**Exhibit 10.43**

 

**ZORAN CORPORATION**

**AMENDED AND RESTATED**

**1995 EMPLOYEE STOCKPURCHASE PLAN**

**(As Amended andRestated Through August 8, 2003)**

 

# 1.             **Establishment,Purpose and Term of Plan**.

## 1.1           ***Establishment.***  The Zoran Corporation 1995 Employee StockPurchase Plan was initially established effective December 14, 1995 (the “**EffectiveDate**”), the effective date of the initial registration by theCompany of its Stock under Section 12 of the Exchange Act (the “**Initial Plan**”).  The Initial Plan was amended and restated inits entirety as the Zoran Corporation Amended and Restated 1995 Employee StockPurchase Plan (the “**Plan**”) effective as of the date ofcommencement of the first Offering under the Plan following approval of thePlan by the stockholders of the Company on June 6, 1996.

## 1.2           ***Purpose.***  The purpose of the Plan to provide EligibleEmployees of the Participating Company Group with an opportunity to acquire aproprietary interest in the Company through the purchase of Stock.  The Company intends that the Plan shallqualify as an “employee stock purchase plan” under Section 423 of the Code(including any amendments or replacements of such section), and the Plan shallbe so construed.

## 1.3           ***Term of Plan.***  The Plan shall continue in effect until theearlier of its termination by the Board or the date on which all of the sharesof Stock available for issuance under the Plan have been issued.

# 2.             **Definitionsand Construction**.

## 2.1           ***Definitions.***  Any term not expressly defined in the Planbut defined for purposes of Section 423 of the Code shall have the samedefinition herein.  Whenever usedherein, the following terms shall have their respective meanings set forthbelow:

### (a)           “**Board**”means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administerthe Plan, “Board” also means such Committee(s).

### (b)           “**Code**”means the Internal Revenue Code of 1986, as amended, and any applicableregulations promulgated thereunder.

### (c)           “**Committee**”means a committee of the Board duly appointed to administer the Plan and havingsuch powers as shall be specified by the Board.  Unless the

 

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 powers of the Committee have beenspecifically limited, the Committee shall have all of the powers of the Boardgranted herein, including, without limitation, the power to amend or terminatethe Plan at any time, subject to the terms of the Plan and any applicablelimitations imposed by law.

 

### (d)           “**Company**”means Zoran Corporation, a Delaware corporation, or any successor corporationthereto.

### (e)           “**Compensation**”means, with respect to an Offering Period under the Plan, all amounts paid incash in the form of base salary during such Offering Period before deductionfor any contributions to any plan maintained by a Participating Company anddescribed in Section 401(k) or Section 125 of the Code.  Compensation shall not include commissions,overtime, bonuses, annual awards, other incentive payments, shift premiums,reimbursements of expenses, allowances, long-term disability, workers’compensation or any amount deemed received without the actual transfer of cashor any amounts directly or indirectly paid pursuant to the Plan or any otherstock purchase or stock option plan.

### (f)            “**EligibleEmployee**” means an Employee who meets the requirements set forth inSection 5 for eligibility to participate in the Plan.

### (g)           “**Employee**”means any person treated as an employee (including an officer or a Director whois also treated as an employee) in the records of a Participating Company andfor purposes of Section 423 of the Code; provided, however, that neitherservice as a Director nor payment of a director’s fee shall be sufficient toconstitute employment for purposes of the Plan.

### (h)           “**Exchange Act**”means the Securities Exchange Act of 1934, as amended.

### (i)            “**Fair MarketValue**” means, as of any date, if there is then a public market forthe Stock, the closing price of a share of Stock (or the mean of the closingbid and asked prices of a share of Stock if the Stock is so reported instead)as reported on the National Association of Securities Dealers AutomatedQuotation (“**NASDAQ**”) System, the NASDAQ National Market System or suchother national or regional securities exchange or market system constitutingthe primary market for the Stock.  Ifthe relevant date does not fall on a day on which the Stock is trading onNASDAQ, the NASDAQ National Market System or other national or regionalsecurities exchange or market system, the date on which the Fair Market Valueshall be established shall be the last day on which the Stock was so tradedprior to the relevant date, or such other appropriate day as shall bedetermined by the Board, in its sole discretion.  If there is then no public market for the Stock, the Fair MarketValue on any relevant date shall be as determined by the Board without regardto any restriction other than a restriction which, by its terms, will neverlapse.  Notwithstanding the foregoing,the Fair Market Value per share of Stock on the Effective Date shall be deemedto be the public offering price set forth in the final prospectus filed withthe Securities and Exchange Commission in connection with the initial publicoffering of the Stock.

### (j)            “**Offering**”means an offering of Stock as provided in Section 6.

 

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### (k)           “**OfferingDate**” means, for any Offering Period, the first day of such OfferingPeriod.

### (l)            “**OfferingPeriod**” means a period determined in accordance withSection 6.1.

### (m)          “**ParentCorporation**” means any present or future “parent corporation” of theCompany, as defined in Section 424(e) of the Code.

### (n)           “**Participant**”means an Eligible Employee participating in the Plan.

### (o)           “**ParticipatingCompany**” means the Company or any Parent Corporation or SubsidiaryCorporation which the Board determines should be included in the Plan.  The Board shall have the sole and absolutediscretion to determine from time to time what Parent Corporations orSubsidiary Corporations shall be Participating Companies.

### (p)           “**ParticipatingCompany Group**” means, at any point in time, the Company and allother corporations collectively which are then Participating Companies.

### (q)           “**PurchaseDate**” means, for any Purchase Period, the last day of such PurchasePeriod.

### (r)            “**PurchasePeriod**” means a period determined in accordance withSection 6.2.

### (s)           “**PurchasePrice**” means the price at which a share of Stock may be purchasedpursuant to the Plan, as determined in accordance with Section 9.

### (t)            “**PurchaseRight**”  means an optionpursuant to the Plan to purchase such shares of Stock as provided inSection 8 which may or may not be exercised during an OfferingPeriod.  Such option arises from theright of a Participant to withdraw such Participant’s accumulated payrolldeductions not previously applied to the purchase of Stock under the Plan (ifany) and terminate participation in the Plan or any Offering therein at anytime during an Offering Period.

### (u)           “**Stock**”means the common stock, par value $0.001, of the Company, as adjusted from timeto time in accordance with Section 4.2.

### (v)           “**SubsidiaryCorporation**” means any present or future “subsidiary corporation” ofthe Company, as defined in Section 424(f) of the Code.

## 2.2           ***Construction.***  Captions and titles contained herein are forconvenience only and shall not affect the meaning or interpretation of anyprovision of the Plan.  Except whenotherwise indicated by the context, the singular shall include the plural, theplural shall include the singular, and use of the term “or” shall include theconjunctive as well as the disjunctive.

 

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# 3.             **Administration.**  The Plan shall be administered by the Board,including any duly appointed Committee of the Board.  All questions of interpretation of the Plan or of any Purchase Rightshall be determined by the Board and shall be final and binding upon allpersons having an interest in the Plan or such Purchase Right.  Subject to the provisions of the Plan, theBoard shall determine all of the relevant terms and conditions of PurchaseRights granted pursuant to the Plan; provided, however, that all Participantsgranted Purchase Rights pursuant to the Plan shall have the same rights andprivileges within the meaning of Section 423(b)(5) of the Code.  All expenses incurred in connection with theadministration of the Plan shall be paid by the Company.

# 4.             **SharesSubject to Plan**.

## 4.1           ***Maximum Number of Shares Issuable.***  Subject to adjustment as provided inSection 4.2, the maximum aggregate number of shares of Stock that may beissued under the Plan shall be one million four hundred seventy-five thousand(1,475,000) and shall consist of authorized but unissued or reacquired sharesof the Stock, or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminatedor canceled, the shares of Stock allocable to the unexercised portion of suchPurchase Right shall again be available for issuance under the Plan.

## 4.2           ***Adjustments for Changes in CapitalStructure.***  In the eventof any stock dividend, stock split, reverse stock split, recapitalization,combination, reclassification or similar change in the capital structure of theCompany, or in the event of any merger (including a merger effected for thepurpose of changing the Company’s domicile), sale of assets or otherreorganization in which the Company is a party, appropriate adjustments shallbe made in the number and class of shares subject to the Plan, to the OfferingShare Limit set forth in Section 8.1 and to each Purchase Right and in thePurchase Price.

# 5.             **Eligibility**.

## 5.1           ***Employees Eligible to Participate.* **Any Employee of a Participating Companyis eligible to participate in the Plan except the following:

### (a)           Employeeswho are customarily employed by the Participating Company Group for twenty (20)hours or less per week;

### (b)           Employeeswho are customarily employed by the Participating Company Group for not morethan five (5) months in any calendar year; and

### (c)           Employeeswho own or hold options to purchase or who, as a result of participation in thePlan, would own or hold options to purchase, stock of the Company or of anyParent Corporation or Subsidiary Corporation possessing five percent (5%) ormore of the total combined voting power or value of all classes of stock ofsuch corporation within the meaning of Section 423(b)(3) of the Code.

## 5.2           ***Leased Employees Excluded.***  Notwithstanding anything herein to thecontrary, any individual performing services for a Participating Company solelythrough a 

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leasingagency or employment agency shall not be deemed an “Employee” of suchParticipating Company.

 

# 6.             **Offerings**.

## 6.1           ***Offering Periods.***  Except as otherwise set forth below, thePlan shall be implemented by sequential Offerings of approximately twenty-four(24) months duration (an “**Offering Period**”); provided, however thatthe first Offering Period shall commence on the Effective Date and end onOctober 31, 1997 (the “**Initial Offering Period**”).  Subsequent Offerings shall commence on thefirst days of May and November of each year and end on the last days of thesecond April and October, respectively, occurring thereafter.  Notwithstanding the foregoing, the Board mayestablish a different term for one or more Offerings or different commencing orending dates for such Offerings; provided, however, that no Offering may exceeda term of twenty-seven (27) months.  AnEmployee who becomes an Eligible Employee after an Offering Period hascommenced shall not be eligible to participate in such Offering but may participatein any subsequent Offering provided such Employee is still an Eligible Employeeas of the commencement of any such subsequent Offering.  Eligible Employees may not participate inmore than one Offering at a time.  Inthe event the first or last day of an Offering Period is not a business day,the Company shall specify the business day that will be deemed the first orlast day, as the case may be, of the Offering Period.

## 6.2           ***Purchase Periods.***  Each Offering Period shall consist of four(4) consecutive purchase periods of approximately six (6) months duration(individually, a “**Purchase Period**”).  The Purchase Period commencing on theOffering Date of the Initial Offering Period shall end on April 30, 1996.  A Purchase Period commencing on the firstday of May shall end on the last day of the next following October.  A Purchase Period commencing on the firstday of November shall end on the last day of the next following April.  Notwithstanding the foregoing, the Board mayestablish a different term for one or more Purchase Periods or differentcommencing or ending dates for such Purchase Periods.  In the event the first or last day of a Purchase Period is not abusiness day, the Company shall specify the business day that will be deemedthe first or last day, as the case may be, of the Purchase Period.

## 6.3           ***Governmental Approval; StockholderApproval.*** Notwithstanding any other provision of the Plan to the contrary, anyPurchase Right granted pursuant to the Plan shall be subject to(a) obtaining all necessary governmental approvals or qualifications ofthe sale or issuance of the Purchase Rights or the shares of Stock and(b) obtaining stockholder approval of the Plan.  Notwithstanding the foregoing, stockholder approval shall not benecessary in order to grant any Purchase Right granted in the Plan’s InitialOffering Period; provided, however, that the exercise of any such PurchaseRight shall be subject to obtaining stockholder approval of the Plan.

# 7.             **Participationin the Plan**.

## 7.1           ***Initial Participation.***  An Eligible Employee shall become aParticipant on the first Offering Date after satisfying the eligibilityrequirements of Section 5 and delivering to the Company’s payroll officeor other office designated by the Company not later than the close of businessfor such office on the last business day before such Offering Date (the “**Subscription**

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**Date**”)a subscription agreement indicating the Employee’s election to participate inthe Plan and authorizing payroll deductions. An Eligible Employee who does not deliver a subscription agreement tothe Company’s payroll or other designated office on or before the SubscriptionDate shall not participate in the Plan for that Offering Period or for anysubsequent Offering Period unless such Employee subsequently enrolls in thePlan by filing a subscription agreement with the Company by the SubscriptionDate for such subsequent Offering Period. The Company may, from time to time, change the Subscription Date asdeemed advisable by the Company in its sole discretion for properadministration of the Plan.

 

## 7.2           ***Continued Participation.***  A Participant shall automaticallyparticipate in the Offering Period commencing immediately after the finalPurchase Date of each Offering Period in which the Participant participatesuntil such time as such Participant (a) ceases to be an Eligible Employee,(b) withdraws from the Plan pursuant to Section 13.2 or(c) terminates employment as provided in Section 14.  If a Participant automatically mayparticipate in a subsequent Offering Period pursuant to this Section 7.2,then the Participant is not required to file any additional subscriptionagreement for such subsequent Offering Period in order to continueparticipation in the Plan.   However, aParticipant may file a subscription agreement with respect to a subsequentOffering Period if the Participant desires to change any of the Participant’selections contained in the Participant’s then effective subscription agreement.

# 8.             **Right toPurchase Shares**.

## 8.1           ***Purchase Right.***  Except as set forth below, during anOffering Period each Participant in such Offering Period shall have a PurchaseRight consisting of the right to purchase that number of whole shares of Stockarrived at by dividing Fifty Thousand Dollars ($50,000) by the Fair MarketValue of a share of Stock on the Offering Date of such Offering Period;provided, however, that such number shall not exceed 7,500 shares (the “**OfferingShare Limit**”).  Shares ofStock may only be purchased through a Participant’s payroll deductions pursuantto Section 10.

## 8.2           ***Pro Rata Adjustment of PurchaseRight.***  Notwithstandingthe foregoing, if the Board shall establish an Offering Period of less thantwenty-three and one-half (231⁄2) months in duration or more than twenty-four andone-half (241⁄2) months in duration, (a) the dollar amount inSection 8.1 shall be determined by multiplying $2,083.33 by the number ofmonths in the Offering Period and rounding to the nearest whole dollar, and (b) theOffering Share Limit shall be determined by multiplying 312.5 shares by thenumber of months in the Offering Period and rounding to the nearest wholeshare.  For purposes of the precedingsentence, fractional months shall be rounded to the nearest whole month.

# 9.             **Purchase Price.**  The Purchase Price at which each share ofStock may be acquired in a given Offering Period pursuant to the exercise ofall or any portion of a Purchase Right granted under the Plan shall be set bythe Board; provided, however, that the Purchase Price shall not be less thaneighty-five percent (85%) of the lesser of (a) the Fair Market Value of ashare of Stock on the Offering Date of the Offering Period, or (b) theFair Market Value of a share of Stock on the Purchase Date of the Offering Period.  Unless otherwise provided by the Board priorto the commencement of an Offering Period, the Purchase Price for that OfferingPeriod shall be eighty-five percent (85%) of the lesser of (a) the FairMarket Value of a share of

 

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Stockon the Offering Date of the Offering Period, or (b) the Fair Market Valueof a share of Stock on the Purchase Date of the Offering Period.

 

# 10.           **Accumulation of Purchase Price through PayrollDeduction.**  Shares ofStock which are acquired pursuant to the exercise of all or any portion of aPurchase Right for an Offering Period may be paid for only by means of payrolldeductions from the Participant’s Compensation accumulated during the OfferingPeriod.  Except as set forth below, theamount of Compensation to be deducted from a Participant’s Compensation duringeach pay period shall be determined by the Participant’s subscriptionagreement.

## 10.1         ***Commencement of Payroll Deductions.***  Payroll deductions shall commence on the firstpayday following the Offering Date and shall continue to the end of theOffering Period unless sooner altered or terminated as provided in the Plan.

## 10.2         ***Limitations on Payroll Deductions.***  The amount of payroll deductions withrespect to the Plan for any Participant during any pay period shall be in onepercent (1%) increments not to exceed ten percent (10%) of the Participant’sCompensation for such pay period. Notwithstanding the foregoing, the Board may change the limits onpayroll deductions effective as of a future Offering Date, as determined by theBoard.  Amounts deducted fromCompensation shall be reduced by any amounts contributed by the Participant andapplied to the purchase of Company stock pursuant to any other employee stockpurchase plan qualifying under Section 423 of the Code.

## 10.3         ***Election to Change or Stop PayrollDeductions.***  During anOffering Period, a Participant may elect to increase or decrease the amountdeducted or stop deductions from his or her Compensation by filing an amendedsubscription agreement with the Company on or before the “Change NoticeDate.”  The “**Change Notice Date**” shallinitially be the seventh (7th) day prior to the end of the first pay period forwhich such election is to be effective; however, the Company may change suchChange Notice Date from time to time.  AParticipant who elects to decrease the rate of his or her payroll deductions tozero percent (0%) shall nevertheless remain a Participant in the current OfferingPeriod unless such Participant subsequently withdraws from the Offering or thePlan as provided in Sections 13.1 and 13.2, respectively, or isautomatically withdrawn from the Offering as provided in Section 13.4.

## 10.4         ***Participant Accounts.***  Individual Plan accounts shall be maintainedfor each Participant.  All payrolldeductions from a Participant’s Compensation shall be credited to such accountand shall be deposited with the general funds of the Company.  All payroll deductions received or held bythe Company may be used by the Company for any corporate purpose.

## 10.5         ***No Interest Paid.*** Interest shall not be paid on sums deducted from a Participant’sCompensation pursuant to the Plan.

## 10.6         ***Company Established Procedures.***  The Company may, from time to time,establish or change (a) a minimum required payroll deduction amount forparticipation in an Offering, (a) limitations on the frequency or numberof changes in the rate of payroll deduction during an Offering, (c) anexchange ratio applicable to amounts withheld in a currency 

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otherthan U.S. dollars, (d) payroll deduction in excess of or less than theamount designated by a Participant in order to adjust for delays or mistakes inthe Company’s processing of subscription agreements, (e) the date(s) andmanner by which the Fair Market Value of a share of Stock is determined forpurposes of administration of the Plan, or (vi) such other limitations orprocedures as deemed advisable by the Company in the Company’s sole discretionwhich are consistent with the Plan and in accordance with the requirements ofSection 423 of the Code.

 

# 11.           **Purchaseof Shares**.

## 11.1         ***Exercise of Purchase Right.***  On each Purchase Date of an Offering Period,each Participant who has not withdrawn from the Offering or whose participationin the Offering has not terminated on or before such Purchase Date shallautomatically acquire pursuant to the exercise of the Participant’s PurchaseRight the number of whole shares of Stock arrived at by dividing the totalamount of the Participant’s accumulated payroll deductions for the PurchasePeriod by the Purchase Price; provided, however, in no event shall the numberof shares purchased by the Participant during an Offering Period exceed thenumber of shares subject to the Participant’s Purchase Right.  No shares of Stock shall be purchased on aPurchase Date on behalf of a Participant whose participation in the Offering orthe Plan has terminated on or before such Purchase Date.

## 11.2         ***Return of Cash Balance.***  Any cash balance remaining in theParticipant’s Plan account shall be refunded to the Participant as soon aspracticable after the Purchase Date.  Inthe event the cash to be returned to a Participant pursuant to the precedingsentence is an amount less than the amount necessary to purchase a whole shareof Stock, the Company may establish procedures whereby such cash is maintainedin the Participant’s Plan account and applied toward the purchase of shares ofStock in the subsequent Purchase Period or Offering Period.

## 11.3         ***Tax Withholding.***  At the time a Participant’s Purchase Rightis exercised, in whole or in part, or at the time a Participant disposes ofsome or all of the shares of Stock he or she acquires under the Plan, theParticipant shall make adequate provision for the foreign, federal, state andlocal tax withholding obligations of the Participating Company Group, if any,which arise upon exercise of the Purchase Right or upon such disposition ofshares, respectively.  The ParticipatingCompany Group may, but shall not be obligated to, withhold from theParticipant’s compensation the amount necessary to meet such withholdingobligations.

## 11.4         ***Expiration of Purchase Right.***  Any portion of a Participant’s Purchase Right remainingunexercised after the end of the Offering Period to which such Purchase Rightrelates shall expire immediately upon the end of such Offering Period.

 

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# 12.           **Limitations on Purchase of Shares; Rights as aStockholder**.

## 12.1         ***Fair Market Value Limitation.***  Notwithstanding any other provision of thePlan, no Participant shall be entitled to purchase shares of Stock under thePlan (or any other employee stock purchase plan which is intended to meet therequirements of Section 423 of the Code sponsored by the Company or aParent Corporation or Subsidiary Corporation) at a rate which exceeds $25,000in Fair Market Value, which Fair Market Value is determined for sharespurchased during a given Offering Period as of the Offering Date for suchOffering Period (or such other limit as may be imposed by the Code), for eachcalendar year in which the Participant participates in the Plan (or any otheremployee stock purchase plan described in this sentence).

## 12.2         ***Pro Rata Allocation.***  In the event the number of shares of Stockwhich might be purchased by all Participants in the Plan exceeds the number ofshares of Stock available in the Plan, the Company shall make a pro rataallocation of the remaining shares in as uniform a manner as shall bepracticable and as the Company shall determine to be equitable.

## 12.3         ***Rights as a Stockholder andEmployee.***  A Participantshall have no rights as a stockholder by virtue of the Participant’sparticipation in the Plan until the date of the issuance of a stock certificatefor the shares of Stock being purchased pursuant to the exercise of theParticipant’s Purchase Right.  Noadjustment shall be made for cash dividends or distributions or other rightsfor which the record date is prior to the date such stock certificate isissued.  Nothing herein shall conferupon a Participant any right to continue in the employ of the ParticipatingCompany Group or interfere in any way with any right of the ParticipatingCompany Group to terminate the Participant’s employment at any time.

# 13.           **Withdrawal**.

## 13.1         ***Withdrawal From an Offering.***  A Participant may withdraw from an Offeringby signing and delivering to the Company’s payroll or other designated office awritten notice of withdrawal on a form provided by the Company for suchpurpose.  Such withdrawal may be electedat any time prior to the end of an Offering Period; provided, however, if aParticipant withdraws after a Purchase Date, the withdrawal shall not affectshares of Stock acquired by the Participant on such Purchase Date.  Unless otherwise indicated, withdrawal froman Offering shall not result in a withdrawal from the Plan or any succeedingOffering therein.  By withdrawing froman Offering effective as of the close of a given Purchase Date, a Participantmay have shares of Stock purchased on such Purchase Date and immediatelycommence participation in the new Offering commencing immediately after suchPurchase Date.  A Participant isprohibited from again participating in an Offering at any time followingwithdrawal from such Offering.  TheCompany may impose, from time to time, a requirement that the notice ofwithdrawal be on file with the Company’s payroll office or other designatedoffice for a reasonable period prior to the effectiveness of the Participant’swithdrawal from an Offering.

## 13.2         ***Withdrawal from the Plan.***  A Participant may withdraw from the Plan bysigning and delivering to the Company’s payroll office or other designatedoffice a written notice of withdrawal on a form provided by the Company forsuch purpose.  Withdrawals made after aPurchase Date shall not affect shares of Stock acquired by the Participant onsuch Purchase Date.

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  In the event a Participant voluntarilyelects to withdraw from the Plan, the Participant may not resume participationin the Plan during the same Offering Period, but may participate in anysubsequent Offering under the Plan by again satisfying the requirements ofSections 5 and 7.1.  The Companymay impose, from time to time, a requirement that the notice of withdrawal beon file with the Company’s payroll office or other designated office for areasonable period prior to the effectiveness of the Participant’s withdrawalfrom the Plan.

 

## 13.3         ***Return of Payroll Deductions.***  Upon a Participant’s withdrawal from anOffering or the Plan pursuant to Sections 13.1 or 13.2, respectively, theParticipant’s accumulated payroll deductions which have not been applied towardthe purchase of shares of Stock shall be returned as soon as practicable afterthe withdrawal, without the payment of any interest, to the Participant, andthe Participant’s interest in the Offering or the Plan, as applicable, shallterminate.  Such accumulated payrolldeductions may not be applied to any other Offering under the Plan.

## 13.4         ***Automatic Withdrawal From anOffering.***  If the FairMarket Value of a share of Stock on a Purchase Date of an Offering (other thanthe final Purchase Date of such Offering) is less than the Fair Market Value ofa share of Stock on the Offering Date for such Offering, then every Participantshall automatically (a) be withdrawn from such Offering at the close ofsuch Purchase Date and after the acquisition of shares of Stock for suchPurchase Period and (b) be enrolled in the Offering commencing on thefirst business day subsequent to such Purchase Period.  A Participant may elect not to beautomatically withdrawn from an Offering Period pursuant to thisSection 13.4 by delivering to the Company not later than the close ofbusiness on the last day before the Purchase Date a written notice indicatingsuch election.

## 13.5         ***Waiver of Withdrawal Right.***  The Company may, from time to time,establish a procedure pursuant to which a Participant may elect, at least six(6) months prior to a Purchase Date, to have all payroll deductions accumulatedin his or her Plan account as of such Purchase Date applied to purchase sharesof Stock under the Plan, and (a) to waive his or her right to withdrawfrom the Offering or the Plan and (b) to waive his or her right to increase,decrease, or cease payroll deductions under the Plan from his or herCompensation during the Purchase Period ending on such Purchase Date.  Such election shall be made in writing on aform provided by the Company for such purpose and must be delivered to theCompany not later than the close of business on the day preceding the datewhich is six (6) months before the Purchase Date for which such election is tofirst be effective.

# 14.           **Terminationof Employment or Eligibility.** Termination of a Participant’s employment with the Company for anyreason, including retirement, disability or death or the failure of aParticipant to remain an Eligible Employee, shall terminate the Participant’sparticipation in the Plan immediately. In such event, the payroll deductions credited to the Participant’s Planaccount since the last Purchase Date shall, as soon as practicable, be returnedto the Participant or, in the case of the Participant’s death, to theParticipant’s legal representative, and all of the Participant’s rights underthe Plan shall terminate.  Interestshall not be paid on sums returned to a Participant pursuant to thisSection 14.  A Participant whoseparticipation has been so terminated may again become eligible to participatein the Plan by again satisfying the requirements of Sections 5 and 7.1.

 

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# 15.           **Transferof Control**.

## 15.1         ***Definitions***.

### (a)           An“**OwnershipChange Event**” shall be deemed to have occurred if any of thefollowing occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or seriesof related transactions by the stockholders of the Company of more than fiftypercent (50%) of the voting stock of the Company; (ii) a merger orconsolidation in which the Company a party; (iii) the sale, exchange, ortransfer of all or substantially all of the assets of the Company; or(iv) a liquidation or dissolution of the Company.

### (b)           A “**Transfer ofControl**” shall mean an Ownership Change Event or a series of relatedOwnership Change Events (collectively, the “**Transaction**”) wherein thestockholders of the Company immediately before the Transaction do not retainimmediately after the Transaction, in substantially the same proportions astheir ownership of shares of the Company’s voting stock immediately before theTransaction, direct or indirect beneficial ownership of more than fifty percent(50%) of the total combined voting power of the outstanding voting stock of theCompany or the corporation or corporations to which the assets of the Companywere transferred (the “**Transferee Corporation(s)**”), as the casemay be.  For purposes of the precedingsentence, indirect beneficial ownership shall include, without limitation, aninterest resulting from ownership of the voting stock of one or morecorporations which, as a result of the Transaction, own the Company or theTransferee Corporation(s), as the case may be, either directly or through oneor more subsidiary corporations.  TheBoard shall have the right to determine whether multiple sales or exchanges ofthe voting stock of the Company or multiple Ownership Change Events arerelated, and its determination shall be final, binding and conclusive.

## 15.2         ***Effect of Transfer of Control onPurchase Rights.***  In theevent of a Transfer of Control, the surviving, continuing, successor, orpurchasing corporation or parent corporation thereof, as the case may be (the **“AcquiringCorporation”**), may assume the Company’s rights and obligations underthe Plan or substitute substantially equivalent Purchase Rights for stock ofthe Acquiring Corporation.  If theAcquiring Corporation elects not to assume or substitute for the outstandingPurchase Rights, the Board may, in its sole discretion and notwithstanding anyother provision herein to the contrary, adjust the Purchase Date of the thencurrent Purchase Period to a date on or before the date of the Transfer ofControl, but shall not adjust the number of shares of Stock subject to anyPurchase Right.  All Purchase Rightswhich are neither assumed or substituted for by the Acquiring Corporation inconnection with the Transfer of Control nor exercised as of the date of theTransfer of Control shall terminate and cease to be outstanding effective as ofthe date of the Transfer of Control. Notwithstanding the foregoing, if the corporation the stock of which issubject to the outstanding Purchase Rights immediately prior to an OwnershipChange Event described in Section 15.1(a)(i) constituting a Transfer of Controlis the surviving or continuing corporation and immediately after such OwnershipChange Event less than fifty percent (50%) of the total combined voting powerof its voting stock is held by another corporation or by other corporationsthat are members of an affiliated group within the meaning of Section 1504(a)of the Code without regard to the provisions of Section 1504(b) of the Code,the outstanding Purchase Rights shall not terminate unless the Board otherwiseprovides in its sole discretion.

 

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# 16.           **Nontransferability of Purchase Rights.**  A Purchase Right may not be transferred inany manner otherwise than by will or the laws of descent and distribution andshall be exercisable during the lifetime of the Participant only by theParticipant.  The Company, in itsabsolute discretion, may impose such restrictions on the transferability of theshares purchasable upon the exercise of a Purchase Right as it deemsappropriate and any such restriction shall be set forth in the respectivesubscription agreement and may be referred to on the certificates evidencingsuch shares.

# 17.           **Reports.**  Each Participant who exercised all or part of his or her PurchaseRight for a Purchase Period shall receive, as soon as practicable after thePurchase Date of such Purchase Period, a report of such Participant’s Planaccount setting forth the total payroll deductions accumulated, the number ofshares of Stock purchased, the Purchase Price for such shares, the date ofpurchase and the remaining cash balance to be refunded or retained in theParticipant’s Plan account pursuant to Section 11.2, if any.  Each Participant shall be providedinformation concerning the Company equivalent to that information generallymade available to the Company’s common stockholders.

# 18.           **Restriction on Issuance of Shares.**  The issuance of shares under the Plan shallbe subject to compliance with all applicable requirements of foreign, federalor state law with respect to such securities. A Purchase Right may not be exercised if the issuance of shares uponsuch exercise would constitute a violation of any applicable foreign, federalor state securities laws or other law or regulations.  In addition, no Purchase Right may be exercised unless (a) aregistration statement under the Securities Act of 1933, as amended, shall atthe time of exercise of the Purchase Right be in effect with respect to theshares issuable upon exercise of the Purchase Right, or (b) in the opinionof legal counsel to the Company, the shares issuable upon exercise of thePurchase Right may be issued in accordance with the terms of an applicableexemption from the registration requirements of said Act.  The inability of the Company to obtain fromany regulatory body having jurisdiction the authority, if any, deemed by theCompany’s legal counsel to be necessary to the lawful issuance and sale of anyshares under the Plan shall relieve the Company of any liability in respect ofthe failure to issue or sell such shares as to which such requisite authorityshall not have been obtained.  As acondition to the exercise of a Purchase Right, the Company may require theParticipant to satisfy any qualifications that may be necessary or appropriate,to evidence compliance with any applicable law or regulation, and to make anyrepresentation or warranty with respect thereto as may be requested by theCompany.

# 19.           **Legends.**  The Company may at any time place legends or other identifyingsymbols referencing any applicable foreign, federal or state securities lawrestrictions or any provision convenient in the administration of the Plan onsome or all of the certificates representing shares of Stock issued under thePlan.  The Participant shall, at therequest of the Company, promptly present to the Company any and allcertificates representing shares acquired pursuant to a Purchase Right in thepossession of the Participant in order to carry out the provisions of thisSection.  Unless otherwise specified bythe Company, legends placed on such certificates may include but shall not belimited to the following:

                “THESHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THEREGISTERED HOLDER UPON

 

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 THE PURCHASEOF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFYTHE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTEREDHOLDER HEREOF MADE ON OR BEFORE               ,19  .  THE REGISTEREDHOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTEREDHOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE.”

# 20.           **Notification of Sale of Shares.**  The Company may require the Participant togive the Company prompt notice of any disposition of shares acquired byexercise of a Purchase Right within two years from the date of granting suchPurchase Right or one year from the date of exercise of such PurchaseRight.  The Company may require thatuntil such time as a Participant disposes of shares acquired upon exercise of aPurchase Right, the Participant shall hold all such shares in the Participant’sname (and not in the name of any nominee) until the lapse of the time periodswith respect to such Purchase Right referred to in the preceding sentence.  The Company may direct that the certificatesevidencing shares acquired by exercise of a Purchase Right refer to suchrequirement to give prompt notice of disposition.

# 21.           **Amendment or Termination of the Plan.**  The Board may at any time amend or terminatethe Plan, except that (a) such termination shall not affect PurchaseRights previously granted under the Plan, except as permitted under the Plan,and (b) no amendment may adversely affect a Purchase Right previouslygranted under the Plan (except to the extent permitted by the Plan or as may benecessary to qualify the Plan as an employee stock purchase plan pursuant toSection 423 of the Code or to obtain qualification or registration of theshares of Stock under applicable foreign, federal or state securitieslaws).  In addition, an amendment to thePlan must be approved by the stockholders of the Company within twelve (12)months of the adoption of such amendment if such amendment would authorize thesale of more shares than are authorized for issuance under the Plan or wouldchange the definition of the corporations that may be designated by the Boardas Participating Companies.

# 22.           **Continuation of Initial Plan as to OutstandingPurchase Rights.**  Anyother provision of the Plan to the contrary notwithstanding, the terms of theInitial Plan shall remain in effect and apply to all Purchase Rights grantedpursuant to the Initial Plan.

                INWITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoingsets forth the Zoran Corporation Amended and Restated 1995 Employee StockPurchase Plan as duly adopted by the Board of Directors and amended andrestated through June 4, 2003.

 

|   |      |
|--------|-----------|
|   |      |
|   | Secretary |
|   |      |

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PLANHISTORY
| October 13, 1995  |   | Board adopts the initial Plan, with an initial  reserve of 150,000 shares.                                                                                                                                                                                                                                                                                                                                                                                     |
|-------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| December 14, 1995 |   | Effective date of stockholder action by consent  without meeting, approving Plan, with an initial reserve of  150,000 shares.                                                                                                                                                                                                                                                                                                                                  |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| December 14, 1995 |   | The Plan initially was effective December 14,  1995, the effective date of the initial registration by the Company of its  Stock under Section 12 of the Exchange Act.  Effective date of a 1-for-3 reverse stock split.  (Numbers presented above reflect an  adjustment.)                                                                                                                                                                     |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| January 24, 1996  |   | Subject to stockholder approval, Board amends and  restates the Plan to increase the number of shares subject to a purchase  right and to eliminate a limit on the number of shares purchasable in a calendar  year less than the calendar year limit imposed by Section 423 of the  Code.  The amended and restated Plan  will be effective as of the date of commencement of the first offering under  the Plan following approval by the stockholders. |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| May 23, 1996      |   | Stockholders approve Plan, as amended  January 24, 1996.                                                                                                                                                                                                                                                                                                                                                                                                       |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| April 23, 1997    |   | Board amends Plan to increase share reserve by  150,000 shares to 300,000 shares and to permit increases in the  rate of payroll deductions.                                                                                                                                                                                                                                                                                                              |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| June 6, 1997      |   | Stockholders approve amendment increasing share  reserve.                                                                                                                                                                                                                                                                                                                                                                                                           |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| April 28, 1999    |   | Board amends Plan to increase share reserve by  100,000 shares to 400,000 shares.                                                                                                                                                                                                                                                                                                                                                                         |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| July 16, 1999     |   | Stockholders approve amendment increasing share  reserve.                                                                                                                                                                                                                                                                                                                                                                                                           |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| June 18, 2000     |   | Board amends Plan to increase share reserve by  100,000 shares to 500,000 shares.                                                                                                                                                                                                                                                                                                                                                                         |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| July 18, 2000     |   | Stockholders approve amendment increasing share.                                                                                                                                                                                                                                                                                                                                                                                                                    |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| April 17, 2001    |   | Board amends Plan to increase share reserve by  50,000 shares to 550,000 shares.                                                                                                                                                                                                                                                                                                                                                                          |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| June  29, 2001    |   | Stockholders  approve amendment increasing share reserve.                                                                                                                                                                                                                                                                                                                                                                                                           |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| April  21, 2002   |   | Board  amends Plan to increase share reserve by 50,000 shares to 600,000 shares.                                                                                                                                                                                                                                                                                                                                                                                    |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

 

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| May  22, 2002   |   | Effective  date of a 3-for-2 stock split, resulting in an adjusted share reserve of  900,000 and adjusted Offer Share Limit of 7,500 shares. |
|-----------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                         |
| June  21, 2002  |   | Stockholders  approve amendment increasing share reserve to 900,000 shares.                                                                  |
|            |   |                                                                                                                                         |
| June  4, 2003   |   | Board  amends Plan to increase share reserve by 575,000 shares to 1,475,000 shares.                                                          |
|            |   |                                                                                                                                         |
| August  8, 2003 |   | Stockholders  approve amendment increasing share reserve to 1,475,000 shares.                                                                |
|            |   |                                                                                                                                         |

 

 

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**ZORAN CORPORATION**

**1995 EMPLOYEE STOCK PURCHASE PLAN**

**SUBSCRIPTIONAGREEMENT**

o                                    OriginalApplication for participation commencing with the Offering Period beginning_________________________, 200     .

o                                    Changein Percentage of Payroll Deductions effective with the pay period ending_________________________, 200     .

I hereby elect toparticipate in the 1995 Employee Stock Purchase Plan (the “**Plan**”) of Zoran Corporation(the “**Company**”)and subscribe to purchase shares of the Company’s common stock as determined inaccordance with the terms of the Plan.

I hereby authorizepayroll deductions in the amount of                  percent (in 1% increments not to exceed 10%) of my “**Compensation**” (as defined inthe Plan) from each paycheck throughout the “**Offering Period**” (as definedin the Plan) in accordance with the terms of the Plan.  I understand that these payroll deductionswill be accumulated for the purchase of shares of common stock of the Companyat the applicable purchase price determined in accordance with the Plan.  I further understand that, except asotherwise set forth in the Plan, shares will be purchased for me automaticallyon the last day of each Purchase Period unless I withdraw from the Plan or fromthe Offering by giving written notice to the Company or unless I terminateemployment.

I furtherunderstand that I will automatically participate in each subsequent Offeringwhich commences immediately after the last day of an Offering in which I amparticipating under the Plan until such time as I file with the Company anotice of withdrawal from the Plan on such form as may be established from timeto time by the Company or I terminate employment.

Shares purchasedfor me under the Plan should be issued in the name set forth below.  (I understand that shares may be issuedeither in my name alone or together with my spouse as community property or injoint tenancy.)
| NAME:                      |   |
|----------------------------|--------|
| ADDRESS:                   |   |
|                       |
| MY SOCIAL SECURITY NUMBER: |   |
|                            |        |  |  |

 

I hereby authorizewithholding from my compensation in order to satisfy the foreign, federal,state and local tax withholding obligations, if any, which may arise upon mypurchase of shares under the Plan and/or upon my disposition of shares Iacquired under the Plan.  I hereby agreethat until I dispose of the shares, unless otherwise permitted by the Company,I will hold all shares I acquire under the Plan in the name entered above (andnot in the name of any nominee) for at least two (2) years from the first dayof the Offering Period in which, and at least one (1) year from the PurchaseDate on which, I acquired such shares. I further agree that I will promptly notify the Chief Financial Officerof the Company in writing of any transfer of such shares prior to the end ofthe periods referred to in the preceding sentence.

I am familiar withthe provisions of the Plan and hereby agree to participate in the Plan subjectto all of the provisions thereof.  Iunderstand that the Board of Directors of the Company reserves the right toamend the Plan and my right to purchase stock under the Plan as may benecessary to qualify the Plan as an employee stock purchase plan as defined inSection 423 of the Internal Revenue Code of 1986, as amended, or to obtainqualification or registration of the Company’s common stock to be issued out ofthe Plan under applicable foreign, federal and state securities laws.  I understand that the effectiveness of thissubscription agreement is dependent upon my eligibility to participate in thePlan.
| Date:  |   |   | Signature:        |   |
|--------|--------|--------|-------------------|--------|
|   |   |   | Name Printed |   |
|        |        |        |                   |        |  |

 

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** **

**ZORAN CORPORATION**

**1995 EMPLOYEE STOCK PURCHASE PLAN**

**NOTICE OF WITHDRAWAL**

 

I hereby elect towithdraw from the offering of the common stock of Zoran Corporation (the “**Company**”)under the Company’s 1995 Employee Stock Purchase Plan (the “**Plan**”)which began on _________________________, 200      andin which I am currently participating (the “**Current Offering**”).

**Make one election undersection A and one election under section B:**

A.                                   CurrentOffering.  As to my participation inthe current purchase period (the “Current Purchase Period”) of the CurrentOffering under the Plan, I elect as follows (check one):

o                                    1.             I elect to terminatemy participation in the Current Purchase Period immediately.

                                                                                                Ihereby request that all payroll deductions credited to my account under thePlan (if any) not previously used to purchase shares under the Plan shall notbe used to purchase shares on the last day of the Current Purchase Period.  Instead, I request that all such amounts bepaid to me as soon as practicable.  Iunderstand that this election immediately terminates my interest in the CurrentOffering.

o                                    2.             I elect to terminatemy participation in the Current Offering following my purchase of shares on thelast day of the Current Purchase Period.

                                                                                                Ihereby request that all payroll deductions credited to my account under thePlan (if any) not previously used to purchase shares under the Plan shall beused to purchase shares on the last day of the Current Purchase Period.  I understand that this election willterminate my interest in the Current Offering immediately following suchpurchase.  I request that any cashbalance remaining in my account under the Plan after my purchase of shares bereturned to me as soon as practicable.

                Iunderstand that if no election is made as to participation in the CurrentOffering under the Plan, I will be deemed to have elected to participate in theCurrent Offering.

B.                                     FutureOfferings.  As to my participationin future offerings of common stock under the Plan, I elect as follows (checkone):

o                                    1.             I elect toparticipate in future offerings under the Plan.

                                                                                                Iunderstand that by making this election I will participate in the next offeringunder the Plan commencing subsequent to the Current Offering, and in eachsubsequent offering commencing immediately after the last day of an offering inwhich I participate, until such time as I elect to withdraw from the Plan orfrom any such subsequent offering.

o                                    2.             I elect not toparticipate in future offerings under the Plan.

                                                                                                Iunderstand that by making this election I terminate my interest in the Plan andthat no further payroll deductions will be made unless I elect in accordancewith the Plan to become a participant in another offering under the Plan.

I understand thatif no election is made as to participation in future offerings under the Plan,I will be deemed to have elected to participate in such future offerings.
| Date:  |   |   |          |   |
|--------|--------|--------|---------------|--------|
|   |   |   | Signature:    |   |
|   |   |   | Name Printed: |   |
|        |        |        |               |        |  |  |

 

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