Document:

Prepared by MerrillDirect

Exhibit 10.2

ZORAN CORPORATION

1995 OUTSIDE DIRECTORS STOCK OPTION PLAN

(As
Amended Through June 18, 2000)

             1.          Establishment,
Purpose and Term of Plan.

                           1.1        Establishment.  The Zoran Corporation 1995 Outside Directors Stock Option Plan
(the “Plan”) is hereby established
effective as of the effective date of the initial registration by the Company
of its Stock under Section 12 of the Exchange Act (the “Effective Date”).

                           1.2        Purpose. 
The purpose of the Plan is to advance the interests of the Participating
Company Group and its stockholders by providing an incentive to attract and
retain highly qualified persons to serve as Outside Directors of the Company
and by creating additional incentive for Outside Directors to promote the
growth and profitability of the Participating Company Group.

                           1.3        Term of Plan.  The Plan shall continue in effect until the earlier of its
termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed. 
However, all Options shall be granted, if at all, within ten (10) years
from the Effective Date.

             2.          Definitions
and Construction.

                          2.1        Definitions.  Whenever used herein, the following terms
shall have their respective meanings set forth below:

                                        (a)         “Board”
means the Board of Directors of the Company. 
If one or more Committees have been appointed by the Board to administer
the Plan, “Board” also means such Committee(s).

                                        (b)        “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

                                        (c)         “Committee”
means a committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board.  Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted
herein, including, without limitation, the power to amend or terminate the Plan
at any time, subject to the terms of the Plan and any applicable limitations
imposed by law.

                                        (d)        “Company”
means Zoran Corporation, a Delaware corporation, or any successor corporation
thereto.

                                        (e)         “Consultant”
means any person, including an advisor, engaged by a Participating Company to
render services other than as an Employee or a Director.

                                        (f)         “Director”
means a member of the Board or the board of directors of any other
Participating Company.

                                        (g)        “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director’s fee shall be sufficient to constitute employment for purposes of the
Plan.

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

                                        (i)          “Fair
Market Value” means, as of any date, if there is then a public
market for the Stock, the closing price of the Stock (or the mean of the
closing bid and asked prices of the Stock if the Stock is so reported instead)
as reported on the National Association of Securities Dealers Automated
Quotation (“NASDAQ”) System, the
NASDAQ National Market System or such other national or regional securities
exchange or market system constituting the primary market for the Stock.  If the relevant date does not fall on a day
on which the Stock is trading on NASDAQ, the NASDAQ National Market System or
other national or regional securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which
the Stock was so traded prior to the relevant date.  If there is then no public market for the Stock, the Fair Market
Value on any relevant date shall be as determined by the Board without regard
to any restriction other than a restriction which, by its terms, will never
lapse.

                                        (j)          “Option”
means a right to purchase Stock (subject to adjustment as provided in
Section 4.2) pursuant to the terms and conditions of the Plan.

                                        (k)         “Optionee”
means a person who has been granted one or more Options.

                                        (l)          “Option
Agreement” means a written agreement between the Company and an
Optionee setting forth the terms, conditions and restrictions of the Option
granted to the Optionee.

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

                                        (n)        “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

                                        (o)        “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

                                        (p)        “Participating
Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.

                                        (q)        “Rule
16b-3” means Rule 16b–3 as promulgated under the Exchange
Act, as amended from time to time, or any successor rule or regulation.

                                        (r)         “Service”
means the Optionee’s service with the Participating Company Group, whether in
the capacity of an Employee, a Director or a Consultant.  The Optionee’s Service shall not be deemed to
have terminated merely because of a change in the capacity in which the
Optionee renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided
that there is no interruption or termination of the Optionee’s Service.  The Optionee’s Service shall be deemed to
have terminated either upon an actual termination of Service or upon the
corporation for which the Optionee performs Service ceasing to be a
Participating Company.

                                        (s)         “Stock”
means the common stock, par value $0.001, of the Company, as adjusted from time
to time in accordance with Section 4.2.

                                        (t)         “Subsidiary
Corporation” means any present or future “subsidiary corporation” of
the Company, as defined in Section 424(f) of the Code.

                           2.2        Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the
Plan.  Except when otherwise indicated
by the context, the singular shall include the plural, the plural shall include
the singular, and use of the term “or” shall include the conjunctive as well as
the disjunctive.

             3.          Administration.

                           3.1        Administration by the Board.  The Plan shall be administered by the Board,
including any duly appointed Committee of the Board.  All questions of interpretation of the Plan or of any Option
shall be determined by the Board, and such determinations shall be final and
binding upon all persons having an interest in the Plan or such Option.  Any officer of a Participating Company shall
have the authority to act on behalf of the Company with respect to any matter,
right, obligation, determination or election which is the responsibility of or
which is allocated to the Company herein, provided the officer has apparent
authority with respect to such matter, right, obligation, determination or
election.

                           3.2        Limitations on Authority of the Board.  Notwithstanding any other provision herein
to the contrary, the Board shall have no authority, discretion, or power to
select the Outside Directors who will receive Options, to set the exercise
price of the Options, to determine the number of shares of Stock to be subject
to an Option or the time at which an Option shall be granted, to establish the
duration of an Option, or to alter any other terms or conditions specified in
the Plan, except in the sense of administering the Plan subject to the
provisions of the Plan.

             4.          Shares
Subject to Plan.

                           4.1        Maximum Number of Shares Issuable.  Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be
issued under the Plan shall be three hundred thousand (300,000) and shall
consist of authorized but unissued shares or reacquired shares of Stock or any
combination thereof.  If an outstanding
Option for any reason expires or is terminated or canceled or shares of Stock
acquired, subject to repurchase, upon the exercise of an Option are repurchased
by the Company, the shares of Stock allocable to the unexercised portion of
such Option, or such repurchased shares of Stock, shall again be available for
issuance under the Plan.

                           4.2        Adjustments for Changes in Capital Structure.  In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company, appropriate adjustments
shall be made in the number and class of shares subject to the Plan, to the
“Initial Option” and “Annual Option” (as defined in Section 6.1), and to
any outstanding Options, and in the exercise price of any outstanding
Options.  If a majority of the shares
which are of the same class as the shares that are subject to outstanding
Options are exchanged for, converted into, or otherwise become (whether or not
pursuant to an Ownership Change Event as defined in Section 8.1) shares of
another corporation (the “New Shares”),
the Board may unilaterally amend the outstanding Options to provide that such
Options are exercisable for New Shares. 
In the event of any such amendment, the number of shares subject to, and
the exercise price of, the outstanding Options shall be adjusted in a fair and
equitable manner as determined by the Board, in its sole discretion.  Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 4.2
shall be rounded down to the nearest whole number, and in no event may the
exercise price of any Option be decreased to an amount less than the par value,
if any, of the stock subject to the Option.

             5.          Eligibility and Type of Options.

                           5.1        Persons Eligible for Options.  An Option shall be granted only to a person
who, at the time of grant, is an Outside Director.

                           5.2        Options Authorized.  Options shall be nonstatutory stock options; that is, options
which are not treated as incentive stock options within the meaning of
Section 422(b) of the Code.

             6.          Terms
and Conditions of Options. 
Options shall be evidenced by Option Agreements specifying the number of
shares of Stock covered thereby, in such form as the Board shall from time to
time establish.  Option Agreements may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

                           6.1        Automatic Grant of Options.  Subject to execution by an Outside Director
of the appropriate Option Agreement, Options shall be granted automatically and
without further action of the Board, as follows:

                                        (a)         Initial
Option.  Each person who is
(i) an Outside Director on the Effective Date, or (ii) first elected or
appointed as an Outside Director after the Effective Date shall be granted an
Option to purchase twenty thousand (20,000) shares of Stock on the Effective
Date or the date of such initial election or appointment, respectively (an “Initial Option”).  Notwithstanding anything herein to the contrary, a Director of
the Company who previously did not qualify as an Outside Director shall not
receive an Initial Option in the event that such Director subsequently becomes
an Outside Director.

                                        (b)        Annual
Option.  Each Outside
Director (including any Director of the Company who previously did not qualify
as an Outside Director but who subsequently becomes an Outside Director) shall
be granted, on the date immediately following the date of each annual meeting
of the stockholders of the Company (an “Annual
Meeting”) following which such person remains an Outside Director,
an Option to purchase four thousand eight hundred (4,800) shares of Stock (an “Annual Option”).  Notwithstanding the foregoing, an Outside Director who has not
served continuously as a Director of the Company for at least six (6) months as
of the date immediately following such Annual Meeting shall not receive an
Annual Option on such date.

                                        (c)         Right
to Decline Option. 
Notwithstanding the foregoing, any person may elect not to receive an
Option by delivering written notice of such election to the Board no later than
the day prior to the date such Option would otherwise be granted.  A person so declining an Option shall
receive no payment or other consideration in lieu of such declined Option.  A person who has declined an Option may
revoke such election by delivering written notice of such revocation to the
Board no later than the day prior to the date such Option would be granted
pursuant to Section 6.1(a) or (b), as the case may be.

                           6.2        Exercise Price.  The exercise price per share of Stock subject to an Option shall
be the Fair Market Value of a share of Stock on the date the Option is granted.

                           6.3        Exercise Period.  Each Option shall terminate and cease to be exercisable on the
date ten (10) years after the date of grant of the Option unless earlier
terminated pursuant to the terms of the Plan or the Option Agreement.

                           6.4        Right to Exercise Options.

                                        (a)         Initial
Option.  Except as otherwise
provided in the Plan or in the Option Agreement, an Initial Option shall (i)
first become exercisable on the date which is one (1) year after the date on
which the Initial Option was granted (the “Initial
Option Vesting Date”); and (ii) be exercisable on and after the
Initial Option Vesting Date and prior to the termination thereof in an amount
equal to the number of shares of Stock initially subject to the Initial Option
multiplied by the Vested Ratio as set forth below, less the number of shares
previously acquired upon exercise thereof. 
The Vested Ratio described in the preceding sentence shall be determined
as follows:

                                                                                                                                                                

	 	 	Vested
  Ratio
	 	 	

	 	Prior
  to Initial Option Vesting Date	0
	 	On
  Initial Option Vesting Date,

  provided the Optionee’s Service

  is continuous from the date of grant

  of the Initial Option until the

  Initial Option Vesting Date	1/4
	 	 	 
	 	Plus	 
	 	For
  each full year of

  of the Optionee’s continuous

  Service from the Initial Option

  Vesting Date until the Vested

  Ratio equals 1/1, an additional	1/4

                                        (b)        Annual
Option.  Except as otherwise
provided in the Plan or in the Option Agreement, an Annual Option shall first
become exercisable on the date which is one (1) year after the date on which
the Annual Option was granted (the “Annual
Option Vesting Date”), provided the Optionee’s Service is continuous
from the date of grant of the Annual Option until the Annual Option Vesting
Date.  The Annual Option shall be
exercisable on and after the Annual Option Vesting Date and prior to the
termination thereof in an amount equal to the number of shares of Stock
initially subject to the Annual Option, less the number of shares previously
acquired upon exercise thereof.

                           6.5        Payment of Exercise Price.

                                        (a)         Forms
of Consideration Authorized. 
Except as otherwise provided below, payment of the exercise price for
the number of shares of Stock being purchased pursuant to any Option shall be
made (i) in cash, by check, or cash equivalent, (ii) by tender to the
Company of shares of Stock owned by the Optionee having a Fair Market Value not
less than the exercise price, (iii) by the assignment of the proceeds of a
sale or loan with respect to some or all of the shares being acquired upon the
exercise of the Option (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to
time by the Board of Governors of the Federal Reserve System) (a “Cashless Exercise”), or (iv) by any
combination thereof.

                                        (b)        Tender
of Stock.  Notwithstanding
the foregoing, an Option may not be exercised by tender to the Company of
shares of Stock to the extent such tender of Stock would constitute a violation
of the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock. 
Unless otherwise provided by the Board, an Option may not be exercised
by tender to the Company of shares of Stock unless such shares either have been
owned by the Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company.

                                        (c)         Cashless
Exercise.  The Company
reserves, at any and all times, the right, in the Company’s sole and absolute
discretion, to establish, decline to approve or terminate any program or
procedures for the exercise of Options by means of a Cashless Exercise.

                           6.6        Tax Withholding.  The Company shall have the right, but not the obligation, to
deduct from the shares of Stock issuable upon the exercise of an Option, or to
accept from the Optionee the tender of, a number of whole shares of Stock
having a Fair Market Value equal to all or any part of the federal, state,
local and foreign taxes, if any, required by law to be withheld by the
Participating Company Group with respect to such Option or the shares acquired
upon exercise thereof.  Alternatively or
in addition, in its sole discretion, the Company shall have the right to
require the Optionee to make adequate provision for any such tax withholding
obligations of the Participating Company Group arising in connection with the
Option or the shares acquired upon exercise thereof.  The Company shall have no obligation to deliver shares of Stock
until the Participating Company Group’s tax withholding obligations have been
satisfied.

             7.          Standard
Form of Option Agreement.

                           7.1        Initial Option.  Unless otherwise provided for by the Board at the time an Initial
Option is granted, each Initial Option shall comply with and be subject to the
terms and conditions set forth in the form of Nonstatutory Stock Option Agreement
for Outside Directors (Initial Option) adopted by the Board concurrently with
its adoption of the Plan and as amended from time to time.

                           7.2        Annual Option.  Unless otherwise provided for by the Board at the time an Annual
Option is granted, each Annual Option shall comply with and be subject to the
terms and conditions set forth in the form of Nonstatutory Stock Option
Agreement for Outside Directors (Annual Option) adopted by the Board
concurrently with its adoption of the Plan and as amended from time to time.

                           7.3        Authority to Vary Terms.  Subject to the limitations set forth in
Section 3.2, the Board shall have the authority from time to time to vary
the terms of any of the standard forms of Option Agreement described in this
Section 7 either in connection with the grant or amendment of an
individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such
new, revised or amended standard form or forms of Option Agreement are not
inconsistent with the terms of the Plan. 
Such authority shall include, but not by way of limitation, the
authority to grant Options which are immediately exercisable subject to the
Company’s right to repurchase any unvested shares of Stock acquired by the
Optionee upon the exercise of an Option in the event such Optionee’s Service is
terminated for any reason.  In no event,
however, shall the Board be permitted to vary the terms of any standard form of
Option Agreement if such change would cause the Plan to cease to qualify as a
formula plan pursuant to Rule 16b-3 at any such time as any class of equity
security of the Company is registered pursuant to Section 12 of the
Exchange Act.

             8.          Transfer
of Control.

                           8.1        Definitions.

                                        (a)         An “Ownership
Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company:

                                                     (i)          the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the
Company;

                                                     (ii)         a merger or consolidation in which the
Company is a party;

                                                     (iii)        the sale, exchange, or transfer of all
or substantially all of the assets of the Company; or

                                                     (iv)       a liquidation or dissolution of the
Company.

                                        (b)        A “Transfer
of Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporation(s)”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one
or more subsidiary corporations.  The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

                           8.2        Effect of Transfer of Control on Options.  In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the “Acquiring
Corporation”), may either assume the Company’s rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiring Corporation’s stock.  In the event the Acquiring Corporation
elects not to assume or substitute for outstanding Options in connection with a
Transfer of Control, any unexercisable or unvested portion of the outstanding
Options shall be immediately exercisable and vested in full as of the date ten
(10) days prior to the date of the Transfer of Control.  The exercise or vesting of any Option that
was permissible solely by reason of this Section 8.2 shall be conditioned
upon the consummation of the Transfer of Control.  Any Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Transfer of Control nor exercised
as of the date of the Transfer of Control shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control.  Notwithstanding the foregoing, shares
acquired upon exercise of an Option prior to the Transfer of Control and any
consideration received pursuant to the Transfer of Control with respect to such
shares shall continue to be subject to all applicable provisions of the Option
Agreement evidencing such Option except as otherwise provided in such Option
Agreement.  Furthermore, notwithstanding
the foregoing, if the corporation the stock of which is subject to the
outstanding Options immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding
Options shall not terminate.

             9.          Nontransferability
of Options.  During the
lifetime of the Optionee, an Option shall be exercisable only by the Optionee
or the Optionee’s guardian or legal representative.  No Option shall be assignable or transferable by the Optionee,
except by will or by the laws of descent and distribution.

             10.        Indemnification.  In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board is delegated shall be indemnified by the Company against all
reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan, or any right granted hereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Company, in
writing, the opportunity at its own expense to handle and defend the same.

             11.        Termination
or Amendment of Plan. 
The Board may terminate or amend the Plan at any time.  However, subject to changes in the law or
other legal requirements that would permit otherwise, without the approval of
the Company’s stockholders, there shall be (a) no increase in the total
number of shares of Stock that may be issued under the Plan (except by
operation of the provisions of Section 4.2), and (b) no expansion in
the class of persons eligible to receive Options.  Furthermore, to the extent required by Rule 16b-3, provisions of
the Plan addressing eligibility to participate in the Plan and the amount,
price and timing of Options shall not be amended more than once every six (6)
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder.  In any event, no termination or amendment of
the Plan may adversely affect any then outstanding Option, or any unexercised
portion thereof, without the consent of the Optionee, unless such termination
or amendment is necessary to comply with any applicable law or government
regulation.

             IN WITNESS WHEREOF, the undersigned Secretary of the
Company certifies that the foregoing sets forth the Zoran Corporation 1995
Outside Directors Stock Option Plan was duly adopted and amended by the Board
through June 18, 2000.

 

	 	___________________________________
	 	Secretary

PLAN HISTORY

 

	October 13, 1995	Board adopts Plan, with an initial reserve of
  200,000 shares.
	 	 
	February 9, 1996	Date of notice of stockholder action by
  consent without meeting, approving Plan with an initial reserve of 200,000
  shares (post the 1:3 reverse stock split on 12/14/95).
	 	 
	June 18, 2000	Board amends Plan to increase share reserve by
  100,000 shares to 300,000 shares.
	 	 
	July __, 2000	Stockholders approve share reserve increase to
  300,000 shares.

 

 

 

 

STANDARD FORM OF

ZORAN CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

FOR OUTSIDE DIRECTORS

(INITIAL OPTION)

 

ZORAN CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

FOR OUTSIDE DIRECTORS

(INITIAL OPTION)

 

             THIS
NONSTATUTORY STOCK OPTION AGREEMENT FOR OUTSIDE DIRECTORS (INITIAL OPTION) (the
“Option Agreement”) is made and
entered into as of the Date of Option Grant, by and between Zoran Corporation
and ___________________________ (the “Optionee”).

The Company has granted to the Optionee
an option to purchase certain shares of Stock, upon the terms and conditions
set forth in this Option Agreement (the “Option”).

             1.          Definitions
and Construction.

                           1.1        Definitions. 
Whenever used herein, the following terms shall have their respective
meanings set forth below:

                                        (a)         “Date
of Option Grant” means _________________ , 200_.

                                        (b)        “Number
of Option Shares” means twenty thousand (20,000) shares of
Stock, as adjusted from time to time pursuant to Section 9.

                                        (c)         “Exercise
Price” means $_________________ per share of Stock, as adjusted from
time to time pursuant to Section 9.

                                        (d)        “Initial
Exercise Date” means the Initial Vesting Date.

                                        (e)         “Initial
Vesting Date” means the date occurring one (1) year after the Date
of Option Grant.

                                        (f)         “Vested
Ratio” means, on any relevant date, the ratio determined as follows:

	 	 	Vested Ratio
	 	 	

	 	Prior
  to Initial Vesting Date	0
	 	 	 
	 	On
  Initial Vesting Date, provided the

  Optionee’s Service is continuous from the

  Date of Option Grant until the Initial Vesting Date	1/4
	 	 	 
	 	Plus	 
	 	 	 
	 	For
  each full year of the Optionee’s continuous

  Service from the Initial Vesting Date

  until the Vested Ratio equals 1/1, an additional	1/4

                                        (g)        “Option Expiration Date” means the date ten (10) years after the Date of
Option Grant.

                                        (h)        “Board”
means the Board of Directors of the Company. 
If one or more Committees have been appointed by the Board to administer
the Plan, “Board” shall also mean such Committee(s).

                                        (i)          “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

                                        (j)          “Committee”
means a committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board.  Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted in the
Plan, including, without limitation, the power to amend or terminate the Plan
at any time, subject to the terms of the Plan and any applicable limitations
imposed by law.

                                        (k)         “Company”
means Zoran Corporation, a Delaware corporation, or any successor corporation
thereto.

                                        (l)          “Consultant”
means any person, including an advisor, engaged by a Participating Company to
render services other than as an Employee or a Director.

                                        (m)        “Director”
means a member of the Board or of the board of directors of any other
Participating Company.

                                        (n)        “Disability”
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s
position with the Participating Company Group because of the sickness or injury
of the Optionee.

                                        (o)        “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director’s fee shall be sufficient to constitute employment for purposes of the
Plan.

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

                                        (q)        “Fair
Market Value” means, as of any date, if there is then a public
market for the Stock, the closing price of the Stock (or the mean of the
closing bid and asked prices of the Stock if the Stock is so reported instead)
as reported on the National Association of Securities Dealers Automated Quotation
(“NASDAQ”) System, the NASDAQ
National Market System or such other national or regional securities exchange
or market system constituting the primary market for the Stock.  If the relevant date does not fall on a day
on which the Stock is trading on NASDAQ, the NASDAQ National Market System or
other national or regional securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which
the Stock was so traded prior to the relevant date.  If there is then no public market for the Stock, the Fair Market
Value on any relevant date shall be as determined by the Board without regard
to any restriction other than a restriction which, by its terms, will never
lapse.

                                        (r)         “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

                                        (s)         “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

                                        (t)         “Participating
Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.

                                        (u)        “Plan”
means the Zoran Corporation 1995 Outside Directors Stock Option Plan.

                                        (v)        “Retirement”
means a termination of the Optionee’s Service as a result of either of the
following, provided that the Optionee has served continuously on the Board for
at least 2 years: (i) the Optionee’s resignation from the Board or (ii) the
expiration of the Optionee’s term as a Director of the Company after the
Optionee has declined to stand for reelection.

                                        (w)        “Rule
16b-3” means Rule 16b–3 as promulgated under the Exchange
Act, as amended from time to time, or any successor rule or regulation.

                                        (x)         “Securities
Act” means the Securities Act of 1933, as amended.

                                        (y)        “Service”
means the Optionee’s service with the Participating Company Group, whether in
the capacity of an Employee, a Director or a Consultant.  The Optionee’s Service shall not be deemed
to have terminated merely because of a change in the capacity in which the
Optionee renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided
that there is no interruption or termination of the Optionee’s Service.  The Optionee’s Service shall be deemed to
have terminated either upon an actual termination of Service or upon the
corporation for which the Optionee performs Service ceasing to be a
Participating Company.

                                        (z)         “Stock”
means the common stock, par value $0.001, of the Company, as adjusted from time
to time in accordance with Section 9.

                                        (aa)       “Subsidiary
Corporation” means any present or future “subsidiary corporation” of
the Company, as defined in Section 424(f) of the Code.

                           1.2        Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this Option
Agreement.  Except when otherwise
indicated by the context, the singular shall include the plural, the plural
shall include the singular, and the term “or” shall include the conjunctive as
well as the disjunctive.

             2.          Tax
Status of the Option. 
This Option is intended to be a nonstatutory stock option and shall not
be treated as an incentive stock option within the meaning of
Section 422(b) of the Code.

             3.          Administration.  All questions of interpretation concerning
this Option Agreement shall be determined by the Board, including any duly
appointed Committee of the Board.  All
determinations by the Board shall be final and binding upon all persons having
an interest in the Option.  Any officer
of a Participating Company shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

             4.          Exercise
of the Option.

                           4.1        Right to Exercise.

                                        (a)         Except as otherwise provided herein,
the Option shall be exercisable on and after the Initial Exercise Date and
prior to the termination of the Option (as provided in Section 6) in an
amount not to exceed the Number of Option Shares multiplied by the Vested Ratio
less the number of shares previously acquired upon exercise of the Option.  In no event shall the Option be exercisable
for more shares than the Number of Option Shares.

                                        (b)        Notwithstanding the foregoing, in the
event that the adoption of the Plan or any amendment of the Plan is subject to
the approval of the Company’s stockholders in order for the Plan or the grant
of the Option to comply with the requirements of Rule 16b-3, the Option
shall not be exercisable prior to such stockholder approval.

                           4.2        Method of Exercise.  Exercise of the Option shall be by written notice to the Company
which must state the election to exercise the Option, the number of whole
shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Optionee’s investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement.  The written notice
must be signed by the Optionee and must be delivered in person, by certified or
registered mail, return receipt requested, by confirmed facsimile transmission,
or by such other means as the Company may permit, to the Chief Financial
Officer of the Company, or other authorized representative of the Participating
Company Group, prior to the termination of the Option as set forth in
Section 6, accompanied by full payment of the aggregate Exercise Price for
the number of shares of Stock being purchased. 
The Option shall be deemed to be exercised upon receipt by the Company
of such written notice and the aggregate Exercise Price.

                           4.3        Payment of Exercise Price.

                                        (a)         Forms
of Consideration Authorized. 
Except as otherwise provided below, payment of the aggregate Exercise
Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash, by check, or cash equivalent, (ii) by
tender to the Company of whole shares of Stock owned by the Optionee having a
Fair Market Value not less than the aggregate Exercise Price, (iii) by means of
a Cashless Exercise, as defined in Section 4.3(c), or (iv) by any
combination of the foregoing.

                                        (b)        Tender
of Stock.  Notwithstanding
the foregoing, the Option may not be exercised by tender to the Company of
shares of Stock to the extent such tender of Stock would constitute a violation
of the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.  The
Option may not be exercised by tender to the Company of shares of Stock unless
such shares either have been owned by the Optionee for more than six (6) months
or were not acquired, directly or indirectly, from the Company.

                                        (c)         Cashless
Exercise.  A “Cashless Exercise” means the assignment in
a form acceptable to the Company of the proceeds of a sale or loan with respect
to some or all of the shares of Stock acquired upon the exercise of the Option
pursuant to a program or procedure approved by the Company (including, without
limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System).  The
Company reserves, at any and all times, the right, in the Company’s sole and
absolute discretion, to decline to approve or terminate any such program or
procedure.

                           4.4        Tax Withholding.  At the time the Option is exercised, in whole or in part, or at
any time thereafter as requested by the Company, the Optionee agrees to make
adequate provision for any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Participating Company Group, if
any, which arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the
Option, (ii) the transfer, in whole or in part, of any shares acquired
upon exercise of the Option, or (iii) the lapsing of any restriction with
respect to any shares acquired upon exercise of the Option.  The Optionee is cautioned that the Option is
not exercisable unless the tax withholding obligations of the Participating
Company Group are satisfied. 
Accordingly, the Optionee may not be able to exercise the Option when
desired even though the Option is vested, and the Company shall have no
obligation to issue a certificate for such shares.

                           4.5        Certificate Registration.  Except in the event the Exercise Price is
paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, the heirs of the Optionee.

                           4.6        Restrictions on Grant of the Option and Issuance of Shares.  The grant of the Option and the issuance of
shares of Stock upon exercise of the Option shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities.  The Option may not be
exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed. 
In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise
of the Option be in effect with respect to the shares issuable upon exercise of
the Option or (ii) in the opinion of legal counsel to the Company, the
shares issuable upon exercise of the Option may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the
Securities Act.  THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED.  ACCORDINGLY, THE
OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE
OPTION IS VESTED.  The inability of the
Company to obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance and sale of any shares subject to the Option 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.  As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto
as may be requested by the Company.

                           4.7        Fractional Shares.  The Company shall not be required to issue fractional shares upon
the exercise of the Option.

             5.          Nontransferability
of the Option.  The Option
may be exercised during the lifetime of the Optionee only by the Optionee or
the Optionee’s guardian or legal representative and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution.  Following the death of
the Optionee, the Option, to the extent provided in Section 7, may be
exercised by the Optionee’s legal representative or by any person empowered to
do so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution.

             6.          Termination
of the Option.  The
Option shall terminate and may no longer be exercised on the first to occur of
(a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee’s Service as described in
Section 7, or (c) a Transfer of Control to the extent provided in
Section 8.

             7.          Effect
of Termination of Service.

                           7.1        Option Exercisability.

                                        (a)         Disability.  If the Optionee’s Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee’s Service terminated, may be exercised by the Optionee (or
the Optionee’s guardian or legal representative) at any time prior to the expiration
of one (1) year after the date on which the Optionee’s Service terminated,
but in any event no later than the Option Expiration Date; provided, however,
that if the Optionee has served continuously on the Board for at least 2 years
prior to such termination of Service, the Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee’s guardian or legal representative)
at any time prior to the Option Expiration Date.

                                        (b)        Death.  If the Optionee’s Service with the
Participating Company Group is terminated because of the death of the Optionee,
the Option, to the extent unexercised and exercisable on the date on which the
Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s legal representative or other person who acquired the right to
exercise the Option by reason of the Optionee’s death) at any time prior to the
expiration of one (1) year after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date;
provided, however, that if the Optionee has served continuously on the Board
for at least 2 years prior to such termination of Service, the Option, to the
extent unexercised and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the Optionee’s legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee’s death) at any time prior to the Option Expiration
Date.  The Optionee’s Service shall be
deemed to have terminated on account of death if the Optionee dies within three
(3) months after the Optionee’s termination of Service.

                                        (c)         Retirement.
 If the Optionee’s Service
with the Participating Company Group is terminated because of the Retirement of
the Optionee, the Option, to the extent unexercised and exercisable on the date
on which the Optionee’s Service terminated, may be exercised at any time prior
to the Option Expiration Date.

                                        (d)        Other
Termination of Service.  If
the Optionee’s Service with the Participating Company Group terminates for any
reason, except Disability, death or Retirement, the Option, to the extent
unexercised and exercisable by the Optionee on the date on which the Optionee’s
Service terminated, may be exercised by the Optionee within three (3) months
after the date on which the Optionee’s Service terminated, but in any event no
later than the Option Expiration Date.

                           7.2        Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, if the
exercise of the Option within the applicable time periods set forth in
Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

                           7.3        Extension if Optionee Subject to Section 16(b).  Notwithstanding the foregoing, if a sale,
within the applicable time periods set forth in Section 7.1, of shares
acquired upon the exercise of the Option would subject the Optionee to suit
under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.

             8.          Ownership
Change and Transfer of Control.

                           8.1        Definitions.

                                        (a)         An “Ownership
Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company:

                                                     (i)          the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the
Company;

                                                     (ii)         a merger or consolidation in which the
Company is a party;

                                                     (iii)        the sale, exchange, or transfer of all
or substantially all of the assets of the Company; or

                                                     (iv)       a liquidation or dissolution of the
Company.

                                        (b)        A “Transfer
of Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporation(s)”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one
or more subsidiary corporations.  The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

                           8.2        Effect of Transfer of Control on Option.  In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent corporation
thereof, as the case may be (the “Acquiring
Corporation”), may either assume the Company’s rights and
obligations under the Option or substitute for the Option a substantially
equivalent option for the Acquiring Corporation’s stock.  In the event the Acquiring Corporation
elects not to assume the Company’s rights and obligations under the Option or
substitute for the Option in connection with the Transfer of Control, any
unexercised portion of the Option shall be immediately exercisable and vested in
full as of the date ten (10) days prior to the date of the Transfer of
Control.  Any exercise of the Option
that was permissible solely by reason of this Section 8.2 shall be
conditioned upon the consummation of the Transfer of Control.  The Option shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control to the extent
that the Option is neither assumed or substituted for by the Acquiring
Corporation in connection with the Transfer of Control nor exercised as of the date
of the Transfer of Control. 
Notwithstanding the foregoing, shares acquired upon exercise of the
Option prior to the Transfer of Control and any consideration received pursuant
to the Transfer of Control with respect to such shares shall continue to be subject
to all applicable provisions of this Option Agreement except as otherwise
provided herein.  Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject
to the Option immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the Option shall
not terminate.

             9.          Adjustments
for Changes in Capital Structure.  In the event of any stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification, or similar change in
the capital structure of the Company, appropriate adjustments shall be made in
the number, Exercise Price and class of shares of stock subject to the
Option.  If a majority of the shares
which are of the same class as the shares that are subject to the Option are
exchanged for, converted into, or otherwise become (whether or not pursuant to
an Ownership Change Event) shares of another corporation (the “New Shares”), the Board may unilaterally
amend the Option to provide that the Option is exercisable for New Shares.  In the event of any such amendment, the
Number of Option Shares and the Exercise Price shall be adjusted in a fair and
equitable manner, as determined by the Board, in its sole discretion.  Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 9
shall be rounded down to the nearest whole number, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of
the stock subject to the Option.

             10.        Rights
as a Stockholder. 
The Optionee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the issuance of a certificate
for the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company).  No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date such certificate is issued, except as provided in
Section 9.

             11.        Legends.  The Company may at any time place legends
referencing any applicable federal, state or foreign securities law
restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. 
The Optionee shall, at the request of the Company, promptly present to
the Company any and all certificates representing shares acquired pursuant to
the Option in the possession of the Optionee in order to carry out the
provisions of this Section.

             12.        Binding
Effect.  Subject to the
restrictions on transfer set forth herein, this Option Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

             13.        Termination
or Amendment.  The Board
may terminate or amend the Plan or the Option at any time; provided, however,
that no such termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Optionee unless such
termination or amendment is necessary to comply with any applicable law or
government regulation.  No amendment or
addition to this Option Agreement shall be effective unless in writing.

             14.        Integrated
Agreement.  This Option
Agreement constitutes the entire understanding and agreement of the Optionee
and the Participating Company Group with respect to the subject matter
contained herein, and there are no agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or provided
for herein.  To the extent contemplated
herein, the provisions of this Option Agreement shall survive any exercise of
the Option and shall remain in full force and effect.

             15.        Applicable
Law.  This Option
Agreement shall be governed by 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 the State of California.

	 	ZORAN
  CORPORATION
	 	 
	 	By:
  
	 	

	 	Title:
	 	

             The
Optionee represents that the Optionee is familiar with the terms and provisions
of this Option Agreement and hereby accepts the Option subject to all of the
terms and provisions thereof.  The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under this Option
Agreement.

	 	 
	 	   OPTIONEE
	 	 
	 	 
	 	 
	Date:	 
	

	

 

STANDARD FORM OF

ZORAN CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

FOR OUTSIDE DIRECTORS

(ANNUAL OPTION)

ZORAN CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

FOR OUTSIDE DIRECTORS

(ANNUAL OPTION)

 

             THIS
NONSTATUTORY STOCK OPTION AGREEMENT FOR OUTSIDE DIRECTORS (ANNUAL OPTION) (the
“Option Agreement”) is made and
entered into as of the Date of Option Grant, by and between Zoran Corporation
and ___________________________ (the “Optionee”).

             The
Company has granted to the Optionee an option to purchase certain shares of
Stock, upon the terms and conditions set forth in this Option Agreement (the “Option”).

             1.          Definitions
and Construction.

                           1.1        Definitions.  Whenever used herein, the following terms
shall have their respective meanings set forth below:

                                        (a)         “Date
of Option Grant” means _________________, 200_.

                                        (b)        “Number
of Option Shares” means four thousand eight hundred
(4,800) shares of Stock, as adjusted from time to time pursuant to
Section 9.

                                        (c)         “Exercise
Price” means $_______________ per share of Stock, as adjusted from
time to time pursuant to Section 9.

                                        (d)        “Option
Expiration Date” means the date ten (10) years after the Date of Option
Grant.

                                        (e)         “Board”
means the Board of Directors of the Company. 
If one or more Committees have been appointed by the Board to administer
the Plan, “Board” shall also mean such Committee(s).

                                        (f)         “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

                                        (g)        “Committee”
means a committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board.  Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted in the
Plan, including, without limitation, the power to amend or terminate the Plan
at any time, subject to the terms of the Plan and any applicable limitations imposed
by law.

                                        (h)        “Company”
means Zoran Corporation, a Delaware corporation, or any successor corporation
thereto.

                                        (i)          “Consultant”
means any person, including an advisor, engaged by a Participating Company to
render services other than as an Employee or a Director.

                                        (j)          “Director”
means a member of the Board or of the board of directors of any other
Participating Company.

                                        (k)         “Disability”
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s
position with the Participating Company Group because of the sickness or injury
of the Optionee.

                                        (l)          “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company;
provided, however, that neither service as a Director nor payment of a
director’s fee shall be sufficient to constitute employment for purposes of the
Plan.

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

                                        (n)        “Fair
Market Value” means, as of any date, if there is then a public
market for the Stock, the closing price of the Stock (or the mean of the
closing bid and asked prices of the Stock if the Stock is so reported instead)
as reported on the National Association of Securities Dealers Automated
Quotation (“NASDAQ”) System, the
NASDAQ National Market System or such other national or regional securities
exchange or market system constituting the primary market for the Stock.  If the relevant date does not fall on a day
on which the Stock is trading on NASDAQ, the NASDAQ National Market System or
other national or regional securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which
the Stock was so traded prior to the relevant date.  If there is then no public market for the Stock, the Fair Market
Value on any relevant date shall be as determined by the Board without regard
to any restriction other than a restriction which, by its terms, will never
lapse.

                                        (o)        “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

                                        (p)        “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation.

                                        (q)        “Participating
Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.

                                        (r)         “Plan”
means the Zoran Corporation 1995 Outside Directors Stock Option Plan.

                                        (s)         “Retirement”
means a termination of the Optionee’s Service as a result of either of the
following, provided that the Optionee has served continuously on the Board for
at least 2 years: (i) the Optionee’s resignation from the Board or (ii) the
expiration of the Optionee’s term as a Director of the Company after the
Optionee has declined to stand for reelection.

                                        (t)         “Rule
16b-3” means Rule 16b–3 as promulgated under the Exchange
Act, as amended from time to time, or any successor rule or regulation.

                                        (u)        “Securities
Act” means the Securities Act of 1933, as amended.

                                        (v)        “Service”
means the Optionee’s service with the Participating Company Group, whether in
the capacity of an Employee, a Director or a Consultant.  The Optionee’s Service shall not be deemed
to have terminated merely because of a change in the capacity in which the
Optionee renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided
that there is no interruption or termination of the Optionee’s Service.  The Optionee’s Service shall be deemed to
have terminated either upon an actual termination of Service or upon the
corporation for which the Optionee performs Service ceasing to be a
Participating Company.

                                        (w)        “Stock”
means the common stock, par value $0.001, of the Company, as adjusted from time
to time in accordance with Section 9.

                                        (x)         “Subsidiary
Corporation” means any present or future “subsidiary corporation” of
the Company, as defined in Section 424(f) of the Code.

                           1.2        Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this Option
Agreement.  Except when otherwise
indicated by the context, the singular shall include the plural, the plural
shall include the singular, and the term “or” shall include the conjunctive as
well as the disjunctive.

             2.          Tax
Status of the Option. 
This Option is intended to be a nonstatutory stock option and shall not
be treated as an incentive stock option within the meaning of
Section 422(b) of the Code.

             3.          Administration.  All questions of interpretation concerning
this Option Agreement shall be determined by the Board, including any duly
appointed Committee of the Board.  All
determinations by the Board shall be final and binding upon all persons having
an interest in the Option.  Any officer
of a Participating Company shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

             4.          Exercise
of the Option.

                           4.1        Right to Exercise.

                                        (a)         Except as otherwise provided herein,
the Option shall first become exercisable on the date occurring one (1) year
after the Date of Option Grant (the “Full
Vesting Date”), provided that the Optionee’s Service is continuous
from the Date of Option Grant to the Full Vesting Date.  The Option shall be exercisable on and after
the Full Vesting Date and prior to the termination of the Option (as provided
in Section 6) in an amount equal to the Number of Option Shares less the
number of shares previously acquired upon exercise of the Option.  In no event shall the Option be exercisable
for more shares than the Number of Option Shares.

                                        (b)        Notwithstanding the foregoing, in the
event that the adoption of the Plan or any amendment of the Plan is subject to
the approval of the Company’s stockholders in order for the Plan or the grant
of the Option to comply with the requirements of Rule 16b-3, the Option
shall not be exercisable prior to such stockholder approval.

                           4.2        Method of Exercise.  Exercise of the Option shall be by written notice to the Company
which must state the election to exercise the Option, the number of whole
shares of Stock for which the Option is being exercised and such other
representations and agreements as to the Optionee’s investment intent with respect
to such shares as may be required pursuant to the provisions of this Option
Agreement.  The written notice must be
signed by the Optionee and must be delivered in person, by certified or
registered mail, return receipt requested, by confirmed facsimile transmission,
or by such other means as the Company may permit, to the Chief Financial
Officer of the Company, or other authorized representative of the Participating
Company Group, prior to the termination of the Option as set forth in Section 6,
accompanied by full payment of the aggregate Exercise Price for the number of
shares of Stock being purchased.  The
Option shall be deemed to be exercised upon receipt by the Company of such
written notice and the aggregate Exercise Price.

                           4.3        Payment of Exercise Price.

                                        (a)         Forms
of Consideration Authorized. 
Except as otherwise provided below, payment of the aggregate Exercise
Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash, by check, or cash equivalent, (ii) by
tender to the Company of whole shares of Stock owned by the Optionee having a
Fair Market Value not less than the aggregate Exercise Price, (iii) by means of
a Cashless Exercise, as defined in Section 4.3(c), or (iv) by any combination
of the foregoing.

                                        (b)        Tender
of Stock.  Notwithstanding
the foregoing, the Option may not be exercised by tender to the Company of
shares of Stock to the extent such tender of Stock would constitute a violation
of the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.  The
Option may not be exercised by tender to the Company of shares of Stock unless
such shares either have been owned by the Optionee for more than six (6) months
or were not acquired, directly or indirectly, from the Company.

                                        (c)         Cashless
Exercise.  A “Cashless Exercise” means the assignment in
a form acceptable to the Company of the proceeds of a sale or loan with respect
to some or all of the shares of Stock acquired upon the exercise of the Option
pursuant to a program or procedure approved by the Company (including, without
limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System).  The
Company reserves, at any and all times, the right, in the Company’s sole and
absolute discretion, to decline to approve or terminate any such program or
procedure.

                           4.4        Tax Withholding.  At the time the Option is exercised, in whole or in part, or at any
time thereafter as requested by the Company, the Optionee agrees to make
adequate provision for any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Participating Company Group, if
any, which arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the
Option, (ii) the transfer, in whole or in part, of any shares acquired
upon exercise of the Option, or (iii) the lapsing of any restriction with
respect to any shares acquired upon exercise of the Option.  The Optionee is cautioned that the Option is
not exercisable unless the tax withholding obligations of the Participating
Company Group are satisfied. 
Accordingly, the Optionee may not be able to exercise the Option when
desired even though the Option is vested, and the Company shall have no
obligation to issue a certificate for such shares.

                           4.5        Certificate Registration.  Except in the event the Exercise Price is
paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, the heirs of the Optionee.

                           4.6        Restrictions on Grant of the Option and Issuance of Shares.  The grant of the Option and the issuance of
shares of Stock upon exercise of the Option shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities.  The Option may not be
exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed. 
In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise
of the Option be in effect with respect to the shares issuable upon exercise of
the Option or (ii) in the opinion of legal counsel to the Company, the
shares issuable upon exercise of the Option may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the
Securities Act.  THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED.  ACCORDINGLY, THE
OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE
OPTION IS VESTED.  The inability of the
Company to obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance and sale of any shares subject to the Option 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.  As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto
as may be requested by the Company.

                           4.7        Fractional Shares.  The Company shall not be required to issue fractional shares upon
the exercise of the Option.

             5.          Nontransferability
of the Option.  The
Option may be exercised during the lifetime of the Optionee only by the
Optionee or the Optionee’s guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution.  Following the death
of the Optionee, the Option, to the extent provided in Section 7, may be
exercised by the Optionee’s legal representative or by any person empowered to
do so under the deceased Optionee’s will or under the then applicable laws of
descent and distribution.

             6.          Termination
of the Option.  The
Option shall terminate and may no longer be exercised on the first to occur of
(a) the Option Expiration Date, (b) the last date for exercising the
Option following termination of the Optionee’s Service as described in
Section 7, or (c) a Transfer of Control to the extent provided in
Section 8.

             7.          Effect
of Termination of Service.

                           7.1        Option Exercisability.

                                        (a)         Disability.  If the Optionee’s Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee’s Service terminated, may be exercised by the Optionee (or
the Optionee’s guardian or legal representative) at any time prior to the
expiration of one (1) year after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date;
provided, however, that if the Optionee has served continuously on the Board
for at least 2 years prior to such termination of Service, the Option, to the
extent unexercised and exercisable on the date on which the Optionee's Service
terminated, may be exercised by the Optionee (or the Optionee’s guardian or
legal representative) at any time prior to the Option Expiration Date.

                                        (b)        Death.  If the Optionee’s Service with the
Participating Company Group is terminated because of the death of the Optionee,
the Option, to the extent unexercised and exercisable on the date on which the
Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s legal representative or other person who acquired the right to
exercise the Option by reason of the Optionee’s death) at any time prior to the
expiration of one (1) year after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date;
provided, however, that if the Optionee has served continuously on the Board
for at least 2 years prior to such termination of Service, the Option, to the
extent unexercised and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the Optionee’s legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee’s death) at any time prior to the Option Expiration
Date.  The Optionee’s Service shall be
deemed to have terminated on account of death if the Optionee dies within three
(3) months after the Optionee’s termination of Service.

                                        (c)         Retirement.  If the Optionee’s Service with the
Participating Company Group is terminated because of the Retirement of the
Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee’s Service terminated, may be exercised at any time prior to
the Option Expiration Date.

                                        (d)        Other
Termination of Service.  If
the Optionee’s Service with the Participating Company Group terminates for any
reason, except Disability, death or Retirement, the Option, to the extent
unexercised and exercisable by the Optionee on the date on which the Optionee’s
Service terminated, may be exercised by the Optionee within three (3) months
after the date on which the Optionee’s Service terminated, but in any event no
later than the Option Expiration Date.

                           7.2        Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, if the
exercise of the Option within the applicable time periods set forth in
Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

                           7.3        Extension if Optionee Subject to Section 16(b).  Notwithstanding the foregoing, if a sale,
within the applicable time periods set forth in Section 7.1, of shares
acquired upon the exercise of the Option would subject the Optionee to suit
under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.

             8.          Ownership
Change and Transfer of Control.

                           8.1        Definitions.

                                        (a)         An “Ownership
Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company:

                                                     (i)          the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the
Company;

                                                     (ii)         a merger or consolidation in which the
Company is a party;

                                                     (iii)        the sale, exchange, or transfer of all
or substantially all of the assets of the Company; or

                                                     (iv)       a liquidation or dissolution of the
Company.

                                        (b)        A “Transfer
of Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporation(s)”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one
or more subsidiary corporations.  The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

                           8.2        Effect of Transfer of Control on Option.  In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the “Acquiring
Corporation”), may either assume the Company’s rights and
obligations under the Option or substitute for the Option a substantially
equivalent option for the Acquiring Corporation’s stock.  In the event the Acquiring Corporation
elects not to assume the Company’s rights and obligations under the Option or
substitute for the Option in connection with the Transfer of Control, any
unexercised portion of the Option shall be immediately exercisable and vested
in full as of the date ten (10) days prior to the date of the Transfer of
Control.  Any exercise of the Option
that was permissible solely by reason of this Section 8.2 shall be
conditioned upon the consummation of the Transfer of Control.  The Option shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control to the extent
that the Option is neither assumed or substituted for by the Acquiring
Corporation in connection with the Transfer of Control nor exercised as of the
date of the Transfer of Control. 
Notwithstanding the foregoing, shares acquired upon exercise of the
Option prior to the Transfer of Control and any consideration received pursuant
to the Transfer of Control with respect to such shares shall continue to be
subject to all applicable provisions of this Option Agreement except as
otherwise provided herein.  Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject
to the Option immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the Option shall
not terminate.

             9.          Adjustments
for Changes in Capital Structure.  In the event of any stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification, or similar change in
the capital structure of the Company, appropriate adjustments shall be made in
the number, Exercise Price and class of shares of stock subject to the
Option.  If a majority of the shares
which are of the same class as the shares that are subject to the Option are
exchanged for, converted into, or otherwise become (whether or not pursuant to
an Ownership Change Event) shares of another corporation (the “New Shares”), the Board may unilaterally
amend the Option to provide that the Option is exercisable for New Shares.  In the event of any such amendment, the
Number of Option Shares and the Exercise Price shall be adjusted in a fair and
equitable manner, as determined by the Board, in its sole discretion.  Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 9
shall be rounded down to the nearest whole number, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of
the stock subject to the Option.

             10.        Rights
as a Stockholder. 
The Optionee shall have no rights as a stockholder with respect to any
shares covered by the Option until the date of the issuance of a certificate
for the shares for which the Option has been exercised (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company).  No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date such certificate is issued, except as provided in
Section 9.

             11.        Legends.  The Company may at any time place legends
referencing any applicable federal, state or foreign securities law
restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. 
The Optionee shall, at the request of the Company, promptly present to
the Company any and all certificates representing shares acquired pursuant to
the Option in the possession of the Optionee in order to carry out the
provisions of this Section.

             12.        Binding
Effect.  Subject to the
restrictions on transfer set forth herein, this Option Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

             13.        Termination
or Amendment.  The Board
may terminate or amend the Plan or the Option at any time; provided, however,
that no such termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Optionee unless such
termination or amendment is necessary to comply with any applicable law or
government regulation.  No amendment or
addition to this Option Agreement shall be effective unless in writing.

             14.        Integrated
Agreement.  This Option
Agreement constitutes the entire understanding and agreement of the Optionee
and the Participating Company Group with respect to the subject matter
contained herein, and there are no agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or
provided for herein.  To the extent
contemplated herein, the provisions of this Option Agreement shall survive any
exercise of the Option and shall remain in full force and effect.

             15.        Applicable
Law.  This Option
Agreement shall be governed by 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 the State of California.

	 	ZORAN
  CORPORATION
	 	 
	 	By:

	 	Title:

 

             The
Optionee represents that the Optionee is familiar with the terms and provisions
of this Option Agreement and hereby accepts the Option subject to all of the
terms and provisions thereof.  The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under this Option
Agreement.

	 	   OPTIONEE
	 	 
	 	 
	Date:Prepared by MerrillDirect

Exhibit
10.3

ZORAN
CORPORATION

AMENDED
AND RESTATED

1995
EMPLOYEE STOCK PURCHASE PLAN

(As
Amended Through June 29, 2001)

             1.          Establishment,
Purpose and Term of Plan.

                           1.1        Establishment.  The Zoran Corporation 1995 Employee Stock Purchase Plan was
initially established effective December 14, 1995 (the “Effective Date”), the effective date of the
initial registration by the Company of its Stock under Section 12 of the
Exchange Act (the “Initial Plan”).  The Initial Plan was amended and restated in
its entirety as the Zoran Corporation Amended and Restated 1995 Employee Stock
Purchase Plan (the “Plan”)
effective as of the date of commencement of the first Offering under the Plan
following approval of the Plan by the stockholders of the Company on
June 6, 1996.

                           1.2        Purpose. 
The purpose of the Plan to provide Eligible Employees of the
Participating Company Group with an opportunity to acquire a proprietary
interest in the Company through the purchase of Stock.  The Company intends that the Plan shall
qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments or replacements of such section), and the Plan shall
be so construed.

                           1.3        Term of Plan.  The Plan shall continue in effect until the earlier of its
termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued.

             2.          Definitions
and Construction.

                           2.1        Definitions. 
Any term not expressly defined in the Plan but defined for purposes of
Section 423 of the Code shall have the same definition herein.  Whenever used herein, the following terms
shall have their respective meanings set forth below:

                                        (a)         “Board”
means the Board of Directors of the Company. 
If one or more Committees have been appointed by the Board to administer
the Plan, “Board” also means such Committee(s).

                                        (b)        “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

                                        (c)         “Committee”
means a committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board.  Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted herein,
including, without limitation, the power to amend or terminate the Plan at any
time, subject to the terms of the Plan and any applicable limitations imposed
by law.

                                        (d)        “Company”
means Zoran Corporation, a Delaware corporation, or any successor corporation
thereto.

                                        (e)         “Compensation”
means, with respect to an Offering Period under the Plan, all amounts paid in
cash in the form of base salary during such Offering Period before deduction
for any contributions to any plan maintained by a Participating Company and
described in Section 401(k) or Section 125 of the Code.  Compensation shall not include commissions,
overtime, bonuses, annual awards, other incentive payments, shift premiums,
reimbursements of expenses, allowances, long-term disability, workers’
compensation or any amount deemed received without the actual transfer of cash
or any amounts directly or indirectly paid pursuant to the Plan or any other
stock purchase or stock option plan.

                                        (f)         “Eligible
Employee” means an Employee who meets the requirements set forth in
Section 5 for eligibility to participate in the Plan.

                                        (g)        “Employee”
means any person treated as an employee (including an officer or a Director who
is also treated as an employee) in the records of a Participating Company and
for purposes of Section 423 of the Code; provided, however, that neither
service as a Director nor payment of a director’s fee shall be sufficient to
constitute employment for purposes of the Plan.

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

                                        (i)          “Fair
Market Value” means, as of any date, if there is then a public
market for the Stock, the closing price of a share of Stock (or the mean of the
closing bid and asked prices of a share of Stock if the Stock is so reported
instead) as reported on the National Association of Securities Dealers
Automated Quotation (“NASDAQ”)
System, the NASDAQ National Market System or such other national or regional
securities exchange or market system constituting the primary market for the
Stock.  If the relevant date does not fall
on a day on which the Stock is trading on NASDAQ, the NASDAQ National Market
System or other national or regional securities exchange or market system, the
date on which the Fair Market Value shall be established shall be the last day
on which the Stock was so traded prior to the relevant date, or such other
appropriate day as shall be determined by the Board, in its sole
discretion.  If there is then no public
market for the Stock, the Fair Market Value on any relevant date shall be as
determined by the Board without regard to any restriction other than a
restriction which, by its terms, will never lapse.  Notwithstanding the foregoing, the Fair Market Value per share of
Stock on the Effective Date shall be deemed to be the public offering price set
forth in the final prospectus filed with the Securities and Exchange Commission
in connection with the initial public offering of the Stock.

                                        (j)          “Offering”
means an offering of Stock as provided in Section 6.

                                        (k)         “Offering
Date” means, for any Offering Period, the first day of such Offering
Period.

                                        (l)          “Offering
Period” means a period determined in accordance with
Section 6.1.

                                        (m)        “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

                                        (n)        “Participant”
means an Eligible Employee participating in the Plan.

                                        (o)        “Participating
Company” means the Company or any Parent Corporation or Subsidiary
Corporation which the Board determines should be included in the Plan.  The Board shall have the sole and absolute
discretion to determine from time to time what Parent Corporations or
Subsidiary Corporations shall be Participating Companies.

                                        (p)        “Participating
Company Group” means, at any point in time, the Company and all
other corporations collectively which are then Participating Companies.

                                        (q)        “Purchase
Date” means, for any Purchase Period, the last day of such Purchase
Period.

                                        (r)         “Purchase
Period” means a period determined in accordance with
Section 6.2.

                                        (s)         “Purchase
Price” means the price at which a share of Stock may be purchased
pursuant to the Plan, as determined in accordance with Section 9.

                                        (t)         “Purchase
Right”  means an option
pursuant to the Plan to purchase such shares of Stock as provided in
Section 8 which may or may not be exercised during an Offering
Period.  Such option arises from the
right of a Participant to withdraw such Participant’s accumulated payroll
deductions not previously applied to the purchase of Stock under the Plan (if
any) and terminate participation in the Plan or any Offering therein at any
time during an Offering Period.

                                        (u)        “Stock”
means the common stock, par value $0.001, of the Company, as adjusted from time
to time in accordance with Section 4.2.

                                        (v)        “Subsidiary
Corporation” means any present or future “subsidiary corporation” of
the Company, as defined in Section 424(f) of the Code.

                           2.2        Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the
Plan.  Except when otherwise indicated
by the context, the singular shall include the plural, the plural shall include
the singular, and use of the term “or” shall include the conjunctive as well as
the disjunctive.

             3.          Administration.  The Plan shall be administered by the Board,
including any duly appointed Committee of the Board.  All questions of interpretation of the Plan or of any Purchase
Right shall be determined by the Board and shall be final and binding upon all
persons having an interest in the Plan or such Purchase Right.  Subject to the provisions of the Plan, the
Board shall determine all of the relevant terms and conditions of Purchase
Rights granted pursuant to the Plan; provided, however, that all Participants
granted Purchase Rights pursuant to the Plan shall have the same rights and
privileges within the meaning of Section 423(b)(5) of the Code.  All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.

             4.          Shares
Subject to Plan.

                           4.1        Maximum Number of Shares Issuable.  Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be
issued under the Plan shall be five hundred fifty thousand (550,000) and shall
consist of authorized but unissued or reacquired shares of the Stock, or any
combination thereof.  If an outstanding
Purchase Right for any reason expires or is terminated or canceled, the shares
of Stock allocable to the unexercised portion of such Purchase Right shall
again be available for issuance under the Plan.

                           4.2        Adjustments for Changes in Capital Structure.  In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company, or in the event of any
merger (including a merger effected for the purpose of changing the Company’s
domicile), sale of assets or other reorganization in which the Company is a
party, appropriate adjustments shall be made in the number and class of shares
subject to the Plan, to the Offering Share Limit set forth in Section 8.1 and
to each Purchase Right and in the Purchase Price.

             5.          Eligibility.

                           5.1        Employees Eligible to Participate.  Any Employee of a Participating Company is
eligible to participate in the Plan except the following:

                                        (a)         Employees who are customarily employed
by the Participating Company Group for twenty (20) hours or less per week;

                                        (b)        Employees who are customarily employed
by the Participating Company Group for not more than five (5) months in any
calendar year; and

                                        (c)         Employees who own or hold options to
purchase or who, as a result of participation in the Plan, would own or hold
options to purchase, stock of the Company or of any Parent Corporation or
Subsidiary Corporation possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of such corporation
within the meaning of Section 423(b)(3) of the Code.

                           5.2        Leased Employees Excluded.  Notwithstanding anything herein to the
contrary, any individual performing services for a Participating Company solely
through a leasing agency or employment agency shall not be deemed an “Employee”
of such Participating Company.

             6.          Offerings.

                           6.1        Offering Periods.  Except as otherwise set forth below, the Plan shall be
implemented by sequential Offerings of approximately twenty-four (24) months
duration (an “Offering Period”);
provided, however that the first Offering Period shall commence on the
Effective Date and end on October 31, 1997 (the “Initial Offering Period”).  Subsequent Offerings shall commence on the
first days of May and November of each year and end on the last days of the
second April and October, respectively, occurring thereafter.  Notwithstanding the foregoing, the Board may
establish a different term for one or more Offerings or different commencing or
ending dates for such Offerings; provided, however, that no Offering may exceed
a term of twenty-seven (27) months.  An
Employee who becomes an Eligible Employee after an Offering Period has
commenced shall not be eligible to participate in such Offering but may
participate in any subsequent Offering provided such Employee is still an
Eligible Employee as of the commencement of any such subsequent Offering.  Eligible Employees may not participate in
more than one Offering at a time.  In
the event the first or last day of an Offering Period is not a business day,
the Company shall specify the business day that will be deemed the first or
last day, as the case may be, of the Offering Period.

                           6.2        Purchase Periods.  Each Offering Period shall consist of four (4) consecutive
purchase periods of approximately six (6) months duration (individually, a “Purchase Period”).  The Purchase Period commencing on the
Offering Date of the Initial Offering Period shall end on April 30, 1996.  A Purchase Period commencing on the first
day of May shall end on the last day of the next following October.  A Purchase Period commencing on the first
day of November shall end on the last day of the next following April.  Notwithstanding the foregoing, the Board may
establish a different term for one or more Purchase Periods or different
commencing or ending dates for such Purchase Periods.  In the event the first or last day of a Purchase Period is not a
business day, the Company shall specify the business day that will be deemed
the first or last day, as the case may be, of the Purchase Period.

                           6.3        Governmental Approval; Stockholder Approval.  Notwithstanding any other provision of the
Plan to the contrary, any Purchase Right granted pursuant to the Plan shall be
subject to (a) obtaining all necessary governmental approvals or
qualifications of the sale or issuance of the Purchase Rights or the shares of
Stock and (b) obtaining stockholder approval of the Plan.  Notwithstanding the foregoing, stockholder
approval shall not be necessary in order to grant any Purchase Right granted in
the Plan’s Initial Offering Period; provided, however, that the exercise of any
such Purchase Right shall be subject to obtaining stockholder approval of the
Plan.

             7.          Participation
in the Plan.

                           7.1        Initial Participation.  An Eligible Employee shall become a
Participant on the first Offering Date after satisfying the eligibility
requirements of Section 5 and delivering to the Company’s payroll office
or other office designated by the Company not later than the close of business
for such office on the last business day before such Offering Date (the “Subscription Date”) a subscription
agreement indicating the Employee’s election to participate in the Plan and
authorizing payroll deductions.  An
Eligible Employee who does not deliver a subscription agreement to the
Company’s payroll or other designated office on or before the Subscription Date
shall not participate in the Plan for that Offering Period or for any
subsequent Offering Period unless such Employee subsequently enrolls in the
Plan by filing a subscription agreement with the Company by the Subscription
Date for such subsequent Offering Period. 
The Company may, from time to time, change the Subscription Date as
deemed advisable by the Company in its sole discretion for proper
administration of the Plan.

                           7.2        Continued Participation.  A Participant shall automatically
participate in the Offering Period commencing immediately after the final
Purchase Date of each Offering Period in which the Participant participates
until such time as such Participant (a) ceases to be an Eligible Employee,
(b) withdraws from the Plan pursuant to Section 13.2 or (c) terminates
employment as provided in Section 14. 
If a Participant automatically may participate in a subsequent Offering
Period pursuant to this Section 7.2, then the Participant is not required
to file any additional subscription agreement for such subsequent Offering Period
in order to continue participation in the Plan.   However, a Participant may file a subscription agreement with
respect to a subsequent Offering Period if the Participant desires to change
any of the Participant’s elections contained in the Participant’s then
effective subscription agreement.

             8.          Right
to Purchase Shares.

                           8.1        Purchase Right.  Except as set forth below, during an Offering Period each
Participant in such Offering Period shall have a Purchase Right consisting of
the right to purchase that number of whole shares of Stock arrived at by
dividing Fifty Thousand Dollars ($50,000) by the Fair Market Value of a share
of Stock on the Offering Date of such Offering Period; provided, however, that
such number shall not exceed 5,000 shares (the “Offering Share Limit”). 
Shares of Stock may only be purchased through a Participant’s payroll
deductions pursuant to Section 10.

                           8.2        Pro Rata Adjustment of Purchase Right.  Notwithstanding the foregoing, if the Board
shall establish an Offering Period of less than twenty-three and one-half (231⁄2)
months in duration or more than twenty-four and one-half (241⁄2) months in
duration, (a) the dollar amount in Section 8.1 shall be determined by
multiplying $2,083.33 by the number of months in the Offering Period and
rounding to the nearest whole dollar, and (b) the Offering Share Limit
shall be determined by multiplying 208.33 shares by the number of months in the
Offering Period and rounding to the nearest whole share.  For purposes of the preceding sentence,
fractional months shall be rounded to the nearest whole month.

             9.          Purchase
Price.  The Purchase
Price at which each share of Stock may be acquired in a given Offering Period
pursuant to the exercise of all or any portion of a Purchase Right granted
under the Plan shall be set by the Board; provided, however, that the Purchase
Price shall not be less than eighty-five percent (85%) of the lesser of
(a) the Fair Market Value of a share of Stock on the Offering Date of the
Offering Period, or (b) the Fair Market Value of a share of Stock on the
Purchase Date of the Offering Period. 
Unless otherwise provided by the Board prior to the commencement of an
Offering Period, the Purchase Price for that Offering Period shall be eighty-five
percent (85%) of the lesser of (a) the Fair Market Value of a share of
Stock on the Offering Date of the Offering Period, or (b) the Fair Market
Value of a share of Stock on the Purchase Date of the Offering Period.

             10.        Accumulation
of Purchase Price through Payroll Deduction.  Shares of Stock which are acquired pursuant
to the exercise of all or any portion of a Purchase Right for an Offering
Period may be paid for only by means of payroll deductions from the
Participant’s Compensation accumulated during the Offering Period.  Except as set forth below, the amount of
Compensation to be deducted from a Participant’s Compensation during each pay
period shall be determined by the Participant’s subscription agreement.

                           10.1      Commencement of Payroll Deductions.  Payroll deductions shall commence on the
first payday following the Offering Date and shall continue to the end of the
Offering Period unless sooner altered or terminated as provided in the Plan.

                           10.2      Limitations on Payroll Deductions.  The amount of payroll deductions with
respect to the Plan for any Participant during any pay period shall be in one
percent (1%) increments not to exceed ten percent (10%) of the Participant’s
Compensation for such pay period. 
Notwithstanding the foregoing, the Board may change the limits on
payroll deductions effective as of a future Offering Date, as determined by the
Board.  Amounts deducted from
Compensation shall be reduced by any amounts contributed by the Participant and
applied to the purchase of Company stock pursuant to any other employee stock purchase
plan qualifying under Section 423 of the Code.

                           10.3      Election to Change or Stop Payroll Deductions.  During an Offering Period, a Participant may
elect to increase or decrease the amount deducted or stop deductions from his
or her Compensation by filing an amended subscription agreement with the
Company on or before the “Change Notice Date.” 
The “Change Notice Date”
shall initially be the seventh (7th) day prior to the end of the first pay
period for which such election is to be effective; however, the Company may
change such Change Notice Date from time to time.  A Participant who elects to decrease the rate of his or her
payroll deductions to zero percent (0%) shall nevertheless remain a Participant
in the current Offering Period unless such Participant subsequently withdraws
from the Offering or the Plan as provided in Sections 13.1 and 13.2,
respectively, or is automatically withdrawn from the Offering as provided in
Section 13.4.

                           10.4      Participant Accounts.  Individual Plan accounts shall be maintained
for each Participant.  All payroll
deductions from a Participant’s Compensation shall be credited to such account
and shall be deposited with the general funds of the Company.  All payroll deductions received or held by
the Company may be used by the Company for any corporate purpose.

                           10.5      No Interest Paid.  Interest shall not be paid on sums deducted from a Participant’s
Compensation pursuant to the Plan.

                           10.6      Company Established Procedures.  The Company may, from time to time,
establish or change (a) a minimum required payroll deduction amount for
participation in an Offering, (a) limitations on the frequency or number
of changes in the rate of payroll deduction during an Offering, (c) an
exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, (d) payroll deduction in excess of or less than the amount
designated by a Participant in order to adjust for delays or mistakes in the
Company’s processing of subscription agreements, (e) the date(s) and
manner by which the Fair Market Value of a share of Stock is determined for
purposes of administration of the Plan, or (vi) such other limitations or
procedures as deemed advisable by the Company in the Company’s sole discretion
which are consistent with the Plan and in accordance with the requirements of
Section 423 of the Code.

             11.        Purchase
of Shares.

                           11.1      Exercise of Purchase Right.  On each Purchase Date of an Offering Period,
each Participant who has not withdrawn from the Offering or whose participation
in the Offering has not terminated on or before such Purchase Date shall
automatically acquire pursuant to the exercise of the Participant’s Purchase
Right the number of whole shares of Stock arrived at by dividing the total
amount of the Participant’s accumulated payroll deductions for the Purchase
Period by the Purchase Price; provided, however, in no event shall the number
of shares purchased by the Participant during an Offering Period exceed the
number of shares subject to the Participant’s Purchase Right.  No shares of Stock shall be purchased on a
Purchase Date on behalf of a Participant whose participation in the Offering or
the Plan has terminated on or before such Purchase Date.

                           11.2      Return of Cash Balance.  Any cash balance remaining in the
Participant’s Plan account shall be refunded to the Participant as soon as
practicable after the Purchase Date.  In
the event the cash to be returned to a Participant pursuant to the preceding
sentence is an amount less than the amount necessary to purchase a whole share
of Stock, the Company may establish procedures whereby such cash is maintained
in the Participant’s Plan account and applied toward the purchase of shares of
Stock in the subsequent Purchase Period or Offering Period.

                           11.3      Tax Withholding.  At the time a Participant’s Purchase Right is exercised, in whole
or in part, or at the time a Participant disposes of some or all of the shares
of Stock he or she acquires under the Plan, the Participant shall make adequate
provision for the foreign, federal, state and local tax withholding obligations
of the Participating Company Group, if any, which arise upon exercise of the
Purchase Right or upon such disposition of shares, respectively.  The Participating Company Group may, but
shall not be obligated to, withhold from the Participant’s compensation the
amount necessary to meet such withholding obligations.

                           11.4      Expiration of Purchase Right.  Any portion of a Participant’s Purchase
Right remaining unexercised after the end of the Offering Period to which such
Purchase Right relates shall expire immediately upon the end of such Offering
Period.

             12.        Limitations
on Purchase of Shares; Rights as a Stockholder.

                           12.1      Fair Market Value Limitation.  Notwithstanding any other provision of the
Plan, no Participant shall be entitled to purchase shares of Stock under the
Plan (or any other employee stock purchase plan which is intended to meet the
requirements of Section 423 of the Code sponsored by the Company or a
Parent Corporation or Subsidiary Corporation) at a rate which exceeds $25,000
in Fair Market Value, which Fair Market Value is determined for shares
purchased during a given Offering Period as of the Offering Date for such
Offering Period (or such other limit as may be imposed by the Code), for each
calendar year in which the Participant participates in the Plan (or any other
employee stock purchase plan described in this sentence).

                           12.2      Pro Rata Allocation.  In the event the number of shares of Stock
which might be purchased by all Participants in the Plan exceeds the number of
shares of Stock available in the Plan, the Company shall make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Company shall determine to be equitable.

                           12.3      Rights as a Stockholder and Employee.  A Participant shall have no rights as a
stockholder by virtue of the Participant’s participation in the Plan until the
date of the issuance of a stock certificate for the shares of Stock being
purchased pursuant to the exercise of the Participant’s Purchase Right.  No adjustment shall be made for cash
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate is issued. 
Nothing herein shall confer upon a Participant any right to continue in
the employ of the Participating Company Group or interfere in any way with any
right of the Participating Company Group to terminate the Participant’s
employment at any time.

             13.        Withdrawal.

                           13.1      Withdrawal From an Offering.  A Participant may withdraw from an Offering
by signing and delivering to the Company’s payroll or other designated office a
written notice of withdrawal on a form provided by the Company for such
purpose.  Such withdrawal may be elected
at any time prior to the end of an Offering Period; provided, however, if a
Participant withdraws after a Purchase Date, the withdrawal shall not affect
shares of Stock acquired by the Participant on such Purchase Date.  Unless otherwise indicated, withdrawal from
an Offering shall not result in a withdrawal from the Plan or any succeeding
Offering therein.  By withdrawing from
an Offering effective as of the close of a given Purchase Date, a Participant
may have shares of Stock purchased on such Purchase Date and immediately
commence participation in the new Offering commencing immediately after such
Purchase Date.  A Participant is
prohibited from again participating in an Offering at any time following
withdrawal from such Offering.  The
Company may impose, from time to time, a requirement that the notice of
withdrawal be on file with the Company’s payroll office or other designated
office for a reasonable period prior to the effectiveness of the Participant’s
withdrawal from an Offering.

                           13.2      Withdrawal from the Plan.  A Participant may withdraw from the Plan by
signing and delivering to the Company’s payroll office or other designated
office a written notice of withdrawal on a form provided by the Company for
such purpose.  Withdrawals made after a
Purchase Date shall not affect shares of Stock acquired by the Participant on
such Purchase Date.  In the event a
Participant voluntarily elects to withdraw from the Plan, the Participant may
not resume participation in the Plan during the same Offering Period, but may
participate in any subsequent Offering under the Plan by again satisfying the
requirements of Sections 5 and 7.1. 
The Company may impose, from time to time, a requirement that the notice
of withdrawal be on file with the Company’s payroll office or other designated
office for a reasonable period prior to the effectiveness of the Participant’s
withdrawal from the Plan.

                           13.3      Return of Payroll Deductions.  Upon a Participant’s withdrawal from an
Offering or the Plan pursuant to Sections 13.1 or 13.2, respectively, the
Participant’s accumulated payroll deductions which have not been applied toward
the purchase of shares of Stock shall be returned as soon as practicable after
the withdrawal, without the payment of any interest, to the Participant, and
the Participant’s interest in the Offering or the Plan, as applicable, shall
terminate.  Such accumulated payroll
deductions may not be applied to any other Offering under the Plan.

                           13.4      Automatic Withdrawal From an Offering.  If the Fair Market Value of a share of Stock
on a Purchase Date of an Offering (other than the final Purchase Date of such
Offering) is less than the Fair Market Value of a share of Stock on the
Offering Date for such Offering, then every Participant shall automatically
(a) be withdrawn from such Offering at the close of such Purchase Date and
after the acquisition of shares of Stock for such Purchase Period and
(b) be enrolled in the Offering commencing on the first business day
subsequent to such Purchase Period.  A
Participant may elect not to be automatically withdrawn from an Offering Period
pursuant to this Section 13.4 by delivering to the Company not later than
the close of business on the last day before the Purchase Date a written notice
indicating such election.

                           13.5      Waiver of Withdrawal Right.  The Company may, from time to time,
establish a procedure pursuant to which a Participant may elect, at least six
(6) months prior to a Purchase Date, to have all payroll deductions accumulated
in his or her Plan account as of such Purchase Date applied to purchase shares
of Stock under the Plan, and (a) to waive his or her right to withdraw
from the Offering or the Plan and (b) to waive his or her right to
increase, decrease, or cease payroll deductions under the Plan from his or her
Compensation during the Purchase Period ending on such Purchase Date.  Such election shall be made in writing on a
form provided by the Company for such purpose and must be delivered to the
Company not later than the close of business on the day preceding the date
which is six (6) months before the Purchase Date for which such election is to
first be effective.

             14.        Termination
of Employment or Eligibility. 
Termination of a Participant’s employment with the Company for any
reason, including retirement, disability or death or the failure of a Participant
to remain an Eligible Employee, shall terminate the Participant’s participation
in the Plan immediately.  In such event,
the payroll deductions credited to the Participant’s Plan account since the
last Purchase Date shall, as soon as practicable, be returned to the
Participant or, in the case of the Participant’s death, to the Participant’s
legal representative, and all of the Participant’s rights under the Plan shall
terminate.  Interest shall not be paid on
sums returned to a Participant pursuant to this Section 14.  A Participant whose participation has been
so terminated may again become eligible to participate in the Plan by again
satisfying the requirements of Sections 5 and 7.1.

             15.        Transfer
of Control.

                           15.1      Definitions.

                                        (a)         An “Ownership
Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: 
(i) the direct or indirect sale or exchange in a single or series
of related transactions by the stockholders of the Company of more than fifty percent
(50%) of the voting stock of the Company; (ii) a merger or consolidation
in which the Company a party; (iii) the sale, exchange, or transfer of all
or substantially all of the assets of the Company; or (iv) a liquidation
or dissolution of the Company.

                                        (b)        A “Transfer
of Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred
(the “Transferee Corporation(s)”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the
Transferee Corporation(s), as the case may be, either directly or through one
or more subsidiary corporations.  The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

                           15.2      Effect of Transfer of Control on Purchase Rights.  In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the “Acquiring
Corporation”), may assume the Company’s rights and obligations under
the Plan or substitute substantially equivalent Purchase Rights for stock of
the Acquiring Corporation.  If the
Acquiring Corporation elects not to assume or substitute for the outstanding
Purchase Rights, the Board may, in its sole discretion and notwithstanding any
other provision herein to the contrary, adjust the Purchase Date of the then
current Purchase Period to a date on or before the date of the Transfer of
Control, but shall not adjust the number of shares of Stock subject to any
Purchase Right.  All Purchase Rights
which are neither assumed or substituted for by the Acquiring Corporation in
connection with the Transfer of Control nor exercised as of the date of the
Transfer of Control shall terminate and cease to be outstanding effective as of
the date of the Transfer of Control. 
Notwithstanding the foregoing, if the corporation the stock of which is
subject to the outstanding Purchase Rights immediately prior to an Ownership
Change Event described in Section 15.1(a)(i) constituting a Transfer of Control
is the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power
of its voting stock is held by another corporation or by other corporations
that are members of an affiliated group within the meaning of Section 1504(a)
of the Code without regard to the provisions of Section 1504(b) of the Code,
the outstanding Purchase Rights shall not terminate unless the Board otherwise
provides in its sole discretion.

             16.        Nontransferability
of Purchase Rights.  A
Purchase Right may not be transferred in any manner otherwise than by will or
the laws of descent and distribution and shall be exercisable during the lifetime
of the Participant only by the Participant. 
The Company, in its absolute discretion, may impose such restrictions on
the transferability of the shares purchasable upon the exercise of a Purchase
Right as it deems appropriate and any such restriction shall be set forth in
the respective subscription agreement and may be referred to on the
certificates evidencing such shares.

             17.        Reports.  Each Participant who exercised all or part
of his or her Purchase Right for a Purchase Period shall receive, as soon as
practicable after the Purchase Date of such Purchase Period, a report of such
Participant’s Plan account setting forth the total payroll deductions
accumulated, the number of shares of Stock purchased, the Purchase Price for
such shares, the date of purchase and the remaining cash balance to be refunded
or retained in the Participant’s Plan account pursuant to Section 11.2, if
any.  Each Participant shall be provided
information concerning the Company equivalent to that information generally
made available to the Company’s common stockholders.

             18.        Restriction
on Issuance of Shares. 
The issuance of shares under the Plan shall be subject to compliance
with all applicable requirements of foreign, federal or state law with respect
to such securities.  A Purchase Right
may not be exercised if the issuance of shares upon such exercise would
constitute a violation of any applicable foreign, federal or state securities
laws or other law or regulations.  In
addition, no Purchase Right may be exercised unless (a) a registration
statement under the Securities Act of 1933, as amended, shall at the time of
exercise of the Purchase Right be in effect with respect to the shares issuable
upon exercise of the Purchase Right, or (b) in the opinion of legal counsel
to the Company, the shares issuable upon exercise of the Purchase Right may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of said Act. 
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares under the Plan 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.  As a condition to the
exercise of a Purchase Right, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation, and to make any
representation or warranty with respect thereto as may be requested by the
Company.

             19.        Legends.  The Company may at any time place legends or
other identifying symbols referencing any applicable foreign, federal or state
securities law restrictions or any provision convenient in the administration
of the Plan on some or all of the certificates representing shares of Stock
issued under the Plan.  The Participant
shall, at the request of the Company, promptly present to the Company any and
all certificates representing shares acquired pursuant to a Purchase Right in
the possession of the Participant in order to carry out the provisions of this
Section.  Unless otherwise specified by
the Company, legends placed on such certificates may include but shall not be
limited to the following:

             “THE SHARES EVIDENCED BY THIS
CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE
PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY
THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED
HOLDER HEREOF MADE ON OR BEFORE               ,
19  .  THE REGISTERED
HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED
HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE.”

             20.        Notification
of Sale of Shares.  The
Company may require the Participant to give the Company prompt notice of any
disposition of shares acquired by exercise of a Purchase Right within two years
from the date of granting such Purchase Right or one year from the date of
exercise of such Purchase Right.  The
Company may require that until such time as a Participant disposes of shares
acquired upon exercise of a Purchase Right, the Participant shall hold all such
shares in the Participant’s name (and not in the name of any nominee) until the
lapse of the time periods with respect to such Purchase Right referred to in
the preceding sentence.  The Company may
direct that the certificates evidencing shares acquired by exercise of a
Purchase Right refer to such requirement to give prompt notice of disposition.

             21.        Amendment
or Termination of the Plan. 
The Board may at any time amend or terminate the Plan, except that
(a) such termination shall not affect Purchase Rights previously granted
under the Plan, except as permitted under the Plan, and (b) no amendment
may adversely affect a Purchase Right previously granted under the Plan (except
to the extent permitted by the Plan or as may be necessary to qualify the Plan
as an employee stock purchase plan pursuant to Section 423 of the Code or
to obtain qualification or registration of the shares of Stock under applicable
foreign, federal or state securities laws). 
In addition, an amendment to the Plan must be approved by the
stockholders of the Company within twelve (12) months of the adoption of such
amendment if such amendment would authorize the sale of more shares than are 

authorized for issuance under the Plan or would change the definition of the
corporations that may be designated by the Board as Participating Companies.

             22.        Continuation
of Initial Plan as to Outstanding Purchase Rights.  Any other provision of the Plan to the
contrary notwithstanding, the terms of the Initial Plan shall remain in effect
and apply to all Purchase Rights granted pursuant to the Initial Plan.

             IN WITNESS WHEREOF, the undersigned Secretary of the
Company certifies that the foregoing sets forth the Zoran Corporation Amended
and Restated 1995 Employee Stock Purchase Plan as duly adopted by the Board of
Directors of the Company on January 24, 1996 and amended through April 17,
2001.

 

                                                                                                                                                                

                                                                                             Secretary

PLAN
HISTORY

	October 13, 1995	Board adopts Initial Plan, with an initial
  reserve of 150,000 shares (post the 1:3 reverse stock split on 12/14/95).
	December 14, 1995	Effective date of stockholder action by
  consent without meeting, approving Initial Plan, with an initial reserve of
  150,000 shares (post the 1:3 reverse stock split on 12/14/95).
	December 14, 1995	The Plan initially was effective December 14,
  1995, the effective date of the initial registration by the Company of its
  Stock under Section 12 of the Exchange Act.
	January 24, 1996	Subject to stockholder approval, Board amends
  and restates the Plan to increase the number of shares subject to a purchase
  right and to eliminate a limit on the number of shares purchasable in a
  calendar year less than the calendar year limit imposed by Section 423
  of the Code.  The amended and restated
  Plan will be effective as of the date of commencement of the first offering
  under the Plan following approval by the stockholders.
	May 23, 1996	Stockholders approve Plan, as amended January 24,
  1996.
	April 23, 1997	Board amends Plan to increase share reserve by
  150,000 shares to 300,000 shares and to permit increases in the rate of
  payroll deductions.
	June 6, 1997	Stockholders approve amendment increasing
  share reserve to 300,000 shares.
	__________, 1999	Board amends Plan to increase share reserve by
  100,000 shares to 400,000 shares.
	July 16, 1999	Stockholders approve amendment increasing
  share reserve to 400,000 shares.
	June 18, 2000	Board amends Plan to increase share reserve by
  100,000 shares to 500,000 shares.
	July ___, 2000	Stockholders approve amendment increasing
  share reserve to 500,000 shares.
	April 17, 2001	Board amends Plan to increase share reserve by
  50,000 shares to 550,000 shares.
	June 29, 2001	Stockholders approve amendment increasing
  share reserve to 550,000 shares.

ZORAN
CORPORATION

1995 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION
AGREEMENT

o         Original Application for participation
commencing with the Offering Period beginning _________________________, 200__.

o         Change in Percentage of Payroll
Deductions effective with the pay period ending _________________________,
200__.

             I hereby elect to participate in
the 1995 Employee Stock Purchase Plan (the “Plan”) of Zoran Corporation
(the “Company”)
and subscribe to purchase shares of the Company’s common stock as determined in
accordance with the terms of the Plan.

             I hereby authorize payroll
deductions in the amount of                percent (in 1%
increments not to exceed 10%) of my “Compensation” (as defined in the Plan) from
each paycheck throughout the “Offering Period” (as defined in the Plan)
in accordance with the terms of the Plan. 
I understand that these payroll deductions will be accumulated for the
purchase of shares of common stock of the Company at the applicable purchase
price determined in accordance with the Plan. 
I further understand that, except as otherwise set forth in the Plan,
shares will be purchased for me automatically on the last day of each Purchase
Period unless I withdraw from the Plan or from the Offering by giving written
notice to the Company or unless I terminate employment.

             I further understand that I will
automatically participate in each subsequent Offering which commences
immediately after the last day of an Offering in which I am participating under
the Plan until such time as I file with the Company a notice of withdrawal from
the Plan on such form as may be established from time to time by the Company or
I terminate employment.

             Shares purchased for me under the
Plan should be issued in the name set forth below.  (I understand that shares may be issued either in my name alone
or together with my spouse as community property or in joint tenancy.)

	NAME:
	

	ADDRESS:
	

	 
	

	MY SOCIAL SECURITY NUMBER:
	

 

             I hereby authorize withholding from
my compensation in order to satisfy the foreign, federal, state and local tax
withholding obligations, if any, which may arise upon my purchase of shares
under the Plan and/or upon my disposition of shares I acquired under the Plan.  I hereby agree that until I dispose of the
shares, unless otherwise permitted by the Company, I will hold all shares I
acquire under the Plan in the name entered above (and not in the name of any
nominee) for at least two (2) years from the first day of the Offering Period
in which, and at least one (1) year from the Purchase Date on which, I acquired
such shares.  I further agree that I
will promptly notify the Chief Financial Officer of the Company in writing of
any transfer of such shares prior to the end of the periods referred to in the
preceding sentence.

             I am familiar with the provisions
of the Plan and hereby agree to participate in the Plan subject to all of the
provisions thereof.  I understand that
the Board of Directors of the Company reserves the right to amend the Plan and
my right to purchase stock under the Plan as may be necessary to qualify the
Plan as an employee stock purchase plan as defined in Section 423 of the
Internal Revenue Code of 1986, as amended, or to obtain qualification or
registration of the Company’s common stock to be issued out of the Plan under
applicable foreign, federal and state securities laws.  I understand that the effectiveness of this
subscription agreement is dependent upon my eligibility to participate in the
Plan.

	Date: ________________________	Signature:
  ______________________________________________
	 	 
	 	Name Printed
  ___________________________________________

ZORAN
CORPORATION

1995 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

             I hereby elect to withdraw from the
offering of the common stock of Zoran Corporation (the “Company”) under the Company’s
1995 Employee Stock Purchase Plan (the “Plan”) which began on
_________________________, 200__ and in which I am currently participating (the
“Current
Offering”).

             Make one election under section A and one election
under section B:

A.         Current Offering.  As to my participation in the current
purchase period (the “Current Purchase Period”) of the Current Offering under
the Plan, I elect as follows (check one):

o         1.          I
elect to terminate my participation in the Current Purchase Period immediately.

             I hereby request that all payroll
deductions credited to my account under the Plan (if any) not previously used
to purchase shares under the Plan shall not be used to purchase shares
on the last day of the Current Purchase Period.  Instead, I request that all such amounts be paid to me as soon as
practicable.  I understand that this
election immediately terminates my interest in the Current Offering.

o         2.          I
elect to terminate my participation in the Current Offering following my
purchase of shares on the last day of the Current Purchase Period.

             I hereby request that all payroll
deductions credited to my account under the Plan (if any) not previously used
to purchase shares under the Plan shall be used to purchase shares on the last
day of the Current Purchase Period.  I
understand that this election will terminate my interest in the Current
Offering immediately following such purchase. 
I request that any cash balance remaining in my account under the Plan
after my purchase of shares be returned to me as soon as practicable.

             I understand that if no election is
made as to participation in the Current Offering under the Plan, I will be
deemed to have elected to participate in the Current Offering.

B.          Future Offerings.  As to my participation in future offerings
of common stock under the Plan, I elect as follows (check one):

o         1.          I
elect to participate in future offerings under the Plan.

             I understand that by making this
election I will participate in the next offering under the Plan commencing
subsequent to the Current Offering, and in each subsequent offering commencing
immediately after the last day of an offering in which I participate, until
such time as I elect to withdraw from the Plan or from any such subsequent
offering.

o         2.          I
elect not to participate in future offerings under the Plan.

             I understand that by making this
election I terminate my interest in the Plan and that no further payroll
deductions will be made unless I elect in accordance with the Plan to become a
participant in another offering under the Plan.

             I understand that if no election is
made as to participation in future offerings under the Plan, I will be deemed
to have elected to participate in such future offerings.

Date:                                                                      Signature:                                                                                                           

                                                                               Name Printed:

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