**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

** **

**FORM 10-K/A**

 

**Amendment No. 1to Form 10-K**

 
| **(Mark One)**                                                                                                                                                                                                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ý**                                                                                                                                                                                                    |   | **Annual report  pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|                                                                                                                                                                                                          |   |   |
| **for the  fiscal year ended December 31, 2002**                                                                                                                                                         |
|                                                                                                                                                                                                          |   |   |
| **o**                                                                                                                                                                                                         |   | **Transition  report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|                                                                                                                                                                                                          |   |   |
| **for the transition period  from              to              ** |
|                                                                                                                                                                                                          |
| **Commission  file number  0-27246**                                                                                                                                                                     |

 

**ZORAN CORPORATION**

(Exact name of Registrant as specified in its charter)

 
| **Delaware**                                                     |   | **94-2794449**                        |
|------------------------------------------------------------------|--------|---------------------------------------|
| (State or other jurisdiction ofincorporation of organization)    |   | (I.R.S. Employer  Identification No.) |
|                                                             |   |                                  |
| **3112 Scott  Boulevard, Santa Clara, California 95054**         |
| (Address of principal  executive offices) (Zip code)             |
|                                                             |   |                                  |
| **(408) 919-4111**                                               |
| Registrant’s telephone number, including area code          |
| Securities registered pursuant to Section 12(b) of the Act: |

 
| **Title of each class** |   | **Name of each exchange on which  registered** |
|-------------------------|--------|------------------------------------------------|
| None                    |   | None                                           |

 
| Securities registered pursuant  to Section 12(g) of the Act: |
|-------------------------------------------------------------------|
|                                                              |
| **Common Stock,  $.001 par value**                                |
| (Title of Class)                                                  |

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

YES ý NO o

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendmentto this Form 10-K. ý

 

Indicateby check mark whether registrant is an accelerated filer (as defined by Rule12b-2 of the Act).  YES ýNO o

 

Theaggregate market value of registrant’s voting stock held by non-affiliates ofregistrant based upon the closing sale price of the Common Stock onJune 28, 2002, as reported on the Nasdaq National Market, wasapproximately $618,000,000.  Shares ofCommon Stock held by each officer, director and holder of 10% or more of theoutstanding Common Stock have been excluded in that such persons may be deemedto be affiliates.  This determination ofaffiliate status is not necessarily a conclusive determination for otherpurposes.

 

Outstandingshares of registrant’s Common Stock, $0.001 par value, as of March 17,2003:  27,399,578

 

 

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**FORM10-K/A**

 

**Amendment No. 1 to Annual Reporton Form 10-K for the Fiscal Year ended December 31, 2002**

 

The undersigned registrant hereby amends Items 10through 13 of Part III and Item 15 of Part IV of its Annual Report on Form 10-Kfor the fiscal hear ended December 31, 2002 to read in their entirety asfollows:

 

**PARTIII**

 

**Item 10. Directors and Executive Officers of the Registrant**

 
| **Name of Nominee** |   | **Age** |   | **Principal Occupation**                                                  |   | **Director Since** |
|---------------------|--------|---------|--------|---------------------------------------------------------------------------|--------|--------------------|
| Levy  Gerzberg      |   | 58      |   | President  and Chief Executive Officer of Zoran                           |   | 1981               |
|                |   |    |   |                                                                      |   |               |
| Uzia  Galil         |   | 78      |   | Chairman  of the Board of Directors, Uzia Initiative and Management, Ltd. |   | 1983               |
|                |   |    |   |                                                                      |   |               |
| James  D. Meindl    |   | 70      |   | Professor  of Microelectronics, Georgia Institute of Technology           |   | 1986               |
|                |   |    |   |                                                                      |   |               |
| Arthur  B. Stabenow |   | 64      |   | Private  Investor                                                         |   | 1990               |
|                |   |    |   |                                                                      |   |               |
| Philip  M. Young    |   | 63      |   | General  Partner, U.S. Venture Partners                                   |   | 1986               |

 

LEVYGERZBERG was a co-founder of Zoran in 1981 and has served as our President andChief Executive Officer since December 1988 and as a director since 1981.  Dr. Gerzberg also served as our Presidentfrom 1981 to 1984 and as our Executive Vice President and Chief TechnicalOfficer from 1985 to 1988.  Prior toco-founding Zoran, Dr. Gerzberg was Associate Director of StanfordUniversity’s Electronics Laboratory. Dr. Gerzberg holds a Ph.D. in Electrical Engineering from StanfordUniversity and an M.S. in Medical Electronics and a B.S. in ElectricalEngineering from the Technion-Israel Institute of Technology in Haifa, Israel.

 

UZIAGALIL has been a director of Zoran since 1983 and has served as Chairman of theboard of directors since October 1993. Mr. Galil currently serves as President and Chief Executive Officerof Uzia Initiative and Management Ltd., a company specializing in the promotionand nurturing of new businesses associated with mobile communication,electronic commerce and medical informatics, which he founded inNovember 1999.  From 1962 untilNovember 1999, Mr. Galil served as President and Chief ExecutiveOfficer of Elron Electronic Industries Ltd., an Israeli high technology holdingcompany, where he also served as Chairman of the board.  From January 1981 until leaving Elron,Mr. Galil also served as Chairman of the board of directors of Elbit Ltd.,an electronic communication affiliate of Elron, and as a member of the board ofdirectors of Elbit Systems Ltd., a defense electronics affiliate of Elron, andall other private companies held in the Elron portfolio.  Mr. Galil currently serves as a memberof the boards of directors of Orbotech Ltd., NetManage Inc. and PartnerCommunications Ltd.  From 1980 to 1990,Mr. Galil served as Chairman of the International Board of Governors ofthe Technion.  Mr. Galil holds anM.S. in Electrical Engineering from Purdue University and a B.S. from theTechnion.  Mr. Galil has also beenawarded an honorary doctorate in technical sciences by the Technion inrecognition of his contribution to the development of science- based industriesin Israel, an honorary doctorate in philosophy by the Weizmann Institute ofScience, an honorary doctorate in engineering by Polytechnic University, NewYork, and an honorary doctorate from the Ben-Gurion University of the Negev inIsrael.  Mr. Galil is also arecipient of the Israel Prize.

 

JAMESD. MEINDL has been a director of Zoran since March 1986.  Dr. Meindl has been a professor ofmicroelectronics at Georgia Institute of Technology sinceNovember 1993.  From September 1986to November 1993, Dr. Meindl served as Provost and Senior Vice Presidentof Academic Affairs at Renssalaer Polytechnic Institute.  Prior thereto, Dr. Meindl was aprofessor of electrical engineering and Director of the Stanford ElectronicsLaboratory and Center for Integrated Systems at Stanford University.  Dr. Meindl is also a director ofSanDisk, Inc. and DMC Stratex.

 

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ARTHURB. STABENOW has been a director of Zoran since November 1990.  Mr. Stabenow has been principallyengaged as a private investor since January 1999.  From March 1986 to January 1999,Mr. Stabenow was Chief Executive Officer of Micro Linear Corporation, asemiconductor company. Mr. Stabenow also serves as a director of Applied Micro CircuitsCorporation.

 

PHILIPM. YOUNG has been a director of Zoran since January 1986.  Mr. Young has been a general partner ofU.S. Venture Partners, a venture capital partnership, since April 1990.  Mr. Young is also a director ofAerogen, Inc. and several private companies.

 

Theinformation required by this Item with respect to additional executive officersof Zoran is incorporated by reference to Part I of this Report under theheading “Executive Officers.”

** **

**SECTION 16(a) BENEFICIAL OWNERSHIPREPORTING COMPLIANCE**

 

Section 16(a)of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),requires our directors and executive officers, and persons who own more than10% of a registered class of the our equity securities, to file with theSecurities Exchange Commission initial reports of ownership and reports ofchanges in ownership of common stock and other equity securities of Zoran.  Officers, directors and greater-than-10%beneficial owners are required by SEC regulation to furnish us with copies ofall reports they file under Section 16(a).

 

To ourknowledge, based solely on our review of the copies of reports filed underSection 16(a) furnished to us and written representations that no otherreports were required, all Section 16(a) filing requirements applicable toits officers, directors and greater than 10% beneficial owners were compliedwith during the year ended December 31, 2002.

 

**Item 11.        Executive Compensation**

** **

**Summary of Cash and Certain Other Compensation**

 

Thefollowing table sets forth information concerning the compensation received forservices rendered to us during the years ended December 31, 2000, 2001 and2002 by our chief executive officer and our three other most highly compensatedexecutive officers whose total salary and bonus for such fiscal year exceeded$100,000 (collectively, the “Named Executive Officers”).

 

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**SUMMARYCOMPENSATION TABLE**

** **
|                                 |   |     |   |             |    |        |   | **Long-Term**    |   |             |   |
|--------------------------------------|--------|----------|--------|------------------|---------|-------------|--------|------------------|--------|------------------|--------|
|                                 |   |     |   |             |    |        |   | **Compensation** |   |             |   |
|                                 |   |     |   |             |    | **Awards**  |   |             |   |
|                                 |   |     |   | **Annual**       |    | **Options** |   |             |   |
|                                 |   |     |   | **Compensation** |    | **Granted** |   | **All Other**    |   |
| **Named Officers**                   |   | **Year** |   | **Salary(1)**    |    | **Bonus**   |   | **(Shares)**     |   | **Compensation** |   |
| Levy Gerzberg, Ph.D                  |   | 2002     |   | $                | 339,921 |        | $      | 255,000          |   | 427,500          |   | $ | 698 | (2) |
| President and Chief                  |   | 2001     |   | $                | 318,423 |        | $      | 226,100          |   | 150,000          |   | $ | 538 | (2) |
| Executive Officer                    |   | 2000     |   | $                | 318,664 |        | $      | 180,000          |   | 135,000          |   | $ | 258 | (2) |
|                                 |   |     |   |             |    |        |   |             |   |             |   |
| Camillo Martino (3)                  |   | 2002     |   | $                | 238,558 |        | $      | 150,000          |   | 150,000          |   | $ | 542 | (2) |
| Chief Operating Officer              |   | 2001     |   | $                | 87,404  |        | $      | —           |   | 300,000          |   | $ | 179 | (2) |
|                                 |   |     |   |             |    |        |   |             |   |             |   |
| Isaac Shenberg, Ph.D.                |   | 2002     |   | $                | 178,750 |        | $      | 63,000           |   | 82,500           |   | $ | 37,427 | (4) |
| Senior Vice President,               |   | 2001     |   | $                | 172,130 |        | $      | 48,899           |   | 100,500          |   | $ | 42,674 | (4) |
| Business and Strategic  Development  |   | 2000     |   | $                | 168,850 |        | $      | 55,957           |   | 60,000           |   | $ | 44,050 | (4) |
|                                 |   |     |   |             |    |        |   |             |   |             |   |   |   |   |
| Karl Schneider                       |   | 2002     |   | $                | 195,750 |        | $      | 68,250           |   | 75,000           |   | $ | 573 | (2) |
| Vice President,                      |   | 2001     |   | $                | 185,250 |        | $      | 60,918           |   | 82,500           |   | $ | 538 | (2) |
| Finance and Chief Financial  Officer |   | 2000     |   | $                | 164,656 |        | $      | 50,400           |   | 45,000           |   | $ | 167 | (2) |

 

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(1)                                  Includes amounts (if any) deferred underour 401(k) Plan.

 

(2)                                  Represents premiums paid by us withrespect to term life insurance for the benefit of Dr. Gerzberg, Mr.Martino and Mr. Schneider.

 

(3)                                  Mr. Martino joined Zoran at itsChief Operating Officer on August 20, 2001.  The reported compensation for 2001 includes compensation earnedby Mr. Martino from that date through December 31, 2001.

 

(4)                                  Consists of (i) premiums paid by usunder an insurance policy that covers certain severance and other benefits and(ii) contributions by us toward a continuing education funds.  In 2002, 2001 and 2000 we paid insurancepremiums for the benefit of Dr. Shenberg in the amounts of $26,715,$27,246 and $29,889, respectively.  In2002, 2001 and 2000, we also made continuing education contributions for thebenefit of Dr. Shenberg in the amounts of $10,712, $15,428 and $14,161,respectively.

 

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**Option Grants**

 

The following table sets forth information concerninggrants of options to purchase our common stock made during the year endedDecember 31, 2002 to the Named Executive Officers:

 

**OPTION GRANTS IN LAST FISCAL YEAR**

 
|            |   | **Individual grants in 2002** |   |             |       |
|-----------------|--------|-------------------------------|--------|------------------|------------|
|            |   |                          |   | **% of Total**   |       |   |   |   |   |   |   |
|            |   | **Number of**                 |   | **Options**      |       |   |   |   |   | **Potential Realizable Value at ** |   |
|            |   | **Securities**                |   | **Granted to**   |       |   |   |   |   | **Assumed Annual Rates of Stock** |   |
|            |   | **Underlying**                |   | **Employees in** |       |   |   |   |   | **Price Appreciation for Option** |   |
|            |   | **Options**                   |   | **Fiscal**       |       | **Exercise or** |   | **Expiration** |   | **Term(1)** |   |
| **Name**        |   | **Granted(2)**                |   | **Year(3)**      |       | **Base Price(4)** |   | **Date** |   | **5%** |   | **10%** |   |
|            |   |                          |   |             | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Levy Gerzberg   |   | 427,500                       |   | 16.1%            |       | $ | 12.36 |   | 8/9/12 |   | $ | 3,323,016 |   | $ | 8,421,176 |   |
|            |   |                          |   |             |       |   |   |   |   |   |   |   |   |
| Camillo Martino |   | 75,000                        |   | 2.8%             |       | $ | 14.93 |   | 8/21/12 |   | $ | 704,205 |   | $ | 1,784,593 |   |
|            |   | 75,000                        |   | 2.8%             |       | $ | 13.60 |   | 10/17/12 |   | $ | 641,473 |   | $ | 1,625,617 |   |
|            |   |                          |   |             |       |   |   |   |   |   |   |   |   |
| Isaac Shenberg  |   | 82,500                        |   | 3.1%             |       | $ | 12.36 |   | 8/9/12 |   | $ | 641,239 |   | $ | 1,625,139 |   |
|            |   |                          |   |             |       |   |   |   |   |   |   |   |   |
| Karl Schneider  |   | 75,000                        |   | 2.8%             |       | $ | 12.36 |   | 8/9/12 |   | $ | 582,985 |   | $ | 1,477,399 |   |

** **

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(1)                                  Potential gains are net of exerciseprice, but before taxes associated with the exercise.  These amounts represent certain hypothetical gains based onassumed rates of appreciation, based on the Securities and ExchangeCommission’s rules, and do not represent our estimate or projection of futureprices of our common stock. Actual gains, if any, on stock option exercises aredependent on our future performance, overall market conditions and theoptionees’ continued employment through the vesting period.  Accordingly, the gains reflected in thistable may not be achieved.

 

(2)                                  All options are fully exercisable fromthe date of grant, subject to our right to repurchase any unvested shares atthe original purchase price upon the optionee’s termination as an employee.  The options (or shares issued upon theexercise of the options) vest in 48 equal monthly installments from thedate of grant.

 

(3)                                  We granted options to purchase anaggregate of 2,662,500 shares of our common stock to employees during the year.

 

(4)                                  All options were granted at an exerciseprice equal to the fair market value of our common stock on the date of grant.

 

**Option Exercises and Fiscal 2002 Year-End Values**

 

Thefollowing table provides the specified information concerning exercises ofoptions to purchase our common stock in the fiscal year ended December 31,2002, and unexercised options held as of December 31, 2002 by the NamedExecutive Officers:

** **

**5**

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** **

**AGGREGATE OPTION EXERCISES IN LASTFISCAL YEARAND FISCAL YEAR-END VALUES**

** **
|                   |   | **Shares**   |   |            |      | **Number of  Shares**                         |    | **Value of  Unexercised**                |   |
|------------------------|--------|--------------|--------|-----------------|-----------|-----------------------------------------------|---------|------------------------------------------|--------|
|                   |   | **Acquired** |   |            |      | **Underlying  Unexercised Options at Fiscal** |    | **In-the-Money  Options at Fiscal Year** |   |
|                   |   | **on**       |   | **Value**       |      | **Year End**                                  |    | **End(1)**                               |   |
| **Name**               |   | **Exercise** |   | **Realized(2)** |      | **Exercisable(3)**                            |    | **Unexercisable**                        |   | **Exercisable(3)** |   | **Unexercisable** |   |
| Levy  Gerzberg, Ph.D.  |   | 59,328       |   | $               | 1,263,963 |                                          | 722,655 |                                     | — |   | $ | 1,151,746 |   | — |   |
|                   |   |         |   |            |      |                                          |    |                                     |   |   |   |   |   |
| Camillo  Martino       |   | —       |   | —          |      | 450,000                                       |    | —                                   |   | $ | 35,250 |   | — |   |
|                   |   |         |   |            |      |                                          |    |                                     |   |   |   |   |   |
| Isaac  Shenberg, Ph.D. |   | 17,281       |   | $               | 378,381   |                                          | 339,020 |                                     | — |   | $ | 1,392,798 |   | — |   |
|                   |   |         |   |            |      |                                          |    |                                     |   |   |   |   |   |
| Karl  Schneider        |   | 21,000       |   | $               | 489,999   |                                          | 253,200 |                                     | — |   | $ | 679,377 |   | — |   |

 

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(1)                                  Based on a market value of $14.07, theclosing price of our common stock on December 31, 2002, as reported on theNasdaq National Market.

 

(2)                                  Based on the closing price of our commonstock as reported on the Nasdaq National Market on the date of exercise.  The executive officer’s actual valuerealized may be different.

 

(3)                                  All options are fully exercisable fromthe date of grant, subject to our right to repurchase any unvested shares atthe original purchase price upon optionee’s termination as an employee.  The options (or shares issued upon theexercise of the options) vest in 48 equal installments given from the dateof grant, or in one installment equal to 1⁄4 of the shares and 38 equalinstallments thereafter, in the case of options granted upon commencement ofemployment.

 

**Employment Contracts and Terminationof Employment and Change-in-Control Arrangements**

 

OnNovember 8, 2002, the Compensation Committee of our board of directors adoptedthe Zoran Corporation Executive Retention and Severance Plan (the “RetentionPlan”) which provides for certain benefits for our executive officers and keyemployees upon a change in control of Zoran. The Retention Plan provides that if, in the event of a change in controlof Zoran, the company acquiring Zoran does not assume or substitute theoutstanding options of the participants in the Retention Plan, then the vestingand exercisability of their options shall be accelerated in full immediatelyprior to, but conditioned upon, the consummation of the change in controltransaction.  The Retention Planprovides for additional benefits if a participant in the Retention Plan isterminated without cause or resigns as a result of certain adversecircumstances described in the Retention Plan within 18 months after a changein control; upon such termination, a participant would be entitled to a lumpsum cash payment in amount equal to the aggregate amount of his monthly salaryfor a period of 36 months in the case of the chief executive officer and 18months in the case of other executive officers, plus a bonus payment, theamount of which is to be determined at the time of termination under the termsof the Retention Plan.  In addition,Zoran shall arrange to provide health and life insurance benefits to theparticipant for 36 months in the case of the chief executive officer and 18months in the case of other executive officers. The Retention Plan alsoprovides that, upon the involuntary termination of an executive officer within18 months following a change in control, the outstanding options of suchexecutive officer shall be immediately exercisable and fully vested.

 

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**Compensation of Directors**

 

Directorsreceive an annual retainer of $20,000, a fee of $2,000 for each meetingattended and quarterly fees of $1,500 for each committee on which they serveand $2,500 for each committee they chair.

 

The1995 Outside Directors Plan (the “Directors Plan”) provides for formula-basedgrants of options to non-employee directors of Zoran.  Under the Directors Plan, each non-employee director isautomatically granted a nonstatutory stock option to purchase 30,000 shares ofour common stock (an “Initial Option”) on the date on which such person firstbecomes a non-employee director of Zoran. Thereafter, on the date immediately following each annual stockholders’meeting, each non-employee director who is reelected at the meeting to anadditional term is granted an additional option to purchase 15,000 shares ofour common stock (an “Annual Option”) if, on such date, he has served on theboard of directors for at least six months. 

 

TheDirectors Plan provides that each Initial Option shall become exercisable ininstallments as to one-fourth of the total number of shares subject to theoption on each of the first, second, third and fourth anniversaries of the dateof grant, and each Annual Option shall become exercisable in full one yearafter the date of grant, subject to the director’s continuous service. Theexercise price per share of all options granted under the Directors Plan isequal to the fair market value of a share of our common stock on the date ofgrant.  Options granted under theDirectors Plan have a term of ten years.

 

**Item 12.           SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters.**

 

**PRINCIPAL STOCKHOLDERS AND SHARE**

 

**OWNERSHIP BY MANAGEMENT**

 

Thefollowing table sets forth certain information known to us relating to thebeneficial ownership of our common stock, as of March 31, 2003 by:  (i) each person who is known by us tobe the beneficial owner of more than 5% of the outstanding shares of commonstock; (ii) each executive officer named in the tables set forth under“Executive Compensation;” (iii) each director; and (iv) all executiveofficers and directors as a group:

 
| **Beneficial Owner**                                                                   |   | **Number of  Shares  Beneficially Owned(1)** |   | **Percent(1)(2)** |   |
|----------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|-------------------|--------|
| Firsthand  Funds and related entities (3)  125 South Market   San Jose, CA  95113 |   | 1,732,157                                    |   | 6.3               | %      |
| Levy  Gerzberg, Ph.D. (4)                                                              |   | 832,366                                      |   | 3.0               | %      |
| Camillo  Martino (5)                                                                   |   | 451,672                                      |   | 1.6               | %      |
| Isaac  Shenberg, Ph.D. (6)                                                             |   | 358,825                                      |   | 1.3               | %      |
| Karl  Schneider (7)                                                                    |   | 254,967                                      |   |              | *      |
| Uzia  Galil (8)                                                                        |   | 90,373                                       |   |              | *      |
| Arthur  B. Stabenow (9)                                                                |   | 70,321                                       |   |              | *      |
| James  D. Meindl, Ph.D. (10)                                                           |   | 68,020                                       |   |              | *      |
| Philip  M. Young (11)                                                                  |   | 43,200                                       |   |              | *      |
| All  directors and executive officers as a group (8 persons) (12)                      |   | 2,169,744                                    |   | 7.4               | %      |

______________

 

*                                         Represents less than 1%

 

(1)                                  Beneficial ownership is determined inaccordance with the rules of the Securities and Exchange Commission.  In computing the number of sharesbeneficially owned by a person and the percentage ownership of that person,shares of common stock subject to options or warrants held by that person thatare currently exercisable, or will become exercisable within 60 days afterMarch 31, 2003, are deemed 

 

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outstanding. Such shares, however, are not deemed outstanding for purposes ofcomputing the percentage ownership of any other person.  In general, options granted under the 1993Option Plan are fully exercisable from the date of grant, subject to our rightto repurchase any unvested shares at the original exercise price in the eventof termination of the optionee’s employment. Unless otherwise indicated in the footnotes to this table, the personsand entities named in the table have sole voting and sole investment power withrespect to all shares beneficially owned, subject to community property lawswhere applicable.

 

(2)                                  Calculated on the basis of 27,399,578shares of common stock outstanding as of March 31, 2003.

 

(3)                                  Based on a Schedule 13G filed byFirsthand Capital Management, Inc. (“FCM”), Silicon Capital Management LLC (“SCM”),Kevin Landis (“Landis”) and Firsthand Funds (“Firsthand”) on February2003.  Landis is the control person ofFCM and SCM, which serve as investment advisor of Firsthand, an investmentcompany. Each of Landis, FCM, SCM and Firsthand has sole voting power and soledispositive power over 1,732,157 shares. Mr. Landis disclaims beneficial ownership as to all sharesbeneficially owned for Section 13(g) filing purposes by FCM, SCM andFirsthand.

 

(4)                                  Includes immediately exercisable optionsto purchase 722,655 shares of common stock.

 

(5)                                  Includes immediately exercisable optionsto purchase 450,000 shares of common stock.

 

(6)                                  Includes immediately exercisable optionsto purchase 339,020 shares of common stock.

 

(7)                                  Includes immediately exercisable optionsto purchase 253,200 shares of common stock.

 

(8)                                  Includes 4,512 shares held byMr. Galil’s spouse.  Mr. Galilmay be deemed to be a beneficial owner of these shares, although Mr. Galildisclaims such beneficial ownership. Also includes options to purchase 73,200 shares of common stock.

 

(9)                                  Includes options to purchase 54,450shares of common stock.

 

(10)                            Includes 333 shares held jointly withDr. Meindl’s spouse and 1,687 shares held by James and Frederica Meindl astrustees of the Meindl Trust dated February 4, 1972.  Also includes options to purchase 66,000shares of common stock.

 

(11)                            Consists of 43,200 options to purchaseshares of common stock.

 

(12)                            Includes options to purchase 2,001,725shares of common stock.

 

**EQUITY COMPENSATION PLANINFORMATION**

 

Wecurrently maintain four compensation plans that provide for the issuance of ourcommon stock to officers and other employees, directors or consultants.  These consist of the 1993 Stock Option Plan,the Directors Plan and the 1995 Employee Stock Purchase Plan (the"Purchase Plan"), which have been approved by stockholders, and the2000 Nonstatutory Stock Option Plan (the “2000 Option Plan”), which has notbeen approved by stockholders.  Thefollowing table sets forth information regarding outstanding options and sharesreserved for future issuance under the foregoing plans as of December 31,2002:

 

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| **Plan  Category(1)**                                      |   | **Number Of Shares  To Be Issued Upon   Exercise Of   Outstanding Options  Warrants And Rights  (A)** |   | **Weighted Average Exercise Price Of   Outstanding Options,  Warrants And  Rights  (B)** |   | **Number Of Shares   Remaining Available  For Future Issuance  Under Equity   Compensation Plans  (Excluding Shares  Reflected In   Column (A))   (C)** |      |
|------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
| Equity compensation plans approved by stockholders         |   | 3,458,946                                                                                             |   | $                                                                                        | 17.15  |                                                                                                                                                    | 1,691,985 | (2) |
|                                                       |   |                                                                                                  |   |                                                                                     |   |                                                                                                                                                    |      |   |
| Equity compensation plans not approved by  stockholders(3) |   | 3,477,066                                                                                             |   | $                                                                                        | 13.95  |                                                                                                                                                    | 1,579,000 |   |
|                                                       |   |                                                                                                  |   |                                                                                     |   |                                                                                                                                                    |      |   |
| Total                                                      |   | 6,936,012                                                                                             |   | $                                                                                        | 15.55  |                                                                                                                                                    | 3,270,985 |   |

 

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(1)           Theinformation presented in this table excludes options assumed by Zoran inconnection with acquisitions of other companies.  As of December 31, 2002, 117,530 shares of Zoran commonstock were issuable upon exercise of these assumed options, at a weightedaverage exercise price of $9.98 per share.

 

(2)           Includes201,985 shares of Zoran common stock remaining available for future issuanceunder the Purchase Plan as of December 31, 2002.

 

(3)           Consistsof options that are outstanding or may be issued pursuant to 2000 OptionPlan.  The material features of the 2000Option Plan are described below.

 

**MaterialFeatures of the 2000 Option Plan**

 

As ofDecember 31, 2002, we had reserved 5,325,000 shares of Common Stock forissuance under the 2000 Option Plan. The 2000 Option Plan provides for the grant of nonstatutory stockoptions to employees or consultants with exercise prices typically equal to(but not less than 85% of) the fair market value of our common stock on thedate of grant.  No current officer orother person whose eligibility would require stockholder approval of the 2000Option Plan under any law or stock exchange rules may be granted an optionunder the plan.  In general, the 2000Option Plan is administered by the Compensation Committee, which determines theoptionees and the terms of the options granted, including exercise price andnumber of shares subject to the options granted.  However, Dr. Gerzberg has the authority to grant options ofup to 30,000 shares.  Certain optionsgranted under the 2000 Option Plan are fully exercisable from the date ofgrant, subject to our right to repurchase unvested shares at the originalpurchase price upon the optionee’s termination of service.  Subject to the optionee’s continued service,the options generally vest at the rate of 1/4 of the shares on the firstanniversary of the date of grant and at the rate of 1/48 of the shares on thelast day of each of the next 36 calendar months thereafter.  Options granted under the 2000 Option Plangenerally have a 10-year term and terminate three months after thetermination of service, except where service terminates due to the optionee’sdeath or permanent and total disability, in which case the option will remainexercisable for one year after such termination but in no event beyond theexpiration of the option’s term.

** **

**Item 13.         CertainRelationships and Related Transactions.**

 

Notapplicable.

 

 

9

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**PARTIV**

 

**Item 15.         Exhibits, FinancialStatement Schedules and Reports on Form 8-K.**

** **

(a)                 Thefollowing documents are filed as a part of this report:

 

(1)     FinancialStatements:

 

See Index toConsolidated Financial Statements at page 39 of this report.

 

(2)     FinancialStatement Schedules:

 

All financial statementschedules are omitted because they are not applicable or not required, orbecause the required information is included in the Consolidated FinancialStatements and Notes thereto which are included herein.

 

(3)     Exhibits:

 

The exhibits listed onthe accompanying Exhibit Index are filed as part of, or are incorporated byreference into, this report.

 

(b)                 Reportson Form 8-K during the quarter ended December 31, 2002:

 

None

 

10

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**SIGNATURES**

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 
| Dated: April  30, 2003 | ZORAN  CORPORATION |
|-----------------------------|--------------------|
|                        |               |   |
|                        |               |   |
|                        | By:                | /s/  Levy Gerzberg |
|                        |               | Levy  Gerzberg, President and |
|                        |               | Chief  Executive Officer |

 

**11**

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** **

**CERTIFICATION OFCHIEF EXECUTIVE  OFFICER**

 

I,Levy Gerzberg, certify that:

 

1.             I have reviewed this annual reporton Form 10-K of Zoran Corporation;

 

2.             Based on my knowledge, this annual reportdoes not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with arespect to the period covered by this annual report;

 

3.             Based on my knowledge, thefinancial statements, and other financial information included in this annualreport, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, theperiods presented in this annual report;

 

4.             The registrant’s other certifyingofficer and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) forthe registrant and we have:

 

(a)           designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this annual report is being prepared;

 

(b)           evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing date of this annual report (the“Evaluation Date”); and

 

(c)           presentedin this annual report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.             The registrant’s other certifyingofficer and I have disclosed, based on our most recent evaluation, to theregistrant’s auditors and the audit committee of the registrant’s board ofdirectors:

 

(a)           allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

(b)           anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.             The registrant’s other certifyingofficer and I have indicated in this annual report whether or not there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Dated:  April 30, 2003 | /s/  Levy Gerzberg                |
|-----------------------------|----------------------------------------|
|                        | Levy Gerzberg                          |
|                        | President and Chief  Executive Officer |

 

12

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**CERTIFICATION OFCHIEF FINANCIAL OFFICER**

 

I,Karl Schneider, certify that:

 

1.             I have reviewed this annual reporton Form 10-K of Zoran Corporation;

 

2.             Based on my knowledge, this annualreport does not contain any untrue statement of a material fact or omit tostate a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with arespect to the period covered by this annual report;

 

3.             Based on my knowledge, thefinancial statements, and other financial information included in this annualreport, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, theperiods presented in this annual report;

 

4.             The registrant’s other certifyingofficer and I are responsible for establishing and maintaining disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) forthe registrant and we have:

 

(a)           designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this annual report is being prepared;

 

(b)           evaluatedthe effectiveness of the registrant’s disclosure controls and procedures as ofa date within 90 days prior to the filing date of this annual report (the“Evaluation Date”); and

 

(c)           presentedin this annual report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.             The registrant’s other certifyingofficer and I have disclosed, based on our most recent evaluation, to theregistrant’s auditors and the audit committee of the registrant’s board ofdirectors:

 

(a)           allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

(b)           anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.             The registrant’s other certifyingofficer and I have indicated in this annual report whether or not there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Dated:  April 30, 2003 | /s/  Karl Schneider                    |
|-----------------------------|---------------------------------------------|
|                        | Karl Schneider                              |
|                        | Vice President and Chief  Financial Officer |

 

13

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Other than Exhibits 99.1and 99.2, the listed exhibits have been previously filed.

 
| **Exhibit   Number** |   | **Exhibit Title**                                                                                                                                                                                                                                                                                                              |
|----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(1)               |   | Form of Restated  Certificate of Incorporation of the Registrant.                                                                                                                                                                                                                                                              |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 3.2(2)               |   | Amended Bylaws of the  Registrant.                                                                                                                                                                                                                                                                                             |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 4.1(3)               |   | Amended and Restated  Stock Rights Agreement dated July 30, 1993 among the Registrant and certain  of its stockholders, as amended.                                                                                                                                                                                            |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| *10.1(4)             |   | 1993 Stock Option Plan,  as amended.                                                                                                                                                                                                                                                                                           |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| *10.2(4)             |   | 1995 Outside Directors  Stock Option Plan.                                                                                                                                                                                                                                                                                     |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| *10.3(4)             |   | Amended and Restated  1995 Employee Stock Purchase Plan.                                                                                                                                                                                                                                                                       |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| *10.4(3)             |   | Form of Indemnity  Agreement for officers and directors.                                                                                                                                                                                                                                                                       |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.7(3)              |   | Letter Agreement dated  December 16, 1991 between the Registrant and Dolby Laboratories Licensing  Corporation, as amended.                                                                                                                                                                                                    |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.11(3)             |   | Lease Agreement dated  October 1, 1992 between the Registrant’s subsidiary, Zoran Microelectronics  Ltd. (“ZML”), and Matam-Haifa Scientific Industries Center Ltd. (“Matam”).                                                                                                                        |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| †10.12(3)       |   | License Agreement for  ZR33891 Digital Filter Processor dated June 8, 1995 between the Registrant  and Atmel Corporation (“Atmel”).                                                                                                                                                                                  |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| †10.13(3)       |   | License Agreement for  ZR34325 Vector Signal Processor dated June 8, 1995 between the Registrant and  Atmel.                                                                                                                                                                                                                   |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| †10.14(3)       |   | Cooperation and Project  Funding Agreement dated June 16, 1991 between ZML and the Israel-United  States Binational Industrial Research and  Development Foundation  (“BIRDF”).                                                                                                                                 |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| †10.15(3)       |   | Cooperation and Project  Funding Agreement dated June 9, 1992 between ZML and BIRDF.                                                                                                                                                                                                                                           |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.16(3)             |   | Note of Approval No.  17391 dated September 5, 1994 issued to ZML by the Office of Chief Scientist,  Head of the Industrial Research and Development Administration of the Israeli  Ministry of Industry and Trade (the “Chief Scientist”), together with ZML’s  Letter of Undertaking dated September 4, 1994. |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.17(3)             |   | Note of Approval No.  17337 dated September 5, 1994 issued to ZML by the Chief Scientist, together  with ZML’s Letter of Undertaking dated September 4, 1994.                                                                                                                                                             |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.18(3)             |   | Loan Agreements dated  July 25, 1995, August 1, 1995, August 15, 1995, August 31, 1995 and November  1, 1995 between ZML and the Israel Discount Bank.                                                                                                                                                                         |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.29(5)             |   | Summary of Discussion  dated April 23, 1996 between ZML and Matam regarding Lease Agreement dated  October 1, 1992 between ZML and Matam.                                                                                                                                                                                      |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.30(6)             |   | Memorandum of  Understanding Dated April 23, 1996 between ZML and IBM Israel Ltd. regarding  Lease Agreement dated October 1, 1992 between ZML and Matam.                                                                                                                                                                      |
|                 |   |                                                                                                                                                                                                                                                                                                                           |
| 10.33(7)             |   | Sub-Sublease dated  April 1, 1997 between the Registrant and Integrated Silicon Solutions,  Inc.                                                                                                                                                                                                                          |

 

14

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| **Exhibit   Number** |   | **Exhibit Title**                                                                                                                                                          |
|----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.35(8)             |   | Agreement for Purchase  and Sale of Assets between the Registrant and MGI Software Corp. dated June  15, 1999.                                                             |
|                 |   |                                                                                                                                                                       |
| 10.36(9)             |   | Unprotected Tenancy  Agreement dated September 16, 1997 between ZML and Matam, together with  Appendix Addendum to Unprotected Tenancy Agreement of 16.9.97.               |
|                 |   |                                                                                                                                                                       |
| 10.37(1)             |   | Addendum to sub-sublease  dated April 1, 1997 between the Registrant Integrated Silicon Solution, Inc.                                                                     |
|                 |   |                                                                                                                                                                       |
| 10.38(10)            |   | Form of Amendment of  Nonstatutory Stock Option Agreement for Outside Directors.                                                                                           |
|                 |   |                                                                                                                                                                       |
| *10.39               |   | 2000 Nonstatutory Stock  Option Plan.                                                                                                                                      |
|                 |   |                                                                                                                                                                       |
| *10.40               |   | Executive Retention and  Severence Plan.                                                                                                                                   |
|                 |   |                                                                                                                                                                       |
| 21.1                 |   | List of subsidiaries of  the Registrant.                                                                                                                                   |
|                 |   |                                                                                                                                                                       |
| 23.1                 |   | Consent of  PricewaterhouseCoopers LLP.                                                                                                                                    |
|                 |   |                                                                                                                                                                       |
| 99.1                 |   | Certification of Chief  Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                      |
|                 |   |                                                                                                                                                                       |
| 99.2                 |   | Certification of Chief  Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                      |
|                 |   |                                                                                                                                                                       |
|                      |
| *                    |   | Constitutes a  management contact or compensatory plan required to be filed pursuant to  Item 14(c) of Form 10-K.                                                     |
|                 |   |                                                                                                                                                                       |
| †               |   | Confidential treatment  has been granted as to a portion of this Exhibit.                                                                                                  |
|                 |   |                                                                                                                                                                       |
| (1)                  |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-K Annual  Report for the year ended December 31, 2000                              |
|                 |   |                                                                                                                                                                       |
| (2)                  |   | Incorporated by  reference to Exhibit 3.3 to Registrant’s Form 10-Q Quarterly Report for the  quarter ended September 30, 1998.                                       |
|                 |   |                                                                                                                                                                       |
| (3)                  |   | Incorporated by  reference to identically numbered exhibit to the 1995 Registration Statement.                                                                             |
|                 |   |                                                                                                                                                                       |
| (4)                  |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-Q Quarterly  Report for the quarter ended June 30, 2002.                           |
|                 |   |                                                                                                                                                                       |
| (5)                  |   | Incorporated by  reference to Exhibit 10.1 to the Registrant’s Form 10-Q Quarterly Report for  the quarter ended June 30, 1996 (the “June 1996 Form 10-Q”). |
|                 |   |                                                                                                                                                                       |
| (6)                  |   | Incorporated by  reference to Exhibit 10.2 to the June 1996 Form 10-Q.                                                                                                     |
|                 |   |                                                                                                                                                                       |
| (7)                  |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-Q Quarterly  Report for the quarter ended March 31, 1997                      |
|                 |   |                                                                                                                                                                       |
| (8)                  |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-Q Quarterly  Report for the quarter ended June 30, 1999.                           |
|                 |   |                                                                                                                                                                       |
| (9)                  |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-K Annual  Report for the year ended December 31, 1999.                             |

 

15

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| (10) |   | Incorporated by  reference to identically numbered exhibit to Registrant’s Form 10-Q Quarterly  Report for the quarter ended June 30, 2001. |
|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

 

16

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