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                                                                   EXHIBIT 10.11

                            C-CUBE SEMICONDUCTOR INC.

                          EMPLOYEE STOCK PURCHASE PLAN


      The following constitute the provisions of the Employee Stock Purchase
Plan of C-Cube Semiconductor Inc.

      1.    Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

      2.    Definitions.

            (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 C-Cube Semiconductor Inc. and any
Designated Subsidiary of the Company.

            (e)   "Compensation" shall mean all base straight time gross
earnings, commissions, overtime, profit sharing and bonuses, but exclusive of
payments for shift premium, incentive compensation, incentive payments and other
compensation.

            (f)   "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

            (g)   "Employee" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

            (h)   "Enrollment Date" shall mean the first day of each Offering
Period.

            (i)   "Exercise Date" shall mean the last Trading Day of each
Purchase Period.

            (j)   "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:



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                  (1)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable, or;

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

                  (3)   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.

            (k)   "Offering Periods" shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after February 1 and
August 1 of each year and terminating on the last Trading Day in the periods
ending approximately twenty-four months later; provided, however, the first
Offering Period under the Plan shall commence on the first Trading Day following
the spin-off of the Company from C-Cube Microsystems Inc. and continue until
January 31, 2002. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan.

            (l)   "Plan" shall mean this Employee Stock Purchase Plan.

            (m)   "Purchase Price" shall mean 85% of the lower of the Fair
Market Value of a share of Common Stock on (i) the day prior to the Enrollment
Date or (ii) on the Exercise Date, unless otherwise provided in Section 13(b)
hereof.

            (n)   "Purchase Period" shall mean the approximately six month
period commencing on one Exercise Date and ending with the next Exercise Date.
However, the first Purchase Period under the Plan shall commence on the first
Trading Day following the spin-off of the Company from C-Cube Microsystems Inc.
and end on July 31, 2000.

            (o)   "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

            (p)   "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

            (q)   "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.



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      3.    Eligibility.

            (a)   Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.

            (b)   Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.

      4.    Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 1 and August 1 of each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence on the first Trading Day following the
spin-off of the Company from C-Cube Microsystems Inc. and continue until January
31, 2002. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.

      5.    Participation.

            (a)   An eligible Employee may become a participant in the Plan by
completing a subscription agreement in the form of Exhibit A attached to this
Plan and filing it with the Company's stock administrator prior to the
applicable Enrollment Date. Such subscription agreement shall (without
limitation) authorize payroll deductions and, with respect to the first Offering
Period under the Plan and subject to Section 5(c) below, indicate the amount of
additional funds, if any, the Employee elects to contribute to the purchase of
shares of Common Stock under the Plan. Any such additional funds must be
delivered to the Company at such time and in such manner as the Company shall
specify.

            (b)   Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

            (c)   In addition to Employee's authorized payroll deductions, an
eligible Employee may contribute up to $3,000 to the purchase of shares under
the first Offering Period in effect under Plan. Such contribution shall be made
in any of the following forms of consideration: (i) cash, (ii) check made
payable to the Company, or (iii) accumulated payroll deductions in



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Employee's account under the C-Cube Microsystems Inc. Employee Stock Purchase
Plan as of the effective date of the spin-off of the Company from C-Cube
Microsystems Inc.

      6.    Payroll Deductions.

            (a)   At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period.

            (b)   All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. Subject to Section 5(c) above, a participant may not make any
additional payments into such account.

            (c)   A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

            (d)   Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

            (e)   At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.

      7.    Grant of Option. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing the amount retained in the Employee's account prior
to the Exercise Date pursuant to the Employee's accumulated payroll deductions
and, with respect to the first Offering Period, any amounts contributed by the
Employee



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pursuant to Section 5(c), by the applicable Purchase Price; provided that in no
event shall an Employee be permitted to purchase during each Purchase Period
more than 10,000 shares of the Company's Common Stock (subject to any adjustment
pursuant to Section 19), and provided further that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise of
the option shall occur as provided in Section 8 hereof, unless the participant
has withdrawn pursuant to Section 10 hereof. The option shall expire on the last
day of the Offering Period.

      8.    Exercise of Option.

            (a)   Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the amount retained in the participant's account
as of the Exercise Date pursuant to the participant's accumulated payroll
deductions and, with respect to the first Offering Period, any amounts
contributed by the participant pursuant to Section 5(c). No fractional shares
shall be purchased; any amounts in a participant's account which are not
sufficient to purchase a full share shall be retained in the participant's
account for the subsequent Purchase Period or Offering Period, subject to
earlier withdrawal by the participant as provided in Section 10 hereof. Any
other monies left over in a participant's account after the Exercise Date shall
be returned to the participant. During a participant's lifetime, a participant's
option to purchase shares hereunder is exercisable only by him or her.

            (b)   The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.

      9.    Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option. Shares to be delivered to a
participant under the Plan shall be registered in the name of the participant or
in the name of the participant and his or her spouse.

      10.   Withdrawal.

            (a)   A participant may withdraw all but not less than all of the
amounts credited to his or her account and not yet used to exercise his or her
option under the Plan at any time by giving written notice to the Company in the
form of Exhibit B attached to this Plan. All of the amounts credited to the
participant's account shall be paid to such participant promptly after receipt
of notice of withdrawal and such participant's option for the Offering Period
shall be automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

            (b)   A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the



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Company or in succeeding Offering Periods which commence after the termination
of the Offering Period from which the participant withdraws.

      11.   Termination of Employment.

            Upon a participant's ceasing to be an Employee, for any reason, he
or she shall be deemed to have elected to withdraw from the Plan and the amounts
credited to such participant's account during the Offering Period but not yet
used to exercise the option shall be returned to such participant or, in the
case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.

      12.   Interest. No interest shall accrue on either the amounts contributed
by participant pursuant to Section 5(c) or the payroll deductions of a
participant in the Plan.

      13.   Stock.

            (a)   Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall initially be no more than five hundred thousand (500,000) shares, plus an
annual increase to be added on the first day of the Company's fiscal year
(beginning 2001) equal to the lesser of (i) 600,000 shares, (ii) one percent
(1%) of the number of outstanding shares on the last Trading Day of the
immediately preceding fiscal year or (iii) a lesser amount determined by the
Board. If, on a given Exercise Date, the number of shares with respect to which
options are to be exercised exceeds the number of shares then available under
the Plan, the Company shall make a pro rata allocation of the shares remaining
available for purchase in as uniform a manner as shall be practicable and as it
shall determine to be equitable.

            (b)   If, the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
the number of shares of Common Stock that are available for sale under the Plan,
the Board may in its sole discretion (i) provide that the Company shall make a
pro rata allocation of the shares of Common Stock available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable among all participants exercising options to purchase Common Stock on
such Exercise Date, notwithstanding any subsequent authorization of additional
shares of Common Stock for issuance under the Plan by the Company's
stockholders, (ii) provide that the Company shall make a pro rata allocation of
the shares available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable among all participants exercising
options to purchase Common Stock on such Exercise Date and terminate all
Offering Periods pursuant to Section 20 hereof or (iii) provide that, if the
Fair Market Value of a share of Common Stock on the date on which additional
shares of Common Stock are authorized for issuance hereunder by the Company's
stockholders (the "Authorization Date") is higher than the Fair Market Value of
a share of Common Stock on the Enrollment Date of any outstanding Offering
Period that commenced prior to the Authorization



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Date, the Purchase Price for authorized shares available to be issued on any
remaining Exercise Date of any Offering Period in effect on the Authorization
Date shall be 85% of the Fair Market Value of a share of Common Stock on the
Authorization Date or on the Exercise Date, whichever is lower.

      14.   Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

      15.   Designation of Beneficiary.

            (a)   A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

            (b)   Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

      16.   Transferability. Neither payroll deductions credited to a
participant's account, amounts contributed by participant pursuant to Section
5(c), nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 15 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.

      17.   Use of Funds. All amounts held by the Company under the Plan
pursuant to either payroll deductions or contributions under Section 5(c) may be
used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such amounts.

      18.   Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions and, if applicable, contributions under Section 5(c), the
Purchase Price, the number of shares purchased and the remaining cash balance,
if any.



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      19.   Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

            (a)   Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the Reserves (including the number of shares
that may be added annually to the Reserves pursuant to Section 13(a)(i)), the
maximum number of shares each participant may purchase each Purchase Period
(pursuant to Section 7), as well as the price per share and the number of shares
of Common Stock covered by each option under the Plan which has not yet been
exercised 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 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)   Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

            (c)   Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.



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      20.   Amendment or Termination.

            (a)   The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 19 hereof,
no such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period is in the
best interests of the Company and its shareholders. Except as provided in
Section 19 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent
necessary to comply with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain shareholder approval in such a manner and to such a degree
as required.

            (b)   Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation or received by participant pursuant to Section 5(c),
and establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent with
the Plan.

      21.   Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

      22.   Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, 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 applicable provisions of law.



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      23.   Term of Plan. The Plan shall become effective upon the effectiveness
of the spinoff of the Company from C-Cube Microsystems Inc. It shall continue in
effect for a term of ten (10) years unless sooner terminated under Section 20
hereof.

      24.   Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.



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