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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SONIC SOLUTIONS
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(Name of Registrant as Specified In Its Charter)
SONIC SOLUTIONS
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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(4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[X] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $125
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(2) Form, Schedule or Registration Statement No.: SCHEDULE 14A
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(3) Filing Party: SONIC SOLUTIONS
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(4) Date Filed: JULY 29, 1996
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Notes:
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SONIC SOLUTIONS 1989
STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. -- The purposes of the Stock option Plan (the
"Plan") of Sonic Solutions, a California corporation (the "Company") are
to:
(a) Encourage employees, consultants, officers and directors to improve
operations and increase profits of the Company;
(b) Encourage employees to accept or continue employment with the Company
or its Affiliates;
(c) Increase the interest of employees, consultants, officers and directors
in the Company's welfare through participation in the growth in value of
the common stock of the Company (the "Common Stock").
Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422A of
the Internal Revenue Code of 1986, as amended (the "Code"), or
"nonstatutory options" ("NSOs").
2. ELIGIBLE PERSONS. -- Every person who at the date of grant of an Option is
an employee, consultant, officer or director of the Company or of any
Affiliate (as defined below) of the Company is eligible to receive NSOs or
ISOs under this Plan. The term "Affiliate" as used in the Plan means a
parent or subsidiary corporation as defined in the applicable provisions
(currently Sections 425(e) and (f), respectively) of the Code. The term
"employee" includes an officer or director who is an employee, as well as a
non-officer, non-director regular employee of the Company.
3. STOCK SUBJECT TO THIS PLAN. -- The total number of shares of stock which may
be granted pursuant to this Plan is 2,090,000 shares of Common Stock. The
shares covered by the portion of any grant under the Plan which expires
unexercised shall become available again for grants under the Plan. Shares
issued pursuant to an Option granted under the Plan which are repurchased by
the Company in accordance with the terms of the Plan shall become available
again for grants as NSOs under the Plan. The number of shares reserved for
purchase under the Plan is subject adjustment in accordance with the
provisions for adjustment in the Plan.
4. ADMINISTRATION. --
(a) This Plan shall be administered by the Board of Directors of the Company
(the "Board") or by the Chief Executive Officer of the Company to whom
administration of the Plan is hereby delegated (in either case, the
"Administrator").
(b) To the extent required by Rule 16b-3 promulgated by the Securities and
Exchange Commission ("Rule 16b-3") no Option shall be granted to (i) a
director of the Company except by the Board when a majority of the members
of the Board, and a majority of the directors acting in the matter, are
"disinterested persons" (as defined below), or (ii) to an officer of the
Company not a member of the Board except by the Board. "Disinterested
person," for the purpose, shall have the same meaning as in Rule 16b-3 or
any successor rule under the Securities Exchange Act or 1934, as amended
(the "Exchange Act").
(c) Subject to the other provisions of this Plan, the Administrator shall
have the authority, in its discretion: (i) to grant Options; (ii) to
determine the fair market value of the Common Stock subject to Options:
(iii) to determine the exercise price of Options granted; (iv) to determine
the persons to whom, and the time or times at which, Options shall be
granted, and the number of shares subject to each Option; (v) to interpret
this Plan; (vi) to prescribe, amend, and rescind rules and regulations
relating to this Plan; (vii) to determine
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the terms and provisions of each Option granted (which need not be
identical, including but not limited to, the time or times at which Options
shall be exercisable; (viii) with the consent of the Optionee, to modify or
amend any Option; (ix) to defer (with the consent of the Optionee) or
accelerate the exercise date of any Option; (x) to authorize any person to
execute on behalf of the Company any instrument evidencing the grant of an
Option; and (xi) to make all other determinations deemed necessary or
advisable for the administration of this Plan. The Administrator may
delegate nondiscretionary administrative duties to such employees of the
Company as it deems proper.
(d) All questions of interpretation, implementation, and application of this
Plan shall be determined by the Administrator. Such determinations shall be
final and binding on all persons.
5. GRANTING OF OPTIONS; OPTION AGREEMENT. -- No Options shall be granted under
this Plan after ten years from the date of adoption of this Plan by the
Board of Directors.
Each option shall be evidenced by a written stock option agreement, in form
satisfactory to the Company, executed by the Company and the person to whom
such Option is granted; provided, however, that the failure by the Company,
the Optionee, or both to execute such an agreement shall not invalidate the
granting of an Option. The agreement shall specify whether each Option it
evidences is a NSO or an ISO.
The Administrator may approve the grant of Options under the Plan to persons
who are expected to become employees of the Company, but are not employees
at the date or approval. In such cases, the Option shall be deemed granted,
without further approval, on the date the grantee becomes an employee and
must satisfy all requirements of this Plan for Options granted on that date.
6. TERMS AND CONDITIONS OF OPTIONS. -- Each Option granted under this Plan
shall be designated as an NSO or an ISO. Each Option shall be subject to the
terms and conditions set forth in Section 6.1. NSOs shall be also subject to
the terms and conditions set forth in Section 6.2, but not those set forth
in Section 6.3. ISOs shall also be subject to the terms and conditions set
forth in Section 6.3, but not those set forth in Section 6.2.
6.1 TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT. -- All Options
granted under this Plan shall be subject to the following terms and
conditions:
6.1.1 CHANGES IN CAPITAL STRUCTURE. -- Subject to Section 6.1.2, if
the stock of the Company is changed by reason of a stock split,
reverse stock split, stock dividend, or recapitalization, or
converted into or exchanged for other securities as a result of
a merger, consolidation or reorganization, appropriate
adjustments shall be made in (a) the number and class of shares
of stock subject to this Plan and each Option outstanding under
this Plan, and (b) the exercise price of each outstanding
Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such
adjustments. Each such adjustment shall be subject to approval
by the Board or Directors in its sole discretion.
6.1.2 CORPORATE TRANSACTIONS. -- New option rights may be substituted
for the option rights granted under this Plan, or the Company's
obligations as to Options outstanding under this Plan may be
assumed, by an employer corporation other than the Company, or
by a parent or subsidiary of such employer corporation, in
connection with any merger, consolidation, acquisition,
separation, reorganization, liquidation or like occurrence in
which the Company is involved, in such manner that the then
outstanding Options which are ISOs will continue to be
"incentive stock options" within the meaning or Section 422A of
the Code to the full extent permitted thereby. Notwithstanding
the foregoing or the provisions or Section 6.1.1, if such
employer corporation, or parent or subsidiary or such employer
corporation, does not substitute new and substantially
equivalent option rights for the option rights granted
hereunder, or assume the option rights granted hereunder, the
option rights granted hereunder shall terminate (a) upon
dissolution or liquidation or the Company, or similar
occurrence, or (b) upon any merger,
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consolidation, acquisition, separation, or similar occurrence,
where the Company will not be a surviving corporation;
provided, however, that each Optionee shall be mailed notice at
least thirty-five (35) days prior to such dissolution,
liquidation, merger, consolidation, acquisition, separation, or
similar occurrence, and shall have at least thirty (30) days
after the mailing or such notice to exercise any unexpired
option rights granted hereunder to the extent exercisable on
the date of such event.
6.1.3 TIME OF OPTION EXERCISE. -- Except as necessary to satisfy the
requirements of (S) 422A of the Code and subject to (S)Section
5 and 6.1.8, Options granted under this Plan shall be
exercisable (a) immediately as of the effective date of the
stock option agreement granting the Option, or (b) at such
other times as are specified in the written stock Option
agreement relating to such Option; provided, however, that if
the Optionee is a director, such Option may not be exercisable,
in whole or in part, at any time prior to the first anniversary
of the date of Option grant, unless the Administrator
determines that the foregoing provision is not necessary to
comply with the provisions of Rule 16b-3 or that Rule 16b-3 is
not applicable to the Plan.
6.1.4 OPTION GRANT DATE. -- Except in the case of advance approvals
described in (S) 5, the date of grant of an Option under this
Plan shall be the date as of which the Administrator approves
the grant. No Option shall be exercisable, however, until a
written stock option agreement in form satisfactory to the
Company is executed by the Company and the Optionee.
6.1.5 NONASSIGNABILITY OF OPTION RIGHTS. -- No Option granted under
this Plan shall be assignable or otherwise transferable by the
Optionee except by will or by the laws of descent and
distribution. During the life of the Optionee, an Option shall
be exercisable only by the Optionee.
6.1.6 PAYMENT. -- Except as provided below, payment in full, in cash,
shall be made for all stock purchased at the time written
notice of exercise of an Option is given to the Company, and
proceeds of any payment shall constitute general funds of the
Company. At the time an Option is granted or exercised, the
Administrator, in the exercise of its absolute discretion, may
authorize any one or more the following additional methods of
payment:
(a) Acceptance of the Optionee's full recourse promissory note
for all or part of the option price, payable on such terms
and bearing such interest rate as determined by the
Administrator (but in no event less than the minimum
interest rate specified by federal tax law at which no
additional interest on debt instruments of such type would
be imputed), which promissory note may be either secured
or unsecured in such manner as the Administrator shall
approve (including, without limitation, by a security
interest in the shares of the Company); and
(b) Delivery by the Optionee of Common Stock already owned by
the Optionee for all or part of the option price, provided
the value (determined as set forth in Section 6.1.11) of
such Common Stock is equal on the date of exercise to the
option price, or such portion thereof as the Optionee is
authorized to pay by delivery of such stock.
6.1.7 TERMINATION OF EMPLOYMENT OR SERVICE. -- Unless determined
otherwise by the Administrator in its absolute discretion, to
the extent not already expired or exercised, an Option shall
terminate: (i) for Optionees not subject to Section 16(b) of
the Exchange Act at the earlier of (a) the Expiration Date or
(b) three months after termination of employment or service as
a consultant with the Company or any Affiliate; (ii) for
Optionees who are non-employee directors, at the earlier of (a)
the Expiration Date (as defined in Section 6.1.12) or (b) seven
months after the last day served as a director of the
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Company or any Affiliate; and (iii) for Optionees who are
employees and either directors or otherwise subject to Section
16(b) of the Exchange Act, at the earlier of (a) the Expiration
Date, (b) three months after termination of employment with the
Company or any Affiliate in the case of ISOs, and (c) in the
case of NSOs, seven months after the later of termination of
employment or services as a consultant with the Company or any
Affiliate or the last day served as a director of the Company
or any Affiliate; provided, that an Option shall be exercisable
after the date of termination of employment or service as a
consultant only to the extent exercisable on the date of
termination; and provided further, that if termination of
employment or service as a consultant is due to the Optionee's
death or "disability" (as determined in accordance with Section
22(e)(3) of the Code), the Optionee, or the Optionee's personal
representative (or any other person who acquires the Option
from the Optionee by will or the applicable laws of descent and
distribution), may at any time within 12 months after the
termination of employment or service as a consultant (or such
lesser period as is specified in the option agreement but in no
event after the Expiration Date of the Option), exercise the
rights to the extent they were exercisable on the date of the
termination. A transfer of an Optionee from the Company to an
Affiliate or vice versa, or from one Affiliate to another, or a
leave of absence due to sickness, military service, or other
cause duly approved by the Company, shall not be deemed a
termination of employment or service as a consultant for
purposes of this Plan.
6.1.8 REPURCHASE OF STOCK.-- Unless otherwise determined by the
Administrator at the time of grant, the stock to be delivered
pursuant to the exercise of any Option granted to an Optionee
under this Plan will be subject to a right or repurchase in
favor of the Company with respect to any Optionee whose
employment or service with the Company is terminated. Such
right of repurchase shall be at the option exercise price and,
unless otherwise determined by the Administrator at the time of
grant, shall expire in accordance with the following schedule
related to the date of the grant of the Option, the date of
first employment, or such other date as may be set by the
Administrator (in any case, the "Vesting Base Date") with
respect to each Option grant:
. One year after the Vesting Base Date the
repurchase right shall expire with respect to 25% of
the stock subject to grant.
. Thereafter, the repurchase right shall expire
with respect to 2.08331/3% of the shares subject to
grant at the end of each succeeding calendar month.
Determination of the number of shares subject to such right of
repurchase shall be made as of the date the employee's
employment by or consultant's service with the Company
terminates. The Company's repurchase right may be waived by the
Board.
6.1.9 WITHHOLDING AND EMPLOYMENT TAXES. -- At the time of exercise of
an Option, the Optionee shall remit to the Company in cash all
applicable federal and state withholding and employment taxes.
The Administrator may, in the exercise of its sole discretion,
permit an Optionee to pay some or all of such taxes by means of
a promissory note on such terms as the Administrator deems
appropriate.
6.1.10 TAX STATUS OF COMPANY. -- Notwithstanding any other term or
condition of the Plan, no option shall be exercisable if
issuance of shares upon exercise would cause the Company to
cease to be a Subchapter S corporation under the relevant
provisions of the Code.
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6.1.11 OTHER PROVISIONS. -- Each Option granted under this Plan may
contain such other terms, provisions, and conditions not
inconsistent with this Plan as may be determined by the
Administrator, and each ISO granted under this Plan shall
includes such provisions and conditions as are necessary to
qualify the Option as an "incentive stock option" within the
meaning of Section 422A of the Code. If Options provide for a
right of first refusal in favor of the Company with respect to
stock acquired by employees, such Options shall further provide
that the right of first refusal shall terminate upon the
earlier of (i) the closing of the Company's initial registered
public offering to the public generally, or (ii) the date ten
(10) years after the grant date as set forth in Section 6.1.4.
6.1.12 DETERMINATION OF VALUE. -- For purposes of the Plan, the value
of Common Stock or other securities of the Company shall be
determined as follows :
(a) If the stock of the Company is listed on any
established stock exchange or a national market system,
including without limitation the National Market System of
the National Association of Securities Dealers Automated
Quotation System, its fair market value shall be the
closing sales price for such stock or the closing bid if
no sales were reported, as quoted on such system or
exchange (or the largest such exchange) for the date the
value is to be determined (or if there are no sales for
such date, then for the last preceding business day on
which there were sales), as reported in the Wall Street
Journal or similar publication.
(b) If the stock of the Company is regularly quoted by a
recognized securities dealer but selling prices are not
reported, its fair market value shall be the mean between
the high bid and low asked prices for the stock on the
date the value is to be determined (or if there are no
quoted prices for the date of grant, then for the last
preceding business day on which there were quoted prices).
(c) In the absence of an established market for the stock,
the fair market value thereof shall be determined by the
Administrator, with reference to the Company's net worth,
prospective earning power, dividend-paying capacity, and
other relevant factors, including the goodwill of the
Company, the economic outlook in the Company's industry,
the Company's position in the industry and its management,
and the values of stock of other corporation in the same
or a similar line of business.
6.1.13 OPTION TERM. -- No Option shall be exercisable more than ten
years after the date of grant, or such lesser period of time as
is set forth in the option agreement (the end of the maximum
exercise period stated in the option agreement is referred to
in this Plan as the "Expiration Date"). No Option granted to a
Ten Percent Shareholder (as defined in Section 6.2.1) shall be
exercisable more than five years after the date of grant.
6.2 TERMS AND CONDITIONS TO WHICH ONLY NSOS ARE SUBJECT. -- Options
granted under this Plan which are designated as NSOs shall be subject
to the following terms and conditions:
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6.2.1 EXERCISE PRICE.-- The exercise price of a NSO shall be not less
than 85 percent of the fair market value (determined in
accordance with Section 6.1.11) of the stock subject to the
Option on the date of grant, except that the exercise price of
a NSO granted to any person who owns, directly or by
attribution, stock possessing more than ten percent of the
total combined voting power of all classes of stock of the
Company or of any Affiliate (a "Ten Percent Shareholder"),
shall in no event be less than 110 percent of such fair market
value.
6.3 TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT. -- Options
granted under this Plan which are designated as ISOs shall be subject
to the following terms and conditions:
6.3.1 EXERCISE PRICE. -- The exercise price of an ISO, which shall be
approved by the Board of Directors, shall be determined in
accordance with the applicable provisions of the Code and shall
in no event be less than the fair market value (determined as
described in Section 6.1.11) of the stock covered by the Option
at the time the Option is granted, except that the exercise
price of an ISO granted to any Ten Percent Shareholder shall in
no event be less than 110 percent of such fair market value.
6.3.2 DISQUALIFYING DISPOSITIONS. -- If stock acquired upon exercise
of an ISO is disposed of in a "disqualifying disposition"
within the meaning of Section 422A of the Code, the holder of
the stock immediately before the disposition shall notify the
Company in writing of the date and terms of the disposition and
comply with any other requirements imposed by the Company in
order to enable the Company to secure any related income tax
deduction to which it is entitled.
6.3.3 LIMITATIONS ON ISO EXERCISABILITY. -- To the extent required to
cause ISOs granted under this Plan to constitute "incentive
stock options" within the meaning of Section 422A(b) of the
Code, notwithstanding any other provision in this Plan, all
ISOs taken together granted to an Optionee under this Plan and
under all incentive stock option plans of the Company or its
Affiliates may not first become exercisable ("vest") at a rate
of more than $100,000 worth of stock (measured on the grant
date(s)) in any calendar year.
7. MANNER OF EXERCISE. -- An Optionee wishing to exercise an Option shall give
written notice to the Company at its principal executive office, to the
attention of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price as provided in Section 6.1.6.
The date the Company receives written notice of an exercise hereunder
accompanied by payment of the exercise price and, if required, by payment of
any federal or state withholding or employment taxes required to be withhold
by virtue of exercise of the Option will be considered as the date such
Option was exercised.
Promptly after receipt of written notice of exercise of an Option, the
Company shall, without stock issue or transfer taxes to the Optionee or
other person entitled to exercise the Option, deliver to the Optionee or
such other person a certificate or certificates for the requisite number of
shares of stock. An Optionee or transferee of an Option shall not have any
privileges as a shareholder with respect to any stock covered by the Option
until the date of issuance of a stock certificate.
8. EMPLOYMENT RELATIONSHIP. -- Nothing in this Plan or any Option granted
thereunder shall interfere with or limit in any way the right of the Company
or of any of its Affiliates to terminate any Optionee's employment or
consulting at any time, nor confer upon any Optionee any right to continue
in the employ or as a consultant of the Company or any of its Affiliates.
9. AMENDMENTS TO PLAN. -- The Board may amend this Plan at any time. Without
the consent of an Optionee, no amendment may affect outstanding Options
except to conform this Plan and ISOs granted under this Plan to federal or
other tax laws relating to incentive stock options. No amendment shall
require shareholder
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approval unless shareholder approval is required to preserve incentive stock
option treatment for federal income tax purposes of the Board otherwise
concludes that shareholder approval is advisable.
10. SHAREHOLDER APPROVAL; TERM. -- This Plan shall become effective upon
adoption by the Board of Directors, provided, however, that no Option shall
be exercisable unless and until written consent of the shareholders of the
Company, or approval by shareholders of the Company voting at a validly
called shareholders' meeting and holding a majority (or such greater number
as may be required by law or applicable governmental regulations or orders)
of the shares entitled to vote is obtained within 12 months after adoption
by the Board of Directors. This Plan shall terminate ten years after
adoption by the Board unless terminated earlier by the Board. the Board may
terminate this Plan at any time without shareholder approval. No Options
shall be granted after termination of this Plan, but termination shall not
affect rights and obligations under then outstanding Options. Options may be
granted and exercised under this Plan only after there has been compliance
with all applicable federal and state securities laws.
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