Attached files
| file | filename |
|---|---|
| EX-3.1 - SONIC SOLUTIONS/CA/ | v198920_ex3-1.htm |
| EX-99.2 - SONIC SOLUTIONS/CA/ | v198920_ex99-2.htm |
| EX-99.3 - SONIC SOLUTIONS/CA/ | v198920_ex99-3.htm |
| EX-10.1 - SONIC SOLUTIONS/CA/ | v198920_ex10-1.htm |
| EX-99.1 - SONIC SOLUTIONS/CA/ | v198920_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): October 7,
2010
SONIC
SOLUTIONS
(Exact
name of registrant as specified in its charter)
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California
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23190
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93-0925818
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(State or other jurisdiction of
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(Commission File Number)
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(I.R.S. Employer Identification
No.)
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organization)
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7250 Redwood Blvd., Suite 300,
Novato, CA
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94945
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number,
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(415) 893-8000
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including area code:
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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On
October 7, 2010, in connection with the completion of the merger of Sonic
Solutions (“Sonic” or the “Company”) and DivX, Inc. (“DivX”), the board of
directors of Sonic (the “Sonic Board” or the “Board”) approved the adoption of
the 2010 Inducement Equity Compensation Plan (the “2010 Plan”). The
2010 Plan provides for the issuance of up to 1,000,000 shares of common stock
pursuant to awards granted as a material inducement to an employee to enter into
employment with the Company and to promote the success of the Company’s
business. The 2010 Plan provides for awards of non-qualified stock
options, stock appreciation rights, restricted stock and restricted stock
units. The 2010 Plan is administered generally by the Board and its
Compensation Committee, which determines the number of shares underlying each
award, the vesting period for such shares and other important terms of the
award. The 2010 Plan has a ten-year term. The 2010 Plan
and awards to be issued thereunder are intended to meet the inducement grant
exception pursuant to NASDAQ listing rule 5635(c)(4). On October 8,
2010, in accordance with Nasdaq’s listing standards, Sonic announced options and
restricted stock units granted to new employees under the 2010 Plan in a press
release, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by
reference.
The
foregoing description of the 2010 Plan is a summary and does not purport to be
complete and is qualified in its entirety by reference to the complete 2010
Plan, which is filed as Exhibit 10.1 hereto and is incorporated herein by
reference.
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Item
2.01
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Completion
of Acquisition or Disposition of
Assets.
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On
October 7, 2010, Sonic and DivX completed the merger (the “Merger”) contemplated
by the Agreement and Plan of Merger, dated as of June 1, 2010, among Sonic,
Siracusa Merger Corporation, Siracusa Merger LLC and DivX, as amended by
Amendment No. 1 thereto, dated August 25, 2010 (as amended, the “Merger
Agreement”). At the effective time of the Merger (the “Effective
Time”), by virtue of the Merger and without any action on the part of any
stockholder, each share of DivX common stock issued and outstanding immediately
prior to the Effective Time was converted into the right to receive 0.514 shares
of Sonic common stock and $3.75 in cash.
The
foregoing description of the Merger and the Merger Agreement does not purport to
be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 and Exhibit 2.2 hereto and is
incorporated herein by reference.
The
Merger Agreement contains representations and warranties that Sonic and DivX
made to each other as of specific dates. The assertions embodied in those
representations and warranties were made solely for purposes of the Merger
Agreement between Sonic and DivX and may be subject to important qualifications
and limitations agreed to by Sonic and DivX in connection with negotiating its
terms. Moreover, the representations and warranties may be subject to a
contractual standard of materiality that may be different from what may be
viewed as material to stockholders or may have been used for the purpose of
allocating risk between Sonic and DivX rather than establishing matters as
facts. For the foregoing reasons, no person should rely on the representations
and warranties as statements of factual information at the time they were made
or at any other time.
Sonic’s
common stock continues to trade on the NASDAQ Global Select Market under the
symbol “SNIC.” Following completion of the Merger, DivX common stock
was delisted from trading on the NASDAQ Global Select Market.
2
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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Immediately
following the Annual Meeting of Shareholders on October 7, 2010, the Sonic Board
held its annual meeting at which it addressed various administrative and
organizational matters. At that meeting, pursuant to the Merger
Agreement and based on the recommendation of Sonic’s Nominating Committee, the
Sonic Board adopted resolutions offering James Brailean and Kevin Hell, former
members of DivX’s board of directors (the “New Directors”), positions on the
Board. The New Directors accepted these offers effective as of the
Effective Time on October 7, 2010. Contingent on this acceptance and
in accordance with the recommendation of Sonic’s Nominating Committee of the
Board, the Board appointed David C. Habiger, Sonic’s President and Chief
Executive Officer to the Board effective as of the Effective Time. In
connection with these appointments and also effective as of the Effective Time,
the number of directors on the Sonic Board was increased from five to eight and
the New Directors were each appointed to the Board and to serve as members of
the Audit, Compensation and Nominating Committees of the Sonic
Board. The service of the New Directors is governed by Sonic’s
standard policies regarding its board of directors, including its standard
director compensation policy, as further described below. No family
relationships exist between either of the New Directors or Mr. Habiger and any
of Sonic’s other directors or executive officers. Other than the Merger
Agreement (with respect to the New Directors), there are no arrangements between
either of the New Directors or Mr. Habiger and any other person pursuant to
which either of the New Directors or Mr. Habiger was selected as a director, nor
are there any transactions to which Sonic is or was a participant in which
either of the New Directors or Mr. Habiger has a material interest subject to
disclosure under Item 404(a) of Regulation S-K.
The Sonic
Board also confirmed that Mr. Doris would continue to act as Chairman of the
Board, that Ms. Sauer would continue in her capacity as Secretary of the Board,
and that the Audit, Compensation and Nominating Committees of the Board would
each continue to be comprised of Messrs. Greber, Marguglio and Langley, together
with the New Directors, with Mr. Greber as chair.
Further,
on October 7, 2010, the Compensation Committee approved and the Board (a)
granted 50,000, 25,000, 12,500, 25,000 and 18,750 restricted stock units to
Messrs. Habiger, Leighton, Ely, Norris and DiMaria, respectively, all of such
restricted stock units vesting semi-annually over three years, (b) granted
20,000 options to Mr. Ely, such options vesting monthly over two years, and (c)
in accordance with the Board Compensation Policy, (i) granted 9,868 options
to each of Messrs. Doris and Greber and 7,895 options to each of Messrs.
Marguglio, Langley, Brailean and Hell, and Ms. Sauer, all of such options
vesting monthly over one year, and (ii) set their cash compensation for the
year at $75,000 for each of Messrs. Doris and Greber and $60,000 for each of
Messrs. Marguglio, Langley, Brailean and Hell, and Ms. Sauer, (d) increased
the annual base compensation of Messrs. Habiger (to $450,000 from $350,000),
Leighton (to $380,000 from $300,000), Ely (to $380,000 from $300,000), Norris
(to $380,000 from $300,000) and DiMaria (to $300,000 from $250,000), and
(e) promoted Mr. Leighton to the position of President – Operations and Mr.
Ely to the position of President - Strategy. All of the
above-described options granted have an exercise price of $11.48 per share (the
closing price of Sonic’s common stock on October 7, 2010) and all are subject to
change of control vesting according to Sonic’s policy for directors and
executive officers. In addition, the Compensation Committee and the Board
(excluding Mr. Doris and Ms. Sauer and Messrs Brailean, Hell and Habiger, who
had not yet been appointed to the Board) considered the current exceptional
level of involvement of Mr. Doris and Ms. Sauer in providing strategic guidance
to the Company's executive officers and management team as well as the standard
level of director compensation provided pursuant to the Board Compensation
Policy and reconfirmed its determination that Mr. Doris shall continue to
receive additional cash compensation at the rate of $37,500 per quarter and Ms.
Sauer shall receive additional cash compensation at the rate of $20,000 per
quarter, until such time as either Mr. Doris or Ms. Sauer reports that he or she
is no longer providing such extra involvement, or until such time as the Board
directs otherwise.
On
October 7, 2010, Sonic shareholders approved the amendment and restatement of
Sonic’s 2004 Equity Compensation Plan (the “2004 Plan”) to (i) increase the
maximum number of shares of Sonic’s common stock authorized for issuance over
the term of the 2004 Plan by 6,000,000 from 3,000,000 shares to 9,000,000
shares, (ii) remove the current limit of 600,000 on the number of shares that
may be granted subject to awards of restricted stock and restricted stock units,
(iii) include a “fungible” share limit, pursuant to which shares of Sonic’s
common stock that are subject to stock options or stock appreciation rights
shall be counted toward the overall 2004 Plan share limit as one share for every
share granted, and shares of common stock that are subject to restricted stock,
restricted stock units and other share-based awards shall be accounted against
the overall limit as two shares for every share granted, (iv) remove the current
“recycling” provisions that do not count shares of Sonic’s common stock issued
(a) in payment of an option or other award’s purchase price or (b) in
satisfaction of tax withholding obligations against the overall share limit
under the 2004 Plan, (v) provide that modifications to the exercise price of
options awarded under the 2004 Plan shall be subject to shareholder approval,
(vi) eliminated dividend equivalent rights, and (vii) make certain other
administrative changes.
3
The
foregoing description of the amendments to the 2004 Plan is a summary and does
not purport to be complete and is qualified in its entirety by reference to the
complete 2004 Plan, which is filed as Exhibit 10.2 hereto and is incorporated
herein by reference.
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Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
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On
October 7, 2010, Sonic shareholders approved an amendment to Sonic’s Bylaws to
increase the number of directors from a range of five to seven to a range of
five to nine, which amendment was effective upon the approval of the
shareholders. The complete Sonic Bylaws, as amended, are filed as
Exhibit 3.1 to this Current Report on Form 8-K and are incorporated herein by
reference.
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Item
5.07
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Submission
of Matters to a Vote of Security
Holders
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The
Company’s Annual Meeting of Shareholders was held at the Company’s headquarters
at 7250 Redwood Blvd., Suite 300, Novato, California on October 7, 2010. Out of
30,787,257 shares of Common Stock (as of the record date of August 16, 2010)
entitled to vote at the meeting, 27,802,762 shares were present in person or by
proxy. The following proposals were considered:
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Proposal
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Number of
shares voted
in favor
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Percentage
of
outstanding
shares voted
in favor
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Percentage
of quorum
voted in
favor
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Number of
shares voted
against
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Number of
shares
abstaining
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Broker
nonvotes
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1. To
approve the Merger and Merger Agreement, including the issuance of shares
of Sonic Common Stock pursuant to the Merger Agreement
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23,299,095 | 75.68 | % | 83.80 | % | 30,779 | 11,477 | 4,461,411 | ||||||||||||||||
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2. To
approve an amendment to Sonic’s Bylaws
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27,360,861 | 88.87 | % | 98.41 | % | 422,453 | 19,448 | — | ||||||||||||||||
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3.
To approve the amendment and restatement of Sonic’s 2004 Equity
Compensation Plan
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18,793,346 | 61.04 | % | 67.60 | % | 4,107,870 | 440,135 | 4,461,411 | ||||||||||||||||
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4. To
elect directors (see below)
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— | — | — | — | — | — | ||||||||||||||||||
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5. To
approve motion to adjourn or postpone the Annual Meeting
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26,182,944 | — | — | 1,603,311 | 16,507 | — | ||||||||||||||||||
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Election
of Directors
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Director
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Number of shares voting
in favor
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Number of shares
withheld
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Broker nonvotes
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Robert J. Doris
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21,837,761 | 1,503,590 | 4,461,411 | |||||||||
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Robert M. Greber
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21,873,250 | 1,468,101 | 4,461,411 | |||||||||
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R. Warren Langley
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22,622,328 | 719,023 | 4,461,411 | |||||||||
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Peter J. Marguglio
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22,617,788 | 723,563 | 4,461,411 | |||||||||
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Mary C. Sauer
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21,835,963 | 1,505,388 | 4,461,411 | |||||||||
Item
8.01 Other Events.
Mr. David
J. Richter, formerly the Executive Vice President, Business & Legal Affairs
and General Counsel of DivX, commenced employment as the Executive Vice
President, Business Development of Sonic on the first business day following the
consummation of the Merger. In addition, Mr. Matthew Milne, formerly
Executive Vice President, Sales and Marketing of DivX, commenced employment with
Sonic as its Executive Vice President and General Manager, DivX Division on the
first business day following the consummation of the Merger.
On
October 8, 2010, the Company issued a press release announcing the completion of
the Merger, a copy which is filed as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
On
October 13, 2010, the Company issued a press release announcing the appointment
of Messrs. Brailean, Hell and Habiger as Sonic directors. A copy of
such press release is filed as Exhibit 99.3 to this Current Report on Form 8-K
and is incorporated herein by reference.
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Item
9.01
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Financial
Statements and Exhibits
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(a) Financial
Statements of Business Acquired
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·
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The
Report of Independent Registered Public Accounting Firm is incorporated
herein by reference to Exhibit 99.4 to this Current Report on Form
8-K.
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·
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The
audited consolidated balance sheets of DivX as of December 31, 2008 and
2009 and the consolidated statements of income, consolidated statements of
stockholders’ equity and consolidated statements of cash flows of DivX for
each of the three years in the period ended December 31, 2009, and the
notes related thereto, are incorporated herein by reference to Exhibit
99.5 to this Current Report on Form
8-K.
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·
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The
unaudited consolidated balance sheet of DivX as of June 30, 2010 and the
consolidated statements of income and consolidated statements of cash
flows of DivX for the three and six months ended June 30, 2010, and the
notes related thereto, are incorporated herein by reference to Exhibit
99.6 to this Current Report on Form
8-K.
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(b) Pro
Forma Financial Information
The pro
forma financial information required by this item has not been filed on this
initial Current Report on Form 8-K. Instead, the pro forma financial information
will be filed by amendment on or before December 23, 2010.
(c) Exhibits
See
Exhibit Index attached hereto.
5
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date:
October 13, 2010
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SONIC
SOLUTIONS
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By:
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/s/ Paul F.
Norris
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Name: Paul
F. Norris
Title: Executive
Vice President,
Chief
Financial Officer and General Counsel
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6
EXHIBIT
INDEX
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Exhibit
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Description
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2.1
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Agreement
and Plan of Merger dated June 1, 2010; incorporated by reference to
Exhibit 1.1 to Sonic’s Current Report on Form 8-K filed with the SEC on
June 2, 2010
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2.2
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Amendment
No. 1, dated August 25, 2010, to the Agreement and Plan of Merger dated
June 1, 2010; incorporated by reference to Exhibit 2.1 to Sonic’s Current
Report on Form 8K filed with the SEC on August 26, 2010
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3.1
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Restated
Bylaws, effective as of October 7, 2010
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10.1
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Sonic
Solutions 2010 Inducement Equity Compensation Plan
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10.2
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Sonic
Solutions 2004 Equity Compensation Plan, Amended and Restated July 2010;
incorporated by reference to Annex G to the registrant’s joint proxy
statement/prospectus filed with the SEC on September 8,
2010
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99.1
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Press
Release issued October 8, 2010 with respect to completion of the
Merger
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99.2
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Press
Release dated October 8, 2010 with respect to inducement option
grants
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99.3
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Press
Release dated October 13, 2010 with respect to appointment of
directors
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99.4
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Report
of Ernst & Young, LLP, independent registered public accounting firm;
incorporated by reference to DivX’s Annual Report on Form 10-K (File No.
001-33029) for the fiscal year ended December 31, 2009
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99.5
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Audited
consolidated balance sheets of DivX as of December 31, 2008 and 2009 and
the consolidated statements of income, consolidated statements of
stockholders’ equity and consolidated statements of cash flows of DivX for
each of the three years in the period ended December 31, 2009;
incorporated by reference to DivX’s Annual Report on Form 10-K (File No.
001-33029) for the fiscal year ended December 31, 2009
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99.6
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Unaudited
consolidated balance sheet of DivX as of June 30, 2010 and the
consolidated statements of income and consolidated statements of cash
flows of DivX for the three and six months ended June 30, 2010, and the
notes related thereto; incorporated by reference to DivX’s Quarterly
Report on Form 10-Q (File No. 001-33029 ) for the fiscal quarter ended
June 30,
2010
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7