Norris Employment Agreement
 
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
 
This Amended and Restated Executive Employment Agreement (this “Agreement”),
effective as of February 25, 2008 (the “Effective Date”) is made by and between
Sonic Solutions (“Company”) and Paul F. Norris (“Executive”).
 
RECITALS
 
WHEREAS, Company and Executive previously entered into an Executive Employment
Agreement dated January 23, 2007 (the “Prior Agreement”); and
 
WHEREAS, Company and Executive now wish to amend and restate the Prior Agreement
in its entirety as set forth herein;
 
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, Company and Executive agree as follows:
 
AGREEMENT
 
1. Employment and Duties.
 
1.1. Employment. Beginning as of Effective Date, Company agrees to employ
Executive and Executive agrees to be employed by Company in accordance with the
terms and conditions of this Agreement.
 
1.2. Position. During the term of employment under this Agreement, Company shall
employ Executive in the position of Executive Vice President, Interim Chief
Financial Officer and General Counsel of Company, or in such other executive
positions as the parties mutually may agree.
 
1.3. Duties and Services. Executive agrees to serve in the position referred to
in Section 1.2 and to perform diligently and to the best of his abilities the
duties and services appertaining to such office as reasonably directed by
Company. Executive’s employment shall also be subject to the policies contained
in Company’s Conduct of Conduct and other similar documents, all as amended from
time to time.
 
1.4. Other Interests. Executive agrees, during the period of his employment by
Company, to devote his full business time, energy and best efforts to the
business and affairs of Company and its affiliates and not to engage without the
Company’s consent, directly or indirectly, in any other business, investment, or
activity that interferes with Executive’s performance of Executive’s duties
hereunder, is contrary to the interests of Company or any of its affiliates, or
except as approved by Company in advance, requires any significant portion of
Executive’s business time.
 
1.5. Duty of Loyalty. Executive acknowledges and agrees that Executive owes a
fiduciary duty of loyalty, fidelity and allegiance to act at all times in the
best interests of Company and to do no act which would injure the business,
interests, or reputation of Company or any of its subsidiaries or affiliates. In
keeping with these duties, Executive shall make full disclosure to Company of
all business opportunities pertaining to Company’s business and shall not
appropriate for Executive’s own benefit business opportunities concerning the
subject matter of the fiduciary relationship.
 

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1.6. Conflicts of Interest. It is agreed that any direct or indirect interest
in, connection with, or benefit from any outside activities, particularly
commercial activities, which interest might in any way adversely affect Company
or any of its affiliates, involves a possible conflict of interest. In keeping
with Executive’s fiduciary duties to Company, Executive agrees that Executive
shall not knowingly become involved in a conflict of interest with Company or
any of its affiliates, or upon discovery thereof, allow such a conflict to
continue. Moreover, Executive agrees that Executive shall disclose to Company
any facts which might involve such a conflict of interest that has not been
approved by Company’s Chief Executive Officer or Board of Directors (the
“Board”). Executive agrees that Company’s determination as to whether a conflict
of interest exists shall be conclusive. Company reserves the right to take such
action as, in its judgment, will end the conflict.
 
2. At Will Employment. Executive’s employment is at-will, and, subject to
Section 6 and the other terms hereof, either Executive or Company may terminate
the employment relationship at any time, with or without cause or notice.
 
3. Compensation.
 
3.1. Base Salary. Executive shall receive an annual base salary equal to
$300,000. Executive’s base salary shall be reviewed periodically, and may be
modified from time to time by the Board (or as the Board may designate
consistent with applicable laws and regulations, by the Compensation Committee
or other committee of the Board or by an officer of the Company) in its sole
discretion and, after any such change, Executive’s new level of base salary
shall be Executive’s base salary for purposes of this Agreement until the
effective date of any subsequent change. Executive’s base salary shall be paid
in equal installments in accordance with Company’s standard policy regarding
payment of compensation to its employees.
 
3.2. Incentive Compensation. While Executive is actively employed under this
Agreement, Executive shall be entitled to participate in any long term or annual
incentive plans maintained by Company for its executives.
 
3.3. Other Benefits. While employed by Company, Executive shall be allowed to
participate, on the same basis generally as other employees of Company, in all
general employee benefit plans and programs, including improvements or
modifications of the same, which on the Effective Date or thereafter are made
available by Company to Company’s employees. Such benefits plans and programs
may include, without limitation, medical, health, and dental care, life
insurance, and disability protection. Nothing in this Agreement is to be
construed or interpreted to provide greater rights, participation, coverage, or
benefits under such benefit plans or programs than provided to similarly
situated employees pursuant to the terms and conditions of such benefit plans
and programs.
 
3.4. Changes Permitted. Company shall not by reason of Sections 3.2 and 3.3 be
obligated to institute, maintain, or refrain from changing, amending, or
discontinuing, any of such benefit plans or programs, so long as such actions
are similarly applicable to covered employees generally.
 

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4. Protection of Information. Executive and Company each ratify, confirm and
acknowledge their continuing agreement to the terms set forth in the Invention
and Confidential Information Agreement previously entered into between them.
 
5. Statements Concerning Company; Legal Requirements.
 
5.1. Statements Concerning Company. Executive shall refrain, both during the
employment relationship and after the employment relationship terminates, from
publishing any oral or written statements about Company, any of its affiliates,
or any of such entities’ officers, employees, agents or representatives that are
slanderous, libelous, or defamatory; or that disclose confidential information
about Company, any of its affiliates, or any of such entities’ business affairs;
or that place Company, any of its affiliates, or any of such entities’ officers,
employees, agents, or representatives in a false light before the public. A
violation or threatened violation of this prohibition may be enjoined by the
courts.
 
5.2. Compliance with Laws. Executive shall at all times comply with United
States laws applicable to Executive’s actions on behalf of Company, including,
without limitation, the United States Foreign Corrupt Practices Act.
 
6. Benefits Upon Termination of Employment.
 
6.1. Termination without Cause or for Good Reason. In the event that Executive’s
employment is terminated by Company without Cause (as defined in Section 6.2) or
voluntarily by Executive for Good Reason (as defined in Section 6.3) and unless
such termination occurs within 180 days of a Change in Control (as defined in
Section 7), Company shall provide Executive with a lump sum payment in an amount
equal to 100% of Executive’s annual base salary at the level in effect
immediately prior to his termination, less applicable deductions or
withholdings. Notwithstanding any other provision of this Agreement to the
contrary, if Executive is a “specified employee” within the meaning of
Section 409A of the Internal Revenue Code (the “Code”) and the related final
regulations and other guidance (“Section 409A”) at the time of Executive’s
termination of employment, then only that portion of the payment provided by
this Section 6.1 that does not exceed the Section 409A Limit (as defined below)
and which qualifies as separation pay under Treasury Regulation Section
1.409A-1(b)(9)(iii), may be paid within the thirty (30) days following
Executive’s termination. Any portion of the payment that exceeds the Section
409A Limit will accrue during the six (6) month period following Executive’s
termination and will become payable in a lump sum on the date six (6) months and
one (1) day following such termination (or the next business day if such date is
not a business day). For purposes of this Agreement, “Section 409A Limit” means
the lesser of two (2) times: (i) Executive’s annual base salary paid to
Executive during Company’s taxable year preceding the taxable year of
Executive’s termination of employment as determined under Treasury Regulation
Section 1.409A-1(b)(9)(iii)(A)(1) and any related Internal Revenue Service
guidance; or (ii) the maximum amount that may be taken into account under a
qualified plan pursuant to Section 401(a)(17) of the Code for the year in which
such termination occurs.
 

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6.2. Circumstances Under Which Termination Benefits Will Not Be Paid. Company
shall not be obligated to provide Executive the termination benefits described
in Section 6.1 if Executive’s employment is terminated by Company for Cause or
if Executive voluntarily terminates his employment with Company other than for
Good Reason. For purposes hereof, “Cause” shall mean (i) Executive’s conviction
of any felony under federal or state law, or any fraud, misappropriation or
embezzlement, or (ii) Executive’s breach of a fiduciary duty owed to Company or
commission of a material violation of Section 4.
 
6.3. Termination for Good Reason. Executive may voluntarily terminate his
employment with Company for Good Reason upon giving Company thirty (30) days
written notice of the occurrence of any of the following without Executive’s
consent and which has not been cured by Company within sixty (60) days of
receipt of such notice from Executive:
 

 
(a)
a material adverse change in Executive’s authority, duties, or responsibilities,
and such a materially adverse change shall in all events be deemed to occur if
Executive no longer serves as Executive Vice President and General Counsel of a
publicly traded company, unless Executive consents in writing to such change;

 

 
(b)
a reduction in his level of base salary;

 

 
(c)
a relocation of his principal place of employment by more than 50 miles, or

 

 
(d)
a material breach by Company (or its successor) of this Agreement.

 
7. Change in Control.
 
7.1. Definition. For purposes of this Agreement, “Change in Control” shall have
the same meaning as “Corporate Transaction,” as such term is defined in the
Company’s 2004 Equity Compensation Plan.
 
7.2. Benefit Upon Change in Control. In the event of a Change in Control that is
also a “change in control event” as determined under Section 409A, Company shall
provide Executive with the following benefits:
 

 
(a)
Executive shall receive a lump sum payment in an amount equal to 100% of his
annual base salary at the level in effect immediately prior to the Change in
Control, less applicable deductions or withholdings; and

 

 
(b)
All unvested stock options, restricted stock units, or other equity compensation
held by Executive at the time of such Change in Control shall immediately vest
in full.

 
8. Miscellaneous.
 
8.1. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
 

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If to Company to:
Sonic Solutions
 
101 Rowland Way
 
Novato, CA 94945
 
Attention: Chief Executive Officer
If to Executive to:
Paul Norris
 
c/o Sonic Solutions
 
101 Rowland Way
 
Novato, CA 94945

 
 
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
 
8.2. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the state of California, as applied to agreements
entered into and performed entirely within the state of California between
residents of the state of California.
 
8.3. No Waiver. No waiver of any breach of any provision of this Agreement will
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof, and no waiver will be effective unless made in
writing and signed by a duly authorized representative of the waiving party.
 
8.4. Severability. If for any reason a court of competent jurisdiction finds any
provision of this Agreement, or portion thereof, to be unenforceable, that
provision of the Agreement will be enforced to the maximum extent permissible so
as to effect the intent of the parties, and the remainder of this Agreement will
continue in full force and effect.
 
8.5. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
 
8.6. Withholding of Taxes and Other Employment Deductions. Company may withhold
from any benefits and payments made pursuant to this Agreement all federal,
state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to Company’s employees generally.
 
8.7. Headings. The Section headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
 
8.8. Gender and Plurals. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and
conversely.
 
8.9. Affiliate. As used in this Agreement, the term “affiliate” shall mean any
entity which owns or controls, is owned or controlled by, or is under common
ownership or control with, Company.
 

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8.10. Assignment. This Agreement shall be binding upon and inure to the benefit
of Company and any successor of Company, by merger or otherwise. Except as
provided in the preceding sentence, this Agreement, and the rights and
obligations of the parties hereunder, are personal and neither this Agreement,
nor any right, benefit, or obligation of either party hereto, shall be subject
to voluntary or involuntary assignment, alienation or transfer, whether by
operation of law or otherwise, without the prior written consent of the other
party.
 
8.11. Entire Agreement.
 
(a) Except as provided in (i) written company policies promulgated by Company
dealing with issues such as securities trading, business ethics, governmental
affairs and political contributions, consulting fees, commissions or other
payments, compliance with law, investments and outside business interests as
officers and employees, reporting responsibilities, administrative compliance,
and the like, (ii) the written benefits, plans, and programs referenced in
Sections 3.2 and 3.3, and (iii) any written agreements contemporaneously or
hereafter executed by Company and Executive, this Agreement constitutes the
entire agreement of the parties with regard to such subject matters, and
contains all of the covenants, promises, representations, warranties, and
agreements between the parties with respect to Executive’s employment
relationship with Company and the term and termination of such relationship, and
replaces and merges previous agreements and discussions pertaining to the
employment relationship between Company and Executive. Notwithstanding the
preceding provisions of this Section 8.11, except as may expressly be provided
herein, the execution of this Agreement shall not affect the rights of the
parties pursuant to (A) stock options and restricted stock units previously
awarded to Executive and currently outstanding under any and all stock plans
maintained by Company, and (B) any confidentiality, non-disclosure or similar
agreement or commitment between the parties. Each party to this Agreement
acknowledges that no representation, inducement, promise or agreement, oral or
written, has been made by either party, or by anyone acting on behalf of either
party, which is not embodied herein, and that no agreement, statement, or
promise relating to the employment of Executive by Company, which is not
contained in this Agreement, shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing and signed by the party to
be charged.
 
(b) This Agreement is intended to comply with Section 409A of the Code (as
amplified by any Internal Revenue Service or U.S. Treasury Department guidance),
and shall be construed and interpreted in accordance with such intent. Executive
and the Company agree to cooperate with one another and, to the extent
reasonably requested by the other party, amend or modify this Agreement to
restructure any compensation set forth in this Agreement in a manner, if
possible and without any increase in cost to the Company, such that no earlier
and/or additional taxes to Executive or the Company will arise under Code
Section 409A. Any provision of this Agreement that would cause the payment of
any benefit to fail to satisfy Section 409A of the Code shall have no force and
effect until amended to comply with Code Section 409A (which amendment may be
retroactive to the extent permitted by the Code or any regulations or rulings
thereunder).
 
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
 

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EXECUTIVE
SONIC SOLUTIONS
By: /s/ Paul F. Norris
By: /s/ David C. Habiger
Name: Paul F. Norris
Name: David C. Habiger
Date: 02/25/08
Title: President and Chief Executive Officer
 
Date: 02/25/08

 
 

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