Exhibit 10.12  Zoran
Corporation 2005
Outside Directors Equity Plan  TABLE OF CONTENTS  1.
  Establishment,
  Purpose and Term of Plan1.1
  Establishment1.2
  Purpose1.3
  Term
  of Plan2.
  Definitions
  and Construction2.1
  Definitions2.2
  Construction3.
  Administration3.1
  Administration
  by the Board3.2
  Authority
  of Officers3.3
  Powers
  of the Board3.4
  Option
  or SAR Repricing3.5
  Indemnification4.
  Shares
  Subject to Plan4.1
  Maximum
  Number of Shares Issuable4.2
  Share
  Accounting4.3
  Adjustments
  for Changes in Capital Structure5.
  Eligibility,
  Participation and Award Limitations5.1
  Persons
  Eligible for Awards5.2
  Annual
  Award Limits6.
  Outside
  Director Awards7.
  Stock
  Options7.1
  Exercise
  Price7.2
  Exercisability
  and Term of Options7.3
  Payment
  of Exercise Price7.4
  Effect
  of Termination of Service7.5
  Transferability
  of Options8.
  Stock
  Appreciation Rights8.1
  Types
  of SARs Authorized8.2
  Exercise
  Price8.3
  Exercisability
  and Term of SARs8.4
  Exercise
  of SARs8.5
  Deemed
  Exercise of SARs  i


8.6
  Effect
  of Termination of Service8.7
  Transferability
  of SARs9.
  Restricted
  Stock Unit Awards9.1
  Purchase
  Price9.2
  Vesting9.3
  Voting
  Rights, Dividend Equivalent Rights and Distributions9.4
  Effect
  of Termination of Service9.5
  Settlement
  of Restricted Stock Unit Awards9.6
  Nontransferability
  of Restricted Stock Unit Awards10.
  Deferred
  Compensation Awards10.1
  Establishment
  of Deferred Compensation Award Programs10.2
  Terms
  and Conditions of Deferred Compensation Awards11.
  Standard
  Forms of Award Agreement11.1
  Award
  Agreement11.2
  Authority
  to Vary Terms12.
  Change
  in Control12.1
  Effect
  of Change in Control on Options and SARs12.2
  Effect
  of Change in Control on Restricted Stock Unit Awards and Deferred
  Compensation Awards13.
  Compliance
  with Securities Law14.
  Tax
  Withholding14.1
  Tax
  Withholding in General14.2
  Withholding
  in Shares15.
  Amendment
  or Termination of Plan16.
  Compliance
  with Section 409A16.1
  Awards
  Subject to Section 409A16.2
  Deferral
  and/or Distribution Elections16.3
  Subsequent
  Elections16.4
  Distributions
  Pursuant to Deferral Elections16.5
  Unforeseeable
  Emergency16.6
  Disabled16.7
  Death16.8
  No
  Acceleration of Distributions  ii


17.
  Miscellaneous
  Provisions17.1
  Repurchase
  Rights17.2
  Provision
  of Information17.3
  Rights
  as Outside Director17.4
  Rights
  as a Stockholder17.5
  Delivery
  of Title to Shares17.6
  Fractional
  Shares17.7
  Beneficiary
  Designation17.8
  Severability17.9
  No
  Constraint on Corporate Action17.10
  Unfunded
  Obligation17.11
  Choice
  of Law  iii


Zoran
Corporation 2005
Outside Directors Equity Plan  1.ESTABLISHMENT,
PURPOSE AND TERM OF PLAN.  1.1Establishment.The Zoran Corporation 2005 Outside Directors Equity Plan
(the Plan) is hereby established effective as of July 13, 2005
the date of its approval by the stockholders of the Company (the Effective Date).  1.2Purpose.The purpose of the Plan is to advance the interests of the
Participating Company Group and its stockholders by providing an incentive to
attract, retain and reward persons performing services as Outside Directors of
the Company and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group. The Plan seeks to achieve
this purpose by providing for Awards in the form of Options, Stock
Appreciation Rights, Restricted Stock Units and Deferred Compensation Awards.  1.3Term of Plan.The Plan shall continue in effect
until its termination by the Board; provided, however, that all Awards shall be
granted, if at all, within ten (10) years from the Effective Date.  2.DEFINITIONS AND
CONSTRUCTION.  2.1Definitions.Whenever used herein, the following
terms shall have their respective meanings set forth below:  (a)Affiliatemeans (i) an
entity, other than a Parent Corporation, that directly, or indirectly through
one or more intermediary entities, controls the Company or (ii) an entity,
other than a Subsidiary Corporation, that is controlled by the Company directly
or indirectly through one or more intermediary entities. For this purpose, the
term control (including the term controlled by) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of the relevant entity, whether through the ownership
of voting securities, by contract or otherwise; or shall have such other
meaning assigned such term for the purposes of registration on Form S-8
under the Securities Act.  (b)Awardmeans any Option,
Stock Appreciation Right, Restricted Stock Unit or Deferred Compensation Award
granted under the Plan.  (c)Award Agreementmeans a written or
electronic agreement between the Company and a Participant setting forth the
terms, conditions and restrictions of the Award granted to the Participant.  (d)Boardmeans the Board of
Directors of the Company. If one or more Committees have been appointed by the
Board to administer the Plan, Board also means such Committee(s).  (e)Change in Controlmeans, unless such
term or an equivalent term is otherwise defined with respect to an Award by the
Participants Award Agreement, the occurrence of any of the following:  (i)any person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than (1) a trustee or other fiduciary holding securities of the
Company


under
an employee benefit plan of a Participating Company or (2) a corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the stock of the
Company, becomes the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of (i) the
outstanding shares of common stock of the Company or (ii) the total
combined voting power of the Companys then-outstanding securities entitled to
vote generally in the election of directors; or  (ii)an Ownership Change
Event or series of related Ownership Change Events (collectively, a Transaction) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of an Ownership
Change Event described in Section 2.1(w)(iii), the entity to which the
assets of the Company were transferred (the Transferee), as the case may be;
or  (iii)a liquidation or dissolution of the
Company.  For
purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through
one or more subsidiary corporations or other business entities. The Board shall
have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.  (f)Codemeans the Internal
Revenue Code of 1986, as amended, and any applicable regulations promulgated
thereunder.  (g)Committeemeans the
Compensation Committee and such other committee or subcommittee of the Board,
if any, duly appointed to administer the Plan and having such powers in each
instance as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law.  (h)Companymeans Zoran
Corporation, a Delaware corporation, or any successor corporation thereto.  (i)Consultantmeans a person
engaged to provide consulting or advisory services (other than as an Employee
or a Director) to a Participating Company.  (j)Deferred Compensation
Awardmeans an award granted to a
Participant pursuant to Section 10.  (k)Directormeans a member of the
Board.  (l)Disabilitymeans the permanent
and total disability of the Participant within the meaning of Section 22(e)(3) of
the Code.  (m)Dividend Equivalentmeans a credit, made
at the discretion of the Board or as otherwise provided by the Plan, to the
account of a Participant in an amount equal to the cash dividends paid on one
share of Stock for each share of Stock represented by an Award held by such
Participant.  (n)Employeemeans any person
treated as an employee (including an Officer or a Director who is also treated
as an employee) in the records of a Participating Company; provided, however,
that neither service as a Director nor payment of a directors fee shall be
sufficient to constitute employment for purposes of the Plan.  2


(o)Exchange Actmeans the Securities
Exchange Act of 1934, as amended.  (p)Fair Market Valuemeans, as of any
date, the value of a share of Stock or other property as determined by the
Board, in its discretion, or by the Company, in its discretion, if such
determination is expressly allocated to the Company herein, subject to the
following:  (i)Except as otherwise determined by
the Board, if, on such date, the Stock is listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Stock
shall be the closing price of a share of Stock (or the mean of the closing bid
and asked prices of a share of Stock if the Stock is so quoted instead) as
quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other
national or regional securities exchange or market system constituting the
primary market for the Stock, as reported in The
Wall Street Journal or such other source as the Company deems
reliable. If the relevant date does not fall on a day on which the Stock has
traded on such securities exchange or market system, the date on which the Fair
Market Value shall be established shall be the last day on which the Stock was
so traded prior to the relevant date, or such other appropriate day as shall be
determined by the Board, in its discretion.  (ii)Notwithstanding the
foregoing, the Board may, in its discretion, determine the Fair Market Value on
the basis of the opening, closing, or average of the high and low sale prices
of a share of Stock on such date, the preceding trading day or the next
succeeding trading day; and, for purposes other than determining the exercise
price or purchase price of shares pursuant to an Award, the high or low sale
price of a share of Stock on such date, the preceding trading day or the next
succeeding trading day, the average of any such prices determined over a period
of trading days or the actual sale price of a share of Stock received by a
Participant. The Board may vary its method of determination of the Fair
Market Value as provided in this Section for different purposes under the
Plan.  (iii)If, on such date, the Stock is not
listed on a national or regional securities exchange or market system, the Fair
Market Value of a share of Stock shall be as determined by the Board in good
faith without regard to any restriction other than a restriction which, by its
terms, will never lapse.  (q)Full Value Awardmeans any Award
settled in Stock, other than (i) an Option, (ii) a Stock Appreciation
Right or (iii) a Deferred Compensation Award which is an elective cash
compensation reduction award described in Section 10.1(a) or a stock
issuance deferral award described in Section 10.1(b).  (r)Insider Trading Policymeans the written
policy of the Company pertaining to the purchase, sale, transfer or other
disposition of the Companys equity securities by Directors, Officers,
Employees or other service providers who may possess material, nonpublic
information regarding the Company or its securities.  (s)Net-Exercisemeans a procedure by
which the Participant will be issued a number of shares of Stock determined in
accordance with the following formula:  N = X(A-B)/A, where N = the number of
shares of Stock to be issued to the Participant upon exercise of the Option; X = the total number of
shares with respect to which the Participant has elected to exercise the
Option; A = the Fair Market
Value of one (1) share of Stock determined on the exercise date; and B = the exercise price
per share (as defined in the Participants Award Agreement)  3


(t)Officermeans any person
designated by the Board as an officer of the Company.  (u)Optionmeans a right to
purchase Stock granted to a Participant pursuant to Section 7. Each Option
shall be a nonstatutory stock option, that is an option not intended to qualify
as an incentive stock option within the meaning of Section 422(b) of
the Code.  (v)Outside
Directormeans a Director who is not an Employee.  (w)Ownership Change Eventmeans the occurrence
of any of the following with respect to the Company:  (i) the direct
or indirect sale or exchange in a single or series of related transactions
by the stockholders of the Company of more than fifty percent (50%) of the
voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; or (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company (other than a sale, exchange or
transfer to one or more subsidiaries of the Company).  (x)Parent Corporationmeans any present or
future parent corporation of the Company, as defined in Section 424(e) of
the Code.  (y)Participantmeans any eligible
person who has been granted one or more Awards.  (z)Participating Companymeans the Company or
any Parent Corporation, Subsidiary Corporation or Affiliate.  (aa)Participating Company
Groupmeans, at any point in time, all
entities collectively which are then Participating Companies.  (bb)Restricted Stock Unitor Stock Unitmeans a right granted
to a Participant pursuant to Section 9 or Section 10, respectively,
to receive a share of Stock on a date determined in accordance with the
provisions of such Sections, as applicable, and the Participants Award
Agreement.  (cc)Retirementmeans a termination
of the Participants Service as a result of either of the following, provided
that the Participant has served continuously on the Board for at least two (2) years:
(i) the Participants resignation from the Board or (ii) the
expiration of the Participants term as a Director after the Participant has
declined to stand for reelection.  (dd)Rule 16b-3means Rule 16b-3
under the Exchange Act, as amended from time to time, or any successor rule or
regulation.  (ee)SARor Stock Appreciation Rightmeans a right granted
to a Participant pursuant to Section 8 to receive payment, for each share
of Stock subject to such SAR, of an amount equal to the excess, if any, of the
Fair Market Value of a share of Stock on the date of exercise of the SAR over
the exercise price.  (ff)Section 409Ameans Section 409A
of the Code (including regulations or administrative guidelines thereunder).  (gg)Securities Actmeans the Securities
Act of 1933, as amended.  (hh)Servicemeans a Participants
employment or service with the Participating Company Group, whether in the
capacity of an Employee, a Director, or a Consultant. A Participants Service
shall not be deemed to have terminated merely because of a change in the
capacity in which the Participant renders such Service or a change in the
Participating Company for which the Participant renders such Service, provided
that there is no interruption or termination of the Participants  4


Service.
Furthermore, a Participants Service shall not be deemed to have terminated if
the Participant takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company. However, if any such leave taken by a
Participant exceeds ninety (90) days, then on the ninety-first (91st) day
following the commencement of such leave the Participants Service shall be
deemed to have terminated, unless the Participants right to return to Service
is guaranteed by statute or contract. Notwithstanding the foregoing, unless
otherwise designated by the Company or required by law, a leave of absence
shall not be treated as Service for purposes of determining vesting under the
Participants Award Agreement. A Participants Service shall be deemed to have
terminated either upon an actual termination of Service or upon the entity for
which the Participant performs Service ceasing to be a Participating Company. Subject
to the foregoing, the Company, in its discretion, shall determine whether the
Participants Service has terminated and the effective date of such
termination.  (ii)Stockmeans the common
stock of the Company, as adjusted from time to time in accordance with Section 4.3.  (jj)Subsidiary Corporationmeans any present or
future subsidiary corporation of the Company, as defined in Section 424(f) of
the Code.  (kk)Vesting Conditionsmean those conditions
established in accordance with the Plan prior to the satisfaction of which
shares subject to an Award remain subject to forfeiture or a repurchase option
in favor of the Company exercisable for the Participants purchase price for
such shares upon the Participants termination of Service.  2.2Construction.Captions and titles contained
herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term or is not intended to be exclusive, unless the
context clearly requires otherwise.  3.ADMINISTRATION.  3.1Administration by the Board.The Plan shall be
administered by the Board, including any duly appointed Committee of the Board.
At any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered
in compliance with the requirements, if any, of Rule 16b-3. All questions
of interpretation of the Plan or of any Award shall be determined by the Board,
and such determinations shall be final and binding upon all persons having an
interest in the Plan or such Award.  3.2Authority of Officers.Any Officer shall have
the authority to act on behalf of the Company with respect to any matter,
right, obligation, determination or election which is the responsibility of or
which is allocated to the Company herein, provided the Officer has apparent
authority with respect to such matter, right, obligation, determination or
election.  3.3Powers of the Board.In addition to any other powers set forth in the Plan and subject to
the provisions of the Plan, the Board shall have the full and final power and
authority, in its discretion:  (a)to determine the persons to whom,
and the time or times at which, Awards shall be granted and the number of
shares of Stock or units to be subject to each Award;  (b)to determine the type of Award
granted;  (c)to determine the Fair Market Value
of shares of Stock or other property;  (d)to determine the terms, conditions
and restrictions applicable to each Award (which need not be identical) and any
shares acquired pursuant thereto, including, without limitation, (i) the
exercise or purchase price of shares pursuant to any Award, (ii) the
method of payment  5


for
shares purchased pursuant to any Award, (iii) the method for satisfaction
of any tax withholding obligation arising in connection with Award, including
by the withholding or delivery of shares of Stock, (iv) the timing, terms
and conditions of the exercisability or vesting of any Award or any shares
acquired pursuant thereto, (v) the time of the expiration of any Award, (vi) the
effect of the Participants termination of Service on any of the foregoing, and
(vii) all other terms, conditions and restrictions applicable to any Award
or shares acquired pursuant thereto not inconsistent with the terms of the
Plan;  (e)to approve one or more
forms of Award Agreement;  (f)to amend, modify, extend, cancel or
renew any Award or to waive any restrictions or conditions applicable to any
Award or any shares acquired pursuant thereto;  (g)to accelerate, continue, extend or
defer the exercisability or vesting of any Award or any shares acquired
pursuant thereto, including with respect to the period following a Participants
termination of Service;  (h)without the consent of the affected
Participant and notwithstanding the provisions of any Award Agreement to the
contrary, to unilaterally substitute at any time a Stock Appreciation Right
providing for settlement solely in shares of Stock in place of any outstanding
Option, provided that such Stock Appreciation Right covers the same number of
shares of Stock and provides for the same exercise price (subject in each case
to adjustment in accordance with Section 4.3) as the replaced Option and
otherwise provides substantially equivalent terms and conditions as the
replaced Option, as determined by the Board;  (i)to prescribe, amend or rescind
rules, guidelines and policies relating to the Plan, or to adopt sub-plans or
supplements to, or alternative versions of, the Plan, including, without
limitation, as the Board deems necessary or desirable to comply with the laws
or regulations of or to accommodate the tax policy, accounting principles or
custom of, foreign jurisdictions whose citizens may be granted Awards; and  (j)to correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award Agreement and
to make all other determinations and take such other actions with respect to
the Plan or any Award as the Board may deem advisable to the extent not
inconsistent with the provisions of the Plan or applicable law.  3.4Option or SAR Repricing.Without the affirmative vote of
holders of a majority of the shares of Stock cast in person or by proxy at a
meeting of the stockholders of the Company at which a quorum representing a
majority of all outstanding shares of Stock is present or represented by proxy,
the Board shall not approve either (a) the cancellation of outstanding
Options or SARs and the grant in substitution therefore of new Options or SARs
having a lower exercise price or (b) the amendment of outstanding Options
or SARs to reduce the exercise price thereof.  3.5Indemnification.In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys fees, actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or intentional
misconduct in duties; provided, however, that within sixty (60) days after the
institution of such action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at its own expense to handle and defend
the same.  6


4.SHARES SUBJECT TO
PLAN.  4.1Maximum Number of Shares Issuable.Subject to adjustment
as provided in Sections 4.2 and 4.3, the maximum aggregate number of
shares of Stock that may be issued under the Plan shall be equal to six
hundred thousand (600,000) shares, and shall consist of authorized but unissued
or reacquired shares of Stock or any combination thereof.  4.2Share Accounting.  (a)Each share of Stock subject to an
Award other than a Full Value Award shall be counted against the limit set
forth in Section 4.1 as one (1) share. Each share of Stock subject to
a Full Value Award shall be counted against the limit set forth in Section 4.1
as one and three-tenths (1.3) shares.  (b)If an outstanding
Award for any reason expires or is terminated or canceled without having been
exercised or settled in full, or if shares of Stock acquired pursuant to an
Award subject to forfeiture or repurchase are forfeited or repurchased by the
Company for an amount not greater than the Participants purchase price, the
shares of Stock allocable to the terminated portion of such Award or such
forfeited or repurchased shares of Stock shall again be available for issuance
under the Plan. Shares withheld or reacquired by the Company in satisfaction of
tax withholding obligations pursuant to Section 14.2 shall not again be
available for issuance under the Plan. Upon payment in shares of Stock pursuant
to the exercise of an SAR, the number of shares available for issuance under
the Plan shall be reduced by the gross number of shares for which the SAR is
exercised. If the exercise price of an Option is paid by tender to the Company,
or attestation to the ownership, of shares of Stock owned by the Participant,
or by means of a Net-Exercise, the number of shares available for issuance
under the Plan shall be reduced by the gross number of shares for which the
Option is exercised.  4.3Adjustments for Changes in Capital
Structure.Subject to any
required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether
through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the
event of payment of a dividend or distribution to the stockholders of the
Company in a form other than Stock (excepting normal cash dividends) that
has a material effect on the Fair Market Value of shares of Stock, appropriate
adjustments shall be made in the number and kind of shares subject to the Plan
and to any outstanding Awards, in the Award limits set forth in Section 5.2
and in the exercise or purchase price per share under any outstanding Award in
order to prevent dilution or enlargement of Participants rights under the Plan.
For purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as effected without receipt of consideration by
the Company.  If a majority of the shares which are of the same class as
the shares that are subject to outstanding Awards are exchanged for, converted
into, or otherwise become (whether or not pursuant to an Ownership Change
Event) shares of another corporation (the New Shares), the Board may unilaterally
amend the outstanding Awards to provide that such Awards are for New Shares. In
the event of any such amendment, the number of shares subject to, and the
exercise or purchase price per share of, the outstanding Awards shall be
adjusted in a fair and equitable manner as determined by the Board, in its
discretion. Any fractional share resulting from an adjustment pursuant to this Section 4.3
shall be rounded down to the nearest whole number, and in no event may the
exercise or purchase price under any Award be decreased to an amount less than
the par value, if any, of the stock subject to such Award. The Board in its
sole discretion, may also make such adjustments in the terms of any Award
to reflect, or related to, such changes in the capital structure of the Company
or distributions as it deems appropriate. The adjustments determined by the
Board pursuant to this Section shall be final, binding and conclusive.  7


5.ELIGIBILITY,
PARTICIPATION AND AWARD LIMITATIONS.  5.1Persons Eligible for Awards.Only those persons
who, at the time of grant, are serving as Outside Directors shall be eligible
to become Participants and to be granted Awards.  5.2Annual Award Limits.Subject to adjustment as provided
in Section 4.3, no Participant may be granted within any fiscal year
of the Company one or more Awards for more than twenty thousand (20,000)
shares; provided, however, that the foregoing annual limit shall be increased
by one or more of the following additions, as applicable: (i) an
additional forty thousand (40,000) shares in the fiscal year in which the
Participant is first appointed or elected to the Board as an Outside Director, (ii) an
additional ten thousand (10,000) shares in any fiscal year in which the
Participant is serving as the Chairman of the Board or Lead Director, (iii) an
additional two thousand five hundred (2,500) shares per committee in any fiscal
year in which the Participant is serving on one or more committees of the Board
other than as the chairman of the committee, and (iv) an additional five
thousand (5,000) shares per committee in any fiscal year in which the
Participant is serving on one or more committees of the Board as the chairman
of the committee.  6.OUTSIDE DIRECTOR
AWARDS.  From time to time, the Board shall set the amount(s) and
type(s) of Awards that shall be granted to all Outside Directors on a periodic,
nondiscriminatory basis pursuant to the Plan, as well as the additional amount(s) and
type(s) of Awards, if any, to be awarded, also on a periodic,
nondiscriminatory basis, in consideration of one or more of the following: (a) the
initial election or appointment of an individual to the Board as an Outside
Director, (b) an Outside Directors service as Chairman of the Board or
Lead Director, (c) an Outside Directors service other than as chairman on
one or more of the committees of the Board, and (d) an Outside Directors
service as the chairman of one or more committees of the Board. The terms and
conditions of each Award shall comply with the applicable provisions of the
Plan. Subject to the limits set forth in Section 5.2 and the foregoing,
the Board shall grant Awards having such terms and conditions as it shall from
time to time determine.  7.STOCK OPTIONS.  Options shall be evidenced by Award Agreements
specifying the number of shares of Stock covered thereby, in such form as
the Board shall from time to time establish. No Option or purported Option
shall be a valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement. Award Agreements evidencing Options may incorporate
all or any of the terms of the Plan by reference, including the provisions of Section 16
with respect to Section 409A if applicable, and shall comply with and be
subject to the following terms and conditions:  7.1Exercise Price.The exercise price for
each Option shall be the Fair Market Value of a share of Stock on the effective
date of grant of the Option. Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner that would qualify under the provisions of Section 424(a) of
the Code.  7.2Exercisability and Term of Options.Options shall be exercisable at
such time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Board and set forth in the Award Agreement evidencing such Option; provided,
however, that no Option shall be exercisable after the expiration of ten (10) years
after the effective date of grant of such Option. Subject to the foregoing,
unless otherwise specified by the Board in the grant of an Option, each Option
shall terminate ten (10) years after the effective date of grant of the
Option, unless earlier terminated in accordance with its provisions.  7.3Payment of Exercise Price.  (a)Forms of Consideration Authorized.Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash or by
check or cash equivalent, (ii) by tender to the Company, or  8


attestation
to the ownership, of shares of Stock owned by the Participant having a Fair
Market Value not less than the exercise price, (iii) by delivery of a
properly executed notice of exercise together with irrevocable instructions to
a broker providing for the assignment to the Company of the proceeds of a sale
or loan with respect to some or all of the shares being acquired upon the
exercise of the Option (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to
time by the Board of Governors of the Federal Reserve System) (a Cashless Exercise), (iv) by
delivery of a properly executed notice electing a Net-Exercise, (v) by
such other consideration as may be approved by the Board from time to time
to the extent permitted by applicable law, or (vi) by any combination
thereof. The Board may at any time or from time to time grant Options
which do not permit all of the foregoing forms of consideration to be used in
payment of the exercise price or which otherwise restrict one or more forms of
consideration.  (b)Limitations on Forms of
Consideration.  (i)Tender of Stock.Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company, or attestation to
the ownership, of shares of Stock to the extent such tender or attestation
would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Companys stock. Unless otherwise
provided by the Board, an Option may not be exercised by tender to the
Company, or attestation to the ownership, of shares of Stock unless such shares
either have been owned by the Participant for more than six (6) months (or
such other period, if any, as the Board may permit) and not used for
another Option exercise by attestation during such period, or were not
acquired, directly or indirectly, from the Company.  (ii)Cashless Exercise.The Company reserves, at any and
all times, the right, in the Companys sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise, including with respect to
one or more Participants specified by the Company notwithstanding that such
program or procedures may be available to other Participants.  7.4Effect of Termination of Service.  (a)Option Exercisability.Subject to earlier termination of
the Option as otherwise provided herein and unless otherwise provided by the
Board in the grant of an Option and set forth in the Award Agreement, an Option
shall terminate immediately upon the Participants termination of Service to
the extent that it is then unvested and shall be exercisable after the
Participants termination of Service to the extent it is then vested only
during the applicable time period determined in accordance with this Section and
thereafter shall terminate:  (i)Disability.If the Participants Service
terminates because of the Disability of the Participant, the Option, to the
extent unexercised and exercisable for vested shares on the date on which the
Participants Service terminated, may be exercised by the Participant (or
the Participants guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Participants
Service terminated, but in any event no later than the date of expiration of
the Options term as set forth in the Award Agreement evidencing such Option
(the Option Expiration Date); provided, however,
that if the Participant has served continuously on the Board for at least two (2) years
prior to such termination of Service, the Option, to the extent unexercised and
exercisable for vested shares on the date on which the Participants Service
terminated, may be exercised by the Participant (or the Participants
guardian or legal representative) at any time prior to the Option Expiration
Date.  (ii)Death.If the Participants Service
terminates because of the death of the Participant, the Option, to the extent
unexercised and exercisable for vested shares on the date on which the
Participants Service terminated, may be exercised by the Participants
legal representative or other person who acquired the right to exercise the
Option by reason of the Participants death at any time prior to the expiration
of twelve (12) months after the date on which the Participants Service
terminated, but in any event no later than the Option Expiration Date;
provided, however, that if the Participant has served continuously on the Board
for at least two (2) years prior to such termination of Service, the
Option,  9


to
the extent unexercised and exercisable for vested shares on the date on which
the Participants Service terminated, may be exercised by the Participant
(or the Participants guardian or legal representative) at any time prior to
the Option Expiration Date. The Participants Service shall be deemed to have
terminated on account of death if the Participant dies within three (3) months
after the Participants termination of Service.  (iii)Retirement.If the Participant s Service
terminates because of the Retirement of the Participant, the Option, to the
extent unexercised and exercisable for vested shares on the date on which the
Participant s Service terminated, may be exercised at any time prior to
the Option Expiration Date.  (iv)Other Termination of Service.If the Participants
Service terminates for any reason, except Disability, death or Retirement, the
Option, to the extent unexercised and exercisable for vested shares on the date
on which the Participants Service terminated, may be exercised by the Participant
at any time prior to the expiration of three (3) months after the date on
which the Participants Service terminated, but in any event no later than the
Option Expiration Date.  (b)Extension if Exercise Prevented by Law.Notwithstanding the
foregoing, if the exercise of an Option within the applicable time periods set
forth in Section 7.4(a) is prevented by the provisions of Section 13
below, the Option shall remain exercisable until three (3) months after
the date the Participant is notified by the Company that the Option is
exercisable, but in any event no later than the Option Expiration Date.  (c)Extension if Participant Subject to Section 16(b).Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section 7.4(a) of
shares acquired upon the exercise of the Option would subject the Participant
to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Participant would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Participants termination of Service, or (iii) the Option
Expiration Date.  7.5Transferability of
Options.During the lifetime of the Participant, an Option shall be exercisable
only by the Participant or the Participants guardian or legal representative. An
Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participants beneficiary, except transfer
by will or by the laws of descent and distribution. Notwithstanding the
foregoing, an Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form S-8
Registration Statement under the Securities Act.  8.STOCK APPRECIATION
RIGHTS.  Stock Appreciation Rights shall be evidenced by Award
Agreements specifying the number of shares of Stock subject to the Award, in
such form as the Board shall from time to time establish. No SAR or
purported SAR shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs
may incorporate all or any of the terms of the Plan by reference,
including provisions of Section 16 with respect to Section 409A if
applicable, and shall comply with and be subject to the following terms and
conditions:  8.1Types of SARs Authorized.SARs may be granted in tandem
with all or any portion of a related Option (a Tandem SAR) or may be
granted independently of any Option (a Freestanding SAR). A Tandem SAR may only
be granted concurrently with the grant of the related Option.  8.2Exercise Price.The exercise price for each SAR
shall be established in the discretion of the Board; provided, however, that (a) the
exercise price per share subject to a Tandem SAR shall be the exercise price
per share under the related Option and (b) the exercise price per share
subject to  10


a
Freestanding SAR shall be not less than the Fair Market Value of a share of
Stock on the effective date of grant of the SAR.  8.3Exercisability and Term of SARs.  (a)Tandem SARs.Tandem SARs shall be
exercisable only at the time and to the extent, and only to the extent, that
the related Option is exercisable, subject to such provisions as the Board may specify
where the Tandem SAR is granted with respect to less than the full number of
shares of Stock subject to the related Option. The Board may, in its
discretion, provide in any Award Agreement evidencing a Tandem SAR that such
SAR may not be exercised without the advance approval of the Company and,
if such approval is not given, then the Option shall nevertheless remain
exercisable in accordance with its terms. A Tandem SAR shall terminate and
cease to be exercisable no later than the date on which the related Option
expires or is terminated or canceled. Upon the exercise of a Tandem SAR with
respect to some or all of the shares subject to such SAR, the related Option
shall be canceled automatically as to the number of shares with respect to
which the Tandem SAR was exercised. Upon the exercise of an Option related to a
Tandem SAR as to some or all of the shares subject to such Option, the related
Tandem SAR shall be canceled automatically as to the number of shares with
respect to which the related Option was exercised.  (b)Freestanding SARs.Freestanding SARs
shall be exercisable at such time or times, or upon such event or events, and
subject to such terms, conditions, performance criteria and restrictions as
shall be determined by the Board and set forth in the Award Agreement
evidencing such SAR; provided, however, that no Freestanding SAR shall be
exercisable after the expiration of ten (10) years after the effective
date of grant of such SAR.  8.4Exercise of SARs.Upon the exercise (or deemed
exercise pursuant to Section 8.5) of an SAR, the Participant (or the
Participants legal representative or other person who acquired the right to
exercise the SAR by reason of the Participants death) shall be entitled to
receive payment of an amount for each share with respect to which the SAR is
exercised equal to the excess, if any, of the Fair Market Value of a share of
Stock on the date of exercise of the SAR over the exercise price. Payment of
such amount shall be made solely in shares of Stock. Unless otherwise provided
in the Award Agreement evidencing a Freestanding SAR, payment upon the exercise
of each SAR shall be made in a lump sum as soon as practicable following the
date of exercise of the SAR. The Award Agreement evidencing any Freestanding
SAR may provide for deferred payment in a lump sum or in installments in
compliance with Section 409A. The number of shares to be issued in payment
of an SAR shall be determined on the basis of the Fair Market Value of a share
of Stock on the date of exercise of the SAR. For purposes of Section 8, an
SAR shall be deemed exercised on the date on which the Company receives notice
of exercise from the Participant or as otherwise provided in Section 8.5.  8.5Deemed Exercise of SARs.If, on the date on
which an SAR would otherwise terminate or expire, the SAR by its terms remains
exercisable immediately prior to such termination or expiration and, if so
exercised, would result in a payment to the holder of such SAR, then any
portion of such SAR which has not previously been exercised shall automatically
be deemed to be exercised as of such date with respect to such portion.  8.6Effect of Termination of Service.Subject to earlier
termination of the SAR as otherwise provided herein and unless otherwise
provided by the Board in the grant of an SAR and set forth in the Award
Agreement, an SAR shall be exercisable after a Participants termination of
Service only to the extent and during the applicable time period determined in
accordance with Section 7.4 (treating the SAR as if it were an Option) and
thereafter shall terminate.  8.7Transferability of SARs.During the lifetime of the
Participant, an SAR shall be exercisable only by the Participant or the
Participants guardian or legal representative. An SAR shall not be subject in
any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participants beneficiary, except transfer by will or by the laws of descent
and distribution. Notwithstanding the foregoing, an SAR shall be  11


assignable
or transferable subject to the applicable limitations, if any, described in the
General Instructions to Form S-8 Registration Statement under the
Securities Act.  9.RESTRICTED STOCK
UNIT AWARDS.  Restricted Stock Unit Awards shall be evidenced by
Award Agreements specifying the number of Restricted Stock Units subject to the
Award, in such form as the Board shall from time to time establish. No
Restricted Stock Unit Award or purported Restricted Stock Unit Award shall be a
valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing Restricted Stock Units may incorporate
all or any of the terms of the Plan by reference, including the provisions of Section 16
with respect to Section 409A, if applicable, and shall comply with and be
subject to the following terms and conditions:  9.1Purchase Price.No monetary payment
(other than applicable tax withholding, if any) shall be required as a
condition of receiving a Restricted Stock Unit Award, the consideration for
which shall be services actually rendered to a Participating Company or for its
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of
cash or past services rendered to a Participating Company or for its benefit
having a value not less than the par value of the shares of Stock issued upon
settlement of the Restricted Stock Unit Award.  9.2Vesting.Restricted Stock Units shall be
made subject to Vesting Conditions based upon the satisfaction of such Service
requirements, conditions, restrictions or performance criteria as shall be
established by the Board and set forth in the Award Agreement evidencing such
Award.  9.3Voting Rights, Dividend Equivalent Rights and
Distributions.Participants shall have no voting rights with respect to
shares of Stock represented by Restricted Stock Units until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). However,
the Board, in its discretion, may provide in the Award Agreement
evidencing any Restricted Stock Unit Award that the Participant shall be
entitled to receive Dividend Equivalents with respect to the payment of cash
dividends on Stock during the period beginning on the date such Award is
granted and ending, with respect to the particular shares subject to the Award,
on the earlier of the date the Award is settled or the date on which it is
terminated. Such Dividend Equivalents, if any, shall be paid by crediting the
Participant with additional whole Restricted Stock Units as of the date of
payment of such cash dividends on Stock. The number of additional Restricted
Stock Units (rounded to the nearest whole number) to be so credited shall be
determined by dividing (a) the amount of cash dividends paid on such date
with respect to the number of shares of Stock represented by the Restricted
Stock Units previously credited to the Participant by (b) the Fair Market
Value per share of Stock on such date. Such additional Restricted Stock Units
shall be subject to the same terms and conditions and shall be settled in the
same manner and at the same time (or as soon thereafter as practicable) as the
Restricted Stock Units originally subject to the Restricted Stock Unit Award. In
the event of a dividend or distribution paid in shares of Stock or other
property or any other adjustment made upon a change in the capital structure of
the Company as described in Section 4.3, appropriate adjustments shall be
made in the Participants Restricted Stock Unit Award so that it represents the
right to receive upon settlement any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the
Participant would be entitled by reason of the shares of Stock issuable upon
settlement of the Award, and all such new, substituted or additional securities
or other property shall be immediately subject to the same Vesting Conditions
as are applicable to the Award.  9.4Effect of Termination of Service.Unless otherwise
provided by the Board and set forth in the Award Agreement evidencing a
Restricted Stock Unit Award, if a Participants Service terminates for any
reason, whether voluntary or involuntary (including the Participants death or
disability), then the Participant shall forfeit to the Company any Restricted
Stock Units pursuant to the Award which remain subject to Vesting Conditions as
of the date of the Participants termination of Service.  9.5Settlement of Restricted Stock Unit Awards.The Company shall
issue to a Participant on the date on which Restricted Stock Units subject to
the Participants Restricted Stock Unit  12


Award
vest or on such other date determined by the Board, in its discretion, and set
forth in the Award Agreement one (1) share of Stock (and/or any other new,
substituted or additional securities or other property pursuant to an
adjustment described in Section 9.3) for each Restricted Stock Unit then
becoming vested or otherwise to be settled on such date, subject to the
withholding of applicable taxes, if any. If permitted by the Board, subject to
the provisions of Section 16 with respect to Section 409A, the
Participant may elect in accordance with terms specified in the Award
Agreement to defer receipt of all or any portion of the shares of Stock or
other property otherwise issuable to the Participant pursuant to this Section,
and such deferred issuance date(s) elected by the Participant shall be set
forth in the Award Agreement. The Board, in its discretion, may provide in
any Award Agreement evidencing a Restricted Stock Unit Award that, if the
settlement of the Award with respect to any shares would otherwise occur on a
day on which the sale of such shares would violate the Companys Insider
Trading Policy, then the settlement with respect to such shares shall occur on
the next day on which the sale of such shares would not violate the Insider
Trading Policy.  9.6Nontransferabilityof Restricted Stock Unit Awards.The right to receive
shares pursuant to a Restricted Stock Unit Award shall not be subject in any
manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participants beneficiary, except transfer by will or by the laws of descent
and distribution. All rights with respect to a Restricted Stock Unit Award
granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participants guardian or legal
representative.  10.DEFERRED
COMPENSATION AWARDS.  10.1Establishment of Deferred Compensation Award Programs.This
Section 10 shall not be effective unless and until the Board determines to
establish a program pursuant to this Section. The Board, in its discretion and
upon such terms and conditions as it may determine, subject to the provisions
of Section 16 with respect to Section 409A, may establish one or
more programs pursuant to the Plan under which:  (a)Elective Cash Compensation Reduction
Awards.Participants may irrevocably elect, prior to a date
specified by the Board and complying with Section 409A, to reduce such
Participants compensation otherwise payable in cash (subject to any minimum or
maximum reductions imposed by the Board) and to be granted automatically at
such time or times as specified by the Board one or more Awards of Stock Units
with respect to such numbers of shares of Stock as determined in accordance
with the rules of the program established by the Board and having such
other terms and conditions as established by the Board.  (b)Stock Issuance Deferral Awards.Participants may irrevocably
elect, prior to a date specified by the Board and complying with Section 409A,
to be granted automatically an Award of Stock Units with respect to such number
of shares of Stock and upon such other terms and conditions as established by
the Board in lieu of:  (i)shares of Stock otherwise issuable
to such Participant upon the exercise of an Option; or  (ii)shares of Stock otherwise issuable
to such Participant upon the exercise of an SAR.  10.2Terms and Conditions of Deferred Compensation Awards.Deferred Compensation
Awards granted pursuant to this Section 10 shall be evidenced by Award
Agreements in such form as the Board shall from time to time establish. No
such Deferred Compensation Award or purported Deferred Compensation Award shall
be a valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing Deferred Compensation
Awards may incorporate all or any of the terms of the Plan by reference,
including the provisions of  13


Section 16
with respect to Section 409A, and, except as provided below, shall comply
with and be subject to the terms and conditions of Section 9.  (a)Voting Rights; Dividend Equivalent Rights
and Distributions.Participants shall
have no voting rights with respect to shares of Stock represented by Stock
Units until the date of the issuance of such shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). However, a Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Stock
during the period beginning on the date the Stock Units are granted
automatically to the Participant and ending on the earlier of the date on which
such Stock Units are settled or the date on which they are forfeited. Such
Dividend Equivalents shall be paid by crediting the Participant with additional
whole Stock Units as of the date of payment of such cash dividends on Stock. The
number of additional Stock Units (rounded to the nearest whole number) to be so
credited shall be determined by dividing (i) the amount of cash dividends
paid on the dividend payment date with respect to the number of shares of Stock
represented by the Stock Units previously credited to the Participant by (ii) the
Fair Market Value per share of Stock on such date. Such additional Stock Units
shall be subject to the same terms and conditions and shall be settled in the
same manner and at the same time (or as soon thereafter as practicable) as the
Stock Units originally subject to the Stock Unit Award. In the event of a
dividend or distribution paid in shares of Stock or other property or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.3, appropriate adjustments shall be made in the
Participants Stock Unit Award so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would
entitled by reason of the shares of Stock issuable upon settlement of the
Award.  (b)Settlement of Stock Unit Awards.A Participant electing
to receive an Award of Stock Units pursuant to this Section 10 shall
specify at the time of such election a settlement date with respect to such
Award which complies with Section 409A. The Company shall issue to the
Participant on the settlement date elected by the Participant, or as soon
thereafter as practicable, a number of whole shares of Stock equal to the
number of vested Stock Units subject to the Stock Unit Award. Such shares of
Stock shall be fully vested, and the Participant shall not be required to pay
any additional consideration (other than applicable tax withholding) to acquire
such shares.  11.STANDARD FORMS OF
AWARD AGREEMENT.  11.1Award Agreement.Each Award shall
comply with and be subject to the terms and conditions set forth in the
appropriate form of Award Agreement approved by the Board and as amended
from time to time. Any Award Agreement may consist of an appropriate form of
Notice of Grant and a form of Agreement incorporated therein by reference,
or such other form or forms, including electronic media, as the Board may approve
from time to time.  11.2Authority to Vary Terms.The Board shall have the authority from time to time to
vary the terms of any standard form of Award Agreement either in
connection with the grant or amendment of an individual Award or in connection
with the authorization of a new standard form or forms; provided, however,
that the terms and conditions of any such new, revised or amended standard form or
forms of Award Agreement are not inconsistent with the terms of the Plan.  12.CHANGE IN CONTROL.  12.1Effect of Change in Control on Options and SARs.  (a)Accelerated Vesting. Notwithstanding any
other provision of the Plan to the contrary, in the event of a Change in
Control, each Option held by a Participant whose Service has not terminated
prior to the date of such Change in Control shall become immediately
exercisable and vested in full as of such date, subject to the consummation of
the Change in Control.  14


(b)Assumption or Substitution. In the event of a
Change in Control, the surviving, continuing, successor, or purchasing entity
or parent thereof, as the case may be (the Acquiror), may, without the
consent of any Participant, either assume or continue the Companys rights and
obligations under outstanding Options and SARs or substitute for outstanding
Options and SARs substantially equivalent options and stock appreciation rights
(as the case may be) for the Acquirors stock. Any Options or SARs which
are neither assumed or continued by the Acquiror in connection with the Change
in Control nor exercised as of the time of consummation of the Change in
Control shall terminate and cease to be outstanding effective as of the time of
consummation of the Change in Control.  (c)Cash-Out. The Board may, in
its sole discretion and without the consent of any Participant, determine that,
upon the occurrence of a Change in Control, each or any Option or SAR
outstanding immediately prior to the Change in Control shall be canceled in
exchange for a payment with respect to each vested share (and each unvested
share, if so determined by the Board) of Stock subject to such canceled Option
or SAR in (i) cash, (ii) stock of the Company or of a corporation or
other business entity a party to the Change in Control, or (iii) other
property which, in any such case, shall be in an amount having a Fair Market
Value equal to the excess of the Fair Market Value of the consideration to be
paid per share of Stock in the Change in Control over the exercise price per
share under such Option or SAR (the Spread). In the event such
determination is made by the Board, the Spread (reduced by applicable
withholding taxes, if any) shall be paid to Participants in respect of the
vested portion of their canceled Options and SARs as soon as practicable
following the date of the Change in Control and in respect of the unvested
portion of their canceled Options and SARs in accordance with the vesting schedule applicable
to such Awards as in effect prior to the Change in Control.  12.2Effect of Change in Control on Restricted Stock Unit
Awards and Deferred Compensation Awards.Subject to the provisions of Section 16
with respect to Section 409A if applicable, in the event of a Change in
Control, each Restricted Stock Unit Award and each Deferred Compensation Award
held by a Participant whose Service has not terminated prior to such date shall
become vested in full as of such date, subject to the consummation of the
Change in Control, and shall be settled effective as of the date of the Change
in Control.  13.COMPLIANCE WITH
SECURITIES LAW.  The grant of Awards and the issuance of shares of
Stock pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities
and the requirements of any stock exchange or market system upon which the
Stock may then be listed. In addition, no Award may be exercised or
shares issued pursuant to an Award unless (a) a registration statement
under the Securities Act shall at the time of such exercise or issuance be in
effect with respect to the shares issuable pursuant to the Award or (b) in
the opinion of legal counsel to the Company, the shares issuable pursuant to
the Award may be issued in accordance with the terms of an applicable
exemption from the registration requirements of the Securities Act. The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Companys legal counsel to be necessary to
the lawful issuance and sale of any shares hereunder shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained. As a condition to
issuance of any Stock, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.  14.TAX WITHHOLDING.  14.1Tax Withholding in General.The Company shall have
the right to deduct from any and all payments made under the Plan, or to
require the Participant, through payroll withholding, cash payment or
otherwise, to make adequate provision for, the federal, state, local and
foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to an Award or the shares acquired pursuant thereto.
The Company shall have no obligation to deliver shares of Stock, to release
shares of Stock from an escrow established pursuant to an Award Agreement, or
to make any  15


payment
in cash under the Plan until the Participating Company Groups tax withholding
obligations have been satisfied by the Participant.  14.2Withholding in Shares.The Company shall have
the right, but not the obligation, to deduct from the shares of Stock issuable
to a Participant upon the exercise or settlement of an Award, or to accept from
the Participant the tender of, a number of whole shares of Stock having a Fair
Market Value, as determined by the Company, equal to all or any part of
the tax withholding obligations of the Participating Company Group. The Fair
Market Value of any shares of Stock withheld or tendered to satisfy any such
tax withholding obligations shall not exceed the amount determined by the
applicable minimum statutory withholding rates.  15.AMENDMENT OR
TERMINATION OF PLAN.  The
Board may amend, suspend or terminate the Plan at any time. However,
without the approval of the Companys stockholders, there shall be (a) no
increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.3)
and (b) no other amendment of the Plan that would require approval of the
Companys stockholders under any applicable law, regulation or rule, including
the rules of any stock exchange or market system upon which the Stock may then
be listed. No amendment, suspension or termination of the Plan shall affect any
then outstanding Award unless expressly provided by the Board. Except as
provided by the next sentence, no amendment, suspension or termination of the
Plan may adversely affect any then outstanding Award without the consent
of the Participant. Notwithstanding any other provision of the Plan to the
contrary, the Board may, in its sole and absolute discretion and without the
consent of any Participant, amend the Plan or any Award Agreement, to take
effect retroactively or otherwise, as it deems necessary or advisable for the
purpose of conforming the Plan or such Award Agreement to any present or future
law, regulation or rule applicable to the Plan, including, but not limited
to, Section 409A.  16.COMPLIANCE WITH SECTION 409A.  16.1Awards Subject to Section 409A.The provisions of this
Section 16 shall apply to any Award or portion thereof that is or becomes
subject to Section 409A, notwithstanding any provision to the contrary
contained in the Plan or the Award Agreement applicable to such Award. Awards
subject to Section 409A include, without limitation:  (a)Any Option that permits the
deferral of compensation other than the deferral of recognition of income until
the exercise of the Award.  (b)Each Deferred Compensation Award.  (c)Any Restricted Stock Unit Award
that either (i) provides by its terms for settlement of all or any portion
of the Award on one or more dates following the Short-Term Deferral Period (as
defined below) or (ii) permits or requires the Participant to elect one or
more dates on which the Award will be settled.  Subject
to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A
or other applicable guidance, the term Short-Term Deferral Period means the period ending on the later of (i) the
date that is two and one-half months from the end of the Companys fiscal year
in which the applicable portion of the Award is no longer subject to a
substantial risk of forfeiture or (ii) the date that is two and one-half
months from the end of the Participants taxable year in which the applicable
portion of the Award is no longer subject to a substantial risk of forfeiture. For
this purpose, the term substantial risk of forfeiture shall have the meaning
set forth in any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A
or other applicable guidance.  16.2Deferral and/or Distribution Elections.Except as otherwise
permitted or required by Section 409A or any applicable U.S. Treasury Regulations
promulgated pursuant to Section 409A or other applicable guidance, the
following rules shall apply to any deferral and/or  16


distribution
elections (each, an Election) that may be permitted or required
by the Board pursuant to an Award subject to Section 409A:  (a)All Elections must be
in writing and specify the amount of the distribution in settlement of an Award
being deferred, as well as the time and form of distribution as permitted
by this Plan.  (b)All Elections shall be made by the
end of the Participants taxable year prior to the year in which services
commence for which an Award may be granted to such Participant; provided,
however, that if the Award qualifies as performance-based compensation for
purposes of Section 409A and is based on services performed over a period
of at least twelve (12) months, then the Election may be made no later
than six (6) months prior to the end of such period.  (c)Elections shall continue in effect
until a written election to revoke or change such Election is received by the
Company, except that a written election to revoke or change such Election must
be made prior to the last day for making an Election determined in accordance
with paragraph (b) above or as permitted by Section 16.3.  16.3Subsequent Elections.Any Award subject to Section 409A which permits a subsequent
Election to delay the distribution or change the form of distribution in
settlement of such Award shall comply with the following requirements:  (a)No subsequent Election may take
effect until at least twelve (12) months after the date on which the subsequent
Election is made;  (b)Each subsequent Election related to
a distribution in settlement of an Award not described in Section 16.3(b),
16.4(b), or 16.4(f) must result in a delay of the distribution for a
period of not less than five (5) years from the date such distribution
would otherwise have been made; and  (c)No subsequent Election related to a
distribution pursuant to Section 16.4(d) shall be made less than
twelve (12) months prior to the date of the first scheduled payment under such
distribution.  16.4Distributions Pursuant to Deferral Elections.No distribution in settlement of an
Award subject to Section 409A may commence earlier than:  (a)Separation from service (as
determined by the Secretary of the United States Treasury);  (b)The date the Participant becomes
Disabled (as defined below);  (c)Death;  (d)A specified time (or pursuant to a
fixed schedule) that is either (i) specified by the Board upon the grant
of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified
by the Participant in an Election complying with the requirements of Section 16.2
and/or 16.3, as applicable;  (e)To the extent provided by the
Secretary of the U.S. Treasury, a change in the ownership or effective control
or the Company or in the ownership of a substantial portion of the assets of
the Company; or  (f)The occurrence of an
Unforeseeable Emergency (as defined below).  Notwithstanding
anything else herein to the contrary, to the extent that a Participant is a Specified
Employee (as defined in Section 409A(a)(2)(B)(i)) of the Company, no
distribution pursuant to  17


Section 16.4(a) in
settlement of an Award subject to Section 409A may be made before the
date which is six (6) months after such Participants date of separation
from service, or, if earlier, the date of the Participants death.  16.5Unforeseeable Emergency. The Board shall have
the authority to provide in the Award Agreement evidencing any Award subject to
Section 409A for distribution in settlement of all or a portion of such
Award in the event that a Participant establishes, to the satisfaction of the
Board, the occurrence of an Unforeseeable Emergency. In such event, the amount(s) distributed
with respect to such Unforeseeable Emergency cannot exceed the amounts
necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay
taxes reasonably anticipated as a result of such distribution(s), after taking
into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participants assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). All distributions
with respect to an Unforeseeable Emergency shall be made in a lump sum as soon
as practicable following the Boards determination that an Unforeseeable
Emergency has occurred.  The
occurrence of an Unforeseeable Emergency shall be judged and determined by the
Board. The Boards decision with respect to whether an Unforeseeable Emergency
has occurred and the manner in which, if at all, the distribution in settlement
of an Award shall be altered or modified, shall be final, conclusive, and not
subject to approval or appeal.  16.6Disabled.The Board shall have the authority
to provide in any Award subject to Section 409A for distribution in
settlement of such Award in the event that the Participant becomes Disabled. A
Participant shall be considered Disabled if either:  (a)the Participant is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12)
months, or  (b)the Participant is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of the Participants employer.  All
distributions payable by reason of a Participant becoming Disabled shall be
paid in a lump sum or in periodic installments as established by the
Participants Election, commencing as soon as practicable following the date
the Participant becomes Disabled. If the Participant has made no Election with
respect to distributions upon becoming Disabled, all such distributions shall
be paid in a lump sum as soon as practicable following the date the Participant
becomes Disabled.  16.7Death. If a Participant dies before
complete distribution of amounts payable upon settlement of an Award subject to
Section 409A, such undistributed amounts shall be distributed to his or
her beneficiary under the distribution method for death established by the
Participants Election as soon as administratively possible following receipt
by the Board of satisfactory notice and confirmation of the Participants death.
If the Participant has made no Election with respect to distributions upon
death, all such distributions shall be paid in a lump sum as soon as
practicable following the date of the Participants death.  16.8No Acceleration of Distributions.Notwithstanding
anything to the contrary herein, this Plan does not permit the acceleration of
the time or schedule of any distribution under this Plan, except as
provided by Section 409A and/or the Secretary of the U.S. Treasury.  17.MISCELLANEOUS
PROVISIONS.  17.1Repurchase Rights.Shares issued under the Plan may be
subject to one or more repurchase options, or other conditions and restrictions
as determined by the Board in its discretion at  18


the
time the Award is granted. The Company shall have the right to assign at any
time any repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the Company. Upon
request by the Company, each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder
and shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.  17.2Provision of Information.Each Participant shall
be given access to information concerning the Company equivalent to that
information generally made available to the Companys common stockholders.  17.3Rights as Outside Director.Nothing in the Plan or
any Award granted under the Plan shall confer on any Participant a right to
remain an Outside Director, or interfere with or limit in any way any right of
a Participating Company to terminate the Participants Service at any time.  17.4Rights as a Stockholder.A Participant shall have no rights
as a stockholder with respect to any shares covered by an Award until the date
of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such shares are issued, except as provided
in Section 4.3 or another provision of the Plan.  17.5Delivery of Title to Shares.Subject to any
governing rules or regulations, the Company shall issue or cause to be
issued the shares of Stock acquired pursuant to an Award and shall deliver such
shares to or for the benefit of the Participant by means of one or more of the
following: (a) by delivering to the Participant evidence of book entry
shares of Stock credited to the account of the Participant, (b) by
depositing such shares of Stock for the benefit of the Participant with any
broker with which the Participant has an account relationship, or (c) by
delivering such shares of Stock to the Participant in certificate form.  17.6Fractional Shares.The Company shall not be required
to issue fractional shares upon the exercise or settlement of any Award.  17.7Beneficiary Designation.Subject to local laws and
procedures, each Participant may file with the Company a written
designation of a beneficiary who is to receive any benefit under the Plan to
which the Participant is entitled in the event of such Participants death
before he or she receives any or all of such benefit. Each designation will
revoke all prior designations by the same Participant, shall be in a form prescribed
by the Company, and will be effective only when filed by the Participant in
writing with the Company during the Participants lifetime. If a married
Participant designates a beneficiary other than the Participants spouse, the
effectiveness of such designation may be subject to the consent of the
Participants spouse. If a Participant dies without an effective designation of
a beneficiary who is living at the time of the Participants death, the Company
will pay any remaining unpaid benefits to the Participants legal
representative.  17.8Severability. If any one or more of the
provisions (or any part thereof) of this Plan shall be held invalid,
illegal or unenforceable in any respect, such provision shall be modified so as
to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan
shall not in any way be affected or impaired thereby.  17.9No Constraint on Corporate Action.Nothing in this Plan
shall be construed to: (a) limit, impair, or otherwise affect the Companys
or another Participating Companys right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets; or (b) limit the
right or power of the Company or another Participating Company to take any
action which such entity deems to be necessary or appropriate.  19


17.10Unfunded Obligation.Participants shall have the status
of general unsecured creditors of the Company. Any amounts payable to
Participants pursuant to the Plan shall be unfunded and unsecured obligations
for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974. No Participating Company shall be
required to segregate any monies from its general funds, or to create any
trusts, or establish any special accounts with respect to such obligations. The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its
payment obligations hereunder. Any investments or the creation or maintenance
of any trust or any Participant account shall not create or constitute a trust
or fiduciary relationship between the Board or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participants creditors in any assets of any Participating
Company. The Participants shall have no claim against any Participating Company
for any changes in the value of any assets which may be invested or
reinvested by the Company with respect to the Plan.  17.11Choice of Law.Except to the extent governed by
applicable federal law, the validity, interpretation, construction and performance
of the Plan and each Award Agreement shall be governed by the laws of the State
of California, without regard to its conflict of law rules.  20


ZORAN
CORPORATION 2005 OUTSIDE DIRECTORS EQUITY
PLAN NONSTATUTORY STOCK OPTION
AGREEMENT  Zoran Corporation
has granted to the Participant named in the Notice of Grant of Nonstatutory
Stock Option (the GrantNotice)
to which this Nonstatutory Stock Option Agreement (the Option Agreement) is attached an option (the Option) to purchase certain
shares of Stock upon the terms and conditions set forth in the Grant Notice and
this Option Agreement. The Option has been granted pursuant to and shall in all
respects be subject to the terms and conditions of the Zoran Corporation 2005 Outside
Directors Equity Plan (the Plan),
as amended to the Date of Grant, the provisions of which are incorporated
herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges
receipt of and represents that the Participant has read and is familiar with
the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan
in the form most recently registered with the Securities and Exchange
Commission (the Plan Prospectus), (b) accepts the Option
subject to all of the terms and conditions of the Grant Notice, this Option
Agreement and the Plan and (c) agrees to accept as binding, conclusive and
final all decisions or interpretations of the Committee upon any questions
arising under the Grant Notice, this Option Agreement or the Plan.  1.DEFINITIONS AND CONSTRUCTION.  1.1Definitions.Unless
otherwise defined herein, capitalized terms shall have the meanings assigned to
such terms in the Grant Notice or the Plan.  1.2Construction.Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of this Option Agreement. Except
when otherwise indicated by the context, the singular shall include the plural
and the plural shall include the singular. Use of the term or is not intended
to be exclusive, unless the context clearly requires otherwise.  2.TAX CONSEQUENCES.  This Option is
intended to be a Nonstatutory Stock Option and shall not be treated as an
Incentive Stock Option within the meaning of Section 422(b) of the
Code.  3.ADMINISTRATION.  All questions of
interpretation concerning this Option Agreement shall be determined by the
Committee. All determinations by the Committee shall be final and binding upon
all persons having an interest in the Option. Any Officer shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, or election which is the responsibility of or which is allocated to
the Company herein, provided the Officer has apparent authority with respect to
such matter, right, obligation, or election.  4.EXERCISE OF THE OPTION.  4.1Right to Exercise.Except
as otherwise provided herein, the Option shall be exercisable on and after the Initial
Vesting Date and prior to the termination of the Option (as provided in Section 6)
in an amount not to exceed the number of Vested Shares less the number of
shares previously acquired upon exercise of the Option. In no event shall the Option
be exercisable for more shares than the Number of Option Shares, as adjusted
pursuant to Section 9.  4.2Method of Exercise.Exercise
of the Option shall be by means of electronic or written notice (the Exercise Notice)
in a form authorized by the Company. An electronic Exercise Notice must be
digitally signed or authenticated by the Participant in such manner as required
by the notice and transmitted to the Company or an authorized representative of
the Company (including a third-party administrator designated by the Company). In
the event that the Participant is not authorized or is unable to provide an
electronic Exercise Notice, the Option shall be exercised by a written Exercise
Notice addressed to the Company, which shall be signed by the Participant and
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile


transmission, or by such
other means as the Company may permit, to the Company, or an authorized
representative of the Company (including a third-party administrator designated
by the Company). Each Exercise Notice, whether electronic or written, must
state the Participants election to exercise the Option, the number of whole
shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Participants investment intent with
respect to such shares as may be required pursuant to the provisions of
this Option Agreement. Further, each Exercise Notice must be received by the
Company prior to the termination of the Option as set forth in Section 6
and must be accompanied by full payment of the aggregate Exercise Price for the
number of shares of Stock being purchased. The Option shall be deemed to be
exercised upon receipt by the Company of such electronic or written Exercise
Notice and the aggregate Exercise Price.  4.3Payment of Exercise Price.  (a)Forms of Consideration
Authorized.Except
as otherwise provided below, payment of the aggregate Exercise Price for the
number of shares of Stock for which the Option is being exercised shall be made
(i) in cash or by check or cash equivalent, (ii) if permitted by the
Company, by tender to the Company, or attestation to the ownership, of whole
shares of Stock owned by the Participant having a Fair Market Value not less
than the aggregate Exercise Price, (iii) by means of a Cashless Exercise,
as defined in Section 4.3(b), or (iv) by any combination of the
foregoing.  (b)Limitations on Forms of
Consideration.  (i)Tender of Stock.Notwithstanding the foregoing, the Option
may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Companys stock. If required by the Company, the
Option may not be exercised by tender to the Company, or attestation to
the ownership, of shares of Stock unless such shares either have been owned by
the Participant for more than six (6) months or such other period, if any,
required by the Company (and not used for another option exercise by
attestation during such period) or were not acquired, directly or indirectly,
from the Company.  (ii)Cashless Exercise.A Cashless
Exercise means the delivery of a properly executed
notice together with irrevocable instructions to a broker in a form acceptable
to the Company providing for the assignment to the Company of the proceeds of a
sale or loan with respect to some or all of the shares of Stock acquired upon
the exercise of the Option pursuant to a program or procedure approved by the
Company (including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board
of Governors of the Federal Reserve System). The Company reserves, at any and
all times, the right, in the Companys sole and absolute discretion, to
establish, decline to approve or terminate any such program or procedure,
including with respect to the Participant notwithstanding that such program or
procedures may be available to others.  4.4Tax Withholding.At
the time the Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, the Participant hereby authorizes
withholding from payroll and any other amounts payable to the Participant, and
otherwise agrees to make adequate provision for (including by means of a
Cashless Exercise to the extent permitted by the Company), any sums required to
satisfy the federal, state, local and foreign tax withholding obligations of
the Participating Company Group, if any, which arise in connection with the
Option. The Company shall have no obligation to deliver shares of Stock until
the tax withholding obligations of the Participating Company Group have been
satisfied by the Participant.  4.5Beneficial Ownership of Shares; Certificate Registration.The Participant hereby authorizes the Company,
in its sole discretion, to deposit for the benefit of the Participant with any
broker with which the Participant has an account relationship of which the
Company has notice any or all shares acquired by the Participant pursuant to
the exercise of the Option. Except as provided by the preceding sentence, a
certificate for the shares as to which the Option is exercised shall be
registered in the name of the Participant, or, if applicable, in the names of
the heirs of the Participant.  2


4.6Restrictions on Grant of the Option and Issuance of Shares.The grant of the Option and the issuance of
shares of Stock upon exercise of the Option shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities. The Option may not be exercised if the issuance of shares
of Stock upon exercise would constitute a violation of any applicable federal,
state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then
be listed. In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise
of the Option be in effect with respect to the shares issuable upon exercise of
the Option or (ii) in the opinion of legal counsel to the Company, the
shares issuable upon exercise of the Option may be issued in accordance
with the terms of an applicable exemption from the registration requirements of
the Securities Act. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE
EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE
PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN
THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority, if any, deemed by the
Companys legal
counsel to be necessary to the lawful issuance and sale of any shares subject
to the Option shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite authority shall
not have been obtained. As a condition to the exercise of the Option, the
Company may require the Participant to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as may be
requested by the Company.  4.7Fractional Shares.The
Company shall not be required to issue fractional shares upon the exercise of
the Option.  5.NONTRANSFERABILITY OF THE OPTION.  During the
lifetime of the Participant, the Option shall be exercisable only by the
Participant or the Participants guardian or legal representative. The Option
shall not be subject in any manner to anticipation, alienation, sale, exchange,
transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participants beneficiary, except transfer by will or by the
laws of descent and distribution. Following the death of the Participant, the
Option, to the extent provided in Section 7, may be exercised by the
Participants
legal representative or by any person empowered to do so under the deceased
Participants will or
under the then applicable laws of descent and distribution. Notwithstanding the
foregoing, the Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form S-8
Registration Statement under the Securities Act.  6.TERMINATION OF THE OPTION.  The Option shall
terminate and may no longer be exercised after the first to occur of (a) the
close of business on the Option Expiration Date, (b) the close of business
on the last date for exercising the Option following termination of the
Participants
Service as described in Section 7, or (c) a Change in Control to the
extent provided in Section 8.  7.EFFECT OF TERMINATION OF SERVICE.  7.1Option Exercisability.The Option shall terminate
immediately upon the Participants termination of Service to the extent that it
is then unvested and shall be exercisable after the Participants termination
of Service to the extent it is then vested only during the applicable time
period as determined below and thereafter shall terminate.  (a)Disability.If the Participants Service terminates because of the
Disability of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participants Service terminated, may be
exercised by the Participant (or the Participants guardian or legal representative) at
any time prior to the expiration of twelve (12) months after the date on which
the Participants Service terminated, but in any event no later than
the Option Expiration Date; provided, however, that if the Participant has
served continuously on the Board for at least two (2) years prior to such
termination of Service, the Option, to the extent unexercised and exercisable
for Vested Shares on the date on which the Participants Service  3


terminated, may be
exercised by the Participant (or the Participants guardian or legal
representative) at any time prior to the Option Expiration Date.  (b)Death.If the Participants Service terminates because of the
death of the Participant, the Option, to the extent unexercised and exercisable
for Vested Shares on the date on which the Participants Service terminated, may be
exercised by the Participants legal representative or other person who
acquired the right to exercise the Option by reason of the Participants death
at any time prior to the expiration of twelve (12) months after the date on
which the Participants Service terminated, but in any event no later than the
Option Expiration Date. The Participants Service shall be deemed to have
terminated on account of death if the Participant dies within three (3) months
after the Participants termination of Service; provided, however, that if the
Participant has served continuously on the Board for at least two (2) years
prior to such termination of Service, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participants Service
terminated, may be exercised by the Participant (or the Participants
guardian or legal representative) at any time prior to the Option Expiration
Date.  (c)Retirement.If the Participants Service terminates
because of the Retirement of the Participant, the Option, to the extent
unexercised and exercisable for Vested Shares on the date on which the
Participants Service terminated, may be exercised at any time prior to
the Option Expiration Date.  (d)Other Termination of
Service.If the
Participants Service terminates for any reason, except Disability, death or
Retirement, the Option, to the extent unexercised and exercisable for Vested
Shares by the Participant on the date on which the Participants Service
terminated, may be exercised by the Participant at any time prior to the
expiration of three (3) months after the date on which the Participants
Service terminated, but in any event no later than the Option Expiration Date.  7.2Extension if Exercise Prevented by Law.Notwithstanding
the foregoing, if the exercise of the Option within the applicable time periods
set forth in Section 7.1 is prevented by the provisions of Section 4.6,
the Option shall remain exercisable until three (3) months after the date
the Participant is notified by the Company that the Option is exercisable, but
in any event no later than the Option Expiration Date.  7.3Extension if Participant Subject to Section 16(b).Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section 7.1
of shares acquired upon the exercise of the Option would subject the
Participant to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the
tenth (10th) day following the date on which a sale of such shares by the
Participant would no longer be subject to such suit, (ii) the one hundred
and ninetieth (190th) day after the Participants termination of Service, or (iii) the
Option Expiration Date.  4


8.EFFECT OF CHANGE IN CONTROL.  In the event of a
Change in Control, the Option shall be come immediately exercisable and vested
in full as of the date of the Change of Control, subject to the consumption of
the Change in Control and provided that the Participants Service has not
terminated prior to the date of the Change in Control. In addition, the
surviving, continuing, successor, or purchasing entity or parent thereof, as
the case may be (the Acquiror),
may, without the consent of the Participant, assume or continue in full force
and effect the Companys rights and obligations under the Option or substitute
for the Option a substantially equivalent option for the Acquirors stock. For
purposes of this Section, the Option shall be deemed assumed if, following the
Change in Control, the Option confers the right to receive, subject to the
terms and conditions of the Plan and this Option Agreement, for each share of
Stock subject to the Option immediately prior to the Change in Control, the
consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a share of Stock on the effective
date of the Change in Control was entitled; provided, however, that if such
consideration is not solely common stock of the Acquiror, the Committee may,
with the consent of the Acquiror, provide for the consideration to be received upon
the exercise of the Option, for each share of Stock subject to the Option, to
consist solely of common stock of the Acquiror equal in Fair Market Value to
the per share consideration received by holders of Stock pursuant to the Change
in Control. The Option shall terminate and cease to be outstanding effective as
of the time of consummation of the Change in Control to the extent that the
Option is neither assumed or continued by the Acquiror in connection with the
Change in Control nor exercised as of the date of the Change in Control.  9.ADJUSTMENTS FOR CHANGES IN
CAPITAL STRUCTURE.  Subject to any
required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether
through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the
event of payment of a dividend or distribution to the stockholders of the
Company in a form other than Stock (excepting normal cash dividends) that
has a material effect on the Fair Market Value of shares of Stock, appropriate
adjustments shall be made in the number, Exercise Price and kind of shares
subject to the Option, in order to prevent dilution or enlargement of the
Participants rights under the Option. For purposes of the foregoing,
conversion of any convertible securities of the Company shall not be treated as
effected without receipt of consideration by the Company.  Any fractional share resulting from an
adjustment pursuant to this Section shall be rounded down to the nearest
whole number, and in no event may the Exercise Price be decreased to an
amount less than the par value, if any, of the stock subject to the Option. The
Committee in its sole discretion, may also make such adjustments in the
terms of the Option to reflect, or related to, such changes in the capital
structure of the Company or distributions as it deems appropriate. The
adjustments determined by the Committee pursuant to this Section shall be
final, binding and conclusive.  10.RIGHTS AS A STOCKHOLDER OR
DIRECTOR.  The Participant
shall have no rights as a stockholder with respect to any shares covered by the
Option until the date of the issuance of the shares for which the Option has
been exercised (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date the shares are issued, except as provided in Section 9.
Nothing in this Option Agreement shall confer upon the Participant any right to
continue in the Service of a Participating Company or interfere in any way with
any right of the Participating Company Group to terminate the Participants Service as a Director at
any time.  11.LEGENDS.  The Company may at
any time place legends referencing any applicable federal, state or foreign
securities law restrictions on all certificates representing shares of stock
subject to the provisions of this Option Agreement. The Participant shall, at
the request of the Company, promptly present to the Company any and all
certificates representing shares acquired pursuant to the Option in the
possession of the Participant in order to carry out the provisions of this
Section.  5


12.MISCELLANEOUS PROVISIONS.  12.1Termination or Amendment.The Committee may terminate
or amend the Plan or the Option at any time; provided, however, that except as
provided in Section 8 in connection with a Change in Control, no such
termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Participant unless such
termination or amendment is necessary to comply with any applicable law or
government regulation. No amendment or addition to this Option Agreement shall
be effective unless in writing.  12.2Further Instruments.The parties hereto
agree to execute such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Option Agreement.  12.3Binding Effect.Subject to the restrictions on transfer set
forth herein, this Option Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.  12.4Delivery of Documents and Notices.Any document relating to
participation in the Plan or any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by a Participating Company, or
upon deposit in the U.S. Post Office or foreign postal service, by registered
or certified mail, or with a nationally recognized overnight courier service,
with postage and fees prepaid, addressed to the other party at the address of
such party set forth in the Grant Notice or at such other address as such party
may designate in writing from time to time to the other party.  (a)Description of
Electronic Delivery.The Plan documents, which may include
but do not necessarily include: the Plan, the Grant Notice, this Option
Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Companys stockholders, may be delivered to the
Participant electronically. In addition, the Participant may deliver
electronically the Grant Notice and Exercise Notice called for by Section 4.2
to the Company or to such third party involved in administering the Plan as the
Company may designate from time to time. Such means of electronic delivery
may include but do not necessarily include the delivery of a link to a
Company intranet or the internet site of a third party involved in
administering the Plan, the delivery of the document via e-mail or such other
means of electronic delivery specified by the Company.  (b)Consent to Electronic
Delivery.The
Participant acknowledges that the Participant has read Section 12.4(a) of
this Option Agreement and consents to the electronic delivery of the Plan
documents and the delivery of the Grant Notice and Exercise Notice, as
described in Section 12.4(a). The Participant acknowledges that he or she may receive
from the Company a paper copy of any documents delivered electronically at no
cost to the Participant by contacting the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. Similarly, the Participant understands that the Participant
must provide the Company or any designated third party administrator with a
paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the
electronic delivery of documents described in Section 12.4(a) or may change
the electronic mail address to which such documents are to be delivered (if
Participant has provided an electronic mail address) at any time by notifying
the Company of such revoked consent or revised e-mail address by telephone,
postal service or electronic mail. Finally, the Participant understands that he
or she is not required to consent to electronic delivery of documents described
in Section 12.4(a).  12.5Integrated Agreement.The Grant Notice, this Option
Agreement and the Plan, together with any Superseding Agreement, if any, shall
constitute the entire understanding and agreement of the Participant and the
Participating Company Group with respect to the subject matter contained herein
and supersede any prior agreements, understandings, restrictions,
representations, or warranties among the Participant and the Participating
Company Group with respect to such subject matter. To the extent contemplated
herein, the provisions of the Grant Notice, the Option Agreement and the Plan
shall survive any exercise of the Option and shall remain in full force and
effect.  6


12.6Applicable Law.This Option Agreement shall be governed by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
the State of California.  12.7Counterparts.The Grant Notice may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  7


Nonstatutory Stock
  Option
  Participant:Date:   STOCK OPTION EXERCISE NOTICE  Zoran CorporationAttention: Stock
  Administration1390 Kifer RoadSunnyvale, CA 94086Ladies and Gentlemen:  1.Option.I was granted an option
(the Option)
to purchase shares of the common stock (the Shares)
of Zoran Corporation (the Company)
pursuant to the Companys
2005 Outside Directors Equity Plan (the Plan),
my Notice of Grant of Nonstatutory Stock Option (the Grant Notice) and my Nonstatutory Stock Option
Agreement (the Option Agreement)
as follows:  Date of Grant:Number of Option
  Shares:Exercise Price per
  Share:
  $  2.Exercise of Option.I hereby elect
to exercise the Option to purchase the following number of Shares, all of which
are Vested Shares in accordance with the Grant Notice and the Option Agreement:  Total Shares Purchased:Total Exercise Price
  (Total Shares X Price per Share)
  $  3.Payments.I enclose payment in full
of the total exercise price for the Shares in the following form(s), as
authorized by my Option Agreement:   Cash:
  $ Check:
  $ Tender of Company
  Stock:
  Contact Plan
  Administrator Cashless Exercise
  (same-day sale):
  Contact Plan
  Administrator  4.Participant Information.  My address is:My Social Security
  Number is:


5.Binding Effect.I agree that the
Shares are being acquired in accordance with and subject to the terms,
provisions and conditions of the Grant Notice, the Option Agreement and the
Plan, to all of which I hereby expressly assent. This Agreement shall inure to
the benefit of and be binding upon my heirs, executors, administrators,
successors and assigns.   Very truly yours,(Signature)   Receipt of the
above is hereby acknowledged.  ZORAN CORPORATION  By:Title:Dated:  2


ZORAN CORPORATION 2005
OUTSIDE DIRECTORS EQUITY PLAN NOTICE OF
GRANT OF NONSTATUTORY STOCK OPTION (INITIAL
OPTION)  The Participant has been granted an option (the Option) to purchase certain
shares of Stock of Zoran Corporation pursuant to the Zoran Corporation2005 Outside Directors Equity Plan (the Plan), as follows:  Participant:Date of Grant:Number of Option Shares:
  
  30,000Exercise Price:
  
  $Initial Vesting Date:
  
  The first anniversary of the Date of GrantOption Expiration Date:
  
  The date ten (10) years after the Date of GrantTax Status of Option:
  
  Nonstatutory Stock Option.Vested Shares:
  
  Except as provided in the Stock Option Agreement,
  the number of Vested Shares (disregarding any resulting fractional share) as
  of any date is determined by multiplying the Number of Option Shares by the Vested Ratio
  determined as of such date as follows:Prior to Initial Vesting Date
  0On Initial Vesting Date, provided the Participants
  Service has not terminated prior to such date
  1/4PlusFor each additional full year of the Participants
  continuous Service from Initial Vesting Date until the Vested Ratio equals
  1/1, an additional
  1/4  By their signatures below
or by electronic acceptance or authentication in a form authorized by the
Company, the Company and the Participant agree that the Option is governed by
this Grant Notice and by the provisions of the Plan and the Stock Option
Agreement, both of which are made a part of this document.  The Participant acknowledges that copies of
the Plan, the Stock Option Agreement and the prospectus for the Plan are
available on the Companys internal web site and may be viewed and printed by
the Participant for attachment to the Participants copy of this Grant Notice.  The Participant represents that the
Participant has read and is familiar with the provisions of the Plan and the
Stock Option Agreement, and hereby accepts the Option subject to all of their
terms and conditions.  ZORAN CORPORATION
  PARTICIPANTBy:SignatureIts:
  President & CEODateAddress:
  1390 Kifer RoadSunnyvale, CA 94086
  Address  ATTACHMENTS:
  
  2005 Outside Directors Equity Plan, as amended to
  the Date of Grant; Nonstatutory Stock Option Agreement, Exercise Notice and
  Plan Prospectus


ZORAN CORPORATION 2005
OUTSIDE DIRECTORS EQUITY PLAN NOTICE OF
GRANT OF NONSTATUTORY STOCK OPTION (ANNUAL OPTION)  The Participant has been granted an option (the Option) to purchase certain
shares of Stock of Zoran Corporation pursuant to the Zoran Corporation2005 Outside Directors Equity Plan (the Plan), as follows:  Participant:Date of Grant:Number of Option Shares:
  
  15,000Exercise Price:
  
  $Initial Vesting Date:
  
  The day immediately preceding the first annual
  meeting of the stockholders of Zoran Corporation occurring after the Date of
  GrantOption Expiration Date:
  
  The date ten (10) years after the Date of GrantTax Status of Option:
  
  Nonstatutory Stock Option.Vested Shares:
  
  Except as provided in the Stock Option Agreement,
  the number of Vested Shares (disregarding any resulting fractional share) as
  of any date is determined by multiplying the Number of Option Shares by the Vested Ratio
  determined as of such date as follows:Prior to Initial Vesting Date
  0On Initial Vesting Date, provided the Participants
  Service has not terminated prior to such date
  1/1  By their signatures below
or by electronic acceptance or authentication in a form authorized by the
Company, the Company and the Participant agree that the Option is governed by
this Grant Notice and by the provisions of the Plan and the Stock Option
Agreement, both of which are made a part of this document.  The Participant acknowledges that copies of
the Plan, the Stock Option Agreement and the prospectus for the Plan are
available on the Companys internal web site and may be viewed and printed by
the Participant for attachment to the Participants copy of this Grant Notice.  The Participant represents that the
Participant has read and is familiar with the provisions of the Plan and the
Stock Option Agreement, and hereby accepts the Option subject to all of their
terms and conditions.  ZORAN CORPORATION
  PARTICIPANTBy:SignatureIts:
  President & CEODateAddress:
  1390 Kifer RoadSunnyvale, CA 94086
  Address  ATTACHMENTS:
  2005 Outside Directors Equity Plan, as amended to
  the Date of Grant; Nonstatutory Stock Option Agreement, Exercise Notice and
  Plan Prospectus