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                                                                    EXHIBIT 10.2

                         MARVELL TECHNOLOGY GROUP, LTD.

                       1997 DIRECTORS' STOCK OPTION PLAN

        1.      PURPOSES OF THE PLAN. The purposes of this Directors' 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 MARVELL TECHNOLOGY GROUP, LTD., a
        Bermuda 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)     "Employee" shall mean any person, including any officer
        or director, employed by the Company or any Parent or Subsidiary of the
        Company who works at least twenty (20) hours a week for 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" shall mean the Securities Exchange Act of
        1934, as amended.

                (i)     "Option" shall mean a stock option granted pursuant to
        the Plan. All options shall be nonstatutory stock options (i.e., options
        that are not intended to qualify as incentive stock options under
        Section 422 of the Code).

                (j)     "Optioned Stock" shall mean the Common Stock subject to
        an Option.

                (k)     "Optionee" shall mean an Outside Director who receives
        an Option.

                (l)     "Outside Director" shall mean a Director who is not an
        Employee.

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


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          (n)  "Plan" shall mean this 1997 Directors' Stock Option Plan.

          (o)  "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

          (p)  "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 150,000 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 Outside Director shall be automatically granted an
Option to purchase Shares (the "First Option") as follows: (A) with respect to
persons who are Outside Directors on the effective date of this Plan, as
determined in accordance with Section 6 hereof, 30,000 shares on such effective
date, and (B) with respect to any other person, 30,000 shares on the date on
which such person first becomes an Outside Director, whether through election
by the shareholders of the Company or appointment by the Board of Directors to
fill a vacancy. The First Option will vest over five years (twenty percent at
the end of the first year and 1/60th for each month thereafter).

               (iii)  After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 6,000 Shares (a "Subsequent Option") on the date of each
Annual Meeting of the Company's shareholders immediately following which such
Outside Director is serving on the Board, provided that, on such date, he or
she shall have served on the Board for at least six (6) months prior to the
date of such Annual Meeting. The Subsequent Option will begin to vest from one
month after the fourth


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anniversary of the date of grant in the amount of 1/12th of the Subsequent
Option for each month thereafter.

               (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 to 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
receiving an Option on such date on the automatic grant date. Any further
grants shall then be deferred 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.

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

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

                     (1) 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;

                     (2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option, determined in
accordance with Section 8 hereof; and

                     (3) the First Option shall be exercisable cumulatively
according to the vesting schedule set out in the Notice of Grant.
Alternatively, at the election of the Optionee, it may be exercised in whole or
in part at any time as to Shares which have not yet vested.

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

                     (1) 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;

                     (2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option,
determined in accordance with Section 8 hereof; and

                     (3) the Subsequent Option shall be exercisable
cumulatively according to the vesting schedule set out in the Notice of Grant.
Alternatively, at the election of the Optionee, if may be exercised in whole or
in part at any time as to Shares which have not yet vested.


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            (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.

            (e)     SUSPENSION OR TERMINATION OF OPTION. If the President or
his or her designee reasonably believes that an Optionee has committed an act
of misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an
obligation owed to the Company, breach of fiduciary duty or deliberate
disregard of the Company rules resulting in loss, damage or injury to the
Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to
terminate such agency relationship, neither the Optionee nor his or her estate
shall be entitled to exercise any option whatsoever. In making such
determination, the Board of Directors (excluding the Outside Director accused
of such misconduct) shall act fairly and shall give the Optionee an opportunity
to appear and present evidence on Optionee's behalf at a hearing before the
Board or a committee of the Board.

     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; EFFECTIVE DATE. The Plan shall become effective on
the effectiveness of the registration statement under the Securities Act of
1933, as amended, relating to the Company's initial public offering of
securities. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 13 of the Plan.




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     7.   TERM OF OPTIONS. 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 shall be determined by
the Board; provided, however, that where there is a public market for the
Common Stock, 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 the Common Stock is traded on
the Nasdaq National Market 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 (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported in The Wall
Street Journal. With respect to any Options granted hereunder concurrently with
the initial effectiveness of the Plan, the fair market value shall be
determined by the Board.

          (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 of Common Stock 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), or any combination of such methods of payment
and/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 SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times as set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable prior to
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.

               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 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 shareholder shall
exist with respect to the Optioned Stock, notwithstanding


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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 ninety (90) days 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 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 Code), he or she may, but only within six
(6) months (or such other period of time not exceeding twelve (12) months as is
determined by the Board) 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 six (6) 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 (or such lesser period of
time as is determined by the Board) 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.

          (ii) Three (3) months after the termination of Continuous Status as a
Director, the Option may be exercised, at any time within six (6) 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


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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 or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder). 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; CORPORATE TRANSACTIONS.

          (a)  ADJUSTMENT. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each
outstanding Option, and the number of shares of Common Stock 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 of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock 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 of Common Stock 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 of Common Stock subject to an Option.

          (b)  CORPORATE TRANSACTIONS. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Eligible Director, at the time of
adoption of the plan for liquidation, dissolution, sale, merger, consolidation
or reorganization, either a reasonable time thereafter within which to exercise
the Option, including Shares as to which the Option would not be otherwise
exercisable, prior to the effectiveness of such liquidation, dissolution, sale,
merger, consolidation or reorganization, at the end of which time the Option
shall terminate, or the right to exercise the Option, including Shares as to
which the Option would not be otherwise exercisable (or receive a substitute
option with comparable terms), as to an equivalent number of shares of stock of
the corporation succeeding the Company or acquiring its business by reason of
such liquidation, dissolution, sale, merger, consolidation or reorganization.

     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



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<PAGE>   8

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 shareholders 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 Exchange Act, the rules and regulations promulgated
thereunder, 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.

        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. 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.

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


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     17.  SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting of an Option hereunder.
If such shareholder approval is obtained at a duly held shareholders' 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 shareholder 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. Options may be granted, but not exercised, before such
shareholder approval.

<PAGE>   10
                         MARVELL TECHNOLOGY GROUP LTD.

                       1997 DIRECTORS' STOCK OPTION PLAN

                         NOTICE OF STOCK OPTION GRANTS


     Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Stock Option Agreement.

1.   NOTICE OF STOCK OPTION GRANT

Optionee's Name and Address

(OptioneeName)
(Address)
(City), (State) (ZipCode)


     You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Stock Option
Agreement, as follows:


     Grant Number                            (GrantNumber)
                                        -------------------------------

     Date of Grant                           (DateOfGrant)
                                        -------------------------------

     Vesting Commencement Date               (VestingCommenceDate)
                                        -------------------------------

     Exercise Price Per Share                (ExercisePricePerShare)
                                        -------------------------------

     Total Number of Shares Granted          (TotalNumberOfShares)
                                        -------------------------------

     Total Exercise Price                    (TotalExercisePrice)
                                        -------------------------------

     Type of Option:                    Nonstatutory Stock Option

     Term/Expiration Date:                   (TermExpirationDate)
                                        -------------------------------

Vesting Schedule:

     This Option may be exercised immediately, in whole or in part, conditioned
upon Optionee entering into a Restricted Stock Purchase Agreement with respect
to any unvested Option Shares. The Shares subject to this Option shall vest
and/or be released from the



<PAGE>   11
Company's repurchase option, as set forth in the Restricted Stock Purchase
Agreement, in accordance with the following schedule.

     For the First Options: Twenty percent (20%) of the Shares subject to the
Option shall vest twelve months after the Vesting Commencement Date, and an
additional one-sixtieth (1/60th) of the Shares subject to the Option shall vest
at the end of each month thereafter, so that all of the Shares shall be vested
five (5) years after the Vesting Commencement Date.

     For the Subsequent Options: One-twelfth (1/12th) of the Shares subject to
the Option shall vest one month after the fourth anniversary of the date of
grant, and an additional one-twelfth (1/12th) of the Shares subject to the
Option shall vest at the end of each month thereafter, so that all of the
Shares shall be vested five (5) years after the Vesting Commencement Date.

Termination Period:

     This Option may be exercised for 90 days after termination of Optionee's
Continuous Status as an Outside Director, or such longer period as may be
applicable upon death or Disability of Optionee's provided in the Plan, but in
no event later than the Expiration Date as provided above.



     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 1997 Directors' Stock Option Plan and the
Nonstatutory Stock Option Agreement, all of which are attached and made a part
of this document.


OPTIONEE:                                MARVELL TECHNOLOGY GROUP, LTD





________________________________________ By: ___________________________________
Signature

________________________________________ Title: ________________________________
Print Name









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