**Exhibit10.39**

 

ZORAN CORPORATION

 

2000 NONSTATUTORYSTOCK OPTION PLAN

 

Amended ThroughJanuary 30, 2002

 

# 1.             Purposes of the Plan.  The purposes of this Stock Option Plan areto attract and retain the best available personnel for positions of substantialresponsibility, to provide additional incentives to Employees and Consultantsof the Company and its Subsidiaries, and to promote the success of theCompany’s business.  Options grantedhereunder shall be Nonstatutory Stock Options.

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

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

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## (b)           “Code” shall mean the InternalRevenue Code of 1986, as amended, and any applicable regulations promulgatedthereunder.

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

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## (d)           “Company” shall mean ZoranCorporation, a Delaware corporation.

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## (e)           “Committee” shall mean theCommittee appointed by the Board in accordance with paragraph (a) of Section 4of the Plan.  If the Board does notappoint or ceases to maintain a Committee, the term “Committee” shall refer tothe Board.

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## (f)            “Consultant” shall mean anyindependent contractor retained to perform services for the Company or anyParent or Subsidiary.

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## (g)           “Continuous Service” shallmean the absence of any interruption or termination of service with theCompany, a successor of the Company or any Parent or Subsidiary, whether in thecapacity of an Employee or a Consultant. Continuous Service shall not be considered interrupted (i) during anyperiod of sick leave, military leave or any other leave of absence approved bythe Board, (ii) in the case of transfers between locations of the Company orbetween 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 Optioneerenders such service provided that no interruption or termination of theOptionee’s service occurs.

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## (h)           “Conversion Date” shall meanthe effective date of a certificate of amendment of the Certificate ofIncorporation of the Company filed with the Secretary of State of the State ofDelaware to effect an increase in the number of authorized shares of CommonStock by an amount at least equal to the maximum aggregate number of Sharesauthorized for issuance under the Plan as provided in Section 3.

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

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## (j)            “Exchange Act” shall mean theSecurities Exchange Act of 1934, as amended.

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

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## (l)            “Option” shall mean a stockoption granted pursuant to the Plan.

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## (m)          “Option Agreement” shall mean awritten agreement between the Company and the Optionee regarding the grant andexercise of Options to purchase Shares and the terms and conditions thereof asdetermined by the Committee pursuant to the Plan.

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

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

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## (p)           “Parent” shall mean a “parentcorporation,” whether now or hereafter existing, as defined bySection 424(e) of the Code.

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

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

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## (s)           “Securities Act” shall meanthe Securities Act of 1933, as amended.

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

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

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# 3.             Stock Subject to the Plan.

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

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## (b)           Conversion of Shares on ConversionDate.  Prior to the Conversion Date,the Shares issuable under the Plan as set forth in Section 3(a) and under eachoutstanding Option shall consist of authorized but unissued or reacquiredshares of Preferred Stock.  On theConversion Date, the Shares issuable under the Plan and under each thenoutstanding Option shall automatically convert into and thereafter shallconsist solely of that number of the authorized but unissued or reacquiredshares of Common Stock into which the number of shares of Preferred Stockissuable under the Plan in accordance with Section 3(a) or under suchoutstanding Option, as the case may be, are convertible in accordance withtheir terms.

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# 4.             Administration of the Plan.

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## (a)           Procedure.  The Plan shall be administered by theBoard.  The Board may appoint aCommittee 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 continueto serve until otherwise directed by the Board.  From time to time, the Board may increase the size of theCommittee and appoint additional members thereof, remove members (with orwithout cause) and appoint new members in substitution therefor, fillvacancies, 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 mayinstead be taken by the Board, and each reference herein to the Committee shallbe deemed to refer also to the Board.

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The Committee shall meetat such times and places and upon such notice as the chairpersondetermines.  A majority of the Committeeshall constitute a quorum.  Any acts bythe Committee may be taken at any meeting at which a quorum is present andshall be by majority vote of those members entitled to vote.  Additionally, any acts reduced to writing orapproved in writing by all of the members of the Committee shall be valid actsof the Committee.

 

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

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

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# 5.             Eligibility and OptionLimitations.

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## (a)           Persons Eligible for Options.  Options under the Plan may be granted onlyto Employees or Consultants whom the Committee, in its sole discretion, maydesignate from time to time.  Forpurposes of the foregoing sentence, “Employees” and “Consultants” shall includeprospective Employees and prospective Consultants to whom Options are grantedin connection with written offers of employment or other servicerelationship.  However, notwithstandingany other provision herein to the contrary, no person shall be eligible to begranted an Option under the Plan whose eligibility would require approval ofthe Plan by the stockholders of the Company under any law or regulation or therules of any stock exchange or market system upon which shares of Common Stockmay then be listed.  If not inconsistentwith 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 enteringinto an employment contract with the Company. An Employee who has been granted an Option, if he or she is otherwiseeligible, may be granted an additional Option or Options

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

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

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# 6.             Term of Plan.  The Plan shall become effective upon itsadoption by the Board.  It shallcontinue in effect for a term of ten (10) years unless sooner terminated underSection 13 of the Plan.

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# 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 Committeedetermines otherwise, the term of each Option shall be ten (10) years from thedate of grant of the Option.  The termof 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 issuedpursuant 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 suchShares on the date the Option is granted. The fair market value of the Common Stock shall be determined by theCommittee, using such criteria as it deems relevant; provided, however, that ifthere is a public market for the Common Stock, the fair market value per Shareshall be the average of the last reported bid and asked prices of the CommonStock 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 theevent the Common Stock is listed on a national securities exchange (within themeaning of Section 6 of the Exchange Act) or on the NASDAQ National MarketSystem (or any successor national market system), the fair market value perShare shall be the closing price on such exchange on the date of grant of theOption, as reported in The Wall Street Journal.  The fair market value of each share ofPreferred Stock shall equal the fair market value determined in accordance withthe preceding sentence of that number of shares of Common Stock into which suchshare of Preferred Stock is then convertible in accordance with its terms.

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## (b)           Consideration.  The consideration to be paid for theOptioned Shares shall be payment in cash or by check unless payment in someother manner is authorized by the Committee at the time of the grant of theOption, including (i) the surrender of other Shares owned by the Optionee formore 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 noticetogether with irrevocable instructions to a broker providing for the assignmentto the Company of the proceeds of a sale or loan with respect to some or all ofthe shares being acquired upon the exercise of the Option (including, withoutlimitation, through an exercise complying with the provisions ofRegulation T as promulgated from time to time by the Board of Governors ofthe Federal Reserve System), or (iii) such other consideration and method ofpayment for the issuance of Optioned Shares as may be permitted underSection 152 of the Delaware General Corporation Law.  Any cash or other property received by theCompany from the sale of Shares pursuant to the Plan shall constitute part ofthe general assets of the Company.

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# 9.             Exercise of Option.

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## (a)           Vesting Period.  Any Option granted hereunder shall beexercisable at such times and under such conditions as determined by theCommittee and as shall be permissible under the terms of the Plan, which shallbe specified in the Option Agreement evidencing the Option.  Unless the Committee specifically determinesotherwise at the time of the grant of the option, each Option shall vest andbecome exercisable, cumulatively, in four substantially equal installments oneach 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 prospectiveConsultant may become exercisable prior to the date on which such personcommences service.

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## (b)           Exercise Procedures.  An Option shall be deemed to be exercisedwhen written notice of such exercise has been given to the Company inaccordance with the terms of the Option by the person entitled to exercise theOption, and full payment for the Shares with respect to which the Option isexercised has been received by the Company. An Option may not be exercised for fractional shares or for less thanten (10) Shares.  As soon as practicablefollowing the exercise of an Option in the manner set forth above, the Companyshall issue or cause its transfer agent to issue stock certificates representingthe Shares purchased.  Until theissuance of such stock certificates (as evidenced by the appropriate entry onthe books of the Company or of a duly authorized transfer agent of theCompany), no right to vote or receive dividends or any other rights as astockholder shall exist with respect to the Optioned Shares notwithstanding theexercise of the Option.  No adjustmentwill be made for a dividend or other rights for which the record date is priorto the date of the transfer by the Optionee of the consideration for thepurchase of the Shares, except as provided in Section 11 of the Plan.

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## (c)           Death of Optionee.  In the event of the death during the Optionperiod 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 whowas in Continuous Service from the date of the grant of the Option until thedate of death or termination, the Option may be exercised, at any time withinone (1) year following the date of death, by the Optionee’s estate or by aperson 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 thetermination or death, whichever comes first.

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## (d)           Disability of Optionee.  In the event of the permanent and totaldisability during the Option period of an optionee who is at the time of suchdisability, or was within the ninety (90) day period prior thereto, an Employeeor Consultant, and who was in Continuous Service from the date of the grant ofthe Option until the date of disability or termination, the Option may beexercised at any time within one (1) year following the date of disability, butonly to the extent of the accrued right to exercise at the time of thetermination or disability, whichever comes first, subject to the condition thatno option shall be exercised after the expiration of the Option period.

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

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## (f)            Tax Withholding.  The Company shall have the right, but notthe obligation, to deduct from the Shares issuable upon the exercise of anOption, or to accept from the Optionee the tender of, a number of whole Shareshaving a fair market value, as determined by the Company, equal to all or anypart of the federal, state, local and foreign taxes, if any, required by law tobe withheld by the Company (or any Parent or Subsidiary) with respect to suchOption or the Shares acquired upon the exercise thereof.  Alternatively or in addition, in itsdiscretion, the Company shall have the right to require the Optionee, throughpayroll withholding, cash payment or otherwise to make adequate provision forany such tax withholding obligations arising in connection with the Option orthe Shares acquired upon the exercise thereof. The fair market value of any Shares withheld or tendered to satisfy anysuch tax withholding obligations shall not exceed the amount determined by theapplicable minimum statutory withholding rates.  The Company shall have no obligation to deliver Shares until suchtax withholding obligations have been satisfied by the Optionee.

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Any adverse consequencesincurred by an Optionee with respect to the use of Shares to pay any part ofany tax withholding obligations in connection with the exercise of an Optionshall be the sole responsibility of the Optionee.  Shares withheld in accordance with this provision shall not againbecome 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 bywill or by the laws of descent and distribution and may be exercised, duringthe lifetime of the Optionee, only by the Optionee.

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# 11.           Adjustments Upon Changes inCapitalization.  Subject to anyrequired action by the stockholders of the Company, the number of Sharessubject to the Plan, the number of Optioned Shares covered by each outstandingOption, and the per share exercise price of each such Option, shall beappropriately adjusted for any increase or decrease in the number of issuedshares of Common Stock resulting from a stock split, reverse stock split,recapitalization, combination, reclassification, the payment of a stockdividend on the Common Stock or any other increase or decrease in the number ofsuch shares of Common Stock effected without receipt of consideration by theCompany; provided, however, that conversion of any convertible securities ofthe Company shall not be deemed to have been “effected without receipt ofconsideration.”  Such adjustment shallbe made by the Committee, whose determination in that respect shall be final,binding and conclusive.  Except asexpressly provided herein, no issue by the Company of shares of stock of anyclass, or securities convertible into shares of stock of any class, shallaffect, and no adjustment by reason thereof shall be made with respect to, thenumber or price of Shares subject to an Option.

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The Committee may, if itso determines in the exercise of its sole discretion, also make provision foradjusting the number or class of securities covered by any Option, as well asthe price to be paid therefor, in the event that the Company effects one ormore reorganizations, recapitalizations, rights offerings, or other increasesor reductions of shares of its outstanding Common Stock or Preferred Stock, andin the event of the Company being consolidated with or merged into any othercorporation.

 

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Unless otherwisedetermined by the Committee, upon the dissolution or liquidation of the Companythe Options granted under the Plan shall terminate and thereupon become nulland void.

 

Upon any merger orconsolidation, if the Company is not the surviving corporation, the Optionsgranted under the Plan shall either be assumed by the surviving entity or shallterminate in accordance with the provisions of the preceding paragraph, unlessotherwise 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 theCommittee makes the determination granting such Option.  Notice of the determination shall be givento each Optionee to whom an Option is so granted within a reasonable time afterthe date of such grant.

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# 13.           Amendment and Termination of thePlan.  The Committee may amend orterminate the Plan from time to time in such respects as the Committee may deemadvisable.  Any such amendment ortermination of the Plan shall not affect Options already granted, and suchOptions shall remain in full force and effect as if the Plan had not beenamended or terminated.

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# 14.           Conditions Upon Issuance of Shares.  Shares shall not be issued with respect toan Option unless the exercise of such Option and the issuance and delivery ofsuch Shares pursuant thereto shall comply with all relevant provisions of law,including, without limitation, the Securities Act, the Exchange Act, the rulesand regulations promulgated thereunder, and the requirements of any stockexchange upon which the Shares may then be listed, and shall be further subjectto the approval of counsel for the Company with respect to suchcompliance.  As a condition to theexercise of an Option, the Company may require the person exercising suchOption to represent and warrant at the time of any such exercise that theShares are being purchased only for investment and without any presentintention to sell or distribute such Shares if, in the opinion of counsel forthe Company, such a representation is required by any of the aforementionedrelevant provisions of law.

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# 15.           Reservation of Shares.  During the term of this Plan the Companywill at all times reserve and keep available the number of Shares as shall besufficient to satisfy the requirements of the Plan.  Inability of the Company to obtain from any regulatory bodyhaving jurisdiction and authority deemed by the Company’s counsel to benecessary to the lawful issuance and sale of any Shares hereunder shall relievethe Company of any liability in respect of the nonissuance or sale of suchShares as to which such requisite authority shall not have been obtained.

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# 16.           Information to Optionee.  The Company shall provide or otherwise makeavailable to each Optionee all such information made available to the Company’sstockholders generally.

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# 17.           Option Agreement.  Options granted under the Plan shall beevidenced by Option Agreements.

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IN WITNESSWHEREOF, the undersigned Secretary of the Company certifies that the foregoingsets forth the Zoran Corporation 2000 Nonstatutory Stock Option Plan as dulyadopted by the Board and amended through January 30, 2002.

 

 
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|   | Secretary |

 

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