EXHIBIT 10.1

CHANGE IN CONTROL AGREEMENT
 
THIS CHANGE IN CONTROL AGREEMENT ("Agreement") is made and entered into on
October 10, 2007 by and between ZiLOG, Inc. (the "Company") and Perry J. Grace,
the Company's Chief Financial Officer ("Executive") (together the "Parties").
 
WHEREAS, Executive is currently employed as the Chief Financial 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 15, 2007, provided, however, that on each
anniversary of December 15, 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
 
 

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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 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 twelve (12) 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.
 
(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
 
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time of the Change of Control, shall immediately become free from restrictions
(other than 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 Change in Control Agreement, dated as of
December 15, 2005, by and between the Parties, which shall remain in effect
until December 14, 2007.  For avoidance of doubt, Employee 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/ Darin Billerbeck
 
/s/ Perry J. Grace
 
Darin Billerbeck  
Perry J. Grace