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                                        EXHIBIT 10.2
                               DSP COMMUNICATIONS, INC.
                           1995 DIRECTOR STOCK OPTION PLAN
                           (AS RESTATED ON JANUARY 1, 1997)

     1.   PURPOSES OF THE PLAN.  The purposes of this Director Stock Option Plan
are to attract and retain the best available personnel for service as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.

          All options granted hereunder shall be "nonstatutory stock options."

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

          a.   "BOARD" shall mean the Board of Directors of the Company.

          b.   "CODE" shall mean the Internal Revenue Code of 1986, as amended.

          c.   "COMMON STOCK" shall mean the Common Stock of the Company.

          d.   "COMPANY" shall mean DSP COMMUNICATIONS, INC., a Delaware
corporation.

          e.   "CONTINUOUS STATUS AS A DIRECTOR" shall mean the absence of any
interruption or termination of service as a Director.

          f.   "DIRECTOR" shall mean a member of the Board.

          g.   "EFFECTIVE DATE" shall have the meaning as set forth in Section 6
below.

          h.   "EMPLOYEE" shall mean 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.

          i.   "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

          j.   "FIRST OPTION" shall have the meaning as set forth in Section
4.b.ii. below.

          k.   "OPTION" shall mean a stock option granted pursuant to the Plan.

          l.   "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.

          m.   "OPTIONEE" shall mean an Outside Director who receives an Option.

          n.   "OUTSIDE DIRECTOR" shall mean a Director who is not an Employee.

          o.   "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

          p.   "PLAN" shall mean this 1995 Director Stock Option Plan.

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          q.   "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

          r.   "SUBSEQUENT OPTION" shall have the meaning as set forth in
Section 4.b.iii. below.

          s.   "SUBSIDIARY" shall mean 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 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 600,000 Shares (the "Pool") of Common Stock.  The Shares may
be authorized, but unissued, or reacquired Common Stock.

          If an Option 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.  If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not 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 nondiscretionary 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 person who is an Outside Director on the Effective
Date of this Plan and each Outside Director who subsequently becomes a member of
the Board of Directors shall be automatically granted an Option to purchase
32,000 Shares (the "First Option") on the date on which the later of the
following events occurs:  (A) the Effective Date of this Plan, as determined in
accordance with Section 6 hereof; or (B) 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 of Directors to fill a vacancy.

               iii)  Additionally, beginning on January 1, 1996, each Outside
Director shall be automatically granted an Option to purchase 8,000 Shares (a
"Subsequent Option"), on January 1 of each year, if on such date, he or she
shall have served on the Board for at least six (6) months.

               iv)   Notwithstanding the provisions of subsections (ii) and
(iii) hereof, in the event that a grant 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 on the
automatic grant date.  Any further grants shall then be deferred until such
time, if any, as additional Shares become available for


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grant under the Plan through action of the stockholders to increase the number
of Shares which may be issued under the Plan or through cancellation or
expiration of Options previously granted hereunder.

               v)    Notwithstanding the provisions of subsections ii) and iii)
hereof, any grant of an Option made before the Company has obtained stockholder
approval of the Plan in accordance with Section 17 hereof shall have their
exercisability conditioned upon obtaining such stockholder approval of the Plan
in accordance with Section 17 hereof.

               vi)   The terms of a First Option granted hereunder shall be as
follows:

                     a)   The First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

                     b)   The exercise price per Share shall be 100% of the
fair market value (as defined in Section 8.b. hereunder) per Share on the date
of grant of the First Option.

                     c)   The First Option shall vest and become exercisable as
to 25% of the Shares subject to the First Option on the first anniversary of the
date of grant of the First Option, and shall vest and become exercisable as to
6.25% of the Shares subject to the First Option at the end of each three-month
period thereafter, subject to the provisions set forth in Section 9, below.

               vii)  The terms of a Subsequent Option granted hereunder shall
be as follows:

                     a)   The Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

                     b)   The exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Subsequent Option.

                     c)   The Subsequent Option shall become exercisable as to
100% of the Shares subject to the Subsequent Option on the first anniversary of
the date of grant of the Subsequent Option.

          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
8.b. of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 8.a. of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) 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 (vi) 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 and binding on all Optionees and any
other holders of any Options granted under the Plan.

     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


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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 an 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; EFFECTIVE DATE.  The Plan shall become effective on the
date on which the Company's registration statement on Form S-1 (or any successor
form thereof) is declared effective by the Securities and Exchange Commission
(the "Effective Date").  It shall continue in effect for a term of ten (10)
years, unless sooner terminated under Section 13 of the Plan, subject to the
limitations set forth in this Plan.

     7.   TERM OF OPTION.  The term of each Option shall be ten (10) years from
the date of grant thereof.

     8.   EXERCISE PRICE AND CONSIDERATION.

          a.   EXERCISE PRICE.  The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be 100% of the fair market
value per Share on the date of grant of the Option.

          b.   FAIR MARKET VALUE.  The fair market value per Share shall be the
mean of the bid and asked prices of the Common Stock in the over-the-counter
market on the date of grant, as reported in THE WALL STREET JOURNAL (or, if not
so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System) or, in the event that the Common
Stock is traded on the NASDAQ National Market System or listed on a stock
exchange, the fair market value per Share shall be the closing price on such
system or exchange on the date of grant of the Option, as reported in THE WALL
STREET JOURNAL; provided, however, that if such market or exchange is closed on
the date of the grant of the Option then the fair market value per Share shall
be based on the most recent date on which such trading occurred immediately
prior to the date of the grant of the Option; provided, further, that for
purposes of the First Options granted on the Effective Date, the fair market
value per share shall be the initial public offering price as set forth in the
final prospectus filed with the Securities and Exchange Commission pursuant to
Rule 424 under the Securities Act of 1933, as amended.

          c.   FORM OF CONSIDERATION.  The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares having 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 (which, if acquired from the Company, shall have been held for at
least six months), any combination of such methods of payment or any other
consideration or method of payment as shall be permitted under applicable
corporate law.

     9.   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; provided, however, that no Options shall be exercisable until
stockholder approval of the Plan in accordance with Section 17 hereof has been
obtained.


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          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, together with such other documentation
as the Company and the broker, if applicable, shall require to effect an
exercise of the Option, 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
8.c 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 11 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 STATUS AS A DIRECTOR.  If an Outside Director
ceases to serve as a Director, he or she may, but only within three (3) months
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination.  Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired.  To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.

          c.   DISABILITY OF OPTIONEE.  Notwithstanding the provisions of
Section 9.b above, in the event a Director is unable to continue his or her
service as a Director with the Company as a result of his or her total and
permanent disability (as defined in Section 22.e.3 of the Internal Revenue
Code), he or she may, but only within six (6) months from the date of such
termination, exercise his or her Option to the extent he or she was entitled to
exercise it at the date of such termination.  Notwithstanding the foregoing, in
no event may the Option be exercised after its term set forth in Section 7 has
expired.  To the extent that he or she was not entitled to exercise the Option
at the date of termination, or if he or she does not exercise such Option (which
he or she was entitled to exercise) within the time specified herein, the Option
shall terminate.

          d.   DEATH OF OPTIONEE.  In the event of the death of an Optionee:

               i) during the term of the Option who is, at the time of his or
her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within twelve (12) months following the date of death, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and remained
in Continuous Status as Director for six (6) months after the date of death.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired.


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               ii) within three (3) months after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within twelve
(12) months following the date of death, by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.  Notwithstanding the foregoing, in no event may the option be
exercised after its term set forth in Section 7 has expired.

     10.  NONTRANSFERABILITY OF OPTIONS.  The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution.  The designation of a
beneficiary by an Optionee does not constitute a transfer.  An Option may be
exercised during the lifetime of an Optionee only by the Optionee or a
transferee permitted by this Section.

     11.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

          a.   CHANGES IN CAPITALIZATION.  Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
Option and the number of Shares which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option.

          b.   DISSOLUTION OR LIQUIDATION.  In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.  The Board may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as of
a date fixed by the Board and give each Optionee the right to exercise his or
her Option as to all or any part of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable.

          c.   MERGER OR ASSET SALE.  In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
shall be substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation.  In the event that the successor corporation does not
agree to assume the Option or to substitute an equivalent option, the Board
shall, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable.  If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and the Option will terminate upon the expiration of such period.
For the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the


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consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holder of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger or sale of assets was not solely common stock of the
successor corporation or its Parent, the Board may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
Fair Market Value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.

     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.  AMENDMENT AND TERMINATION OF THE PLAN.

          a.   AMENDMENT AND TERMINATION.  The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the stockholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation.
Notwithstanding the foregoing, the provisions set forth in Section 4 of this
Plan (and any other Sections of this Plan that affect the formula award terms
required to be specified in this Plan by Rule 16b-3) shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.

          b.   EFFECT OF AMENDMENT OR TERMINATION.  Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

     14.  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 "Securities Act"), the Exchange Act, the rules and
regulations promulgated under the Securities Act and the Exchange Act, state
securities laws, and the requirements of any stock exchange 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.


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          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.

     15.  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.

     16.  OPTION AGREEMENT.  Options shall be evidenced by written option
agreements in such form as the Board shall approve.

     17.  STOCKHOLDER APPROVAL.

          a.   Continuance of the Plan shall be subject to approval by the
stockholders of the Company at the first meeting of stockholders.  If such
stockholder approval is obtained at a duly held stockholders' meeting, it may be
obtained by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present or represented and entitled to vote thereon.  If
such stockholder approval is obtained by written consent, it may be obtained by
the written consent of the holders of a majority of the outstanding shares of
the Company.

          b.   Any required approval of the stockholders of the Company shall be
solicited substantially in accordance with Section 14.a of the Exchange Act and
the rules and regulations promulgated thereunder.


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