<PAGE>
                                                                    EXHIBIT 10.2

                                                        OPTION NUMBER:__________

                            VIRAGE LOGIC CORPORATION
                           1997 EQUITY INCENTIVE PLAN
                                OPTION AGREEMENT

        This Stock Option Agreement (this "AGREEMENT") is made and entered into
between Virage Logic Corporation, a Delaware corporation (the "COMPANY"), and
the person (the "PARTICIPANT") named in the attached Notice of Grant of Stock
Options and Option Agreement (the "NOTICE"). Capitalized terms not defined
herein shall have the meaning ascribed to them in the Company's 1997 Equity
Incentive Plan (the "PLAN"), a copy of which is attached hereto as Exhibit A.

        1. GRANT OF OPTION. The Company hereby grants to Participant pursuant to
the Plan an option (this "OPTION") to purchase the total number of shares of
Common Stock of the Company (the "SHARES") at the price per share (the "EXERCISE
PRICE"), each as set forth in the Notice, subject to all of the terms and
conditions of this Agreement and the Plan. If the Notice designates this Option
as an incentive stock option, this Option is intended to qualify as an
"incentive stock option" (an "ISO") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "CODE"). If designated otherwise,
this Option is intended not to qualify as an "incentive stock option."

        2. EXERCISE PERIOD AND VESTING SCHEDULE.

                (a) This Option shall become first exercisable ("vest") as to:

                        (i) 25% of the Shares on the first anniversary of the
Vesting Commencement Date, and

                        (ii) an additional 2.0833% of the Shares each month
beginning with the month following the first anniversary of the Vesting
Commencement Date.

        3. EXPIRATION; TERMINATION.

                3.1 Expiration. This Option shall expire on the expiration date
set forth in the Notice (the "Expiration Date") or earlier due to Participant's
Termination, but in no event later than ten (10) years after the effective grant
date set forth in the Notice (the "GRANT DATE") (or no later than five (5) years
after the Grant Date if this Option is designated as an ISO and the Participant
owns directly, indirectly or constructively more than 10% of the voting stock of
the Company or any Parent or Subsidiary as of the Grant Date). In no event may
this Option be exercised after the Expiration Date.

                3.2 Termination.

                        (i) Unless a longer period is allowed by the Committee,
this Option may be exercised for the following periods following Termination
under the following circumstances:

<TABLE>
<CAPTION>
Termination Due to:                       Post-Termination Exercise Period:
-------------------                       ---------------------------------
<S>                                       <C>
Other than Death or Disability or Cause                3 months

Death                                                  12 months

Disability                                             12 months

Cause                                                    None
</TABLE>

                        (ii) This option shall terminate to the extent not
exercised within the post-Termination exercise periods specified above.



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                        (iii) If Death occurs within 3 months following
Termination other than for Disability or Cause, Termination shall be treated as
being due to Death.

                        (iv) Unless otherwise permitted by the Committee, this
Option may be exercised following Termination only to the extent it was
exercisable on the Termination Date.

                        (v) Notwithstanding the foregoing, this Option may
terminate upon the occurrence of a corporate transaction in the manner
determined by the Board pursuant to Section 17 of the Plan.

                3.3 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate or alter the terms of Participant's employment or other
relationship at any time.

        4. MANNER OF EXERCISE.

                4.1 Stock Option Exercise Notice. To exercise this Option,
Participant (or in the case of exercise after Participant's death, Participant's
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed Notice of Exercise of Stock Option in the form attached
hereto as Exhibit B, or in such other form as may be approved by the Committee
from time to time (the "EXERCISE NOTICE"). If someone other than Participant
exercises this Option, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal right to
exercise this Option. This Option shall be deemed to be exercised upon receipt
by the Company of the Exercise Notice, Exercise Price and withholding taxes.

                4.2 Limitations on Exercise. This Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. This Option may
not be exercised as to fewer than fifty (50) Shares unless it is exercised as to
all Shares as to which this Option is then exercisable.

                4.3 Payment. Unless otherwise permitted by the Committee at the
time of payment, where permitted by law, payment of the Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Participant:

                (a) In cash (by check);

                (b) by surrender of shares of the Company's Common Stock that
(i) either (A) have been owned by Participant for more than six (6) months and
have been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully
paid with respect to such shares); or (B) were obtained by Participant in the
open public market; and (ii) are clear of all liens, claims, encumbrances or
security interests; or

                (c) provided that a public market for the Company's stock
exists, through a "same day sale" commitment from Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD DEALER") whereby Participant irrevocably elects to exercise this
Option and to sell a portion of the Shares so purchased sufficient to pay for
the total Exercise Price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise Price directly to the
Company.

                4.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Option, Participant must pay or provide for any applicable
federal, state and local withholding taxes that the Committee, in its sole
discretion, determines that the Company is obligated to collect. Unless
otherwise permitted by the Committee, payment of such taxes shall be made in
cash (by check) or by withholding amounts otherwise payable by the Company to
the Participant.

                4.5 Issuance of Shares. Provided that the Exercise Notice,
Exercise Price and tax withholding payments are in form and substance
satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Participant, Participant and Participant's spouse as
community property,



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Participant and a joint tenant with rights of survivorship or Participant's
legal representative, executor, heir or legatee, as the case may be and shall
deliver certificates representing the Shares with the appropriate legends
affixed thereto or make appropriate entries on its records for shares requested
to be issued in book-entry form only.

        5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If this Option is
designated as an ISO and the Participant sells or otherwise disposes of,
including by gift, any of the Shares acquired pursuant to this Option on or
before the later of (i) the date two (2) years after the Grant Date, and (ii)
the date one (1) year after transfer of such Shares to Participant upon exercise
of this Option, Participant shall immediately notify the Company in writing of
such disposition. Participant agrees that Participant may be subject to federal,
state and local income and employment tax withholding by the Company on the
compensation income recognized by Participant from the early disposition and
Participant agrees to pay such withholding taxes to the Company in cash (by
check) or out of the current wages or other amounts payable to Participant.

        6. NONTRANSFERABILITY OF OPTION AND SHARES. This Option may not be
transferred in any manner other than by will or the laws of descent and
distribution and may be exercised during the lifetime of Participant only by
Participant. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of Participant. Unvested Shares may not
be transferred in any manner and Participant understands and agrees that the
Company will place legends to such effect on any stock certificate(s) evidencing
the unvested Shares, together with any other legends that may be required by
state or U.S. Federal securities laws, the Company's Articles of Incorporation
or Bylaws, any other agreement between Participant and the Company or any
agreement between Participant and any third party. Participant agrees that, to
ensure compliance with the restrictions imposed on the unvested Shares by this
Agreement, the Company may issue appropriate "stop-transfer" instructions to its
transfer agent. Further, the Company will not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as owner of such
Shares, or to accord the right to vote or receive dividends to any purchaser or
other transferee to whom such Shares have been so transferred.

        7. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to Participant.

        8. INTERPRETATION. Participant acknowledges that he or she has received
a copy of the Plan, is familiar with its terms and provisions and accepts this
Option subject to those terms and provisions. Any dispute regarding the
interpretation of the Plan or this Agreement shall be submitted by Participant
or the Company to the Committee for review. Participant agrees to accept as
final and binding all decisions or interpretations of the Committee upon any
question arising under the Plan or this Agreement.

        9. NO TAX ADVICE FROM COMPANY. Participant represents that he or she has
consulted with such tax advisors as Participant has deemed desirable in
connection with the grant of this Option and that Participant is not relying
upon the Company or any agent or employee of, or advisor to, the Company for any
tax advice.

        10. ENTIRE AGREEMENT. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

        11. NOTICES. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated on the Notice or to such other
address as the Participant may designate in writing from time to time to the
Company. All notices shall be deemed to have been given or delivered upon: (i)
personal delivery; (ii) three (3) days after deposit in the United States mail
by certified or registered mail (return receipt requested); (iii) one (1)
business day after deposit with any return receipt express courier (prepaid); or
(iv) one (1) business day after transmission by facsimile, rapifax or
telecopier.

        12. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement, including its rights to purchase Shares under the
Repurchase Option. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Company. Subject to the restrictions on
transfer set forth



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herein, this Agreement shall be binding upon Participant and Participant's
heirs, executors, administrators, legal representatives, successors and assigns.

        13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.







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                                    EXHIBIT A

                           1997 EQUITY INCENTIVE PLAN















                                       A-1
<PAGE>

                                    EXHIBIT B

                               NOTICE OF EXERCISE















                                       B-1
<PAGE>

                            VIRAGE LOGIC CORPORATION
                           1997 EQUITY INCENTIVE PLAN
                       NOTICE OF EXERCISE OF STOCK OPTION


    (A) Name of Purchaser: ___________________________________

    (B) Social Security Number: ______________________________

    (C) Date of Option Agreement: ________________

    (D) Number of Shares for which Option is being Exercised: _________________

    (E) Exercise Price Per Share: ________________

    (F) Total Exercise Price: ____________________

EXERCISE ELECTION

Pursuant to Section 4 of the Option Agreement between the undersigned and Virage
Logic Corporation (the "Company") dated as of the date referred to in (C) above,
the undersigned hereby irrevocably elects to exercise the purchase right
represented by the Option Agreement for, and to purchase under that Option
Agreement, the number of shares set forth in (D) above. The undersigned hereby
submits payment for the total exercise price set forth in (F) above by (check
one):

______  submitting a check payable to Virage Logic Corporation in the amount of
        $______________;

______  submitting ______________ shares of the Company's Common Stock having a
        "fair market value"** equal to the total exercise price as of the date
        of exercise. The undersigned hereby represents that such shares: (A)
        have been owned by the undersigned for more than six (6) months and have
        been paid for within the meaning of SEC Rule 144 (and, if such shares
        were purchased from the Company by use of a promissory note, such note
        has been fully paid with respect to such shares); or (B) were obtained
        by the undersigned in the open public market; and (ii) are clear of all
        liens, claims, encumbrances or security interests; or

______  by authorizing my broker (who is a member of the NASD) to remit to the
        Company the total exercise price received through a "same day sale"

** The "fair market value" of the Common Stock is the closing price on the
Nasdaq National Market as of the date of exercise.

TAX MATTERS

I understand that federal, state and local income and employment taxes may be
required to be withheld by the Company as a result of my exercise of this
Option. Accordingly (check one):

______  I am submitting a check to the Company in the amount of all such taxes
        that the Company has indicated are due; or

______  I hereby authorize the Company to withhold the amount of all such taxes
        that the Company has indicated are due from amounts otherwise payable to
        me by the Company.

I understand that the shares purchased upon the exercise of the Option may be
subject to the Company's Right of Repurchase and thus may be subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the
Internal Revenue Code. I understand further that an election under Section 83(b)
of the Internal Revenue Code with respect to such shares can only be made within
30 days after I purchase them.

I have discussed the vesting and other restrictions applicable to the shares
with the Company. I understand that the Company recommends that I discuss
whether these restrictions constitute a "substantial risk of forfeiture" within
the meaning of Code Section 83(c) (and the consequences thereof, including an
election under Code Section 83(b)) with my tax personal advisor.

ISSUANCE OF SHARES



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Please issue the shares as follows (check one):

     ____ in my name individually; or

     ____ in my name and _________________________ as __________________________
          (i.e. community property or joint tenants with rights of survivorship)



DELIVERY OF SHARES

Please deliver the shares as follows (check one):

     ____ Hold in book entry; or

     ____ Mail to the following address: If to a Broker please include Brokerage
          name, account name and account number.

                        _________________________________
                        _________________________________
                        _________________________________
                        _________________________________



Date:_______________________        Signature:_________________________________


================================================================================

STOCK ADMINISTRATION USE ONLY

Report Control Number ____________________________

Date of Certificate/Exercise date ____________________________



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