Exhibit
4.7


CATALYST
SEMICONDUCTOR, INC.


2003
DIRECTOR STOCK OPTION PLAN


1.
Purpose of the Plan. The purpose of this 2003 Director Stock Option Plan is to
attract and retain highly qualified personnel to serve as Outside Directors of
the Company. This 2003 Director Stock Option Plan is the successor to the
Company’s 1993 Director Stock Option Plan (the “Predecessor Plan”). Options
granted under the Predecessor Plan shall be governed by the terms of the
Predecessor Plan.


All
options granted hereunder shall be “non-statutory stock options.”


2.
Definitions. As used herein, the following definitions shall apply:


(a) “Board”
means the Board of Directors of the Company.


(b) “Code”
means the Internal Revenue Code of 1986, as amended.


(c) “Common
Stock” means the Common Stock of the Company.


(d) “Company”
means Catalyst Semiconductor, Inc., a Delaware corporation.


(e) “Continuous
Status as a Director” means the absence of any interruption or termination of
service as a Director.


(f) “Director”
means a member of the Board.


(g) “Employee”
means any person, including officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. The payment of a Director’s fee by the
Company shall not be sufficient in and of itself to constitute “employment” by
the Company.


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


(i) “Fair
Market Value” means, as of any date, the value of Common Stock determined as
follows:


(i) If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”)
System, the Fair Market Value of a Share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in Common Stock) on the date of determination, or, if not a market
trading day, on the last market trading day prior to the date of determination,
as reported in The Wall Street Journal or such other source as the Board deems
reliable;


(ii)
If the Common Stock is quoted on the NASDAQ System (but not on the National
Market System thereof) or regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the
Common Stock on the date of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable; or


(iii)
In the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Board.


(j) “Option”
means a stock option granted pursuant to the Plan.


(k) “Optioned
Stock” means the Common Stock subject to an Option.











(l) “Optionee”
means an Outside Director who receives an Option.


(m) “Outside
Director” means a Director who is not an Employee.


(n) “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.


(o) “Plan”
means this 2003 Director Stock Option Plan.


(p) “Share”
means a share of the Common Stock, as adjusted in accordance with Section 10 of
the Plan.


(q) “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.


3.
Stock Subject to the Plan. Subject to the provisions of Section 10 of the Plan,
the maximum aggregate number of Shares which may be optioned and sold under the
Plan equals the number of Shares subject to outstanding options under the
Predecessor Plan on the Effective Date and the number of Shares available for
additional grant under the Predecessor Plan on the Effective Date. The Shares
may be authorized but unissued, or reacquired Common Stock.


If an
Option (or an outstanding option under the Predecessor Plan on the Effective
Date) should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan.


4.
Administration of and Grants of Options under the Plan.


(a)
Administrator. Except as otherwise required herein, the Plan shall be
administered by the Board.


(b)
Procedure for Grants. All grants of Options hereunder shall be automatic and
non-discretionary and shall be made strictly in accordance with the following
provisions:


(i) No
person shall have any discretion to select which Outside Directors shall be
granted Options or to determine the number of Shares to be covered by Options
granted to Outside Directors.


(ii)
Each new Outside Director who shall first become an Outside Director on or
after the Plan’s Effective Date shall automatically be granted an Option to
purchase 30,000 Shares upon the date on which such person first becomes an
Outside Director, whether through election by the stockholders of the Company
or appointment by the Board to fill a vacancy (a “One-Time Grant”). In
addition, on the first day of each fiscal year during the term of this Plan,
each Outside Director who shall have been an Outside Director for at least six
(6) months as of such date shall automatically receive an Option to purchase
15,000 Shares (an “Annual Grant”).


(iii)
The terms of each Option granted hereunder shall be as follows:


(A)
the term of the Option shall be ten (10) years;


(B) the Option
shall be exercisable only while the Outside Director remains a Director of the
Company, except as set forth in


Section
8 hereof;


(C)
the exercise price per Share shall be 100% of the Fair Market Value per Share
on the date of grant of the Option;


(D)
each Annual Grant and One-Time Grant shall be fully vested and exercisable upon
the date of grant of











the
Option.


(iv)
In the event that any Option granted under the Plan would cause the number of
Shares subject to outstanding Options plus the number of Shares previously
purchased upon exercise of Options to exceed the Pool, then each such automatic
grant shall be for that number of Shares determined by dividing the total
number of Shares remaining available for grant by the number of Outside
Directors entitled to receive Options on the grant date. No further grants
shall be made until such time, if any, as additional Shares become available
for grant under the Plan through action of the shareholders to increase the
number of Shares which may be issued under the Plan or through cancellation or
expiration of Options previously granted hereunder.


(c) Powers of the
Board. Subject to the provisions and restrictions of the Plan, the Board shall
have the authority, in its discretion: (i) to determine, upon review of
relevant information and in accordance with Section


2(i)
of the Plan, the Fair Market Value of the Common Stock; (ii) to interpret the
Plan; (iii) to prescribe, amend and rescind rules and regulations relating to
the Plan; (iv) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder; and (v) to make all other determinations deemed necessary or
advisable for the administration of the Plan.


(d)
Effect of Board’s Decision. All decisions, determinations and interpretations
of the Board shall be final.


5. Eligibility.
Options may be granted only to Outside Directors. All Options shall be
automatically granted in accordance with the terms set forth in


Section
4(b) hereof. An Outside Director who has been granted an Option may, if he or
she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.


The
Plan shall not confer upon any Optionee any right with respect to continuation
of service as a Director or nomination to serve as a Director, nor shall it
interfere in any way with any rights which the Director or the Company may have
to terminate his or her directorship at any time.


6.
Term of Plan. The Plan shall become effective upon the later of (a) the
approval of the Plan by the stockholders of the Company, or (b) the termination
of the Predecessor Plan (the “Effective Date”). It shall continue in effect for
ten years from the date of its adoption by the Board, unless sooner terminated
under Section 11 of the Plan.


7.
Consideration. The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board and may consist entirely of, to the extent allowable under applicable
law, (i) cash, (ii) check, (iii) other shares which have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised and which, in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than 12
months on the date of surrender, (iv) delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver
to the Company the amount of sale or loan proceeds required to pay the exercise
price, (v) any combination of the foregoing methods of payment, or (vi) such
other consideration and method of payment for the issuance of Shares to the
extent permitted under applicable law.


8. Exercise of Option.


(a) Procedure for
Exercise; Rights as a Stockholder. Any Option granted hereunder shall be
exercisable at such times as are set forth in Section


4(b)
hereof.


An
Option may not be exercised for a fraction of a Share.


An
Option shall be deemed to be exercised when written notice of such exercise has
been given to the 











Company
in accordance with the terms of the Option by the person entitled to exercise
the Option and full payment for the Shares with respect to which the Option is
exercised has been received by the Company.


Full
payment may consist of any consideration and method of payment allowable under
Section 7 of the Plan. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. A share certificate
for the number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 10 of the Plan.


Exercise
of an Option in any manner shall result in a decrease in the number of Shares
which thereafter may be available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is exercised.


(b) Termination of
Continuous Status as a Director. In the event an Optionee’s Continuous Status
as a Director terminates (other than upon the Optionee’s death or total and
permanent disability (as defined in Section


22(e)(3)
of the Code)), the Optionee may exercise his or her Option, but only within 90
days from the date of such termination, and only to the extent that the
Optionee was entitled to exercise it at the date of such termination (but in no
event later than the expiration of its ten-year term). To the extent that the
Optionee was not entitled to exercise an Option at the date of such
termination, and to the extent that the Optionee does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.


(c)
Disability of Optionee. In the event Optionee’s Continuous Status as a Director
terminates as a result of total and permanent disability (as defined in Section
22(e)(3) of the Code), the Optionee may exercise his or her Option, but only
within six months from the date of such termination, and only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of its ten-year term). To the extent
that the Optionee was not entitled to exercise an Option at the date of termination,
or if he or she does not exercise such Option (to the extent otherwise so
entitled) within the time specified herein, the Option shall terminate.


(d)
Death of Optionee. In the event of an Optionee’s death while a Director, the
Optionee’s estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within one year
following the date of death, and only to the extent that the Optionee was
entitled to exercise it at the date of death (but in no event later than the
expiration of its ten-year term). To the extent that the Optionee was not
entitled to exercise an Option at the date of death, and to the extent that the
Optionee’s estate or a person who acquired the right to exercise such Option does
not exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.


9.
Non-Transferability of Options. The Option may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will, by
the laws of descent or distribution or pursuant to a qualified domestic
relations order, and may be exercised, during the lifetime of the Optionee,
only by the Optionee or a permitted transferee.


10.
Adjustments.


(a)
Changes in Capitalization. In the event that the stock of the Company is
changed by reason of any stock split, reverse stock split, recapitalization, or
other change in the capital structure of the Company, or converted into or
exchanged for other securities as a result of any merger, consolidation or
reorganization, or in the event that the outstanding number of shares of stock
of the Company is increased through payment of a stock dividend, appropriate
proportionate adjustments shall be made in the number and class of shares of
stock subject to the Plan, the number and class of shares subject to any Option
outstanding under the Plan, and the exercise price of any such outstanding
Option; provided, however, that the Company shall not 











be
required to issue fractional shares as a result of any such adjustment. Any
such adjustment shall be made upon approval by the Board, whose determination
shall be conclusive. If there is any other change in the number or type of the
outstanding shares of stock of the Company, or of any other security into which
such stock shall have been changed or for which it shall have been exchanged,
and if the Board in its sole discretion determines that such change equitably
requires an adjustment in the Options then outstanding under the Plan, such
adjustment shall be made in accordance with the determination of the Board. No
adjustments shall be required by reason of the issuance or sale by the Company
for cash or other consideration of additional shares of its stock or securities
convertible into or exchangeable for shares of its stock.


(b)
Change in Control. In the event of a “Change in Control” of the Company, as
defined in paragraph (c) below, then the following provisions shall apply:


(i)
Any Option outstanding on the date of such Change in Control (“Outstanding
Option”) shall be assumed by the successor corporation (if any) or by a Parent
or Subsidiary of the successor corporation (if any);


(ii)
Each Outstanding Option shall remain exercisable by the Optionee for a period
of at least three (3) years from the date of the Change in Control (but in no
event beyond the term of the Option); and


(iii)
Each Optionee with an Outstanding Option shall be provided with written notice
of the period of exercisability provided for in subsection (b)(iii) above
promptly after the date of the Change in Control by the Company or by the
entity surviving after the Change in Control.


(c)
Definition of “Change in Control”. For purposes of this Section 10, a “Change
in Control” means the happening of any of the following:


(i)
when any “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than the Company, a Subsidiary or a Company employee
benefit plan, including any trustee of such plan acting as trustee), is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than fifty (50%) of the combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors; or


(ii) a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or


(iii)
the stockholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all the Company’s assets; or


(iv) a
change in the composition of the Board occurring as a result of any one meeting
of the stockholders of the Company, as a result of which fewer than a majority
of the directors are Incumbent Directors. “Incumbent Directors” shall mean
directors who either are (A) directors of the Company as of the date the Plan
is approved by the stockholders, or (B) elected, or nominated for election, to
the Board of Directors of the Company with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company).


11.
Amendment and Termination of the Plan.


(a)
Amendment and Termination. The Board may at any time amend, alter, suspend or
discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with applicable law or regulation,
the Company shall obtain stockholder 











approval
of any Plan amendment in such a manner and to such a degree as required.


(b)
Effect of Amendment or Termination. Any such amendment or termination of the
Plan shall not affect Options already granted and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated.


12.
Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4(b) hereof. Notice
of the determination shall be given to each Outside Director to whom an Option
is so granted within a reasonable time after the date of such grant.


13.
Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws and the requirements of any stock exchange or market
system upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.


As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares, if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.


Inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s 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.


14.
Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan.


15.
Option Agreement. Options shall be evidenced by written option agreements in
such form as the Board shall approve.