Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05503/USCOURTS-cand-3_06-cv-05503-18/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE ZORAN CORPORATION

DERIVATIVE LITIGATION

______________________________________

This document relates to: 

All Actions

 /

No. C 06-05503 WHA

FURTHER REQUEST FOR

INFORMATION

In addition to the information previously requested, counsel for all parties should

address the following in their submissions: 

- How would the proposed repricing and cancellation of options be treated on

Zoran’s re-stated financial statements? 

- Counsel should provide any and all known literature and case law that discusses

how re-pricings and cancellations of the type proposed would result in value to

Zoran. 

- How does the 1.65 million gained from repricing and cancelling stock options

take into account the time value of money from when the options were initially

granted and/or exercised to the present? How would the time value of money

be taken into account given that the re-priced options might not result in cash to

the company for many years? 

Case 3:06-cv-05503-WHA Document 136 Filed 03/05/08 Page 1 of 2
United States District Court

For the Northern District of California

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- Please provide a list detailing all of the options, and the relevant exercise prices,

granted to Levy Gerzberg, Karl Schneider, and Arthur Stabenow that have yet

to be exercised. The list should be broken down by each individual defendant. 

 

- At the hearing on the motion for preliminary approval, plaintiffs’ counsel

argued that repricing and cancelling stock options was a proper result, as

opposed to cash compensation, because of its purported symmetrical nature to

the alleged harm, i.e., backdating. Had none of the options at issue in this

action been exercised this argument may have merit because it simply would

have been a non-cash expenditure at the time granted. The 1.65 million alleged

to be backdated, however, comprises stock option grants that have actually been

exercised by the individual defendants. Counsel should explain how the past

cash shortfall of 1.65 million in the form of the exercised options is symmetrical

to the non-cash credit the company would receive if the options were repriced

or cancelled.

- Please provide Black-Scholes analysis for all the options being repriced or

cancelled using the stock price on February 26, 2008, the date of the actual

stipulation by the parties (as well as the other dates earlier requested).

The parties are requested to seek no extension to the date of MARCH 17, 2008 AT NOON, for

their submissions. 

IT IS SO ORDERED.

Dated: March 5, 2008. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:06-cv-05503-WHA Document 136 Filed 03/05/08 Page 2 of 2