EXHIBIT 10.3

 

Avid Technology, Inc.

Nonstatutory Stock Option Grant

Terms and Conditions

 

1.      Grant of Option. Avid Technology, Inc., a Delaware corporation (the
“Company”), has granted to the Optionee identified in the attached Notice of
Stock Option Grant (the “Notice”) an option pursuant to the Company’s Stock Plan
identified in the Notice (the “Plan”) to purchase a total number of shares as
identified in the Notice (the “Shares”) of common stock, $0.01 par value per
share, of the Company (“Common Stock”) at the price per share and subject to the
terms and conditions set forth herein and in the Notice and the Plan.

It is intended that the option evidenced hereby shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”). Except as
otherwise indicated by the context, the term “Optionee,” as used in this option,
shall be deemed to include any person who acquires the right to exercise this
option validly under its terms. Except where the context otherwise requires, the
term “Company” shall include any of the Company’s present or future parent or
subsidiary corporations as defined in Sections 424(e) and 424(f) of the Code.

2.          Vesting Schedule. Except as otherwise provided herein, this option
may be exercised in whole or in part prior to the tenth anniversary (the “Final
Exercise Date”) of the date of grant as indicated in the Notice (the “Grant
Date”), subject to the vesting schedule provided in the Notice. The right of
exercise shall be cumulative so that to the extent the option is not exercised
in any period to the maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all Shares for which it is
vested until the earlier of the Final Exercise Date or the termination of this
option under Section 3 hereof or the Plan.

 

3.

Exercise of Option.

(a)          Form of Exercise. Each election to exercise this option shall be in
a manner as determined by the Company from time to time and shall be accompanied
by payment in full in accordance with Section 4 below. The Optionee may purchase
less than the number of shares covered hereby, provided that no partial exercise
of this option may be for any fractional share or for fewer than ten whole
shares.

(b)          Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company (an “Eligible Optionee”).

(c)          Termination of Relationship with the Company. If the Optionee
ceases to be an Eligible Optionee for any reason, then, except as provided in
paragraphs (d), (e) and (f) below, the right to exercise this option shall
terminate three months after such cessation (but in no event

 

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(Revised November 2006)

 

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after the Final Exercise Date), provided that this option shall be exercisable
only to the extent that the Optionee was entitled to exercise this option on the
date of such cessation.

(d)          Exercise Period Upon Death or Disability. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Optionee and the Company
has not terminated such relationship for “cause” as specified in paragraph (f)
below, this option shall be exercisable, within the period of one year following
the date of death or disability of the Optionee, by the Optionee (or in the case
of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Optionee
on the date of his or her death or disability, and further provided that this
option shall not be exercisable after the Final Exercise Date.

(e)          Exercise Period Upon Retirement. If the Optionee retires prior to
the Final Exercise Date while he or she is an Eligible Optionee, then:

(i) if this option is not fully vested on the Optionee’s date of retirement, the
option shall continue to vest and be exercisable through the date which is 90
days after the final vesting date set forth in the Notice (but in no event after
the Final Exercise Date); and

(ii) if this option is fully vested on the Optionee’s date of retirement, the
option shall be exercisable by the Optionee for a period of one year following
the date of retirement (but in no event after the Final Exercise Date).

For purposes of this Section 3, “retirement” shall mean the cessation of
employment with the Company for any reason other than “cause” as specified in
paragraph (f) below, by an Optionee who is at least 60 years of age and who has
worked continuously for the Company for the seven years immediately preceding
the date of cessation of employment.

(f)           Discharge for Cause. If the Optionee, prior to the Final Exercise
Date, is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall mean willful misconduct by the Optionee or willful
failure by the Optionee to perform his or her responsibilities to the Company
(including, without limitation, breach by the Optionee of any provision of any
employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Optionee and the Company), as determined by the
Company, which determination shall be conclusive. The Optionee shall be
considered to have been discharged for “Cause” if the Company determines, within
30 days after the Optionee’s resignation, that discharge for cause was
warranted.

(g)          Effect of Breach of Covenants. Notwithstanding anything to the
contrary in paragraphs (c), (d) and (e) above, if the Optionee, prior to the
Final Exercise Date, violates (as determined by the Company in its sole
discretion) the non-competition, non-solicitation or confidentiality provisions
of any employment contract, confidentiality and nondisclosure agreement or other
similar agreement between the Optionee and the Company, the right to exercise
this option shall terminate immediately upon such violation.

 

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(Revised November 2006)

 

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4.          Payment of Purchase Price. Common Stock purchased upon the exercise
of this option shall be paid for as follows:

 

(a)

in cash or by check, payable to the order of the Company;

(b)          with the prior consent of the Company (which may be withheld in its
sole discretion), by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or
(ii) delivery by the Optionee to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price and any required
tax withholding;

(c)          if the Common Stock is registered under the Securities Exchange Act
of 1934, by delivery of shares of Common Stock owned by the Optionee valued at
their fair market value (“Fair Market Value”) as determined by (or in a manner
approved by) the Board of Directors of the Company (the “Board”), provided (i)
such method of payment is then permitted under applicable law, (ii) such Common
Stock, if acquired directly from the Company, was owned by the Optionnee for six
months or such other minimum period of time, if any, as may be established by
the Board in its discretion and (iii) such Common Stock is not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(d)          to the extent permitted by applicable law and by the Board, by
payment of such other lawful consideration as the Board may determine; or

 

(e)

by any combination of the above permitted forms of payment.

5.          Tax Matters. No Shares will be issued pursuant to the exercise of
this option unless and until the Optionee pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option. In the Board’s discretion, and subject to such conditions as the Board
may establish, such tax obligations may be paid in whole or in part in shares of
Common Stock, including Shares retained from the option creating the tax
obligation, valued at their Fair Market Value. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Optionee.

6.          Nontransferability of Option. This option may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Optionee, either voluntarily
or by operation of law, except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order, and, during the lifetime of
the Optionee, this option shall be exercisable only by the Optionee.

7.          Provisions of the Plan. This option is subject to the provisions of
the Plan, a copy of which is furnished to the Optionee with this option.

 

8.

Miscellaneous.

 

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(Revised November 2006)

 

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(a)          Governing Law. This option shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to applicable
conflicts of laws.

(b)          Severability. The invalidity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other provision
hereof, and each such other provision shall be severable and enforceable to the
extent permitted by law.

(c)          Binding Effect. These terms and conditions shall be binding upon
and inure to the benefit of the Company and the Optionee and their respective
heirs, executors, administrators, legal representatives, successors and assigns.

(d)          Entire Agreement. These terms and conditions, the attached Notice
and the Plan constitute the entire agreement between the parties, and supersedes
all prior agreements and understandings, relating to the subject matter hereof.

(e)          Amendment. These terms and conditions may be amended or modified in
accordance with Section 11(f) of the Plan.

 

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(Revised November 2006)

 

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Avid Technology, Inc.

Notice of Grant of Stock Option

 

[NAME]

 

Employee ID: _____

 

 

Dear ___________,

 

Effective_____________ (the “Grant Date”), you have been granted a stock option
to buy ______ shares of common stock of Avid Technology, Inc. (the “Company”) at
an exercise price of $____ per share.

 

Shares in each period will become fully vested on the date shown.

 

Number of Shares

Vest Type

Full Vest

Expiration

 

 

 

 

 

 

 

 

 

 

By your signature and the Company’s signature below, you and the Company agree
that this option is granted under and governed by the terms and conditions of
the 2005 Stock Incentive Plan and the attached Terms and Conditions.

 

AVID TECHNOLOGY, INC.

 

By _______________________________

Date _______________________

 

 

__________________________________

Date _______________________

Employee

 

 

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(Revised November 2006)