UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)
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Filed by a Party other than the Registrant | o |
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o | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Under Rule 14a-12 |
SONIC SOLUTIONS
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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x | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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7250 Redwood Blvd., Suite 300
Novato, California 94945
(415) 893-8000
NOTICE OF 2009 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 28, 2009
1. | To elect five directors to serve for the ensuing year or until their successors are elected and qualified; |
2. | To approve an amendment and restatement to the Company’s 2004 Equity Compensation Plan, which will increase the number of shares of the Company’s common stock reserved for issuance under the plan by an additional 3,000,000 shares; and |
3. | To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
Secretary
September 24, 2009
NOVATO, CALIFORNIA 94945
(415) 893-8000
2009 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 28, 2009
INFORMATION CONCERNING THE ANNUAL MEETING
• | View the Company’s proxy materials for the Annual Meeting and vote on the Internet; |
• | Request a paper copy of the Company’s proxy materials for the Annual Meeting; and |
• | Instruct the Company to send the future proxy materials to you electronically by e-mail. |
• | consider and vote upon the election of five directors to serve for the ensuing year or until their successors are elected and qualified; |
• | to approve an amendment and restatement to the Company’s 2004 Equity Compensation Plan, which will increase the number of shares of the Company’s common stock reserved for issuance under the plan by an additional 3,000,000 shares; and |
• | transact such other business as may properly come before the meeting or any adjournments or postponements thereof. |
• | Proxy card.Be sure to complete, sign and date the card and return it in the prepaid envelope. If you are a shareholder of record and you return your signed proxy cardwithout indicating your voting preferences, the persons named in the proxy card will vote: |
• | FOR the election of the nominees for director named on page 6 of this Proxy Statement; and |
• | FOR the approval of the proposal to amend and restate the 2004 Equity Compensation Plan |
• | In person at the Annual Meeting.All shareholders may vote in person at the Annual Meeting. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspector of election with your ballot when you vote at the meeting. |
• | Submitting a new, duly executed proxy card or paper ballot bearing a later date; |
• | Sending written notice to the Company’s Corporate Secretary; or |
• | Attending the Annual Meeting and voting in person. |
Name | Age | Position | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Robert J. Doris | 56 | Chairman of the Board of Directors | ||||||||
Mary C. Sauer | 56 | Director & Secretary | ||||||||
Robert M. Greber | 71 | Director | ||||||||
Peter J. Marguglio | 63 | Director | ||||||||
R. Warren Langley | 66 | Director |
Name and Address(1) | Number of Shares Beneficially Owned(2) | Percentage of Shares Beneficially Owned(2) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Barclays Global Investors, NA(3) 45 Freemont Street San Francisco, CA 94105 | 1,722,855 | 6.44 | % | |||||||
Harvest Capital Strategies LLC(4) 600 Montgomery Street, Suite 1100 San Francisco, CA 94111 | 1,421,568 | 5.32 | % | |||||||
Royce and Associates(5) 1414 Avenue of the Americas New York, NY 10019 | 1,488,600 | 5.57 | % | |||||||
William Blair & Company, L.L.C.(6) 222 W Adams Chicago, IL 60606 | 3,414,209 | 12.77 | % | |||||||
Waddell & Reed Financial, Inc.(7) Waddell & Reed Financial Services, Inc. Waddel & Reed, Inc. Waddell & Reed Investment Management Company Ivy Investment Company 6300 Lamar Avenue Overland Park, KS 66202 | 2,318,542 | 8.67 | % | |||||||
Directors and Officers | ||||||||||
Robert J. Doris(8) | 2,800,279 | 10.47 | % | |||||||
Mary C. Sauer(9) | 2,800,279 | 10.47 | % | |||||||
Peter Marguglio(10) | 337,543 | 1.26 | % | |||||||
Robert M. Greber(11) | 157,550 | * | ||||||||
R. Warren Langley(12) | 112,100 | * | ||||||||
David C. Habiger(13) | 254,833 | * | ||||||||
A. Clay Leighton(14) | 484,583 | 1.81 | % | |||||||
Mark Ely(15) | 101,685 | * | ||||||||
Paul Norris(16) | 144,995 | * | ||||||||
All directors and executive officers as a group (9 persons) | 7,193,847 | 26.90 | % |
* | Less than 1%. |
(1) | Unless otherwise indicated, the address of each person is c/o Sonic Solutions, 7250 Redwood Blvd., Suite 300, Novato, CA 94945. |
(2) | Table is based upon information supplied by directors, officers and principal shareholders. Applicable percentage ownership for each shareholder is based on 26,743,539 shares of common stock outstanding as of September 23, 2009, together with applicable options for such shareholders. Beneficial ownership is determined in accordance with Securities Exchange Commission (“SEC”) rules and generally includes voting or investment power with respect to securities, subject to community property laws where applicable. Shares of common stock subject to options are deemed outstanding for the purpose of computing the percentage ownership of the person holding such options, but are not treated as outstanding for computing the percentage ownership of any other person. |
(3) | The information is based solely on Schedule 13G filed with the SEC by Barclays Global Investors, NA, on December 31, 2008. |
(4) | The information is based solely on Schedule 13G filed with the SEC by Harvest Capital Strategies, LLC on December 31, 2008. |
(5) | The information is based solely on Schedule 13G filed with the SEC by Royce and Associates on December 31, 2008. |
(6) | The information is based solely on Schedule 13G filed with the SEC by William Blair & Company, L.L.C. on December 31, 2008. |
(7) | The information is based solely on Schedule 13G filed with the SEC by Waddell & Reed, Inc. on December 31, 2008. |
(8) | Includes 720,531 shares owned by Mr. Doris, 156,717 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009, 1,609,009 owned by the Doris-Sauer Revocable Trust u/a/d 5 Nov 2004, 217,995 shares owned by Ms. Sauer, and 96,027 shares issuable upon exercise of Ms. Sauer’s options which will be exercisable within 60 days of September 23, 2009. The revocable trust was established by Robert Doris and Mary Sauer, husband and wife. Mr. Doris and Ms. Sauer are joint trustees of the Trust and each person has the power to vote and dispose of any and all securities held by the Trust. Both Mr. Doris and Ms. Sauer disclaim beneficial ownership of the shares and options. |
(9) | Includes 217,995 shares owned by Ms. Sauer, 96,027 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009, 1,609,009 owned by the Doris-Sauer Revocable Trust u/a/d 5 Nov 2004, 720,531 shares owned by Mr. Doris, and 156,717 shares issuable upon exercise of Mr. Doris’s options which will be exercisable within 60 days of September 23, 2009. The revocable trust was established by Robert Doris and Mary Sauer, husband and wife. Mr. Doris and Ms. Sauer are joint trustees of the Trust and each person has the power to vote and dispose of any and all securities held by the Trust. Both Ms. Sauer and Mr. Doris disclaim beneficial ownership of the shares and options. |
(10) | Includes 193,443 shares owned by Mr. Marguglio, and 144,100 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(11) | Includes 10,000 shares owned by Mr. Greber, 12,500 shares owned directly by a trust whose sole trustee and beneficiary is Mr. Greber’s will and 135,050 issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(12) | Includes 112,100 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(13) | Includes 9,000 shares owned by Mr. Habiger and 245,833 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(14) | Includes 109,500 shares owned by Mr. Leighton and 375,083 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(15) | Includes 41,060 shares owned by Mr. Ely, 18,750 unvested RSUs which will vest every six months and 41,875 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
(16) | Includes 39,120 shares owned by Mr. Norris, 3,500 unvested RSUs which will vest every six months and 102,375 shares issuable upon exercise of options which will be exercisable within 60 days of September 23, 2009. |
Name | Age | Position | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
David C. Habiger | 40 | Chief Executive Officer and President | ||||||||
Paul F. Norris | 47 | Executive Vice President, Acting Chief Financial Officer and General Counsel | ||||||||
A. Clay Leighton | 53 | Chief Operating Officer | ||||||||
Mark Ely | 40 | Executive Vice President of Strategy |
proxy statement associated with the Company’s combined 2006 and 2007 Annual Shareholders Meeting is available on the Company’s internet web site atwww.sonic.com, by calling the SEC at (800) SEC-0330 for the location of the nearest public reference room or through the SEC’s EDGAR system atwww.sec.gov. The Company’s website does not constitute a part of this Proxy Statement or the proxy materials.
considered to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to personal grievances or matters as to which the Company has already received substantially similar communications. Comments or complaints relating to the Company’s accounting, internal accounting controls or auditing matters may be referred directly to the Audit Committee by writing to the Chairman of the Audit Committee, c/o Sonic Solutions, 7250 Redwood Blvd., Suite 300, Novato, CA 94945.
(3) the number of shares of the Company’s common stock which are beneficially owned by the shareholder; (4) any material interest of the shareholder in such business; and (5) any other information that is required to be provided by the shareholder pursuant to Regulation 14A under the Exchange Act, in the shareholder’s capacity as a proponent of the proposal.
Peter J. Marguglio
R. Warren Langley
March 31, | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 | 2008 | 2007 | |||||||||||||
Audit fees(1) | $ | 1,124 | $ | 1,050 | $ | 1,524 | |||||||||
Audit related fees(2) | 130 | 1,963 | 102 | ||||||||||||
Total fees | $ | 1,254 | $ | 3,013 | $ | 1,626 |
compensation for inclusion in the Company’s Proxy Statement, in accordance with applicable rules and regulations. In September 2005, the Board approved the base salaries and option grants for Mr. Habiger and Mr. Leighton. In January 2007, the Board approved Executive Employment Agreements for Messrs. Habiger, Leighton and Ely. In February 2008, the Board approved the Executive Employment Agreement for Mr. Norris.
• | to design compensation packages that will attract, retain, and motivate highly qualified key employees who can be instrumental to the Company’s long-term success; |
• | to pay competitively in relation to similar audio and video software and hardware companies and to provide appropriate reward opportunities for achieving high levels of performance compared to similar organizations in the marketplace; |
• | to emphasize individual excellence and encourage all employees, not just the Company’s executive officers, to take initiative and lead projects that enhance the Company’s overall effectiveness; |
• | to emphasize sustained performance by aligning rewards with shareholder interests; and |
• | to motivate executives and employees to achieve the Company’s annual and long-term business goals and encourage behavior toward the fulfillment of those objectives. |
Committee and/or its full Board may exercise its discretion in modifying any recommended adjustments or awards to executives.
• | an assessment of individual contribution as judged by the CEO (other than with respect to his own salary), as well as the Compensation Committee and/or Board; |
• | tenure; |
• | relationship to the salaries of other executives at comparable companies; and |
• | the Company’s overall financial results. |
periods since the Compensation Committee does not target salary at a particular percentage of total compensation.
Robert M. Greber, Chairman
R. Warren Langley
Peter J. Marguglio
*Name and Principal Position | Year | Salary ($) (1) | Bonus ($) | Stock Awards ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
David C. Habiger, | 2009 | 354,000 | — | — | 270,698 | — | 5,700 | 630,398 | ||||||||||||||||||||||||||
Chief Executive Officer | 2008 | 350,000 | — | — | 715 | — | 12,250 | 362,965 | ||||||||||||||||||||||||||
2007 | 350,000 | — | — | 265,913 | — | 11,863 | 627,776 | |||||||||||||||||||||||||||
Paul F. Norris | 2009 | 340,175 | — | — | 157,841 | — | 5,550 | 503,565 | ||||||||||||||||||||||||||
Executive Vice President, | 2008 | 259,615 | 50,000 | — | 50,288 | — | 7,400 | 367,303 | ||||||||||||||||||||||||||
Acting Chief Financial | 2007 | 250,096 | — | — | — | 5,784 | 255,880 | |||||||||||||||||||||||||||
Officer and | ||||||||||||||||||||||||||||||||||
General Counsel | ||||||||||||||||||||||||||||||||||
A. Clay Leighton (4) | 2009 | 258,112 | — | — | 163,099 | — | 6,200 | 427,411 | ||||||||||||||||||||||||||
Chief Operating Officer | 2008 | 300,000 | — | — | — | — | 18,000 | 318,000 | ||||||||||||||||||||||||||
2007 | 300,000 | — | — | — | — | 11,800 | 311,800 | |||||||||||||||||||||||||||
Mark Ely (5) | 2009 | 386,526 | — | — | 166,648 | — | 8,975 | 562,149 | ||||||||||||||||||||||||||
Executive Vice President | 2008 | 300,000 | 50,000 | — | 143 | — | 1,000 | 351,143 | ||||||||||||||||||||||||||
of Strategy | 2007 | 249,670 | 59,861 | — | 53,183 | — | 11,693 | 374,407 |
* | Other than the individuals listed above, the Company does not have any other executive employees who have received more than $100,000 in compensation, including bonuses and options, during each of the last three fiscal years. |
(1) | In addition to salary, the following Named Executive Officers tendered options and received cash payments in fiscal 2009 as follows: |
Name | Shares Tendered (#) | Tender Offer Price Per Share ($) | Cash Received ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
David C. Habiger | 400,000 | $ | 0.01 | $ | 4,000 | |||||||||
Paul F. Norris | 75,000 | 0.02 | 1,500 | |||||||||||
A. Clay Leighton | 100,000 | 0.02 | 2,000 | |||||||||||
200,000 | 0.01 | 2,000 | ||||||||||||
Mark Ely | 40,000 | 0.01 | 400 | |||||||||||
80,000 | 0.02 | 1,600 | ||||||||||||
4,379 | 0.30 | 1,314 |
(2) | Amounts shown in this column reflect the Company’s accounting expense for these awards and do not reflect whether the recipient has actually realized a financial benefit from the awards. The column reflects the dollar amount recognized for financial statement reporting purposes (disregarding an estimate of forfeitures related to service-based vesting conditions) in accordance with SFAS No. 123(R), and may include amounts for awards granted in and prior to 2009, 2008 and 2007, respectively. |
(3) | Consists of matching contributions made by the Company on behalf of the Named Executive Officers to the Company’s 401(k) plan. |
(4) | In May 2008, Mr. Leighton’s annual salary was reduced by $45,888 as part of a voluntary agreement with the Company in connection with repriced stock options due to the Company’s stock option review during fiscal 2008. In January 2009, the agreement was satisfied in full. |
(5) | In addition to salary, Mr. Ely received $82,938 in form of RSUs. The grant date fair value of the RSUs was determined by using the closing price of the Company’s common stock as of the day of release. Mr. Ely’s grant of RSUs vests 12.5% every six months for four years. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(2) | |||||||||||||||||||||||||||||||||||
David C. Habiger(3) | 6/12/2008 | — | — | — | — | — | — | 375,000 | — | $ | 6.89 | $ | 975,525 | |||||||||||||||||||||||||||||||||
12/15/2008 | — | — | — | — | — | — | 300,000 | — | 1.23 | 139,350 | ||||||||||||||||||||||||||||||||||||
Paul F. Norris(3) | 6/12/2008 | — | — | — | — | — | — | 144,000 | — | 6.89 | 374,602 | |||||||||||||||||||||||||||||||||||
12/15/2008 | — | — | — | — | — | — | 150,000 | — | 1.23 | 69,675 | ||||||||||||||||||||||||||||||||||||
A. Clay Leighton(3) | 6/12/2008 | — | — | — | — | — | — | 225,000 | — | 6.89 | 585,315 | |||||||||||||||||||||||||||||||||||
12/15/2008 | — | — | — | — | — | — | 200,000 | — | 1.23 | 92,900 | ||||||||||||||||||||||||||||||||||||
Mark Ely(4) | 6/12/2008 | — | — | — | — | — | — | — | 50,000 | 1.20 | 60,000 | |||||||||||||||||||||||||||||||||||
12/15/2008 | — | — | — | — | — | — | 150,000 | — | 1.23 | 69,675 |
(1) | On September 25, 2008, the Board approved the 2008 Executive Bonus Plan (“Plan”). Pursuant to the Plan, payments for bonus amounts will be made in cash and the Company’s Chief Financial Officer will calculate the bonus amount payable to each participant at the end of each performance period. As of March 31, 2009 the Company accrued bonus amount of $0.1 million and had not paid out any cash bonuses for the Named Executive Officers during fiscal 2009. |
(2) | Reflects the grant date fair value of each equity award computed in accordance with SFAS No. 123(R). Please refer to Note 4, “Shareholders’ Equity,” to the Consolidated Financial Statements included in the Annual Report for the relevant assumptions used to determine the compensation cost of the Company’s stock and option awards. |
(3) | Grants on June 12, 2008 have three year vesting beginning on the date of grant date. Grants on December 15, 2008 vest monthly over four years beginning on the date of grant. All of the options granted are also subject to change of control vesting per the employment agreement for the Named Executive Officers. |
(4) | Mr. Ely’s grant of RSUs on June 12, 2008 vests 12.5% every six months for four years after the vesting commencement date and the December 15, 2008 stock option grant vests monthly over four years beginning on the date of grant. The grant date fair value of the RSUs was determined by using the closing price of the Company’s common stock as of close on March 31, 2009. All options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested (#) | Market Value of Shares or Units That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||
David C. Habiger | 93,750 | 281,250 | (1) | — | 6.89 | 6/12/18 | — | — | — | — | |||||||||||||||||||||||||||||
18,750 | 281,250 | (2) | — | 1.23 | 12/15/18 | — | — | — | — | ||||||||||||||||||||||||||||||
Paul F. Norris | 36,000 | 108,000 | (1) | — | 6.89 | 6/12/18 | — | — | — | — | |||||||||||||||||||||||||||||
9,375 | 140,625 | (2) | — | 1.23 | 12/15/18 | — | — | — | — | ||||||||||||||||||||||||||||||
— | — | — | — | — | 7,000 | 8,400 | (3) | — | — | ||||||||||||||||||||||||||||||
A. Clay Leighton | 66,392 | — | (4) | — | 1.17 | 10/25/11 | |||||||||||||||||||||||||||||||||
12,500 | 187,500 | (2) | — | 1.23 | 12/15/18 | — | — | — | — | ||||||||||||||||||||||||||||||
51,940 | — | (4) | — | 3.97 | 3/11/13 | ||||||||||||||||||||||||||||||||||
56,250 | 168,750 | (1) | — | 6.89 | 6/12/18 | — | — | — | — | ||||||||||||||||||||||||||||||
36,608 | — | (4) | — | 1.17 | 10/25/11 | ||||||||||||||||||||||||||||||||||
20,000 | — | (5) | — | 1.12 | 7/12/11 | ||||||||||||||||||||||||||||||||||
48,060 | — | (4) | — | 6.33 | 3/11/13 | ||||||||||||||||||||||||||||||||||
Mark Ely | 7,500 | — | (2) | — | 3.97 | 3/11/13 | |||||||||||||||||||||||||||||||||
9,375 | 140,625 | (2) | — | 1.23 | 12/15/18 | — | — | — | — | ||||||||||||||||||||||||||||||
31,250 | 37,500 | (3) | — | — |
(1) | Unvested options vest in equal installments monthly for three years beginning on the date of grant date and expire in ten years. All of the options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
(2) | Unvested options vest in equal installments monthly for four years beginning on the date of grant and expire in ten years. All of the options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
(3) | The RSU valuation was determined by multiplying the total number of shares by $1.20, the closing price of the Company’s common stock on March 31, 2009. RSUs vest 12.5% every six months for four years after the vesting commencement date. All of the options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
(4) | Unvested options vest in equal installments monthly for three years beginning on the date of grant and expire in ten years. All of the options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
(5) | Unvested options vest in equal installments monthly for one year beginning on the date of grant. All of the options granted are subject to change of control vesting per the employment agreement for the Named Executive Officers. |
Option Awards | Stock Vested | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||
David C. Habiger | — | — | — | — | |||||||||||||||
Paul F. Norris | — | — | 7,000 | 8,400 | |||||||||||||||
A. Clay Leighton | — | — | — | — | |||||||||||||||
Mark Ely | — | — | 18,750 | 22,500 |
(1) | The RSU valuation was determined by multiplying the total number of shares by $1.20, the closing price of the Company’s common stock on March 31, 2009. |
Mr. Leighton’s outstanding unvested stock options, RSUs, or other equity compensation will immediately vest in full and the Company will make a lump sum payment equal to 100% of his annual base salary at the level in effect at the time of the Change in Control.
Potential Payments Upon: | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Involuntary Termination Other Than For Cause | Voluntary Termination for Good Reason | ||||||||||||||||||||||
Name | Type of Benefit | Prior to Change in Control ($) | Change of Control ($) | Prior to Change in Control ($) | Change of Control ($) | ||||||||||||||||||
David C. Habiger | Cash Severance Payments | 613 | 613 | 613 | 613 | ||||||||||||||||||
Vesting Acceleration (1) | — | — | — | — | |||||||||||||||||||
Total Termination Benefits: | 613 | 613 | 613 | 613 | |||||||||||||||||||
Paul F. Norris | Cash Severance Payments | 300 | 300 | 300 | 300 | ||||||||||||||||||
Vesting Acceleration (1) | — | 8 | — | 8 | |||||||||||||||||||
Total Termination Benefits: | 300 | 308 | 300 | 308 | |||||||||||||||||||
A. Clay Leighton | Cash Severance Payments | 300 | 300 | 300 | 300 | ||||||||||||||||||
Vesting Acceleration (1) | — | — | — | — | |||||||||||||||||||
Total Termination Benefits: | 300 | 300 | 300 | 300 | |||||||||||||||||||
Mark Ely | Cash Severance Payments | 300 | 300 | 300 | 300 | ||||||||||||||||||
Vesting Acceleration (1) | — | 38 | — | 38 | |||||||||||||||||||
Total Termination Benefits: | 300 | 338 | 300 | 338 |
Name | Fees Earned or Paid in Cash ($) (1) | Option Awards ($) (2) | Total ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Robert J. Doris (3) | 114,134 | (4) | 97,622 | (6) | 211,756 | |||||||||
Mary C. Sauer (3) | 79,653 | (5) | 78,223 | (7) | 157,876 | |||||||||
Robert M. Greber | 70,762 | 21,976 | (8) | 92,738 | ||||||||||
Peter J. Marguglio | 67,534 | 17,581 | (9) | 85,115 | ||||||||||
R. Warren Langley | 68,022 | 17,581 | (10) | 85,603 |
(1) | In addition to salary, the following Directors tendered options and received cash payments in fiscal 2009: |
Name | Shares Tendered (#) | Tender Offer Price Per Share ($) | Cash Received ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Robert J. Doris | 157,790 | $ | 0.06 | $ | 9,467 | |||||||||
332,738 | 0.02 | 6,655 | ||||||||||||
Mary C. Sauer | 67,790 | 0.06 | 4,067 | |||||||||||
152,738 | 0.02 | 3,055 | ||||||||||||
Robert M. Greber | 25,000 | 0.06 | 1,500 | |||||||||||
52,500 | 0.02 | 1,050 | ||||||||||||
Peter J. Marguglio | 24,000 | 0.06 | 1,440 | |||||||||||
42,000 | 0.02 | 840 | ||||||||||||
R. Warren Langley | 24,000 | 0.06 | 1,440 | |||||||||||
42,000 | 0.02 | 840 |
(2) | Amounts shown in this column reflect the Company’s accounting expense for these awards and do not reflect whether the recipient has actually realized a financial benefit from the awards. The column reflects the dollar amount recognized for financial statement reporting purposes disregarding an estimate of forfeitures related to service-based vesting conditions in accordance with SFAS No 123(R). |
(3) | In lieu of the outside Directors Compensation Policy, Mr. Doris and Ms. Sauer received the above amounts in consideration of their providing advisory services to the Company’s executives. Also includes matching contributions made by the Company on behalf of Mr. Doris and Ms. Sauer to the Company’s 401(k) plan. |
(4) | In May 2008, Mr. Doris’s compensation was reduced by $45,888 as part of a voluntary agreement with the Company in connection with repriced stock options due to the Company’s stock option review during fiscal 2008. The agreement was satisfied in full in June 2009. |
(5) | In May 2008, Ms. Sauer’s compensation was reduced by $31,324 as part of a voluntary agreement with the Company in connection with repriced stock options due to the Company’s stock option review during fiscal 2008. The agreement was satisfied in full in June 2009. |
(6) | As of March 31, 2009, Mr. Doris held options to purchase an aggregate of 755,447 of the Company’s Common Stock and held unvested options of 65,325. |
(7) | As of March 31, 2009, Ms. Sauer held options to purchase an aggregate of 458,297 of the Company’s Common Stock and held unvested options of 52,275. |
(8) | As of March 31, 2009, Mr. Greber held options to purchase an aggregate of 163,475 of the Company’s Common Stock, and held unvested options of 65,325. |
(9) | As of March 31, 2009, Mr. Marguglio held options to purchase an aggregate of 118,825 of the Company’s Common Stock, and held unvested options of 52,275. |
(10) | As of March 31, 2009, Mr. Langley held options to purchase an aggregate of 112,825 of the Company’s Common Stock, and held unvested options of 52,275. |
PROPOSAL NO. 2 — | APPROVAL OF AMENDMENT AND RESTATEMENT OF THE SONIC SOLUTIONS 2004 EQUITY COMPENSATION PLAN |
appreciation rights for up to an additional 500,000 shares which shall not count against the limit set forth in the previous sentence. For awards of restricted stock and restricted stock units that are intended to be performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), the maximum number of shares subject to such awards that may be granted to a participant during a calendar year is 300,000 shares. The foregoing limitations shall be adjusted proportionately by the plan administrator in connection with any change in the Company’s capitalization due to a stock split, stock dividend or similar event affecting the Company’s common stock and its determination shall be final, binding and conclusive.
options and stock appreciation rights may be granted to eligible participants under such plan during a specified period. Compensation paid pursuant to options or stock appreciation rights granted under such a plan and with an exercise price equal to the fair market value of the Company’s common stock on the date of grant is deemed to be inherently performance-based, since such awards provide value to participants only if the stock price appreciates. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations, if any option or stock appreciation right is canceled, the cancelled award shall continue to count against the maximum number of shares of the Company’s common stock with respect to which an award may be granted to a participant.
deemed to have been “effected without receipt of consideration.” In the event of any distribution of cash or other assets to shareholders other than a normal cash dividend, the Administrator will make adjustments in connection with the events described in the preceding sentence or substitute, exchange or grant awards with respect to the shares of a related entity (collectively “adjustments”). Any such adjustments to outstanding awards will be effected in a manner that precludes the material enlargement of rights and benefits under such awards. Adjustments, if any, and any determinations or interpretations, including any determination of whether a distribution is other than a normal cash dividend, will be made by the Administrator and its determination shall be final, binding and conclusive. In connection with the foregoing adjustments, the Administrator may, in its discretion, prohibit the exercise of awards or other issuance of shares of common stock, cash or other consideration pursuant to awards during certain periods of time. Except as the Administrator determines, no issuance of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of shares of common stock subject to an award.
• | The acquisition of beneficial ownership of 50% or more of the Company’s common stock by any individual or entity or related group of persons; |
• | a sale, transfer or other disposition of all or substantially all of the Company’s assets; |
• | a merger or consolidation in which the Company is not the surviving entity; |
• | a reverse merger in which the Company is the surviving entity but, among other things, more than 40% of the Company’s common stock is acquired by any individual or entity or related group of persons who are different from those who held such common stock immediately prior to such merger; or |
• | the Company’s complete liquidation or dissolution. |
• | acquisition of beneficial ownership of 50% or more of the Company’s common stock by any individual or entity or related group of persons pursuant to a tender or exchange offer which a majority of the Board members (who have served on the Board for at least thirty-six (36) months) do not recommend the Company’s shareholders accept, or |
• | a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who have either been Board members continuously for a period of at least thirty-six (36) months or have been Board members for less than thirty-six (36) months and were elected or nominated for election by at least a majority of Board members who have served on the Board for at least thirty-six (36) months. |
corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents therein, the Company shall obtain shareholder approval of any such amendment to the 2004 Plan in such a manner and to such a degree as required. In addition, shareholder approval will be obtained for any amendment of the 2004 Plan to (i) materially increase the benefits accruing to participants under the 2004 Plan; (ii) to materially modify the requirements for participation in the 2004 Plan or (iii) to increase the number of shares of common stock reserved for issuance under the 2004 Plan.
the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the participant’s total compensation is deemed reasonable in amount.
2004 Equity Compensation Plan | ||||||||
---|---|---|---|---|---|---|---|---|
Name | Total Grants | |||||||
David C. Habiger (1) | 400,000 | |||||||
Paul F. Norris | 89,000 | |||||||
A. Clay Leighton (2) | 200,000 | |||||||
Mark Ely | 130,000 | |||||||
Executive Officers as a group (4 persons) | 819,000 | |||||||
Directors as a group (5 persons) | 386,500 | |||||||
Robert J. Doris, nominee | 170,000 | |||||||
Mary C. Sauer, nominee | 80,000 | |||||||
Robert M. Greber, nominee | 52,500 | |||||||
Peter J. Marguglio, nominee | 42,000 | |||||||
R. Warren Langley, nominee | 42,000 |
(1) | Received 5% or more of the awards granted under this Plan. |
2004 EQUITY COMPENSATION PLAN
Amended and Restated August 2009
on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same.
(ix) operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue, (xiv) expenses, (xv) earnings before interest, taxes and depreciation, (xvi) economic value added, (xvii) market share and (xviii) other measures of performance selected by the Administrator. The performance criteria may be applicable to the Company, Related Entities and/or any individual business units of the Company or any Related Entity. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement.
Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate.
be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance 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 hereof shall be made with respect to, the number or price of Shares subject to an Award.