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1995 OUTSIDE DIRECTORS STOCK OPTION PLAN

Stock Option Agreement

1995 OUTSIDE DIRECTORS STOCK OPTION PLAN | Document Parties: ZORAN CORPORATION You are currently viewing:
This Stock Option Agreement involves

ZORAN CORPORATION

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Title: 1995 OUTSIDE DIRECTORS STOCK OPTION PLAN
Date: 4/20/2007
Industry: Semiconductors     Sector: Technology

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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


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