SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

ZORAN CORPORATION
- -----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.

1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ZORAN CORPORATION

----------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 29, 2001

------------------------

TO THE STOCKHOLDERS:

The Annual Meeting of Stockholders of Zoran Corporation, a Delaware
corporation (the "Company"), will be held at the offices of the Company at
3112 Scott Boulevard, Santa Clara, California on June 29, 2001 at 2:00 p.m. for
the following purposes:

1. To elect five (5) directors.

2. To approve an amendment to the Company's 1995 Employee Stock Purchase
Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 50,000 shares.

3. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the year ending December 31,
2001.

4. To transact such other business as may properly come before the meeting,
or any adjournment thereof.

Stockholders of record at the close of business on April 27, 2001 shall be
entitled to vote at the meeting. For ten days prior to the meeting, a complete
list of stockholders entitled to vote at the meeting will be available for
examination by any stockholder, for any purpose relating to the meeting, during
ordinary business hours at the Company's principal offices located at 3112 Scott
Boulevard, Santa Clara, California.

By order of the Board of Directors

DENNIS C. SULLIVAN
SECRETARY

Santa Clara, California
May 29, 2001

IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO
SO EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.

ZORAN CORPORATION
3112 SCOTT BOULEVARD
SANTA CLARA, CALIFORNIA 95054

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PROXY STATEMENT

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INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The enclosed Proxy is solicited on behalf of Zoran Corporation, a Delaware
corporation ("Zoran" or the "Company"), for use at the Annual Meeting of
Stockholders to be held June 29, 2001 at 2:00 p.m., local time, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the
offices of the Company, 3112 Scott Boulevard, Santa Clara, California. The
Company's principal executive offices are located at 3112 Scott Boulevard, Santa
Clara, California. Its telephone number at that address is (408) 919-4111.

These proxy solicitation materials are being mailed on or about May 29, 2001
to all stockholders entitled to vote at the Annual Meeting.

RECORD DATE

Stockholders of record at the close of business on April 27, 2001 are
entitled to notice of, and to vote at, the Annual Meeting. At the record date,
17,482,054 shares of the Company's Common Stock, $0.001 par value, were issued
and outstanding.

REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.

VOTING

The shares represented by the proxies received will be voted as you direct.
If you give no direction, the shares will be voted as recommended by the Board
of Directors. Each stockholder is entitled to one vote for each share of stock
held by him or her on all matters.

SOLICITATION

The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional soliciting materials sent to stockholders. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation materials to such
beneficial owners. In addition, the Company may reimburse brokerage firms and
other persons representing beneficial owners of shares for their expenses in
forwarding solicitation materials to such beneficial owners. Proxies may also be
solicited by certain of the Company's directors, officers and regular employees,
without additional compensation, personally or by telephone or telegram.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING

The Company's bylaws require advance notice of any stockholder proposals to
be brought before a stockholders' meeting. Under the bylaws, in order for
business to be properly brought before a meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Company. To be timely, a stockholder proposal to be presented at an annual
meeting must be

received at the Company's principal executive offices not less than 120 calendar
days in advance of the anniversary of the date that the Company's proxy
statement was released to stockholders in connection with the previous year's
annual meeting of stockholders, except that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed by more than 30
calendar days from the date contemplated at the time of the previous year's
proxy statement, or in the event of a special meeting, notice by the stockholder
to be timely must be received not later than the close of business on the 10th
day following the day on which notice of the date of the meeting was mailed or
public disclosure of the date of the meeting was made.

Accordingly, proposals of stockholders intended to be presented at the 2002
Annual Meeting of Stockholders must be received by the Company no later than
January 29, 2002. Such proposals may be included in next year's proxy statement
if they comply with certain rules and regulations promulgated by the Securities
and Exchange Commission (the "SEC").

PROPOSAL NO. 1
ELECTION OF DIRECTORS

A board of five directors will be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the five nominees named below. All of the nominees are currently directors
of the Company.

If elected, Management's nominees will serve as directors until the
Company's next Annual Meeting of Stockholders and until their successors are
elected and qualified. If a nominee declines to serve or becomes unavailable to
serve for any reason, or if another vacancy occurs before the election (although
Management knows of no reason to anticipate that this will occur), the proxies
may be voted for such substitute nominee as management may designate.

If a quorum is present and voting, the five nominees for director receiving
the highest number of votes will be elected as directors. Abstentions and shares
held by brokers that are present but not voted because the brokers were
prohibited from exercising discretionary authority (i.e., "broker non-votes")
will be counted as present for purposes of determining if a quorum is present.

The table below sets forth, for the current directors, certain information
with respect to age and background. The nominees for election as director at the
Annual Meeting are Messrs. Gerzberg, Galil, Meindl, Stabenow and Young.

NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- --------------- -------- -------------------------------------------------- --------------

Levy Gerzberg............... 56 President and Chief Executive Officer of the 1981
Company

Uzia Galil.................. 76 Chairman of the Board of Directors, Uzia 1983
Initiative and Management, Ltd.

James D. Meindl............. 68 Professor of Microelectronics, Georgia Institute 1986
of Technology

Arthur B. Stabenow.......... 62 Private Investor 1990

Philip M. Young............. 61 General Partner, U.S. Venture Partners 1986

LEVY GERZBERG was a co-founder of Zoran in 1981 and has served as our
President and Chief Executive Officer since December 1988 and as a Director
since 1981. Dr. Gerzberg also served as our President from 1981 to 1984 and as
our Executive Vice President and Chief Technical Officer from 1985 to 1988.
Prior to co-founding Zoran, Dr. Gerzberg was Associate Director of Stanford
University's Electronics Laboratory. Dr. Gerzberg holds a Ph.D. in Electrical
Engineering from Stanford University and an M.S. in Medical Electronics and a
B.S. in Electrical Engineering from the Technion-Israel Institute of Technology
in Haifa, Israel.

UZIA GALIL has been a director of Zoran since 1983 and has served as
Chairman of the Board of Directors since October 1993. Mr. Galil currently
serves as President and Chief Executive Officer of Uzia Initiative and
Management Ltd., a company specializing in the promotion and nurturing of new
businesses associated with mobil communication, electronic commerce and medical
informatics, which he founded in November 1999. From 1962 until November 1999,
Mr. Galil served as President and Chief Executive Officer of Elron Electronic
Industries Ltd., an Israeli high technology holding company, where he also
served as Chairman of the Board. From January 1981 until leaving Elron, Mr.Galil
also served as Chairman of the Board of Directors of Elbit Ltd., an electronic
communication affiliate of Elron, and as a member of the Boards of Directors of
Elbit Systems Ltd., a defense electronics affiliate of Elron, and all other
private companies held in the Elron portfolio. Mr. Galil currently serves as a
member of the Boards of Directors of Orobotech Ltd., NetManage Inc. and Partner
Communications Ltd. From 1980 to 1990, Mr. Galil served as Chairman of the
International Board of Governors of the Technion. Mr. Galil holds an M.S. in
Electrical Engineering from Purdue University and a B.S. from the Technion.
Mr. Galil has also been awarded an honorary doctorate in technical sciences by
the Technion in recognition of his contribution to the development of science-
based industries in Israel, an honorary doctorate in philosophy by the Weizmann
Institute of Science, an honorary doctorate in engineering by Polytechnic
University, New York, and an honorary doctorate from the Ben-Gurion University
of the Negev in Israel. Mr. Galil is also a recipient of the Israel Prize.

JAMES D. MEINDL has been a director of Zoran since March 1986. Dr. Meindl
has been a professor of microelectronics at Georgia Institute of Technology
since November 1993. From September 1986 to November 1993, Dr. Meindl served as
Provost and Senior Vice President of Academic Affairs at Renssalaer Polytechnic
Institute. Prior thereto, Dr. Meindl was a professor of electrical engineering
and Director of the Stanford Electronics Laboratory and Center for Integrated
Systems at Stanford University. Dr. Meindl is also a director of SanDisk, Inc.
and DMC Stratex.

ARTHUR B. STABENOW has been a director of Zoran since November 19990.
Mr. Stabenow has been principally engaged as a private investor since
January 1999. From March 1986 to January 1999 Mr. Stabenow was employed as Chief
Executive Officer of Micro Linear Corporation, a semiconductor company.
Mr. Stabenow also serves as a director of Applied Micro Circuits Corporation.

PHILIP M. YOUNG has been a director of Zoran since January 1986. Mr. Young
has been a general partner of U.S. Venture Partners, a venture capital
partnership, since April 1990. Mr. Young is also a director of The Immune
Response Corporation, Vical Incorporated, Compugen, Ltd., Aerogen, Inc. and 3Dfx
Interactive, Inc.

BOARD MEETINGS AND COMMITTEES

The Board of Directors of the Company held eight meetings during the year
ended December 31, 2000. The Board of Directors has a Compensation Committee and
an Audit Committee. [The Board of Directors has no standing nominating committee
or committee performing similar functions.]During the year ended December 31,
2000, no incumbent director attended fewer than 75% of the aggregate of (i) all
meetings of the Board of Directors (held during the period in which such
director served) and (ii) all meetings of committees of the Board on which such
director served.

The Compensation Committee, which consists of Uzia Galil and Arthur B.
Stabenow, is responsible for reviewing the performance of the officers of the
Company and making recommendations to the Board concerning salaries and
incentive compensation for such officers. The Compensation Committee held three
meetings during the year ended December 31, 2000.

The Audit Committee, which consisted of Arthur B. Stabenow and James D.
Meindl during fiscal year 2000, is responsible for reviewing the Company's
financial statements and significant audit and accounting practices with the
Company's independent auditors and making recommendations to the Directors with
respect thereto. The Audit Committee held four meetings during the year ended
December 31, 2000.

PRINCIPAL STOCKHOLDERS AND SHARE
OWNERSHIP BY MANAGEMENT

The following table sets forth certain information known to the Company
relating to the beneficial ownership of the Company's Common Stock, as of
March 31, 2001, by: (i) each person who is known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock;
(ii) each executive officer named in the tables set forth under "Executive
Compensation"; (iii) each director; and (iv) all executive officers and
directors as a group:

NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENT(1)
- ---------------- --------------------- ----------

Entities affiliated with AIM Management Group Inc.(2) ...... 2,363,800 13.5%
11 Greenway Plaza, Suite 100
Houston, TX 77046

Entities affiliated with Capital Group International, 1,922,950 11.0%
Inc.(3) ..................................................
11100 Santa Monica Blvd.
Los Angeles, CA 90025

Firsthand Capital Management, Inc. and Kevin M. 1,349,300 7.7%
Landis(4) ................................................
125 South Market
San Jose, CA 95113

Capital International, Inc.(5) ............................. 1,238,950 7.1%
11100 Santa Monica Blvd.
Los Angeles, CA 90025

Emerging Markets Growth Fund, Inc.(6) ...................... 1,057,402 6.1%
11100 Santa Monica Blvd.
Los Angeles, CA 90025

Levy Gerzberg, Ph.D.(7)..................................... 448,360 2.5%

Isaac Shenberg, Ph.D.(8).................................... 155,396 *

Aharon Aharon(9)............................................ 147,104 *

Karl Schneider(10).......................................... 105,475 *

Uzia Galil(11).............................................. 55,449 *

James D. Meindl, Ph.D.(12).................................. 40,547 *

Philip M. Young(13)......................................... 45,295 *

Arthur B. Stabenow(14)...................................... 42,081 *

All directors and executive officers as a group 1,039,707 5.6%
(8 persons)...............................................

- ------------------------

* Represents less than 1%

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options or warrants held by that person
that are currently exercisable, or will become exercisable within 60 days
after March 31, 2001, are deemed outstanding. Such shares, however, are not
deemed outstanding for purposes of computing the percentage ownership of
any other person. In general, options granted under the 1993 Stock Option
Plan are fully exercisable from the date of grant, subject to the Company's
right to repurchase any unvested shares at the original exercise price in
the event of termination of the optionee's employment. Unless otherwise
indicated in the footnotes to this

table, the persons and entities named in the table have sole voting and
sole investment power with respect to all shares beneficially owned,
subject to community property laws where applicable.

(2) Based on a Schedule 13G filed by AIM Management Group, Inc. on January 10,
2001. Includes certain shares owned by AIM Advisors, Inc. and AIM Capital
Management, Inc. Both AIM Advisors, Inc. and AIM Capital Management, Inc.
are wholly-owned subsidiaries of AIM Management Group Inc.

(3) Based on a Schedule 13G/A filed by Capital Group International, Inc. on
February 12, 2001. Includes 1,238,950 shares owned by Capital
International, Inc. and 1,057,402 shares owned by Emerging Markets Growth
Fund, Inc. Capital Group International, Inc. is the parent holding company
of a group of investment management companies that hold investment power
and, in some cases, voting power over the securities. The total number of
shares listed as held by Capital Group International, Inc. excludes any
shares held by its subsidiaries because it does not have any voting or
investment power over those securities and because it disclaims beneficial
ownership over these securities. The investment management companies, which
include a "bank" as defined in Section 3(a)6 of the Securities Exchange Act
of 1934 (the "Act") and several investment advisors registered under
Section 203 of the Investment Advisors Act of 1940, provide investment
advisory and management services for their respective clients which include
registered investment companies and institutional accounts. Capital Group
International, Inc. does not have investment power or voting power over any
of the securities reported above; however, Capital Group
International, Inc. may be deemed to "beneficially" own" such securities by
virtue of Rule 13d-3 under the Act. Capital International, Inc., an
investment advisor registered under Section 203 of the Investment Advisers
Act of 1940 is deemed to be the beneficial owner of 1,238,950 shares of
Common Stock as a result of acting as investment adviser to various
investment companies and institutional accounts. Emerging Markets Growth
Fund, Inc., an investment company registered under the Investment Company
Act of 1940, is advised by Capital International, Inc.

(4) Based on a Schedule 13G filed by Firsthand Capital Management, Inc. on
February 14, 2001. Firsthand Capital Management, Inc. is an Investment
Adviser registered under the Investment Advisers Act of 1940, as amended,
and a control person of the Adviser, respectively. Mr. Landis disclaims
beneficial ownership as to all shares beneficially owned for Section 13(g)
filing purposes by Firsthand Capital Management, Inc., an investment
adviser.

(5) Based on a Schedule 13G/A filed by Capital Group International, Inc. on
February 12, 2001. Capital International, Inc., an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940, is
deemed to be the beneficial owner of the shares as a result of acting as
investment adviser to various investment companies and institutional
accounts. Capital International Research and Management, Inc. is doing
business as Capital International, Inc.

(6) Based on a Schedule 13G/A filed by Capital Group International, Inc. on
February 12, 2001. Emerging Markets Growth Fund, Inc., an investment
company registered under the Investment Company Act of 1940, is advised by
Capital International, Inc.

(7) Includes immediately exercisable options to purchase 421,323 shares of
common stock.

(8) Includes immediately exercisable options to purchase 155,785 shares of
common stock.

(9) Includes immediately exercisable options to purchase 146,000 shares of
common stock.

(10) Includes immediately exercisable options to purchase 102,800 shares of
common stock.

(11) Includes 3,008 shares held by Mr. Galil's spouse. Mr. Galil may be deemed
to be a beneficial owner of these shares, although Mr. Galil disclaims
such beneficial ownership. Also includes immediately exercisable options
to purchase 44,000 shares of common stock.

(12) Includes 222 shares held jointly with Dr. Meindl's spouse and 1,125 shares
held by James and Frederica Meindl as trustees of the Meindl Trust dated
February 4, 1972. Also includes immediately exercisable options to
purchase 39,200 shares of common stock.

(13) Includes immediately exercisable options to purchase 45,266 shares of
common stock.

(14) Includes immediately exercisable options to purchase 29,000 shares of
common stock.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater-than-10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all reports they file under
Section 16(a).

To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with
during the year ended December 31, 2000.

EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information concerning the compensation
received for services rendered to the Company during the years ended
December 31, 1998, 1999 and 2000 by the Chief Executive Officer of the Company
and the four other most highly compensated executive officers of the Company
whose total salary and bonus for such fiscal year exceeded $100,000
(collectively, the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
-------------------- OPTIONS GRANTED ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS (SHARES) COMPENSATION
- --------------------------- -------- --------- -------- --------------- ------------

Levy Gerzberg, Ph.D. ...................... 2000 $318,664 $180,000 90,000 $ 258(2)
President and Chief 1999 $300,011 $225,000 55,000 $ 237(2)
Executive Officer 1998 $294,270 -- 231,666 $ 154(2)

Isaac Shenberg, Ph.D. ..................... 2000 $168,850 $ 55,957 40,000 $44,050(3)
Senior Vice President, Business 1999 $155,167 $ 55,000 20,000 $36,117(3)
and Strategic Development 1998 $152,574 -- 55,000 $24,430(3)

Aharon Aharon ............................. 2000 $195,845 $ 70,000 50,000 $28,238(2)(3)
Senior Vice President and Chief 1999 $180,519 $ 72,000 30,000 $53,791(3)(4)
Operating Officer 1998 $161,582 -- 110,000

Karl Schneider(5) ......................... 2000 $164,656 $ 50,400 30,000 $ 167(2)
Vice President, Finance and Chief 1999 $158,653 $ 50,000 15,000 $ 153(2)
Financial Officer 1998 $122,152 -- 50,000 $ 125(2)

- ------------------------

(1) Includes amounts (if any) deferred under the Company's 401(k) Plan.

(2) Represents premiums paid by the Company with respect to term life insurance
for the benefit of Dr. Gerzberg and Messrs. Aharon and Schneider.

(3) Consists of (i) premiums paid by the Company under an insurance policy that
covers certain severance and other benefits that may be payable to the Named
Executive Officer and (ii) contributions by the Company toward a continuing
education fund for his benefit. The Company paid an insurance premium for
the benefit of Dr. Shenberg in the amount of $29,889 in 2000. The Company
paid insurance premiums for the benefit of Dr. Shenberg and Mr. Aharon in
the amounts of $24,507, and $24,695, in 1999 respectively, and $21,080 and
$25,300, respectively, in 1998. The Company also made a continuing education
contribution for the benefit of Dr. Shenberg in the amount of $14,161 in
2000. In addition, the Company made continuing education contributions for
the benefit of Dr. Shenberg and Mr. Aharon in the amounts of 11,610 and
3,373, respectively, in 1999, and $3,350 and $3,352, respectively, in 1998.

(4) Represents payment of accrued vacation upon relocation to main corporate
offices in the amount $25,139.

(5) Mr. Schneider joined the Company as an employee in January 1998 and became
an executive officer in July 1998. The reported compensation for 1998
includes compensation earned by Mr. Schneider during the full fiscal year.

OPTION GRANTS

The following table sets forth information concerning grants of options to
purchase the Company's Common Stock made during the year ended December 31, 2000
to the Named Executive Officers:

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS IN FISCAL 2000
------------------------------------------------------ POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN OPTION TERM(1)
OPTIONS FISCAL EXERCISE OR EXPIRATION ---------------------------
NAME GRANTED YEAR(2) BASE PRICE(3) DATE 5% 10%
- --------------------------------- ---------- ------------ ------------- ---------- ------------ ------------

Levy Gerzberg, Ph.D.............. 90,000 6.9% $41.00 7/28/10 $2,320,621 $5,880,910

Isaac Shenberg, Ph.D............. 40,000 3.1% $41.00 7/28/10 $1,031,387 $2,613,738

Aharon Aharon.................... 50,000 3.8% $41.00 7/28/10 $1,289,234 $3,267,172

Karl Schneider................... 30,000 2.3% $41.00 7/28/10 $ 773,540 $1,968,303

- ------------------------

(1) Potential gains are net of exercise price, but before taxes associated with
the exercise. These amounts represent certain hypothetical gains based on
assumed rates of appreciation, based on the Securities and Exchange
Commission's rules, and do not represent the Company's estimate or
projection of future Common Stock prices. Actual gains, if any, on stock
option exercises are dependent on the future performance of the Company,
overall market conditions and the optionees' continued employment through
the vesting period. The amounts reflected in this table may not be achieved.

(2) The Company granted options to purchase an aggregate of 1,307,050 shares of
Common Stock during the year.

(3) All options were granted at an exercise price equal to the fair market value
of the Common Stock on the date of grant.

(4) The option is fully exercisable from the date of grant, subject to the
Company's right to repurchase any unvested shares at the original purchase
price upon the optionee's termination as an employee. The shares vests in 48
equal monthly installments from the date of grant.

OPTION EXERCISES AND YEAR-END HOLDINGS

The following table sets forth information concerning the stock options held
as of December 31, 2000 by the Named Executive Officers:

AGGREGATE OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES

VALUE OF UNEXERCISED
IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS
SHARES OPTIONS AT DECEMBER 31, 2000 AT DECEMBER 31, 2000(1)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE REALIZED(2) EXERCISABLE(3) UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE
- ---- ----------- ----------- -------------- ------------- -------------- -------------

Levy Gerzberg........... 80,000 $ 3,807,314 371,323 $2,163,648
Isaac Shenberg.......... 10,000 $ 445,270 125,785 $ 764,330
Aharon Aharon........... 45,500 $ 1,987,183 111,000 $ 296,360
Karl Schneider.......... 9,200 $ 472,352 77,800 $ 313,568

- ------------------------

(1) Based on the closing price of $15.50, as reported on the Nasdaq National
Market on December 29, 2000.

(2) Based on the closing price of the Company's Common Stock as reported on the
Nasdaq National Market on the date of exercise. The executive officer's
actual value realized may be different.

(3) All options are fully exercisable, subject to the Company's right to
repurchase any unvested shares at the original exercise price in the event
of the optionee's termination. Options (or shares issued upon exercise
thereof) vest over a period of four years from the date of grant.

COMPENSATION OF DIRECTORS

Directors receive quarterly fees of $3,000 as compensation for their
services as members of the Board of Directors. In addition, directors receive
fees of $500 for each Board or committee meeting attended.

The Company's 1995 Outside Directors Stock Option Plan (the "Directors
Plan") provides for formula-based grants of options to non-employee directors.
Under the Directors Plan, each non-employee director of the Company is
automatically granted a nonstatutory stock option to purchase 20,000 shares of
Common Stock (an "Initial Option") on the date on which such person first
becomes a non-employee director of the Company. Thereafter, on the date
immediately following each annual stockholders' meeting, each non-employee
director who is reelected at the meeting to an additional term is granted an
additional option to purchase 4,800 shares of Common Stock (an "Annual Option")
if, on such date, he has served on the Board of Directors for at least six
months. The Directors Plan provides that each Initial Option shall become
exercisable in installments as to one-fourth of the total number of shares
subject to the option on each of the first, second, third and fourth
anniversaries of the date of grant, and each Annual Option shall become
exercisable in full one year after the date of grant, subject to the director's
continuous service. The exercise price per share of all options granted under
the Directors Plan shall be equal to the fair market value of a share of the
Company's Common Stock on the date of grant. Options granted under the Directors
Plan have a term of ten years.

During fiscal year 2000, Arthur B. Stabenow also received an additional
non-qualified stock option to purchase 5,000 shares of Common Stock, under the
Company's 1993 Stock Option Plan. This option vests in installments as to
one-fourth of the total number of shares subject to the option at the end of
each full quarter after the grant date. The option has a term of ten years.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

COMPENSATION PHILOSOPHY

The goals of the Company's compensation policy are to attract, retain and
reward executive officers who contribute to the overall success of the Company
by offering compensation that is competitive in the semiconductor industry, to
motivate executives to achieve the Company's business objectives and to align
the interests of officers with the long-term interests of stockholders. The
Company currently uses salary, bonuses and stock options to meet these goals.

FORMS OF COMPENSATION

The Company provides its executive officers with a compensation package
consisting of base salary, incentive bonuses and participation in benefit plans
generally available to other employees. In setting total compensation, the
Compensation Committee considers individual and Company performance, as well as
market information regarding compensation paid by other companies in the
Company's industry.

BASE SALARY. Salaries for executive officers are initially set based on
negotiation with individual executive officers at the time of recruitment and
with reference to salaries for comparable positions in the semiconductor
industry for individuals of similar education and background to the executive
officers being recruited. The Company also gives consideration to the
individual's experience, reputation in his or her industry and expected
contributions to the Company. Salaries are generally reviewed annually by the
Compensation Committee and are subject to increases based on (i) the
Compensation Committee's determination that the individual's level of
contribution to the Company has increased since his or her salary had last been
reviewed and (ii) increases in competitive pay levels.

BONUSES. It is the policy of the Company that a substantial component of
each officer's potential annual compensation take the form of a
performance-based bonus. Bonus payments to officers other than the Chief
Executive Officer are determined by the Compensation Committee, in consultation
with the Chief Executive Officer, based on the financial performance of the
Company and the achievement of the officer's individual performance objectives.
The Chief Executive Officer's bonus is determined by the Compensation Committee,
without participation by the Chief Executive Officer, based on the same factors.

LONG-TERM INCENTIVES. Longer term incentives are provided through the 1993
Stock Option Plan, which rewards executives and other employees through the
growth in value of the Company's stock. The Compensation Committee believes that
employee equity ownership is highly motivating, provides a major incentive for
employees to build stockholder value and serves to align the interests of
employees with those of stockholders. Grants of stock options to executive
officers are based upon each officer's relative position, responsibilities,
historical and expected contributions to the Company, and the officer's existing
stock ownership and previous option grants, with primary weight given to the
executive officers' relative rank and responsibilities. Initial stock option
grants designed to recruit an executive officer to join the Company may be based
on negotiations with the officer and with reference to historical option grants
to existing officers. Stock options are granted at an exercise price equal to
the market price of the Company's Common Stock on the date of grant and will
provide value to the executive officers only when the price of the Common Stock
increases over the exercise price.

2000 COMPENSATION

Compensation for the Chief Executive Officer and other executive officers
for 2000 was set according to the Company's established compensation policy
described above. At the end of fiscal 2000, the Company paid bonuses to the
Company's executive officers, including a cash bonus of $180,000 to
Dr. Gerzberg. These payments were based upon the Company's successes in 2000 in
the execution of its operating and strategic plan, including substantial growth
in revenue and operating income, the individual executives' contributions to
these successes and the overall performance of the Company and the individual
officers' performance with respect to certain specific operational and strategic
objectives.

Uzia Galil
Arthur B. Stabenow

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including internal control
systems. PricewaterhouseCoopers LLP is responsible for expressing an opinion as
to the conformity of our audited financial statements with generally accepted
accounting principles.

During fiscal year 200, the Audit Committee consisted of two directors each
of whom, in the judgment of the Board, is an "independent director" as defined
in the listing standards for The Nasdaq Stock Market. The Audit Committee acts
pursuant to a written charter that has been adopted by the Board of Directors. A
copy of this charter is attached to this Proxy Statement as Appendix A.

The Committee has discussed and reviewed with the auditors all matters
required to be discussed Statement on Auditing Standards No. 61 (Communication
with Audit Committees). The Committee has met with PricewaterhouseCoopers LLP,
with and without management present, to discuss the overall scope of
PricewaterhouseCoopers LLP's audit, the results of its examinations, its
evaluations of the Company's internal controls and the overall quality of its
financial reporting.

The Audit Committee has received from the auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), discussed
with the auditors any relationships that may impact their objectivity and
independence, and satisfied itself as to the auditors' independence.

Based on the review and discussions referred to above, the committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000.

AUDIT COMMITTEE

Arthur B. Stabenow
James D. Meindl

PERFORMANCE GRAPH

Set forth below is a graph indicating cumulative total return at
December 31, 1996, 1997, 1998, 1999 and 2000 on $100 invested, alternatively, in
the Company's Common Stock, the CRSP Total Return Index for the Nasdaq Stock
Market and the Nasdaq Electronic Components Stock Index on December 15, 1995
(the date of the Company's initial public offering).

COMPARISON OF FIVE--YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
ZORAN CORPORATION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

LEGEND

CRSP TOTAL RETURNS INDEX FOR:

Nasdaq Electronic
ZORAN Nasdaq Stock Components Stocks
CORPORATION Market (US Companies) SIC 3670-3679 US & Foreign
12/29/1995 $100.0 $100.0 $100.0
12/31/1996 $86.7 $123.0 $173.2
12/31/1997 $58.1 $150.7 $181.6
12/31/1998 $84.3 $212.5 $280.5
12/31/1999 $268.7 $394.8 $521.6
12/29/2000 $74.7 $237.4 $428.6

NOTES: A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends. B. The indexes are reweighted daily, using
the market capitalization on the previous trading day. C. If the monthly
interval, based on the fiscal year-end, is not a trading day, the preceding
trading day is used. D. The index level for all series was set to $100 on
12/29/1995.

PROPOSAL NO. 2
AMENDMENT TO 1995 EMPLOYEE STOCK PURCHASE PLAN

At the Annual Meeting, the stockholders are being asked to approve an
amendment to the Company's Amended and Restated 1995 Employee Stock Purchase
Plan (the "Purchase Plan") to increase the number of shares of Common Stock
reserved for issuance thereunder by 50,000 shares to a total of 550,000 shares.
The Purchase Plan provides for the purchase of the Company's Common Stock by
employees of the Company and any subsidiaries designated by the Board.
Management believes that the Purchase Plan is an important factor in attracting
and retaining qualified employees essential to the success of the Company. As of
March 31, 2001, a total of 328,273 shares of the Company's Common Stock had been
issued under the Purchase Plan, leaving 171,727 shares available for issuance.

SUMMARY OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN

The following summary of the Purchase Plan is qualified in its entirety by
the specific language of the Purchase Plan, a copy of which is available to any
stockholder upon request.

GENERAL

The Purchase Plan is intended to qualify as an "employee stock purchase
plan" under Section 423 of the Code. Each participant in the Purchase Plan is
granted, at the beginning of each offering under the plan (an "Offering"), the
right to purchase through accumulated payroll deductions up to a number of
shares of the Common Stock of the Company (a "Purchase Right") determined on the
first day of the Offering. The Purchase Right is automatically exercised on the
last day of each purchase period within the Offering unless the participant has
withdrawn from participation in the Offering or in the Purchase Plan prior to
such date.

SHARES SUBJECT TO PURCHASE PLAN

Currently, a maximum of 500,000 of the Company's authorized but unissued or
reacquired shares of Common Stock may be issued under the Purchase Plan, subject
to appropriate adjustment in the event of a stock dividend, stock split, reverse
stock split, recapitalization, combination, reclassification or similar change
in the Company's capital structure or in the event of any merger, sale of assets
or other reorganization of the Company. Subject to stockholder approval, the
Board has amended the Purchase Plan to increase the share reserve to 550,000
shares. If any Purchase Right expires or terminates, the shares subject to the
unexercised portion of such Purchase Right will again be available for issuance
under the Purchase Plan.

ADMINISTRATION

The Purchase Plan is administered by the Board of Directors or a duly
appointed committee of the Board (hereinafter referred to as the "Board").
Subject to the provisions of the Purchase Plan, the Board determines the terms
and conditions of Purchase Rights granted under the plan. The Board will
interpret the Purchase Plan and Purchase Rights granted thereunder, and all
determinations of the Board will be final and binding on all persons having an
interest in the Purchase Plan or any Purchase Rights.

ELIGIBILITY

Any employee of the Company or of any present or future parent or subsidiary
corporation of the Company designated by the Board for inclusion in the Purchase
Plan is eligible to participate in an Offering under the plan so long as the
employee is customarily employed for more than 20 hours per week and more than
five months in any calendar year. However, no employee who owns or holds

options to purchase, or as a result of participation in the Purchase Plan would
own or hold options to purchase, 5% or more of the total combined voting power
or value of all classes of stock of the Company or of any parent or subsidiary
corporation of the Company is entitled to participate in the Purchase Plan. As
of March 31, 2001, 286 employees were eligible to participate in the Purchase
Plan. During the fiscal year ended December 31, 2000, Messrs. Gerzberg,
Shenberg, Aharon and Schneider purchased 2528 shares, 1908 shares, 2199 shares,
and 1485 shares, respectively, under the Purchase Plan and all current executive
officers as a group and all current employees who are not executive officers
(including officers who are not executive officers) as a group purchased 8,120
shares and 81,711 shares, respectively, under the Purchase Plan. During that
fiscal year, no nominee for election as a director other than Dr. Gerzberg was
eligible to participate in the Purchase Plan.

OFFERINGS

Generally, each Offering of Common Stock under the Purchase Plan is for a
period of 24 months (an "Offering Period"). Offering Periods under the Purchase
Plan are overlapping, with a new Offering Period beginning every six months.
However, employees may only participate in one Offering at a time. Offering
Periods generally commence on the first day of May and November of each year (an
"Offering Date") and end on the last day of the second following April and
October, respectively. Each Offering Period is generally comprised of four
six-month purchase periods ("Purchase Periods"). Shares are purchased on the
last day of each Purchase Period ("Purchase Dates"). The Board may establish a
different term for one or more Offerings (not to exceed 27 months) or Purchase
Periods or different commencement or ending dates for an Offering or a Purchase
Period.

PARTICIPATION AND PURCHASE OF SHARES

Participation in the Purchase Plan is limited to eligible employees who
authorize payroll deductions, which may not exceed 10% of compensation for each
pay period during an Offering or such other rate as the Board determines. Once
an employee becomes a participant in the Purchase Plan, the employee will
automatically participate in each successive Offering until such time as the
employee ceases to be an eligible employee, withdraws from the Purchase Plan, or
terminates employment.

The Purchase Plan provides that each participant in an Offering has a
maximum Purchase Right equal to the lesser of: (a) the number of whole shares
determined by dividing $50,000 by the fair market value of a share of Common
Stock on the Offering Date or (b) 5,000 shares, subject to certain limitations.
These dollar and share amounts are pro-rated for any Offering Period that is
less than 23 1/2 months or more than 24 1/2 months in duration. Notwithstanding
any other provision of the Purchase Plan, no participant may purchase under the
Purchase Plan shares of Common Stock having a fair market value exceeding
$25,000 in any calendar year (measured by the fair market value of the Company's
Common Stock on the Offering Date).

At the end of each Purchase Period, a participant acquires the number of
shares of the Company's Common Stock determined by dividing the total amount of
payroll deductions from the participant's compensation during the Purchase
Period by the purchase price, limited in any case by the number of shares
subject to the participant's Purchase Right for the Offering. The purchase price
per share at which the shares are sold under the Purchase Plan generally equals
85% of the lesser of the fair market value of a share of Common Stock on the
Offering Date or on the Purchase Date. The fair market value of the Common Stock
on any relevant date generally will be the closing price per share on such date
as reported on the Nasdaq National Market. Any payroll deductions under the
Purchase Plan not applied to the purchase of shares are returned to the
participant, except for an amount insufficient to purchase another whole share,
which amount may be applied to the next Offering Period or Purchase Period.

A participant may withdraw from an Offering at any time without affecting
his or her eligibility to participate in future Offerings. However, once a
participant withdraws from an Offering, that participant may not again
participate in the same Offering.

TRANSFER OF CONTROL

The Purchase Plan provides that, in the event of (i) a sale or exchange by
the stockholders in a single or series of related transactions of more than 50%
of the Company's voting stock, (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 wherein, upon any such event, the stockholders of the Company
immediately before such event do not retain direct or indirect beneficial
ownership of more than 50% of the total combined voting power of the voting
stock of the Company, its successor, or the corporation to which the assets of
the Company were transferred (a "Transfer of Control"), the acquiring or
successor corporation may assume the Company's rights and obligations under the
Purchase Plan or substitute substantially equivalent Purchase Rights for such
corporation's stock. If the acquiring or successor corporation elects not to
assume or substitute for the outstanding Purchase Rights, the Board may adjust
the next Purchase Date to a date on or before the date of the Transfer of
Control. Any Purchase Rights that are not assumed, substituted for, or exercised
prior to the Transfer of Control will terminate.

TERMINATION OR AMENDMENT

The Purchase Plan will continue until terminated by the Board of Directors
or until all of the shares reserved for issuance under the Purchase Plan have
been issued. The Board may amend or terminate the Purchase Plan at any time,
except that the approval of the Company's stockholders is required within
12 months of the adoption of any amendment increasing the number of shares
authorized for issuance under the Purchase Plan or changing the definition of
the corporations that may be designated for inclusion in the Purchase Plan.

SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE PLAN

The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law of participation in the
Purchase Plan and does not attempt to describe all potential tax consequences.
Furthermore, the tax consequences are complex and subject to change, and a
taxpayer's particular situation may be such that some variation of the described
rules is applicable.

A participant recognizes no taxable income either as a result of commencing
to participate in the Purchase Plan or purchasing shares of the Company's Common
Stock under the terms of the Purchase Plan so long as it qualifies under
Section 423 of the Code. If a participant disposes of shares purchased under the
Purchase Plan within two years from the first day of the applicable Offering or
within one year from the Purchase Date (a "disqualifying disposition"), the
participant will realize ordinary income in the year of such disposition equal
to the amount by which the fair market value of the shares on the date the
shares were purchased exceeds the purchase price. The amount of the ordinary
income will be added to the participant's basis in the shares, and any
additional gain or resulting loss recognized on the disposition of the shares
will be a capital gain or loss. A capital gain or loss will be long-term if the
participant's holding period is more than twelve months, otherwise it will be
short-term.

If the participant disposes of shares purchased under the Purchase Plan at
least two years after the first day of the applicable Offering and at least one
year after the Purchase Date, the participant will realize ordinary income in
the year of disposition equal to the lesser of (i) the excess of the fair market
value of the shares on the date of disposition over the purchase price or
(ii) 15% of the fair market value of the shares on the first day of the
applicable Offering. The amount of any ordinary income will

be added to the participant's basis in the shares, and any additional gain
recognized upon the disposition after such basis adjustment will be a long-term
capital gain. If the fair market value of the shares on the date of disposition
is less than the purchase price, there will be no ordinary income and any loss
recognized will be a long-term capital loss.

If the participant still owns the shares at the time of death, ordinary
income will be recognized in the year of death equal to the lesser of (i) the
excess of the fair market value of the shares on the date of death over the
purchase price or (ii) 15% of the fair market value of the shares on the first
day of the Offering in which the shares were purchased.

The Company should be entitled to a tax deduction in the year of a
disqualifying disposition equal to the amount of ordinary income recognized by
the participant as a result of the disposition, except to the extent such
deduction is limited by applicable provisions of the Code or the regulations
thereunder. In all other cases, no deduction is allowed to the Company.

REQUIRED VOTE

The affirmative vote of the holders of a majority of the shares of Common
Stock present or represented by proxy and entitled to vote at the Annual Meeting
is required for approval of this proposal. Abstentions and broker non-votes will
each be counted as present for purposes of determining the presence of a quorum
but will have no effect on the outcome of this vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE 1995 EMPLOYEE STOCK PURCHASE PLAN.

PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors of the Company has selected PricewaterhouseCoopers
LLP as independent accountants to audit the financial statements of the Company
for the year ending December 31, 2001. A representative of
PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting with
the opportunity to make a statement if the representative desires to do so, and
is expected to be available to respond to appropriate questions.

The following table sets forth the aggregate fees billed to the Company for
the fiscal year ended December 31, 2000 by PricewaterhouseCoopers LLP:

Audit Fees.................................................. $157,200.00
Financial Information Systems Design and Implementation
Fees...................................................... $ --
All Other Fees.............................................. $311,584.00

The Audit Committee has considered the role of PricewaterhouseCoopers LLP in
providing tax and acquisition services and other non-audit services to the
Company and has concluded that such services are compatible with
PricewaterhouseCooper's independence as the Company's auditors.

VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION

The affirmative vote of a majority of the votes cast affirmatively or
negatively at the annual meeting of stockholders at which a quorum representing
a majority of all outstanding shares of Common Stock of the Company is present
and voting, either in person or by proxy is required for approval of this
proposal. Abstentions and broker non-votes will each be counted as present for
purposes of determining the presence of a quorum but will not have any effect on
the outcome of the proposal.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP.

OTHER BUSINESS

The Company currently knows of no other matters to be submitted at the
Annual Meeting. If any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the enclosed form of proxy to vote the
shares they represent as the Board of Directors may recommend.

THE BOARD OF DIRECTORS

Dated: May 29, 2001

APPENDIX A

ZORAN CORPORATION
CHARTER OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS

I. STATEMENT OF POLICY

This Charter specifies the scope of the responsibilities of the Audit
Committee of the Board of Directors of Zoran Corporation (the "Company"), and
how the Committee carries out those responsibilities, including the structure,
processes, and membership requirements. The primary function of the Committee is
to assist the Board of Directors in fulfilling its financial oversight
responsibilities by reviewing and reporting to the Board upon (i) the financial
reports and other financial information provided by the Company to any
governmental body or to the public, (ii) the Company's systems of internal and
external controls regarding finance, accounting, legal compliance and ethics
that management and the Board have established and (iii) the Company's auditing,
accounting and financial reporting processes in general. Consistent with this
function, the Committee should encourage continuous improvement of, and should
foster adherence to, the Company's financial policies, procedures and practices
at all levels. The Committee's primary duties and responsibilities are to:

- Serve as an independent and objective party to monitor the Company's
financial reporting process and internal control systems.

- Review and appraise the audit efforts and independence of the Company's
auditors.

- Provide an open avenue of communication among the independent auditors,
financial and senior management, and the Board.

The Committee will primarily fulfill these responsibilities, and others as may
be prescribed by the Board from time to time, by carrying out the activities
enumerated in Section IV of this Charter.

II. ORGANIZATION AND MEMBERSHIP REQUIREMENTS

The Committee shall be comprised of three or more directors as determined by
the Board, each of whom shall be independent directors, and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Committee. A
member of the Committee shall be considered independent if, among other things,
such Director:

- is not an employee of the Company or its affiliates and has not been
employed by the Company or its affiliates within the past three years;

- is not a member of the immediate family of an executive officer of the
Company or its affiliates who currently serves in that role or did so
during the past three years;

- has not accepted more than $60,000 in compensation from the Company during
the previous fiscal year (excluding compensation and the related benefits
for Board service, retirement plan benefits or non-discretionary
compensation);

- has not been a partner, controlling shareholder or an executive officer of
any for-profit business to which the Company made, or from which it
received, payments (other than those which arise solely from investments
in the Company's securities) that exceed 5% of the Company's consolidated
gross revenues for that year, or $200,000, whichever is more, in any of
the past three years; and

- is not an executive of another entity on whose Compensation Committee any
of the Company's current executives serves.

All members of the Committee must be able to read and understand fundamental
financial statements, including a balance sheet, income statement, and cash flow
statement. In addition, at least

A-1

one member must have past employment experience in finance or accounting,
professional certification in accounting, or other comparable experience or
background resulting in the individual's financial sophistication, including
being or having been a chief executive, chief financial, or other senior officer
with financial oversight responsibilities.

The members of the Committee shall be elected by the Board and shall serve
until their successors shall be duly elected and qualified. Unless a chairman is
elected by the full Board, the members of the Committee may designate a chairman
by majority vote of the full Committee membership.

III. MEETINGS

The Committee shall meet at least annually with management and the
independent auditors in separate executive sessions to discuss any matters that
the Committee or each of these groups believe should be discussed privately. In
addition, the Committee should meet with the independent auditors and management
on a quarterly basis to review the Company's financial statements consistent
with Section IV.A.5. below.

IV. PROCESSES

To fulfill its responsibilities and duties the Committee shall:

A. DOCUMENTS/REPORTS TO REVIEW

1. Review and reassess the Charter's adequacy periodically, as
conditions dictate.

2. Review the organization's annual audited financial statements and any
reports or other financial information submitted to any governmental
body, or the public, including any certification, report, opinion, or
review rendered by the independent auditors.

3. Review the regular Management Letter to management prepared by the
independent auditors and management's response.

4. Review related party transactions for potential conflicts of
interests.

5. Review the interim financial statements with financial management and
the independent auditors prior to the filing of the Company's
Form 10-Ks and Form 10-Qs. These meetings should include a discussion
of the independent auditors, judgment of the quality of the Company's
accounting and any uncorrected misstatements as a result of the
auditors quarterly review.

6. Maintain written minutes of its meetings, which minutes will be filed
with the minutes of the meetings of the Board. The Committee will
also record its summaries of recommendations to the Board in written
form that will be incorporated as part of the minutes of the Board
meeting at which those recommendations are presented.

B. INDEPENDENT AUDITORS

1. Recommend to the Board the selection of the independent auditors,
considering independence and effectiveness.

2. Obtain from the independent auditors a formal written statement
delineating all relationships between the auditor and the Company,
and discussing with the auditor any disclosed relationships or
services that may impact auditor objectivity and independence
(consistent with Independence Standards Board Standard No. 1).

3. Take, or recommend that the Board take, appropriate action to oversee
the independence of the outside auditor.

4. Review the performance of the independent auditors and approve any
proposed discharge of the independent auditors when circumstances
warrant.

A-2

5. Periodically consult with the independent auditors out of the
presence of management about internal controls and the fullness and
accuracy of the Company's financial statements.

C. FINANCIAL REPORTING PROCESSES

1. In consultation with the independent auditors, review the integrity
of the Company's financial reporting processes, both internal and
external.

2. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.

3. Consider and approve, if appropriate, changes to the Company's
auditing and accounting principles and practices as suggested by the
independent auditors or management.

D. PROCESS IMPROVEMENT

1. Review with management and the independent auditors any significant
judgments made in management's preparation of the financial
statements and the view of each as to appropriateness of such
judgments.

2. Review with management and the independent auditors any significant
difficulties encountered during the course of the audit, including
any restrictions on the scope of work or access to required
information.

3. Review any significant disagreement among management and the
independent auditors in connection with the preparation of the
financial statements.

4. Review with the independent auditors and management the extent to
which changes or improvements in financial or accounting practices,
as approved by the Committee, have been implemented.

5. Provide oversight and review the Company's asset management policies,
including an annual review of the Company's investment policies and
performance for cash and short-term investments.

E. ETHICAL AND LEGAL COMPLIANCE

1. Ensure that management has set an appropriate corporate "tone" for
quality financial reporting, sound business practices and ethical
behavior.

2. Ensure that management has the proper review system in place to
ensure that the Company's financial statements, reports and other
financial information disseminated to governmental organizations and
the public satisfy legal requirements.

3. Review management's monitoring of compliance with the Foreign Corrupt
Practices Act.

4. Review, with the Company's counsel, legal compliance matters
including corporate securities trading policies.

5. Review, with the Company's counsel, any legal matter that could have
a significant impact on the Company's financial statements.

6. Perform any other activities consistent with this Charter, the
Company's Bylaws and governing law, as the Committee or the Board
deems necessary or appropriate.

7. If necessary, initiate special investigations, and if appropriate,
hire special counsel or experts to assist the Committee.

A-3

ZORAN CORPORATION

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS

The undersigned, revoking all prior proxies, hereby appoints Levy
Gerzberg and Karl Schneider, or either of them, with full power of
substitution, as proxies to represent and vote as designated in this proxy
any and all of the shares of stock of Zoran Corporation, held or owned by or
standing in the name of the undersigned on the Company's books on April 27,
2001 at the Annual Meeting of Stockholders of the Company to be held at the
Company's offices at 3112 Scott Blvd., Santa Clara, CA 95054 at 2:00 p.m. on
June 29, 2001, and any continuation or adjournment thereof, with all powers
the undersigned would possess if personally present at the meeting.

The undersigned hereby directs and authorizes said proxies, and each of
them, or their substitute or substitutes, to vote as specified with respect
to the proposals listed on the reverse side, or, if no specification is made,
to vote in favor thereof.

The undersigned hereby further confers upon said proxies, and each of
them, or their substitute or substitutes, discretionary authority to vote
with respect to all other matters, which may properly come before the meeting
or any continuation or adjournment thereof.

The undersigned hereby acknowledges receipt of: (a) Notice of Annual
Meeting of Stockholders of the Company, (b) accompanying Proxy Statement, and
(c) Annual Report to Stockholders for the fiscal year ending December 31,
2000.

(TO BE SIGNED ON REVERSE SIDE)

/X/ Please mark your
votes as in this
example.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR AND
FOR PROPOSALS 2, AND 3.

FOR WITHHELD
1. Election of the five (5) directors / / / /
to the Board of Directors.

FOR ALL NOMINEES EXCEPT AS FOLLOWS:

- ---------------------------------

NOMINEES: Levy Gerzberg
Uzia Galil
James D. Meindl
Arthur B. Stabenow
Philip M. Young

FOR AGAINST ABSTAIN
/ / / / / /
2. To approve an amendment to the
1995 Employee Stock Purchase Plan to
increase the number of shares of
Common Stock reserved for issuance
thereunder by 50,000 shares.

/ / / / / /
3. To ratify the appointment of
PricewaterhouseCoopers LLP as
independent accountants of the
Company for the fiscal year ending
December 31, 2001.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK
MAY BE REPRESENTED AT THE MEETING.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /

Signature: Date: Signature: Date:
---------------- --------- --------------- -----

Note: Sign exactly as your name(s) appears on your stock certificate. If
shares of stock are held in the name of two or more persons or in the name of
husband and wife, either as joint tenants or otherwise, both or all of such
persons should sign the above Proxy. If shares of stock are held by a
corporation, the Proxy should be executed by the President or Vice President
and the Secretary or Assistant Secretary. Executors or administrators or
other fiduciaries who execute the above Proxy for a deceased stockholder
should give their full title. Please date the Proxy.