Exhibit 10.12
 
 
                                  ZILOG
                            EMPLOYMENT AGREEMENT
 
 
This Agreement is made by and between Zilog, Inc., a Delaware corporation
(hereinafter "Zilog") and Jerry Corvino (hereinafter "Corvino"),
whereby Zilog and Corvino agree that Corvino accepts employment as Senior
Vice President and Chief Information Officer of Zilog, under the following
terms and conditions:
 
1. Term.  Zilog and Corvino agree that Corvino will be Senior Vice
President and Chief Information Officer of Zilog for a period of
twenty-four (24) months, commencing on 6-1-98 and ending 5-31-00.
This Agreement may be extended upon written agreement of Zilog and
Corvino.  If during the term of this Agreement a "Change in
Control" of Zilog occurs, the term of this Agreement will be
extended for a period of twenty four (24) months commencing on the
earlier of the effective date of the Change in Control or the date
this Agreement would otherwise expire; provided, however, in the
case of a Change in Control that is subject to an agreement that is
executed before the date this Agreement would otherwise expire but
becomes effective on a closing date that will occur after the date
this Agreement would otherwise expire, there will be no such
automatic twenty-four month extension if the closing date does not
occur within six (6) months after the date this Agreement would
otherwise expire.  Under these circumstances the term of this
Agreement shall be extended six (6) months from the date it would
otherwise expire.
 
For the purposes of this Agreement, "Change in Control" shall mean
the occurrence of any of the following events:
 
(i) A change in the composition of the board of directors of
Zilog, Inc., as a result of which fewer than two-thirds of the
incumbent directors are directors who either:
 
(a) Had been directors of Zilog, Inc. twenty-four (24)
months prior to such change; or
 
(b) were elected, or nominated for election, to the board of
directors of Zilog, Inc. with the affirmative votes of
at least a majority of the directors who had been
directors of Zilog, inc. twenty-four (24) months prior
to such change and who were still in office at the time
of the election or nomination;
 
(ii) any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) other than Zilog, Inc. (or its
designee), by the acquisition or aggregation of securities is
or becomes the beneficial owner, directly or indirectly of
securities of Zilog, Inc. representing twenty percent (20%) or
more of the combined voting power of  Zilog, Inc.'s then
outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote
at elections of directors;
 
(iii) the sale of all or substantially all of the assets of Zilog,
Inc. to a third party who is not an affiliate (including a
parent or subsidiary) of Zilog, Inc., or;
 
(iv) any acquisition of stock, tender offer, merger, consolidation,
sale, reorganization, dissolution or other such event or
series of events, which in the opinion of a majority of the
members of the board of Zilog, Inc. (as reflected in a written
resolution of the board of Zilog, inc.) has resulted in a
change of control of Zilog, Inc.
 
2. Extent of Services.  Corvino shall devote his entire time, attention
and energies to his position as Senior Vice President and Chief
Information Officer of Zilog and shall not, during the term of this
Employment Agreement, be engaged in any other business activity,
except as set forth below, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; provided,
that Corvino may engage in: 1) personal investment activities: or 2)
service on Boards of Directors of other companies; consistent with
Zilog's Conflict of Interest policy.
 
3. Compensation.
 
A. Salary.  For each month of employment, Zilog will pay, or
cause to be paid, to Corvino the sum of at least  $18,750.00
as base salary.  Such sum will be paid in monthly installments
or such other normal periodic payment schedule as Zilog may
establish for its executives.  Corvino's salary will be
reviewed periodically in accordance with established salary
review procedures and adjustments to his salary, if any, will
be based upon such reviews.
 
B. Employee Performance Incentive Plan and Executive Bonus Plan.
Corvino will be eligible to receive Awards and Payouts in
accordance with the terms of the Zilog Employee Performance
Incentive Plan (hereinafter "EPIP"), and the EPIP Executive
Bonus Plan (hereinafter "Executive Bonus") as such plans may
be modified from time to time and as modified by this
Agreement.
 
C. Zilog Employee Stock Option Plan.  Zilog has provided to
Corvino stock options under the 1998 Long Term Incentive Plan
(hereinafter "LTIP"), a copy of such plan being attached
hereto.  Vesting will continue in accordance with the plan
provisions during the term of this Agreement.
 
4. Benefits.  As an employee of Zilog, Corvino will be entitled to such
benefits as Zilog normally provides its executives.  In addition,
Zilog will provide Corvino with Directors and officers (D&O)
insurance in an amount deemed appropriate by the Company.
 
5. Company Policies.  Corvino agrees to be bound by all Zilog Company
Policies applicable to its employees including but not limited to
Business Ethics, Conflict of interest, Proprietary Information and
Antitrust Compliance, and he agrees to sign any such documents as
Zilog requests evidencing such agreement.
 
6. Termination of Employment.  Zilog reserves the right to terminate
the employment of Corvino at any time during the term of this
Agreement, for any reason or for no reason, with or without cause,
by giving Corvino at least thirty (30) days written notice of such
termination or compensation in lieu of notice; and Corvino may
terminate his employment by giving at least thirty (30) days written
notice to Zilog.  Zilog reserves the right to accelerate any
deferred resignation date given it by Corvino, and any such
acceleration of such date will not alter the character of such
termination from voluntary to involuntary.
 
7. Payment Upon Termination.  Notwithstanding any other provisions of
this Agreement to the contrary, Zilog'' obligations to Corvino, if
his employment with Zilog is terminated prior to the end of this
Agreement, shall be as follows:
 
A. If Corvino voluntarily resigns his employment for 1) other
than Good Reason (as defined in paragraph 7.B. below) or 2)
other than Retirement (as defined in Paragraph 7.C. below) or
3) other than the sale, merger or change in ownership of Zilog
(as defined in paragraph 7.G. below) prior to the termination
date of this Agreement, he will be entitled to:  (1) base
salary then due and owing for services previously performed,
(2) payouts under EPIP which become payable to Corvino
pursuant to the terms of EPIP prior to the effective date of
resignation, and (3)
B. payouts under the Executive Bonus which become payable to
Corvino pursuant to the terms of the Executive Bonus prior to
the effective date of resignation.  Upon payment of the
foregoing items, Zilog will have no further obligation to
Corvino.
 
C. If Corvino voluntarily resigns his employment for Good Reason,
as defined herein, prior to the termination date of this
Agreement, he will be entitled to the benefits provided in
Paragraph 7.D. below.  Good Reason, as used herein, shall
mean:
 
(i) a reduction in Corvino's authority, responsibility or
status as Senior Vice President and Chief Information
Officer such that Corvino ceases to be an "officer" as
that term is defined in the regulations under Section 16
of the Securities Exchange Act of 1934;
 
(ii) a reduction in Corvino's base salary other than in
connection with a general reduction applicable to the
Senior Vice Presidents of Zilog who are members of the
Executive Committee;
 
(iii) a reduction in form and effect or cessation of any
benefit or compensation plan, except EPIP, the Executive
Bonus, the Deferred Compensation Plan, or those that may
occur for the Zilog employee group in general in accord
with a general policy change;
 
(iv) a requirement to relocate, except for the office
relocations that would not increase Corvino's one-way
commute distance by more than 20 miles;
 
(v) any material breach of this Agreement on the part of
Zilog not fully remedied by Zilog within sixty (to) days
after written notice by Corvino of such breach.
 
D. If Corvino retires as defined in PM60-05 prior to the
termination date of this Agreement, he will be entitled to the
following at the effective date of retirement:  (1) base
salary then due and owing for services previously performed,
(2) payouts under EPIP for Awards made prior to the effective
date of the retirement, and 3) payouts under the Executive
Bonus for Awards made prior to the effective date of the
retirement.  EPIP and Executive Bonus Awards may also be
granted at Zilog's sole discretion for the year in which the
retirement occurs, prorated to the date of the retirement.
Payouts for all Awards will be made at the same time and on
the same schedule as those for active employees.  Upon the
payment of the foregoing items, Zilog will have no further
obligation to Corvino.
 
E. If Zilog terminates Corvino's employment during the term of
this Agreement other than for 1) Cause or Detrimental Activity
as defined in 7.E. below, or 2) the sale, merger or change in
ownership of Zilog (as defined in paragraph 7.G. below) he
will be entitled to receive the following:  (1) the then
current base salary for the period remaining in this
Agreement, (2) payouts under EPIP for Awards made prior to the
effective date of termination of employment which payouts are
payable to Corvino pursuant to the terms of EPIP prior to
expiration of the term of this Agreement, and (3) payouts
under the Executive Bonus for Awards made prior to the
effective date of termination of employment which payouts are
payable to Corvino pursuant to the terms of the Executive
Bonus prior to expiration of the term of this Agreement.
Corvino will not be eligible for Awards under EPIP or the
Executive Bonus made after the date on which his employment at
Zilog ceased of for payouts made on any Awards after the
expiration date of this Agreement.  Vesting of stock options
granted under LTIP will continue for the period remaining in
the Agreement.  Upon the payment of the foregoing items, Zilog
will have no further obligation to Corvino.
 
F. If Zilog terminates Corvino during the term of this Agreement
for Cause, or for Detrimental Activity as defined herein,
Zilog will have no further monetary obligation to Corvino
other than:  (1) any base salary then due and owing for
services previously performed, (2) payouts under EPIP which
become payable to Corvino pursuant to the terms of EPIP prior
to the effective date of termination, and (3) payouts under
the Executive Bonus which become payable to Corvino pursuant
to the terms of the Executive Bonus prior to the effective
date of termination.  Cause or Detrimental Activity shall be a
willful violation of a major company policy, conviction of any
criminal or civil law involving moral turpitude, willful
misconduct which results in a material reduction in Corvino's
effectiveness in the performance of his duties, or willful and
reckless disregard for the best interests of the Company.
 
G. If Corvino ceases to be an employee of Zilog during the term
of this Agreement because of total and permanent disability or
death, Zilog's obligations to Corvino or his beneficiaries
will be limited solely to:  (1)  any base salary then due and
owing for services previously performed, (2) payouts in
accordance with the terms of EPIP, (3) payouts in accordance
with the terms of the Executive Bonus and (4) any benefits
including LTIP benefits normally provided by Zilog it its
employees due to or on account of total and permanent
disability or death.
 
H. If Corvino leaves his employment, either voluntarily for Good
Reason or involuntarily for reasons other than for Cause or
Detrimental Activity, following the effective date of a Change
in Control prior to the termination date of this Agreement, he
will be entitled to receive the following:  (1) the then
current base salary for the period remaining in this
Agreement, payable in a cash lump sum not more than five (5)
business days following the date of leaving employment, (2)
payouts under EPIP for Awards made prior to the effective date
of termination of employment, and (3) payouts under the
Executive Bonus for Awards made prior to the effective date of
termination of employment.  EPIP and Executive Bonuses shall
also be awarded for the year in which the termination of
employment occurs and shall be calculated in accordance with
the terms of such arrangements assuming the date of Corvino's
termination is the last day of Zilog's fiscal year and based
on Zilog's financial performance for the portion of such
fiscal year that includes calculated financials for Zilog as a
separate entity.  All of the above EPIP and Executive Bonus
Awards shall be paid in a cash lump sum within five (5)
business days of the date of Corvino's termination of
employment.  All outstanding unvested stock options whether
granted under LTIP or otherwise will continue to vest for the
period of time remaining in the Agreement (the "Continuation
Period").  Regardless of the provisions of LTIP or any other
plans or agreements, the Continuation Period shall be counted
as employment with Zilog for purposes of vesting under all
options and for purposes of determining the expiration date of
any stock options held by Corvino when his employment
terminates.  During the remaining term of this Agreement
Corvino (and, where applicable, his dependents) shall be
entitled to continue participation in the group insurance
plans maintained by Zilog, including life, disability and
health insurance programs, as if he were still an employee of
Zilog.  To the extend that Zilog finds it impossible to cover
Corvino under its group insurance policies during such period,
 
 
I. Zilog shall provide Corvino with individual policies which
offer at least the same level of coverage and which impose not
more than the same costs on him as if he were still an
employee of Zilog.  The foregoing notwithstanding, in the
event that Corvino becomes eligible for comparable group
insurance coverage in connection with new employment, the
coverage provided by Zilog under this paragraph shall
terminate immediately.  Any group health continuation coverage
that Zilog is otherwise required to offer under the
Consolidated Omnibus Budget Reconciliation Act of 1986
("COBRA") shall be offered when coverage under this
paragraph terminates.
 
Except as provided in the paragraph immediately following,
upon payment of the foregoing items, Zilog will have no
further obligation to Corvino.
 
In the event that it is determined that any payment or
distribution of any type to or for the benefit of Corvino made
by Zilog, any of its affiliates, by any person who acquires
ownership or effective control of Zilog or ownership of a
substantial portion of Zilog's assets (within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder (the "Code")) or by any
affiliate of such person, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (the "Total Payments"), would be
subject to the excise tax imposed by section 4999 of the Code
or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest or
penalties, are collectively referred to as the "Excise
Tax"), then Corvino shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount that
shall fund the payment by Corvino of any Excise Tax on the
Total Payments as well as all income taxes imposed on the
Gross-Up Payment, any Excise Tax imposed on the Gross-Up
Payment and any interest or penalties imposed with respect to
taxes on the Gross-Up Payment or any Excise Tax.
 
All mathematical determinations and all determinations of
whether any of the total Payments are "parachute payments"
(within the meaning of Section 280G of the Code) that are
required to be made hereunder, including all determinations of
whether a Gross-Up Payment is required and of the amount of
such Gross-Up Payment, shall be made by the independent
auditors retained by Zilog most recently prior to the Change
In Control (the "Auditors"), who shall provide their
determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up
Payment and any other relevant matters, both to Zilog and to
Corvino within seven (7) business days of Corvino's
termination date, if applicable, or such earlier time as is
requested by Zilog or by Corvino (if Corvino reasonably
believes that any of the Total Payments may be subject to the
Excise Tax).  If the Auditors determine that no Excise Tax is
payable by Corvino, it shall furnish Corvino with a written
statement that such Auditors have concluded that no Excise Tax
is payable (including the reasons therefor) and that Corvino
has substantial authority not to report any Excise Tax on his
federal income tax return.  If a Gross-Up Payment is
determined to be payable, it shall be paid to Corvino within
five (5) business days after the Determination is delivered to
Zilog or Corvino.  Any determination by the Auditors shall be
binding upon Zilog and Corvino, absent manifest error.
 
As a result of uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the
Auditors hereunder, it is possible that Gross-Up Payments not
made by Zilog should have been made ("Underpayments") or
that Gross-Up Payments will have been made by Zilog which
should not have been made ("Overpayments").  In either
event, the Auditors shall determine the amount of the
Underpayment or Overpayment that has occurred.  In the case of
an Underpayment, the amount of such Underpayment shall
promptly be paid by Zilog to or for the benefit or Corvino.
In the case of an Overpayment, the employee shall, at the
direction and expense of Zilog, take such steps as are
reasonably necessary (including the filing of returns and
claims for refund), follow reasonable instructions from, and
procedures established by, Zilog and otherwise reasonably
cooperate with Zilog to correct such Overpayment; provided,
however, that (a) Corvino shall in no event be obligated to
return to Zilog an amount greater than the net after-tax
portion of the Overpayment that Corvino has retained or has
recovered as a refund from the applicable taxing authorities,
and (b) this provision shall be interpreted in a manner
consistent with the intent of this excise tax restoration
provision which is to make Corvino whole, on an after-tax
basis, for the application of the Excise Tax, it being
understood that the correction of an Overpayment may result in
Corvino's repaying to Zilog an amount which is less than the
Overpayment.
 
8. Corvino Representations.  Corvino represents to Zilog that to the
best of his knowledge he is under no obligation to any employer or
third party which would preclude his full, complete and unfettered
discharge of his duties under this Agreement.
 
9. Notices.  Any notices required to be given hereunder shall be in
writing, and if by Zilog shall be addressed to Corvino as indicated
in Zilog's personnel records or such other address as Corvino shall
specify in writing, and if by Corvino to Zilog at:
 
Zilog, Inc.
Suite 110
910 East Hamilton Avenue
Campbell, California  95008
ATTENTION:  Vice President, Human Resources
 
Such addresses may be changed by written notice from either Zilog or
Corvino, to the other.
 
10. Amendment.  This Agreement may be amended only in writing, signed by
both parties hereto.
 
11. Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon Zilog, its successors and assigns.  Corvino
may not assign, transfer, pledge or hypothecate any of his rights or
obligations hereunder, Awards or payouts under EPIP or the Executive
Bonus or other compensation to which he may be entitled hereunder.
Zilog will require any successor (whether direct or indirect, by
purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the business and/or assets of Zilog to assume
expressly and agree, in substance and form satisfactory to Corvino,
to perform this Agreement in the same manner and to the same extent
Zilog would be required to perform it if no succession had taken
place.
 
12. Waiver of Breach.  The waiver by Zilog of a breach of any provision
of this Agreement by Corvino shall not operate or be construed as a
waiver of any subsequent breach by Corvino.
 
13. Severability.  The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any
other provision hereof.
 
14. Entire Agreement.  This entire Agreement consists of this document,
together with the following documents:
 
A. EPIP, to be attached as Exhibit I when finalized;
B. Executive Bonus, to be attached as Exhibit II when finalized;
C. Zilog 1998 Long Term Incentive Plan, to be attached as Exhibit
   III when finalized;
D. Employee Proprietary Rights and Non-Disclosure Agreement,
   attached as Exhibit IV;
E. Conflict of Interest Statement, attached as Exhibit V;
F. Statement addressed to "Human Resources," attached as Exhibit
   VI;
G. Policy on Business Ethics, attached as Exhibit VII; and
H. PM60-05, attached as Exhibit VIII.
 
15. Governing Law.  This Employment Agreement shall be governed by the
laws of the State of California, without regard to conflict of laws
principles.
 
 
Executed effective:  June 1, 1998
                   -----------------
                        (DATE)
 
By:  /s/ Gerald J. Corvino                 By:   /s/  Curtis J. Crawford
 
Dated: June 1, 1998                           Dated:   June 1, 1998