AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
EXHIBIT
2.1
AMENDMENT
NO. 1 TO
This
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) is made and entered into
as of August 25, 2010, by and among Sonic Solutions, a California
corporation(“Parent”),
Siracusa Merger Corporation, a Delaware corporation and a direct wholly owned
subsidiary of Parent, Siracusa Merger LLC, a Delaware limited liability company
and a direct wholly owned subsidiary of Parent, and DivX, Inc., a Delaware
corporation.
RECITALS
A. The
parties hereto entered into an Agreement and Plan of Merger dated as of June 1,
2010 (the “Agreement”)
pursuant to which the parties have agreed to effect the Transaction on the terms
described therein.
B. The
parties hereto wish to amend the Agreement for the limited purposes set forth
herein.
C. Pursuant
to Section 7.4 of the Agreement, the Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time, subject to certain exceptions, by an instrument executed by each of
the parties to the Agreement.
D. The
undersigned constitute each party to the Agreement.
E. Certain
capitalized terms used in this Amendment but not otherwise defined herein shall
have the meaning ascribed to them in the Agreement.
AGREEMENT
NOW, THEREFORE, in
consideration of the covenants, promises and representations set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE
I
AMENDMENT
OF MERGER AGREEMENT
1. Section
5.9(a)(i) and Section 5.9(a)(ii) of the Agreement are hereby amended and
restated in their entirety to read as follows:
“(i) For
the purposes of this Section 5.9(a), the following terms have the following
meanings:
(1) A
“Continuing Employee”
shall mean each employee of Company or any Subsidiary of Company who, as of
immediately following the Effective Time of the First Merger, continues his or
her employment with Company or any Subsidiary of Company or becomes at the
Effective Time of the First Merger an employee of Parent or any Subsidiary of
Parent; provided, however, that in no event shall the individuals listed in
Schedule 4.1(b)(xv) of the Company Disclosure Schedule be deemed to be
Continuing Employees.
(2) An
“In-the-Money Company
Option” shall mean each Company Option with a per share exercise price
less than the sum of (x) the Merger Cash Consideration plus (y) the
value of the Merger Stock Consideration based on the closing price for a
share of Parent Common Stock, rounded to the nearest one-tenth of a cent, as
reported on Nasdaq for the trading day immediately prior to the day on which the
Effective Time of the First Merger occurs.
(3) The
“Stock Award Exchange
Ratio” shall mean the sum of (x) the Merger Stock Consideration plus
(y) the quotient obtained by dividing (A) the Merger Cash
Consideration, by (B) the closing price for a share of Parent Common Stock,
rounded to the nearest one-tenth of a cent, as reported on Nasdaq for the
trading day immediately prior to the day on which the Effective Time of the
First Merger occurs.
(4) An
“Underwater or At-the-Money
Company Option” shall mean each Company Option with a per share exercise
price equal to or greater than the sum of (x) the Merger Cash Consideration
plus (y) the value of the Merger Stock Consideration based on the
closing price for a share of Parent Common Stock, rounded to the nearest
one-tenth of a cent, as reported on Nasdaq for the trading day immediately prior
to the day on which the Effective Time of the First Merger occurs.
(ii) At
the Effective Time of the First Merger, neither (A) Company’s 2000 Stock Option
Plan (the “2000 Plan”)
nor (B) any then-outstanding Company Option held by a Person that is not a
Continuing Employee or any then-outstanding Underwater or At-the-Money Company
Option (irrespective of whether such Underwater or At-the-Money Company Option
is held by a Continuing Employee) shall be assumed by Parent (the Company
Options described in this Section 5.9(a)(ii)(B) referred to herein as the “Terminating Options”). The
exercisability and vesting of each then-outstanding Terminating Option shall be
accelerated in accordance with the terms of the Company Stock Plan under which
it was granted, effective as of the date required or prescribed pursuant to the
terms and conditions of such Company Stock Plan prior to the Effective Time of
the First Merger. The exercise or vesting of any Terminating Option and any
shares of Company Common Stock acquired upon the exercise thereof resulting
solely by application of this Section 5.9(a)(ii) shall be conditioned upon
the consummation of the First Merger. The 2000 Plan, and any Terminating Options
which are Underwater or At-the-Money Company Options granted pursuant to a
Company Stock Plan that are not exercised prior to the Effective Time of the
First Merger, shall terminate and cease to be outstanding effective as of the
Effective Time of the First Merger. At the Effective Time of the First Merger,
any Terminating Options which are unexercised In-the-Money Company Options will
automatically be converted into the right to receive $3.75 in cash and 0.514
validly issued, fully paid and nonassessable shares of Parent Common Stock (with
cash paid in respect of fractional shares in accordance with the formula set
forth in Section 1.6(e) hereof), for each share of Company Common Stock
calculated to be issuable upon exercise of such Terminating Option using the
following formula:
X = Y (A-B)
A
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Where:
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X
=
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the
number of shares of Company Common Stock, rounded down to the nearest
whole share, to be used for the purposes of determining the amount of cash
and the number of shares of Parent Common Stock for which the Terminating
Option which is an In-the-Money Company Option will be automatically
converted at the Effective Time;
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Y
=
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the
maximum number of shares of Company Common Stock for which the Terminating
Option is exercisable as of immediately prior to the Effective Time
without giving effect to any vesting or other restrictions applicable to
the Terminating Option;
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A
=
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$3.75
plus the product of (i) 0.514 and (ii) the closing price for a share of
Parent Common Stock, rounded to the nearest one-tenth of a cent, as
reported on Nasdaq for the trading day immediately prior to the day on
which the Effective Time of the First Merger occurs;
and
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B
=
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the
exercise price of the Terminating Option as of immediately prior to the
Effective Time of the First Merger.
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2
All federal, state and local
withholding obligations relating to the automatic conversion of Terminating
Options which are In-the-Money Company Options at the Effective Time of the
First Merger will be satisfied by deducting such amounts from the cash otherwise
payable to the holders of such Terminating Options. If the withholding
obligations exceed the cash otherwise payable to the holder of the Terminating
Option, any remaining withholding obligation will be satisfied by withholding a
number of shares of Parent Common Stock otherwise issuable to the holder of the
Terminating Option equal to the quotient obtained by dividing (a) the dollar
amount of any remaining withholding obligation by (b) the closing price for a
share of Parent Common Stock, rounded to the nearest one-tenth of a cent, as
reported on Nasdaq for the trading day immediately prior to the day on which the
Effective Time of the First Merger occurs. Parent shall appoint the Exchange
Agent for the purpose of distributing the Parent Common Stock and other cash
amounts contemplated by this Section 5.9(a) to the holders of Terminating
Options which are In-the-Money Company Options.”
2. The
term “Agreement” as used in the Agreement shall refer to the Agreement as
amended by this Amendment.
ARTICLE
II
ADDITIONAL
PROVISIONS
2.1 Effect of
Amendment. Except as expressly amended by this Amendment, the
terms and conditions of the Agreement remain in full force and
effect.
2.2 Counterparts. This Amendment
may be executed in two or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
2.3 Headings. The
Section headings contained in this Amendment are inserted for convenience
only and shall not affect in any way the meaning or interpretation of this
Amendment.
2.4 Severability. In
the event that any provision of this Amendment or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Amendment will continue in full force
and effect and the application of such provision to other Persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or
unenforceable provision of this Amendment with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of such void or unenforceable provision.
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remainder of this page intentionally left blank.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Agreement and Plan of Merger to be executed by their duly authorized respective
officers as of the date first written above.
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SONIC
SOLUTIONS
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By:
/s/ Xxxx
X. Xxxxxx
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Name:
Xxxx X. Xxxxxx
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Title:
EVP, CFO and General
Counsel
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SIRACUSA
MERGER CORPORATION
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By:
/s/ Xxxx
X. Xxxxxx
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Name:
Xxxx X. Xxxxxx
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Title:
Secretary
and Treasurer
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SIRACUSA
MERGER LLC
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By:
/s/ Xxxx
X. Xxxxxx
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Name:
Xxxx X. Xxxxxx
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Title:
Secretary
and Treasurer
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DIVX,
INC.
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By:
/s/ Xxxxx
Xxxx
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Name:
Xxxxx Xxxx
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Title:
Chief Executive
Officer
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