Exhibit 10.21
 
                                    ZILOG
                            EMPLOYMENT AGREEMENT
 
 
This Agreement is made by and between ZiLOG, Inc., a Delaware corporation
(hereinafter "ZiLOG") and Aydin Koc (hereinafter "Koc"), whereby ZiLOG and Koc
agree that Koc accepts employment as Senior Vice President and General Manager,
Home Entertainment Group of ZiLOG, under the following terms and conditions:
 
1. Term.  ZiLOG and Koc agree that Koc will be Senior Vice President and General
Manager, Home Entertainment Group of ZiLOG for a period of twenty-four (24)
months, commencing on your date of hire.  This Agreement may be extended upon
written agreement of ZiLOG and Koc.  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.  Koc shall devote his entire time, attention and
energies to his position as Senior Vice President and General Manager, Home
Entertainment Group 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 Koc 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; or 3)
advisory and community activities that do not affect his time commitment to
ZiLOG.
 
3. Compensation.
 
A. Salary.  For each month of employment, ZiLOG will pay, or cause to be
paid, to Koc 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.  Koc'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.  Koc 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 Koc 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, Koc will be entitled to such benefits as
ZiLOG normally provides its executives.  In addition, ZiLOG will provide Koc
with Directors and officers (D&O) insurance in an amount deemed appropriate
by the Company for his level of responsibility.
 
5. Company Policies.  Koc agrees to be bound by all ZiLOG published 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 reasonable documents as ZiLOG
requests evidencing such agreement.
 
6. Termination of Employment.  ZiLOG reserves the right to terminate the
employment of Koc at any time during the term of this Agreement, for any
reason or for no reason, with or without cause, by giving Koc at least thirty
(30) days written notice of such termination or compensation in lieu of
notice; and Koc 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 Koc, 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's obligations to Koc, if his employment with
ZiLOG is terminated prior to the end of this Agreement, shall be as follows:
 
A. If Koc 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 Koc pursuant to the terms of
EPIP prior to the effective date of resignation, and (3)
payouts under the Executive Bonus which become payable to Koc 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 Koc.
 
B. If Koc 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 Koc's authority, responsibility or status as
Senior Vice President and General Manager, Home Entertainment
Group such that Koc 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 Koc'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 Koc'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 (60) days after written
notice by Koc of such breach.
 
C. If Koc 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 Koc.
 
D. If ZiLOG terminates Koc'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 Koc 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 Koc pursuant to the terms of the Executive Bonus
prior to expiration of the term of this Agreement.  Koc will not be
eligible for Awards under EPIP or the Executive Bonus made after the
date on which his employment at ZiLOG ceased or 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 Koc.
 
E. If ZiLOG terminates Koc during the term of this Agreement for Cause, or
for Detrimental Activity as defined herein, ZiLOG will have no further
monetary obligation to Koc other than:  (1) any base salary then due
and owing for services previously performed, 2) payouts under EPIP
which become payable to Koc pursuant to the terms of EPIP prior to the
effective date of termination, and (3) payouts under the Executive
Bonus which become payable to Koc 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
Koc's effectiveness in the performance of his duties, or willful and
reckless disregard for the best interests of the Company.
 
F. If Koc 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 Koc 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.
 
G. If Koc 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 Koc'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 Koc'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 Koc when his employment terminates.  During the
remaining term of this Agreement Koc (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 Koc under its
group insurance policies during such period,
 
H. ZiLOG shall provide Koc 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 Koc 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 Koc.
 
In the event that it is determined that any payment or distribution of
any type to or for the benefit of Koc 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
Koc shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount that shall fund the payment by Koc 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 Koc within seven
(7) business days of Koc's termination date, if applicable, or such
earlier time as is requested by ZiLOG or by Koc (if Koc 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 Koc,
it shall furnish Koc with a written statement that such Auditors have
concluded that no Excise Tax is payable (including the reasons
therefor) and that Koc 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 Koc within five (5)
business days after the Determination is delivered to ZiLOG or Koc.
Any determination by the Auditors shall be binding upon ZiLOG and Koc,
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 Koc.  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) Koc
shall in no event be obligated to return to ZiLOG an amount greater
than the net after-tax portion of the Overpayment that Koc 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
Koc 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 Koc's repaying to ZiLOG an amount which is less than the
Overpayment.
 
8. Koc Representations.  Koc 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 Koc as indicated in ZiLOG's personnel
records or such other address as Koc shall specify in writing, and if by Koc
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 Koc, 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.  Koc 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
Koc, 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 or by Koc of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
 
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. Policy on Business Ethics, attached as Exhibit VII; and
G. 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:  August 3, 1998
                    -------------------
                         (DATE)
 
By:  /s/ Aydin Koc                  By:    /s/ Curtis J. Crawford
 
Dated:  August 3, 1998              Dated:    August 3, 1998