SAN JOSE, Calif., Aug. 8 /EMWNews/ -- Zilog, Inc. (Nasdaq:

ZILG) today announced that it has entered into a settlement agreement and

release with the entities and persons affiliated with Riley Investment

Management LLC, resolving all proxy matters and other issues relating to

Zilog. The agreement provides, among other things, for the following:



    -- Zilog will promptly increase the total number of directors on its

Board of Directors from five to six, divided evenly among its three

Classes.



    -- Zilog's Board of Directors will promptly appoint Eric Singer to join

the Board as a director in Class III and appoint him to its Compensation

Committee.



    -- Zilog will include Mr. Singer in its proxy materials as a nominee

for election to the Board of Directors as a director in Class III and use

its reasonable best efforts to cause Mr. Singer's election to the Board at

its 2008 annual meeting, which is expected to be held on October 6, 2008.



    -- The Riley entities will vote their shares in favor of Zilog's slate

of nominees for election to the Board of Directors at the company's 2008

and 2009 annual meetings, and will not solicit proxies in connection with

those meetings, including with respect to the proposed bylaw amendments.



    -- The Riley entities will abide by certain confidentiality and

standstill obligations through the completion of Zilog's 2009 annual

meeting, including an agreement not to acquire an aggregate beneficial

ownership position of more than 13% of Zilog's outstanding common stock.

The Riley entities and their clients currently own approximately 1,433,055

shares of Zilog common stock, representing approximately 8.5 percent of

Zilog's outstanding shares.



    "We are pleased to have achieved this agreement with the Riley Group

and believe that it best serves the interests of Zilog and its

shareholders," said Darin Billerbeck, president and CEO of Zilog. "Through

this agreement, Zilog and RIM will avoid a costly and disruptive proxy

contest at a time when the company is exploring a full range of strategic

alternatives to enhance shareholder value. We look forward to working with

Mr. Singer."



    Mr. Singer's principal occupation or employment is Senior Investment

Analyst at Riley Investment Management LLC since July 2007. Riley

Investment Management LLC is an investment adviser, which provides

investment management services and is the general partner of Riley

Investment Partners Master Fund, L.P. Mr. Singer began his career at

WisdomTree Capital Management in New York from 1995 to 2000 and was

affiliated with Singer Capital Management from 2001 to 2003. Most recently,

from 2003 to June 2007 Mr. Singer managed private portfolios for Alpine

Resources LLC and its related entities. Mr. Singer is a 1995 graduate of

Brandeis University.



    "We look forward to working with the Zilog Board to enhance shareholder

value," said Bryant Riley, Managing Member of Riley Investment Management

LLC.

    About Zilog, Inc.



    Zilog is a global supplier of application specific, embedded system-on-

chip (SoC) solutions for secured transactions, consumer electronics and

industrial application and an industry leader in remote control and

universal IR database solutions. From its roots as an award-winning

architect in the microprocessor and microcontroller industry, Zilog has

evolved to become a leader in production-ready and custom-built SoC

solution sets. Zilog is headquartered in San Jose, California, and employs

approximately 500 people around the world, with sales offices in Asia,

Europe, and North America. For more information about Zilog and its

products, visit http://www.zilog.com/.



    Cautionary Statements



    This release contains forward-looking statements relating to

expectations, plans or prospects for Zilog, Inc. that are based upon the

current expectations and beliefs of Zilog's management and are subject to

certain risks and uncertainties that could cause actual results to differ

materially from those described in the forward-looking statements. These

statements include those relating to the Zilog's evaluation of a course of

action that will increase value for Zilog stockholders. The risks related

to any action to increase shareholder value are detailed in the company's

filings with the U.S. Securities and Exchange Commission ("SEC"). Zilog

does not expect to, and disclaims any obligation to update such statements

until release of its next quarterly earnings announcement or in any other

manner. Zilog, however, reserves the right to update such statement, or any

portion thereof, at any time for any reason.



    For a detailed discussion of these and other cautionary statements,

please refer to the risk factors discussed in filings with the SEC,

including but not limited to, the Company's Annual Report on Form 10-K for

the fiscal year ended March 31, 2008, and any subsequently filed reports.

All documents also are available through the SEC's Electronic Data

Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov or

from the Company's website at http://www.zilog.com.






    Contacts:                            Investors:

    Stewart Chalmers                     Kristine Mozes

    Positio Public Relations             Mozes Communications LLC

    (818) 681-3588                       (781) 652-8875