Exhibit 10.18
ZORAN CORPORATION
1995 OUTSIDE DIRECTORS STOCK
OPTION PLAN
(As Amended Through April 21,
2002)
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 condition 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.
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(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 fifty thousand (350,000) 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
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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 .
S
