good Reason" shall be deemed to
exist if, without the Executive's approval:  (i) the Company or its successor
materially reduces Executive's duties or responsibilities; or (ii) the Company
or its successor materially reduces Executive's overall compensation, including
annual base salary and bonus opportunity; or (iii) Executive's principal place
of employment is moved more than 50 miles from its location on the date of this
Agreement.  Within 60 days of becoming aware of an event or circumstances that
constitutes Good Reason under this Agreement, Executive shall provide written
notice, describing such event or circumstances in reasonable detail, to Company
and Executive will provide the Company with thirty days to cure such diminution
prior to termination for Good Reason.
 
(c)           For purposes of this Agreement, "Disability" shall mean any
illness, disability or other incapacity that renders Executive physically or
mentally unable regularly to perform his duties hereunder for a period in excess
or sixty (60) consecutive days or more than ninety (90) days in any consecutive
twelve (12) month period.  The Board shall make a good faith determination of
whether Executive is physically or mentally unable to regularly perform his
duties, subject to its review and consideration of any physical and/or mental
health information provided to it by Executive as determined by a physician
reasonably acceptable to the Company.
 
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7.           Change in Control Protection Period.  For purposes of this
Agreement, the Change in Control Protection Period shall be the period two (2)
months prior to and twelve (12) months following a Change in Control.
 
8.           Limitation on Payments.  In the event that the Company's tax
counsel or certified public accounting professional confirms in writing to the
Company and Executive that payments under this Agreement, together with any
other payments to Executive from the Company that are "parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code") ("Potential Parachute Payments") would otherwise equal or
exceed three (3) times the Executive's "Base Amount" as defined in Section 280G
of the Code, then notwithstanding anything to the contrary in this Agreement,
the payments under this Agreement shall be reduced to an amount such that the
Potential Parachute Payments do not exceed 2.99 times the Executive's Base
Amount.  Any reduction in payments required by this Section 8 shall be applied
to such payments and benefits under this Agreement as the Company in its sole
discretion deems necessary, shall be communicated to Executive in writing prior
to the date the first reduced payment or benefit would otherwise be due and
shall be accompanied by written documentation from the Company's tax counsel or
certified public accounting professional evidencing that the reduction is the
minimum amount required to comply with this Section 8.
 
9.           No Right to Continued Employment.  Nothing in this Agreement shall
guarantee the right of Executive to continued employment by the Company and the
Company retains all rights to terminate Executive's employment at any time for
any reason or for no reason and with or without prior notice.
 
10.           Binding Agreement.  This Agreement is a personal contract and the
rights and interests of Executive hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him.  This Agreement shall be
binding upon and shall inure to the benefit of the Company's successors and
assigns.
 
11.           Tax Withholding.  The Company may withhold from any amounts
payable under this Agreement any taxes that are required to be withheld pursuant
to any applicable law or regulation.
 
12.           Entire Agreement.  This Agreement contains all the understandings
between the Parties hereto pertaining to the matters referred to herein and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto, provided that it shall not
supersede that certain Offer Letter, dated as of December 21, 2006, by and
between the Parties, which shall remain in effect until December 21, 2007.  For
avoidance of doubt, Executive shall not receive payments under Section 3 of this
Agreement.  Executive represents that, in executing this Agreement, he does not
rely and has not relied upon any representation or statement not set forth
herein made by the Company with regard to the subject matter of this Agreement
or otherwise.
 
13.           Amendment or Modification.  No provision of this Agreement may be
amended or waived unless such amendment or waiver is agreed to in writing,
signed by Executive and by a duly authorized officer of the Company.
 
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14.           Notices.  Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or fax or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
 
To Executive at:
 
6800 Santa Teresa Boulevard
San Jose, CA  95119
 
To the Company at:
 
ZiLOG, Inc.
U.S. Headquarters
6800 Santa Teresa Boulevard
San Jose, CA  95119
Attn:  Legal Department
 
Any notice delivered personally or by courier under this Section 13 shall be
deemed given on the date delivered and any notice sent by telecopy or registered
or certified mail, postage prepaid, return receipt requested, shall be deemed
given on the date telecopied or mailed.
 
15.           Waiver of Other Severance Rights.  To the extent that Change in
Control Payments are made to Executive pursuant to this Agreement, Executive
hereby expressly waives the right to receive severance payments or severance
benefits under any other plan or agreement of the Company.
 
16.           Each Party the Drafter.  This Agreement and the provisions
contained in it shall not be construed or interpreted for or against any party
to this Agreement because that party drafted or caused that party's legal
representative to draft any of its provisions.
 
17.           Governing Law.  This Agreement will be governed by and construed
in accordance with the laws of the State of California, without regard to its
conflicts of laws principles.
 
18.           Headings.  All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
 
19.           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first written above.
 
ZiLOG, INC.
 
EXECUTIVE
           
By:
/s/ Jay Knowlton
 
 /s/ Darin G. Billerbeck
 
Jay Knowlton (authorized officer)
 
Darin G. Billerbeck