Exhibit
10.39


 


ZORAN CORPORATION


 


2000 NONSTATUTORY
STOCK OPTION PLAN


 


Amended Through
January 30, 2002


 


1.             Purposes of the Plan.  The purposes of this Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentives to Employees and Consultants
of the Company and its Subsidiaries, and to promote the success of the
Company’s business.  Options granted
hereunder shall be Nonstatutory Stock Options.


 


2.             Definitions.  As used herein, and in any Option granted
hereunder, the following definitions shall apply:


 


(a)           “Board” shall mean the Board
of Directors of the Company.


 


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


 


(c)           “Common Stock” shall mean the
Common Stock of the Company.


 


(d)           “Company” shall mean Zoran
Corporation, a Delaware corporation.


 


(e)           “Committee” shall mean the
Committee appointed by the Board in accordance with paragraph (a) of Section 4
of the Plan.  If the Board does not
appoint or ceases to maintain a Committee, the term “Committee” shall refer to
the Board.


 


(f)            “Consultant” shall mean any
independent contractor retained to perform services for the Company or any
Parent or Subsidiary.


 


(g)           “Continuous Service” shall
mean the absence of any interruption or termination of service with the
Company, a successor of the Company or any Parent or Subsidiary, whether in the
capacity of an Employee or a Consultant. 
Continuous Service shall not be considered interrupted (i) during any
period of sick leave, military leave or any other leave of absence approved by
the Board, (ii) in the case of transfers between locations of the Company or
between the Company and any Parent, Subsidiary or successor of the Company, or
(iii) merely as a result of a change in the capacity in which the Optionee
renders such service provided that no interruption or termination of the
Optionee’s service occurs.


 


(h)           “Conversion Date” shall mean
the effective date of a certificate of amendment of the Certificate of
Incorporation of the Company filed with the Secretary of State of the State of
Delaware to effect an increase in the number of authorized shares of Common
Stock by an amount at least equal to the maximum aggregate number of Shares
authorized for issuance under the Plan as provided in Section 3.


 


(i)            “Employee” shall mean any
person employed by the Company or any Parent or Subsidiary.


 


(j)            “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.


 


(k)            “Nonstatutory Stock Option”
shall mean an Option that is not intended to be an incentive stock option
within the meaning of Section 422 of the Code.


 

















 


(l)            “Option” shall mean a stock
option granted pursuant to the Plan.


 


(m)          “Option Agreement” shall mean a
written agreement between the Company and the Optionee regarding the grant and
exercise of Options to purchase Shares and the terms and conditions thereof as
determined by the Committee pursuant to the Plan.


 


(n)           “Optioned Shares” shall mean the
Shares subject to an Option.


 


(o)           “Optionee” shall mean an
Employee or Consultant who receives an Option.


 


(p)           “Parent” shall mean a “parent
corporation,” whether now or hereafter existing, as defined by
Section 424(e) of the Code.


 


(q)           “Plan” shall mean this 2000
Nonstatutory Stock Option Plan.


 


(r)            “Preferred Stock” shall mean
the Series A Preferred Stock of the Company.


 


(s)           “Securities Act” shall mean
the Securities Act of 1933, as amended.


 


(t)            “Share” shall mean (i) prior
to the Conversion Date, a share of Preferred Stock, as adjusted in accordance
with Section 11, and (ii) on and after the Conversion Date, a share of
Common Stock, as adjusted in accordance with Section 11.


 


(u)           “Subsidiary” shall mean a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code.


 


3.             Stock Subject to the Plan.


 


(a)           Maximum Number of Shares Issuable.  Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be issued under the
Plan shall be five million three hundred twenty-five thousand (5,325,000).  If an Option expires or becomes
unexercisable for any reason without having been exercised in full, the Shares
which were subject to the Option but as to which the Option was not exercised
shall, unless the Plan shall have been terminated, become available for other
Option grants under the Plan.


 


(b)           Conversion of Shares on Conversion
Date.  Prior to the Conversion Date,
the Shares issuable under the Plan as set forth in Section 3(a) and under each
outstanding Option shall consist of authorized but unissued or reacquired
shares of Preferred Stock.  On the
Conversion Date, the Shares issuable under the Plan and under each then
outstanding Option shall automatically convert into and thereafter shall
consist solely of that number of the authorized but unissued or reacquired
shares of Common Stock into which the number of shares of Preferred Stock
issuable under the Plan in accordance with Section 3(a) or under such
outstanding Option, as the case may be, are convertible in accordance with
their terms.


 


4.             Administration of the Plan.


 


(a)           Procedure.  The Plan shall be administered by the
Board.  The Board may appoint a
Committee consisting of one or more members of the Board to administer the Plan,
subject to such terms and conditions as the Board may prescribe.  Once appointed, the Committee shall continue
to serve until otherwise directed by the Board.  From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and,
thereafter, directly administer the Plan. 
Any action which may be taken by the Committee under the Plan may
instead be taken by the Board, and each reference herein to the Committee shall
be deemed to refer also to the Board.


 


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The Committee shall meet
at such times and places and upon such notice as the chairperson
determines.  A majority of the Committee
shall constitute a quorum.  Any acts by
the Committee may be taken at any meeting at which a quorum is present and
shall be by majority vote of those members entitled to vote.  Additionally, any acts reduced to writing or
approved in writing by all of the members of the Committee shall be valid acts
of the Committee.


 


(b)           Powers of the Committee.  Subject to the provisions of the Plan, the
Committee shall have the authority: 
(i) to determine, upon review of relevant information, the fair
market value of the Shares; (ii) to determine the exercise price of
Options to be granted, the Employees or Consultants to whom and the time or
times at which Options shall be granted, and the number of Shares to be
represented by each Option; (iii) to interpret the Plan; (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan;
(v) to determine the terms and provisions of each Option (which need not be
identical) and, with the consent of the holder thereof, to modify or amend any
Option; (vi) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option; (vii) to
accelerate or (with the consent of the Optionee) defer an exercise date of any
Option; and (viii)  to make all other determinations deemed necessary or
advisable for the administration of the Plan.


 


(c)           Effect of Committee’s Decision.  All decisions, determinations and
interpretations of the Committee shall be final and binding on all potential or
actual Optionees, any other holder of an Option or other equity security of the
Company and all other persons.


 


5.             Eligibility and Option
Limitations.


 


(a)           Persons Eligible for Options.  Options under the Plan may be granted only
to Employees or Consultants whom the Committee, in its sole discretion, may
designate from time to time.  For
purposes of the foregoing sentence, “Employees” and “Consultants” shall include
prospective Employees and prospective Consultants to whom Options are granted
in connection with written offers of employment or other service
relationship.  However, notwithstanding
any other provision herein to the contrary, no person shall be eligible to be
granted an Option under the Plan whose eligibility would require approval of
the Plan by the stockholders of the Company under any law or regulation or the
rules of any stock exchange or market system upon which shares of Common Stock
may then be listed.  If not inconsistent
with any such law, regulation or rule, an Option may be granted to a person,
not previously employed by the Company, as an inducement essential to entering
into an employment contract with the Company. 
An Employee who has been granted an Option, if he or she is otherwise
eligible, may be granted an additional Option or Options


 


(b)           No Right to Continuing Employment.  Neither the establishment nor the operation
of the Plan shall confer upon any Optionee or any other person any right with
respect to continuation of employment or other service with the Company (or any
Parent or Subsidiary), nor shall the Plan interfere in any way with the right
of the Optionee or the right of the Company (or any Parent or Subsidiary) to
terminate such employment or service at any time.


 


(c)           Option Repricing.  No Option shall be repriced without the
approval of a majority of the shares of Common Stock present or represented by
proxy and voting at a meeting of the stockholders of the Company at which a
quorum representing a majority of all outstanding shares of Common Stock is
present or represented by proxy.


 


6.             Term of Plan.  The Plan shall become effective upon its
adoption by the Board.  It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.


 


7.             Term of Option.  The term of each Option shall not exceed ten
(10) years from the date of grant of the Option, and, unless the Committee
determines otherwise, the term of each Option shall be ten (10) years from the
date of grant of the Option.  The term
of the Option shall be set forth in the Option Agreement.


 


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8.             Option Price and Consideration.


 


(a)           Option Price.  The option price for the Shares to be issued
pursuant to any Option shall be such price as is determined by the Committee,
which shall in no event be less than 85% of the fair market value of such
Shares on the date the Option is granted. 
The fair market value of the Common Stock shall be determined by the
Committee, using such criteria as it deems relevant; provided, however, that if
there is a public market for the Common Stock, the fair market value per Share
shall be the average of the last reported bid and asked prices of the Common
Stock on the date of grant, as reported in The Wall Street Journal (or,
if not so reported, as otherwise reported by the NASDAQ System) or, in the
event the Common Stock is listed on a national securities exchange (within the
meaning of Section 6 of the Exchange Act) or on the NASDAQ National Market
System (or any successor national market system), the fair market value per
Share shall be the closing price on such exchange on the date of grant of the
Option, as reported in The Wall Street Journal.  The fair market value of each share of
Preferred Stock shall equal the fair market value determined in accordance with
the preceding sentence of that number of shares of Common Stock into which such
share of Preferred Stock is then convertible in accordance with its terms.


 


(b)           Consideration.  The consideration to be paid for the
Optioned Shares shall be payment in cash or by check unless payment in some
other manner is authorized by the Committee at the time of the grant of the
Option, including (i) the surrender of other Shares owned by the Optionee for
more than six months and having a fair market value equal to the option price,
(ii) following the Conversion Date, by delivery of a properly executed notice
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System), or (iii) such other consideration and method of
payment for the issuance of Optioned Shares as may be permitted under
Section 152 of the Delaware General Corporation Law.  Any cash or other property received by the
Company from the sale of Shares pursuant to the Plan shall constitute part of
the general assets of the Company.


 


9.             Exercise of Option.


 


(a)           Vesting Period.  Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Committee and as shall be permissible under the terms of the Plan, which shall
be specified in the Option Agreement evidencing the Option.  Unless the Committee specifically determines
otherwise at the time of the grant of the option, each Option shall vest and
become exercisable, cumulatively, in four substantially equal installments on
each of the first four anniversaries of the date of the grant of the option,
subject to the Optionee’s Continuous Service. 
However, no Option granted to a prospective Employee or prospective
Consultant may become exercisable prior to the date on which such person
commences service.


 


(b)           Exercise Procedures.  An Option shall be deemed to be exercised
when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option, and full payment for the Shares with respect to which the Option is
exercised has been received by the Company. 
An Option may not be exercised for fractional shares or for less than
ten (10) Shares.  As soon as practicable
following the exercise of an Option in the manner set forth above, the Company
shall issue or cause its transfer agent to issue stock certificates representing
the Shares purchased.  Until the
issuance of such stock certificates (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Shares notwithstanding the
exercise of the Option.  No adjustment
will be made for a dividend or other rights for which the record date is prior
to the date of the transfer by the Optionee of the consideration for the
purchase of the Shares, except as provided in Section 11 of the Plan.


 


(c)           Death of Optionee.  In the event of the death during the Option
period of an Optionee who is at the time of his death, or was within the ninety
(90) day period immediately prior thereto, an Employee or Consultant, and who
was in Continuous Service from the date of the grant of the Option until the
date of death or termination, the Option may be exercised, at any time within
one (1) year following the date of death, by the Optionee’s estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the accrued right to exercise at the time of the
termination or death, whichever comes first.


 


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(d)           Disability of Optionee.  In the event of the permanent and total
disability during the Option period of an optionee who is at the time of such
disability, or was within the ninety (90) day period prior thereto, an Employee
or Consultant, and who was in Continuous Service from the date of the grant of
the Option until the date of disability or termination, the Option may be
exercised at any time within one (1) year following the date of disability, but
only to the extent of the accrued right to exercise at the time of the
termination or disability, whichever comes first, subject to the condition that
no option shall be exercised after the expiration of the Option period.


 


(e)           Other Termination of Continuous
Service.  If the Continuous Service
of an Optionee shall cease for any reason other than permanent and total
disability or death, he or she may, but only within ninety (90) days (or such
other period of time as is determined by the Committee) after the date his or
her Continuous Service ceases, exercise his or her Option to the extent that he
or she was entitled to exercise it at the date of such termination of
Continuous Service, subject to the condition that no Option shall be
exercisable after the expiration of the Option period.


 


(f)            Tax Withholding.  The Company shall have the right, but not
the obligation, to deduct from the Shares issuable upon the exercise of an
Option, or to accept from the Optionee the tender of, a number of whole Shares
having a fair market value, as determined by the Company, equal to all or any
part of the federal, state, local and foreign taxes, if any, required by law to
be withheld by the Company (or any Parent or Subsidiary) with respect to such
Option or the Shares acquired upon the exercise thereof.  Alternatively or in addition, in its
discretion, the Company shall have the right to require the Optionee, through
payroll withholding, cash payment or otherwise to make adequate provision for
any such tax withholding obligations arising in connection with the Option or
the Shares acquired upon the exercise thereof. 
The fair market value of any Shares withheld or tendered to satisfy any
such tax withholding obligations shall not exceed the amount determined by the
applicable minimum statutory withholding rates.  The Company shall have no obligation to deliver Shares until such
tax withholding obligations have been satisfied by the Optionee.


 


Any adverse consequences
incurred by an Optionee with respect to the use of Shares to pay any part of
any tax withholding obligations in connection with the exercise of an Option
shall be the sole responsibility of the Optionee.  Shares withheld in accordance with this provision shall not again
become available for purposes of issuance under the Plan.


 


10.           Non-Transferability of Options.  An Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised, during
the lifetime of the Optionee, only by the Optionee.


 


11.           Adjustments Upon Changes in
Capitalization.  Subject to any
required action by the stockholders of the Company, the number of Shares
subject to the Plan, the number of Optioned Shares covered by each outstanding
Option, and the per share exercise price of each such Option, shall be
appropriately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split,
recapitalization, combination, reclassification, the payment of a stock
dividend on the Common Stock or any other increase or decrease in the number of
such shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive.  Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to an Option.


 


The Committee may, if it
so determines in the exercise of its sole discretion, also make provision for
adjusting the number or class of securities covered by any Option, as well as
the price to be paid therefor, in the event that the Company effects one or
more reorganizations, recapitalizations, rights offerings, or other increases
or reductions of shares of its outstanding Common Stock or Preferred Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.


 


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Unless otherwise
determined by the Committee, upon the dissolution or liquidation of the Company
the Options granted under the Plan shall terminate and thereupon become null
and void.


 


Upon any merger or
consolidation, if the Company is not the surviving corporation, the Options
granted under the Plan shall either be assumed by the surviving entity or shall
terminate in accordance with the provisions of the preceding paragraph, unless
otherwise determined by the Committee.


 


12.           Time of Granting Options.  Unless otherwise specified by the Committee,
the date of grant of an Option under the Plan shall be the date on which the
Committee makes the determination granting such Option.  Notice of the determination shall be given
to each Optionee to whom an Option is so granted within a reasonable time after
the date of such grant.


 


13.           Amendment and Termination of the
Plan.  The Committee may amend or
terminate the Plan from time to time in such respects as the Committee may deem
advisable.  Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if the Plan had not been
amended or terminated.


 


14.           Conditions Upon Issuance of Shares.  Shares shall not be issued with respect to
an Option unless the exercise of such Option and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such
compliance.  As a condition to the
exercise of an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.


 


15.           Reservation of Shares.  During the term of this Plan the Company
will at all times reserve and keep available the number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  Inability of the Company to obtain from any regulatory body
having jurisdiction and authority deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Company of any liability in respect of the nonissuance or sale of such
Shares as to which such requisite authority shall not have been obtained.


 


16.           Information to Optionee.  The Company shall provide or otherwise make
available to each Optionee all such information made available to the Company’s
stockholders generally.


 


17.           Option Agreement.  Options granted under the Plan shall be
evidenced by Option Agreements.


 


IN WITNESS
WHEREOF, the undersigned Secretary of the Company certifies that the foregoing
sets forth the Zoran Corporation 2000 Nonstatutory Stock Option Plan as duly
adopted by the Board and amended through January 30, 2002.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  



 


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