Avid 1997 Annual Report Download - page 42

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those employees covered by other incentive plans. The Plan provides that the Company contribute a varying percentage of
salary based on the Company’s achievement of targeted return on invested capital in 1998, as defined by the Plan.
1998 Variable Compensation Plan
In December 1997, the Board of Directors approved the 1998 Executive and Senior Management Variable Compensation
Plan (the “1998 Variable Plan”). The 1998 Variable Plan, effective January 1, 1998, covers executive officers and senior
management. The plan provides that the Company contribute a varying percentage of salary based on the Company’s
achievement of targeted return on invested capital in 1998, as defined by the Plan.
Stock Plans
1989 Stock Option Plan
The 1989 Stock Option Plan (the "1989 Plan") allows for the issuance of incentive and non-qualified stock options to
purchase the Company's Common Stock. Incentive stock options may not be granted at less than the fair market value of
the Company's Common Stock at the date of grant and are exercisable for a term not to exceed ten years. For holders of
10% or more of the total combined voting power of all classes of the Company's stock, options may not be granted at less
than 110% of the fair market value of the Common Stock at the date of grant, and the option term may not exceed 5 years.
In connection with the establishment of the 1993 Stock Incentive Plan, the 1989 Plan was amended to provide that, subject
to certain exceptions, no further options or awards could be issued thereunder.
1991 Stock Option Plan
Digidesign had an employee stock option plan whereby an aggregate of 1,500,000 shares of common stock were reserved for
issuance. Effective upon the acquisition by Avid, the stock option agreements were assigned to Avid and Avid registered the
670,884 shares, equivalent to the number of options outstanding, taking into effect the exchange ratio of 0.79 shares of
Avid Common Stock for each share of Digidesign Common Stock. Under the plan, options may be granted to employees,
directors, consultants, and advisors to the Company. Incentive stock options may be granted at prices not lower than fair
market value, as established by the Board of Directors on the date of grant. Non-qualified stock options may be granted at
not less than 85% of fair market value, as established by the Board of Directors on the date of grant. Avid has not granted
any options under this plan. The options expire in a maximum of ten years and may be either incentive stock options or
non-qualified stock options, determined at the discretion of the Board of Directors. Options are immediately exercisable,
subject to a right of repurchase which generally lapses as to 25% of the subject shares on the first anniversary of the vesting
commencement date, and as to an additional 2.083% for each succeeding full month of continuous employment.
1993 Stock Incentive Plan
Under the 1993 Stock Incentive Plan (the "1993 Plan"), a maximum of 800,000 shares of Common Stock may be issued
upon exercise of incentive stock options or non-qualified stock options, or in connection with awards of restricted stock
grants, stock appreciation rights or performance shares. The terms of the incentive stock options granted under this plan are
substantially the same as for those granted under the 1989 Plan. The options generally vest ratably over a four-year period.
1993 Director Stock Option Plan
The 1993 Director Stock Option Plan (the "Director Plan"), as amended April 12, 1996, provides for the grant of options to
purchase up to a maximum of 220,000 shares of Common Stock of the Company to non-employee directors of the
Company, at an exercise price equal to the fair market value of the stock on the date of grant. Certain options vest
immediately whereas other options vest ratably over a four-year period from the date of grant.
1994 Stock Option Plan
The 1994 Stock Option Plan, as amended on February 12, 1996, allows for the issuance of incentive and non-qualified
options to purchase up to a maximum of 2,400,000 shares of the Company's Common Stock. The terms of the options
granted under this plan are essentially the same as for those granted under the 1989 Plan.
1997 Stock Incentive Plan
The 1997 Stock Incentive Plan covers employees, consultants, and directors of the Company, and allows for the issuance of
incentive and non-qualified stock options and restricted stock grants to purchase the Company’s Common Stock. An
aggregate of 1,000,000 shares of Common Stock are reserved for issuance under the plan including up to 500,000 shares of
restricted stock which may be issued pursuant to the plan. The terms of the options granted under this plan are essentially
the same as for those granted under the 1989 Plan. The options generally vest ratably over a four-year period.