Harvey Partners, LLC Publicizes Letter to Zilog, Inc.

NEW YORK, April 10 /PRNewswire/ -- Harvey Partners, LLC, the investment
manager to Harvey SMidCap Fund, LP and Harvey SMidCap Offshore Fund, Ltd.,
announced today it is publicizing its March 14, 2008 open letter to the Board
of Directors of Zilog, Inc. (Nasdaq: ZILG), because the Board has chosen to
ignore Harvey's shareholder concerns. Harvey presently owns 4.98% of the
company's outstanding stock. In their letter, Harvey articulated its concerns
regarding the direction of the company and its belief that the Board should
pursue a sale in order to maximize shareholder value. The full text of that
letter is included below in this release.
Harvey believes the Board is not focused on the shareholders or creating
shareholder value. After one month, the Board has not responded to Harvey's
letter. Nor is there evidence that the Board has taken any steps to direct
management to capitalize on the company's technology. Management on its own
has not been able to leverage the company's technology.
Harvey is not an activist, but has become increasingly concerned with and
is being motivated by the Board's unresponsiveness and inaction. In light of
the Board's conduct and management's inability, Harvey believes a strategic
transaction is the only path to shareholder value.
March 14, 2008

Board of Directors
c/o Corporate Secretary
Zilog, Inc.
6800 Santa Teresa Boulevard
San Jose, California 95119

Dear Members of the Board:

We are long term investors, nonetheless we feel immediately compelled to
express our views directly to the Board of Directors. Based on the
opportunities presently facing the company, outweighed by severe macroeconomic
challenges, we view the most productive path for Zilog and its shareholders to
be a sale of the company.
The company's historical financial performance does not support continuing
its current course as a stand alone enterprise. We recognize and applaud
management's success in improving gross margins over the last three fiscal
years. Indeed, this gross margin performance is admirable. However, selling,
general and administrative expenses have remained stubbornly at 30% of
revenues over the same period. In short, management has been unable to
leverage and translate this one financial success into profitability.
Consequently, shareholder value has suffered.
We agree with management that the universal remote, embedded flash and
32-bit ARM businesses are indeed exciting. However, the balance of the
company's business is lackluster at best, a wasteful management distraction,
and a financial drain. The continuing operation of these assets under the
current model is, as the company's history shows, insufficient to produce
value enhancing outcomes. Instead, given the company's positioning, its
assets are only capable of producing value from a strategic transaction,
rather than ordinary course operation.
Management is not able to derive profits, and thereby drive shareholder
value, from its stewardship of the company's few promising assets. Thus, the
company's future as a stand alone enterprise is not encouraging. Other
companies, however, appear to believe that they can make the company's assets
more productive and are willing to pay for the opportunity to do so. The
onset of a recession will only serve to increase the challenges facing the
company. Therefore, the company should initiate a process to attract
additional takeover offers in order to deliver value, rather than risk
dissipation of the assets and further value erosion.
In our strong view, the Board should direct management to initiate a
process to explore opportunities to increase shareholder value. We would
welcome the invitation to engage in a direct dialog with the Board or any of
its members to explain our position further and to better understand the
Board's view of the company's future.
Very truly yours,

Harvey Partners, LLC

James A. Schwartz

SOURCE Harvey Partners, LLC

Lizzy Schubert of Harvey Partners, LLC, +1-212-389-8767, Fax, +1-212-389-8769