exhibit_10-1.htm


    


     

    EXHIBIT
10.1

    


    AVID
TECHNOLOGY, INC.

    Avid
Technology Park

    One Park
West

    Tewksbury,
MA 01876

     

    2010
EXECUTIVE BONUS PLAN

     

    On
February 8, 2010 (the “Effective Date”), the
Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”)
of Avid Technology, Inc. (the “Company”) adopted this 2010
Executive Bonus Plan (the “Plan”).

     

    
      	
              1.  

            	
              PURPOSE
      OF THE PLAN

            


    

     

    The
purpose of this Plan is: (i) to advance the interests of the Company’s
stockholders by enhancing the Company’s ability to attract, retain and motivate
executive officers, and (ii) to reward its executive officers for their
contributions toward the achievement of certain Company financial goals and
their personal performance in 2010.  Except where the context
otherwise requires, the term “Company,” as used in this
Plan, includes any of the Company’s present or future parent or subsidiary
corporations, as defined in Sections 424(e) or (f) of the Internal Revenue Code
of 1986, as amended, and any regulations promulgated thereunder, and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board.

     

    
      	
              2.  

            	
              FINAL
      AUTHORITY; ADMINISTRATION

            


    

     

    The
Committee will administer and have final authority on all matters relating to
the Plan, except as otherwise set forth herein.  The Committee may
interpret and construe the Plan, decide any and all matters arising under or in
connection with the Plan, and correct any defect, supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent it deems
expedient to implement the Plan.  Additionally, the Committee may
amend, suspend, revoke or terminate the Plan at any time.  All bonus
payouts under the Plan are subject to prior approval by the
Committee.  All decisions by the Committee will be made in the
Committee’s sole discretion and will be final and binding on all persons having
or claiming any interest in the Plan.

     

    
      	
              3.  

            	
              ELIGIBILITY

            


    

     

    All of
the Company’s executive officers will be eligible to participate in the Plan,
excluding executive officers hired after September 30, 2010.  Eligible
executive officers must be employed by the Company on December 31, 2010 in order
to receive a bonus, if any, under this Plan.  An eligible executive
officer who ceases to be employed by the Company, other than as a result of
termination by the Company for cause, after December 31, 2010, but prior to the
bonus payout date, will be entitled to receive a bonus pursuant and subject to
the terms and conditions of this Plan.  For purposes of the Plan, the
following individuals will be deemed to be employed by the Company as of
December 31, 2010: (i) any executive officer on an approved leave of absence on
that date, and (ii) any executive officer who in 2010 becomes disabled and
qualifies for benefits under the Company’s long-term disability
plan.  For individuals who become executive officers of the Company
during 2010 as a result of an acquisition, initial eligibility for participation
in the Plan will be determined by the Committee on a case-by-case
basis.  Each eligible executive officer is deemed a “Participant” in the
Plan.

     

    
      	
              4.  

            	
              TARGET
      BONUS

            


    

     

    Each
Participant has been designated by the Company as being eligible to earn a
target bonus amount equal to a percentage of the Participant’s base salary (the
“Bonus
Percentage”).

     

    Each
Participant’s “Target Bonus
Amount” for 2010 is his or her Bonus Percentage multiplied by the base
salary paid to him or her in 2010.  For purposes of the Plan, base
salary includes regular wages and vacation, sick time and holiday pay, but not
leave of absence, bonus or other premium pay.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              5.  

            	
              PLAN
      MODEL OVERVIEW

            


    

     

    
      
        Actual
bonus payouts will be based on the following two components: Company Performance
and Personal Performance (each referred to as a “Performance
Component”).  Each Performance Component is described in
greater detail in Section 6.  The Performance Components have been
assigned weights for purposes of calculating bonus payouts, in accordance with
the following table:



    

    
      	
              Performance
      Component

            	
              Weight

            
	
              Company
      Performance

            	
              80%

            
	
              Personal
      Performance

            	
              20%

            


    

    


    


    
      	
              6.  

            	
              PERFORMANCE
      COMPONENTS

            


    

     

    
      	
              6.1 

            	
              Company
      Performance.  Company Performance will be measured using
      two metrics (each a “Company Metric”), with
      each Company Metric assigned a weight, as set forth in the following
      table:

            


    

    
       

      
        	
                Company Metric1

              	
                Weight

              
	
                Company
      Revenues

              	
                40%

              
	
                Company
      Operating Earnings2

              	
                60%

              
	
                 
      1.    Actual performance for all Company
      Metrics will be determined on a non-GAAP basis consistent with historical
      Company practice.

              
	 
      2.    Operating earnings will include bonus
      payout for executives and employees.


      

       

    

    For each
Company Metric, the Compensation Committee will establish a minimum performance
level, a target performance level and a maximum performance
level.  Each Company Metric will receive a score based upon
achievement
of these performance levels as set forth in the following table:

     

    
      	
              Performance
      Level

            	
              Score

            
	
              Maximum
      (and above)

            	
              1.5

            
	
                   Between target and
      maximum

            	
              1.00
      to 1.51

            
	
              Target

            	
              1.00

            
	
                   Between minimum and
      target

            	
              0.30
      to 1.002

            
	
              Minimum

            	
              0.30

            
	
                   Below
      minimum

            	
              0.00

            
	
               
      1.     Score will be adjusted on a linear basis
      between 1.00 and 1.5 based on actual results.

            
	
               
      2.     Score will be adjusted on a linear basis
      between 0.30 and 1.00 based on actual
results.

            


    

    


     

    The
scores attached to each Company Metric will be used in the following formula,
which incorporates the weight of each Company Metric, to determine the “Company Performance
Score”:

     

    
      	
              (Company
      Revenues score) x (40%)

            
	
              +  (Company
      Operating Earnings score) x (60%)

            
	
              Company
      Performance Score

            


    

    


     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              6.2 

            	
              Personal
      Performance.  The Compensation Committee will assign
      personal performance goals to Participants for 2010.  The
      Compensation Committee will consider goals recommended by the Chief
      Executive Officer for each Participant when making such
      assignments.  The Compensation Committee may amend or modify any
      goal or substitute a new goal in place of any existing goal, to the extent
      equitable under the circumstances (e.g., in the event a Participant’s role
      or responsibilities change).

            


    

     

    The
Participant’s performance relative to each goal will be scored on a scale of
0.00 to 1.35, with a score of 1.00 representing target performance.

     

    Within a
reasonable period of time after December 31, 2010, each Participant will receive
from the Compensation Committee, a final assessment of his or her performance
relative to each goal (a “Personal Performance
Score”).

     

    


    
      	
              7.  

            	
              OVERALL
      PARTICIPANT SCORE

            


    

     

    Each
Participant will be assigned an “Overall Score” that will be
calculated in accordance with the formula set forth below:

     

    
      	(Company
      Performance Score) x
      (80%)
	+  (Personal
      Performance Score) x
      (20%)
	
              Overall
      Score

            


    

    


    
      	
              8.  

            	
              BONUS
      PAYOUTS

            


    

     

    
      	
              8.1 

            	
              Bonus
      Payout.  Each Participant’s actual bonus payout under
      this Plan, if any, will be determined in accordance with the following
      formula:

            


    

     

    (Target
Bonus Amount) x (Overall Score) = Bonus Payout

     

    Notwithstanding
the preceding, if the Company has a non-GAAP operating loss for 2010, the bonus
payout will be reduced to zero for each Participant.

     

    
      	
              8.2 

            	
              Timing.  Bonuses,
      if any, are expected to be determined and paid in the first quarter of
      2011 after the Company files its Annual Report on Form 10-K with the
      Securities and Exchange Commission for fiscal year 2010, although the
      Company will not have any liability to any Participant if bonus payouts
      are delayed beyond that time period for any reason, provided that in no
      event will the bonuses, if any, be paid later than December 31,
      2011.

            


    

     

    
      	
              9.  

            	
              CHANGES
      TO EMPLOYMENT CIRCUMSTANCES

            


    

     

    
      	
              9.1 

            	
              Changes
      to Base Salary.  Because each Participant’s Target Bonus
      Amount is based upon base salary paid in 2010, any adjustments to the rate
      or payment of a Participant’s base salary will automatically be
      incorporated on a pro rata basis into that Participant’s bonus payout
      calculation, including, without limitation, in the event of (i) any
      increase or diminution in base salary, (ii) any suspension, in whole or in
      part, of the payment of base salary in connection with an authorized leave
      of absence, and (iii) any payment of less than a full year’s base salary
      in connection with a date of hire after January 1, 2010.  If a
      Participant becomes disabled and qualifies for benefits under the
      Company’s long-term disability plan, the Participant’s bonus payout will
      be calculated based upon the Participant’s base salary paid while on the
      Company payroll as an employee.

            


    

     

    
      	
              9.2 

            	
              Changes
      to Bonus Percentage.  If a Participant’s Bonus Percentage
      changes during 2010, then separate bonus calculations will be performed
      for each time period for which different Bonus Percentages existed, using
      the Participant’s base salary during each such time
  period.

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
              10.  

            	
              MISCELLANEOUS

            


    

     

    
      	
              10.1 

            	
              Other
      Bonuses and Incentives.  Nothing in this Plan shall limit
      the discretionary authority of the Board or the Committee to approve and
      pay out additional or alternative bonuses to Participants (based on
      performance) or provide Participants additional or alternative incentives
      outside of the terms of this Plan.

            


    

     

    
      	
              10.2 

            	
              No
      Right to Employment or Other Status.  This
      Plan shall not be construed as giving any Participant the right to
      continued employment or any other relationship with the
      Company.  The Company expressly reserves the right at any time
      to dismiss or otherwise terminate its relationship with any Participant
      free from any liability or claim under the Plan, except as may otherwise
      be provided in the Participant’s employment agreement or change-in-control
      agreement with the Company.

            


    

     

    
      	
              10.3  

            	
              Provisions
      for non-U.S. Participants.  The Company may modify bonus
      payouts or establish separate procedures for Participants who are non-U.S.
      nationals or who are employed outside the United States in order to comply
      with laws, rules, regulations or customs of such foreign jurisdictions
      with respect to tax, currency, employee benefits or other
      matters.

            


    

     

    
      	
              10.4 

            	
              Governing
      Law.  This Plan will be governed by and construed in
      accordance with the internal laws of the Commonwealth of Massachusetts
      without giving effect to any choice or conflict of law
      provision.