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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
SCHEDULE 14A INFORMATION
____________________________________________
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant  ý                            Filed by a Party other than the Registrant  ¨ 
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Preliminary Proxy Statement
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Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Materials Pursuant to sec. 240.14a-12
____________________________________________
Avid Technology, Inc.
(Exact Name of Registrant as Specified in Its Charter)
 ____________________________________________
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March 20, 2020
Dear Stockholder,
I am pleased to invite you to attend the 2020 Annual Meeting of Stockholders of Avid Technology, Inc. The annual meeting will be held on April 30, 2020 at 8:30 a.m. eastern time, at 75 Network Drive, Burlington, Massachusetts.
You will find information regarding the business to be conducted at the annual meeting in our notice of annual meeting and proxy statement. Stockholders will receive a notice of Internet availability of the proxy materials instead of a printed copy of the proxy materials. The notice of Internet availability includes instructions for accessing the proxy materials over the Internet or requesting a printed copy of the materials by mail or an electronic copy by email.
Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the annual meeting, we encourage you to read the proxy statement and vote by proxy through the Internet or request, sign and return your proxy card by mail as soon as possible so that your shares may be represented at the meeting. Voting by proxy will not affect your right to attend the annual meeting and vote in person should you so choose.
If your shares are held by a broker, your broker cannot vote your shares for non-routine matters, including the election of directors, the advisory vote on 2019 executive compensation, and the proposed approval of an increase in the shares authorized for issuance under our 2014 Stock Incentive Plan, unless you provide voting instructions. Therefore, if your shares are held by a broker, please instruct your broker regarding how to vote your shares on these non-routine matters. This will ensure that your shares are counted with respect to these matters.
On behalf of the board of directors, I would like to express our appreciation for your investment in our company. I look forward to greeting many of you at the annual meeting.
Sincerely,
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Jeff Rosica
Chief Executive Officer and President




AVID TECHNOLOGY, INC.
75 Network Drive
Burlington, MA 01803
_________________________________
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
_________________________________
NOTICE IS HEREBY GIVEN that the 2020 Annual Meeting of Stockholders of Avid Technology, Inc., a Delaware corporation (the "company"), will be held on April 30, 2020 at 8:30 a.m. local time at 75 Network Drive, Burlington, Massachusetts (together with adjournments or postponements thereof, the "annual meeting"):
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to elect four directors, each to serve until our 2021 annual meeting of stockholders and, as to each, until a successor is duly elected and qualified, or until earlier death, resignation or removal of the director;
2.
to ratify, by a non-binding advisory vote, the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020;
3.
to approve an amendment to the company's 2014 Stock Incentive Plan to increase by an additional 1,400,000 shares the number of shares authorized for issuance under the plan; and
4.
to approve, by a non-binding, advisory vote, the 2019 compensation paid to the company's named executive officers.
We also will transact any other business that may properly come before the annual meeting or at any adjournments or postponements of the annual meeting.
March 3, 2020 is the record date for determining the stockholders entitled to notice of the annual meeting and to vote at the annual meeting and at any adjournments or postponements of the annual meeting.

By Order of our Board of Directors,
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Alessandra Melloni
Corporate Secretary
Burlington, Massachusetts
March 20, 2020



TABLE OF CONTENTS
 
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TABLE OF CONTENTS



AVID TECHNOLOGY, INC.
75 Network Drive
Burlington, Massachusetts 01803
_______________________________
PROXY STATEMENT
ANNUAL MEETING
April 30, 2020
_________________________________

NOTICE ABOUT ALTERNATIVE MEETING ARRANGEMENTS

We intend to hold our Annual Meeting in person. However, we are actively monitoring the outbreak of the novel coronavirus (COVID-19) and are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our website at http://avid.com for updated information. If you are planning to attend our Annual Meeting, please check the website 10 days prior to the meeting date. As always, we encourage you to vote your shares prior to our Annual Meeting.

INFORMATION ABOUT PROXY MATERIALS, THE ANNUAL MEETING AND VOTING
Why am I receiving these materials?
On or about March 20, 2020, we have made these materials available to you on the Internet and, upon your request, have delivered printed versions of these materials to you by mail or electronic copies to you by email, in connection with the solicitation of proxies by our board of directors for use at our 2020 Annual Meeting of Stockholders to be held on April 30, 2020 at 8:30 a.m. local time, and at any postponement(s) or adjournment(s) of the annual meeting. The annual meeting will be held at 75 Network Drive, Burlington, Massachusetts. However, you do not need to attend the annual meeting to vote your shares. Instead, you may simply complete, sign and return the proxy card or submit your proxy through the Internet according to the instructions contained in the notice of Internet availability or proxy card.
What is included in these materials?
These materials include:
this proxy statement (including the Notice of 2020 Annual Meeting of Stockholders);
our Annual Report to Stockholders for the year ended December 31, 2019; and
a proxy card.

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What items will be voted on at the annual meeting?
Stockholders will vote on the following items at the annual meeting:
Proposal One:
the election to the board of directors of the four nominees named in this proxy statement each to serve until our 2021 annual meeting of stockholders and, as to each, until a successor is duly elected and qualified, or until earlier death, resignation or removal of the director;
Proposal Two:
ratification, by a non-binding advisory vote, of the appointment of BDO USA, LLP as our independent registered public accounting firm for the company’s fiscal year ending December 31, 2020;
Proposal Three:
to approve an amendment to the company's 2014 Stock Incentive Plan to increase by an additional 1,400,000 shares the number of shares authorized for issuance under the plan; and
Proposal Four:
to approve, by a non-binding, advisory vote, the 2019 compensation paid to the company's named executive officers.
We are not aware of any other matters to be presented at our annual meeting. However, if any other matters are properly presented, the persons designated as proxies intend to vote, or otherwise act, on those matters in accordance with their judgment.
What are the voting recommendations of the board of directors?
The board recommends that you vote your shares:
FOR” each of the four nominees to the board of directors named in this proxy statement (Proposal No. 1);
FOR” the ratification, by a non-binding advisory vote, of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020 (Proposal No. 2);
"FOR" the approval of an amendment to our 2014 Stock Incentive Plan to increase by an additional 1,400,000 shares the number of shares authorized for issuance under the plan (Proposal No. 3); and
FOR” approval, by a non-binding, advisory vote, of the 2019 compensation paid to our named executive officers (Proposal No. 4).
What is the voting requirement to approve each of the proposals?
Election of Directors (Proposal No. 1). To be elected, directors must receive a majority of the votes cast (the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee). Prior to the election, each director nominee currently serving on our board delivered to the board of directors an irrevocable resignation that will become effective if (i) he or she does not receive a majority of the votes cast (with “abstentions” and “broker non-votes” not counted as a vote “for” or “against” such nominee’s election) and (ii) within 90 days following certification of the stockholder vote, the board determines to accept such resignation in accordance with our corporate governance guidelines. We will publicly disclose any such decision by the board of directors with regard to any director’s resignation.
Other Matters. Under our Amended and Restated By-Laws, the affirmative vote of the holders of a majority of the votes cast will be required for approval of the ratification by a non-binding advisory vote of the selection of the independent registered public accounting firm for 2020 (Proposal No. 2), approval of an amendment to our 2014 Stock Incentive Plan to increase the number of shares authorized for issuance thereunder (Proposal No. 3), and advisory approval of the 2019 compensation paid to our named executive officers (Proposal No. 4). For these proposals, abstentions and broker

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non-votes are not included in the number of votes cast and therefore have no effect on the outcome of such votes. While the advisory vote on our company’s 2019 executive compensation is required by law, it will not be binding on us or our board of directors.  However, the compensation committee of our board of directors will take into account the outcome of this vote when considering future executive compensation decisions and holding future stockholder advisory votes on executive compensation.
Who may vote at the annual meeting?
Only stockholders of record as of the close of business on March 3, 2020, the record date, are entitled to receive notice of, to attend and to vote at the annual meeting. As of the record date, there were 43,210,481 shares of our common stock, $0.01 par value per share, issued and outstanding. Stockholders are entitled to one vote per share.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
In certain sections of this proxy statement, we distinguish between stockholders of record and beneficial owners. Most of our stockholders are beneficial owners of shares held in street name.
Stockholders of Record. If your shares are held in your name with our transfer agent, Computershare, you are considered the “stockholder of record” of those shares. As a stockholder of record, you are receiving the notice of Internet availability or, as applicable, a printed or electronic copy of the proxy materials directly from us.
Beneficial Owners of Shares Held in Street Name. If your shares are held in a brokerage account or by another custodian, you are considered the “beneficial owner” of those shares and the shares are held in “street name” by the broker or custodian, which is the stockholder of record. As a beneficial owner, your broker or custodian will forward to you the notice of Internet availability or, as applicable, a printed or electronic copy of the proxy materials.
How do I vote?
There are three ways to vote your shares:
Over the Internet. You may submit your vote over the Internet any time prior to 11:59 p.m. ET on April 29, 2020 by following the instructions on notice of Internet availability or the proxy card.
By Mail. You may submit your vote by mail by following the instructions on the proxy card. Please allow sufficient time for mailing as only proxy cards received by us prior to the annual meeting will be deemed valid and counted.
In Person. All stockholders of record may vote in person at the annual meeting. We will give you a ballot when you arrive. Please note, however, that if you are a beneficial owner of shares held in street name, in order to vote your shares in person at the annual meeting, you must obtain a legal proxy from the stockholder of record (which is your broker or custodian) that authorizes you to do so.  
If you receive more than one notice of Internet availability or multiple printed copies of the proxy materials (including multiple proxy cards), in order to vote all of your shares by proxy, you must return each proxy card or separately vote over the Internet all the shares owned by you. You may receive multiple copies of the proxy materials if, for example, you hold shares in more than one brokerage account or you are a stockholder of record and hold shares registered in more than one name.
How are proxies voted?
All shares represented by valid proxies received prior to the annual meeting will be voted and, where a stockholder specifies a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder’s instructions.

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What happens if I do not return my proxy?
Stockholders of Record. If you are a stockholder of record and do not vote over the Internet, by mailing your proxy card or by delivering your proxy to the annual meeting, your shares will not be voted unless you appear in person (or are legally represented) and vote your shares by ballot at the annual meeting.
Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not vote over the Internet or by mailing your proxy card, under the rules of various securities exchanges, the broker or custodian that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If your broker or custodian that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the broker or custodian will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares; this is referred to as a “broker non-vote.” A broker non-vote may also result if your broker or custodian may, but opts not to, vote your shares on a routine matter for which you have not given instructions.
What happens if I submit my vote by proxy but do not give specific voting instructions with respect to a particular proposal?
As a stockholder of record, whether you vote over the Internet or by mailing your proxy card, if you sign and return your proxy card without giving specific voting instructions with respect to a particular proposal, the persons designated by us as proxies will vote your shares as recommended by our board of directors.
Which proposals are considered “routine” or “non-routine”?
The only proposal that is considered a routine matter under applicable rules is Proposal 2, the ratification by a non-binding advisory vote of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. All other proposals are considered non-routine.
Therefore, unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on Proposals 1, 3, or 4. Because Proposal 2, regarding the ratification of the appointment of our independent registered public accounting firm by a non-binding advisory vote, is considered a routine matter, brokers are permitted to vote shares held by them without instruction from beneficial owners.
How are abstentions and broker non-votes treated?
Abstentions and broker non-votes will not be counted as shares voting on any proposal. Assuming the presence of a quorum, abstentions and broker non-votes will not affect the voting on any of the proposals under consideration by stockholders. Abstentions and broker non-votes will, however, as stated above, be counted as present and entitled to vote for purposes of determining whether a quorum is present at the annual meeting.
Can I change my vote after I have voted?
If you vote your shares by proxy, you may revoke your proxy at any time before its exercise by re-voting over the Internet, submitting a subsequently dated proxy card, delivering a written revocation to our Corporate Secretary at our principal offices in Burlington, Massachusetts, or voting in person at the annual meeting. If you submit multiple proxies, the last proxy received by us will be the proxy used for purposes of the annual meeting. Voting by proxy will not affect your right to attend the annual meeting and vote in person should you so choose.
Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to revoke a proxy, you must contact that firm to revoke any prior voting instructions.
What is the quorum requirement for the annual meeting?
The holders of a majority of the shares of our issued and outstanding common stock entitled to vote at the annual meeting constitute a quorum. Shares of common stock represented in person or by proxy (including shares that abstain or do not vote for any reason with respect to one or more of the proposals presented for stockholder

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approval) will be counted for purposes of determining whether a quorum is present at the annual meeting. If a quorum is not present, the annual meeting will be adjourned or postponed until a quorum is obtained.
Who will serve as the inspector of election?
Whit Rappole, Vice President of Corporate Development and Investor Relations, or such other person as duly appointed by the Corporate Secretary of the company, to whom the board has delegated such authority, will serve as the inspector of election.
Where can I find the voting results of the annual meeting?
The preliminary voting results will be announced at the annual meeting. The final voting results will be tallied by the inspector of election and reported on a Current Report on Form 8-K that we will file with the Securities and Exchange Commission, or SEC, by May 6, 2020.
How do I receive a paper copy of the proxy materials?
If you prefer to receive paper copies of the proxy materials, you can still do so. You may request a paper copy by following the instructions provided in the notice of Internet availability. The notice of Internet availability also provides you with instructions on how to request paper copies of the proxy materials on an ongoing basis. There is no charge to receive the materials by mail. You may request printed copies of the materials until one year after the date of the annual meeting.
Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
Under rules adopted by the SEC, we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of these materials to each stockholder. On or about March 20, 2020, we have mailed to our stockholders of record as of March 3, 2020 (other than those who previously requested electronic or paper delivery on an ongoing basis) a notice of Internet availability containing instructions on how to access our proxy materials, including our proxy statement and our annual report. All stockholders will have the ability to access our proxy materials on the website referred to in the notice of Internet availability or request a printed set of the proxy materials. The notice of Internet availability also instructs you on how to access your proxy card to vote through the Internet. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via email until you elect otherwise. If you have previously elected to receive printed proxy materials, you will continue to receive these materials in paper format until you elect otherwise.
Who is paying for the cost of our proxy solicitation?
We will bear all costs for our solicitation of proxies. Our directors, officers and certain of our employees may solicit proxies by mail, telephone, email, facsimile or personally without additional compensation. We are requesting that brokers and custodians forward the notice of Internet availability or, as applicable, printed copies of the proxy materials to stockholders for whom they hold shares. We will reimburse these entities for their reasonable out-of-pocket distribution expenses.
Where can I direct any questions regarding the solicitation of votes?
Please direct any questions regarding the solicitation of votes in connection with our 2020 Annual Meeting of Stockholders to Whit Rappole, Vice President of Corporate Development and Investor Relations, 75 Network Drive, Burlington, MA 01803. Please call (978) 275-2032 or email ir.avid.com.
What is the deadline to propose actions for consideration at the 2021 Annual Meeting of Stockholders?
In order for a stockholder proposal to be eligible to be included in our proxy statement and proxy card for the 2021 Annual Meeting of Stockholders, the proposal must be submitted to our Corporate Secretary at our principal offices in Burlington, Massachusetts, on or before November 20, 2020, and concern a matter that may be properly

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considered and acted upon at the annual meeting in accordance with Rule 14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act").
Under the advance notice provisions in our Amended and Restated By-Laws, stockholders are required to provide notice to our Corporate Secretary at our principal offices in Burlington, Massachusetts, of the nomination of directors or to introduce an item of business at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the anniversary date of our prior annual meeting. However, if our annual meeting is called for a date that is not within 25 days before or after the anniversary date of the prior year's annual meeting, notice by the stockholder must be received no later than the close of business on the tenth day following the earlier of either the day on which the notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first. For further information about our director nomination process, please see "Director Nomination Process" below.
 
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON APRIL 30, 2020:

THIS PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT:
www.proxyvote.com


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PROPOSAL 1 - ELECTION OF DIRECTORS
Proposal Summary
The first proposal for consideration at our annual meeting is the election of the four director nominees named in this proxy statement. Our board of directors is currently divided into three classes, designated as Class I, Class II and Class III directors, with one class elected each year. As a result of an amendment to our Amended and Restated By-Laws approved at our annual meeting of stockholders held in 2019, the annual election of all directors will be phased in gradually and the board of directors will be fully declassified upon the conclusion of the 2022 annual meeting of stockholders. As a result, at the 2020 annual meeting of stockholders, those directors currently classified as Class III directors, along with Christian A. Asmar, who was appointed by the board of directors on October 31, 2019 to fill a vacancy created by an increase in the size of the board of directors, will stand for election for a one-year term to expire at our 2021 annual meeting of stockholders.
Director Nominees. Our board of directors has, upon the recommendation of our nominating and governance committee, nominated our current Class III directors, Elizabeth M. Daley, Daniel B. Silvers and John P. Wallace, for re-election as directors at our annual meeting. Our board of directors has also, upon the recommendation of our nominating and governance committee, nominated Mr. Asmar, who was appointed by the board of directors as a director on October 31, 2019 to fill a vacancy created by an increase in the size of the board of directors, to stand for re-election as a director at our annual meeting. Information about each director nominee is provided below. If elected, each director nominee for will serve as a director until our 2021 annual meeting of stockholders and his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. Each director nominee has indicated his or her willingness to serve if elected, but if any of the nominees should be unable or unwilling to serve, proxies may be voted for substitute nominee(s) designated by our board of directors.
Under our Amended and Restated By-Laws, directors in non-contested elections are elected by an affirmative majority of votes cast. You can vote “for” or “against” a nominee, or you may “abstain” from voting with respect to a nominee, however, an abstention will not count as a vote cast in the election.
Board Recommendation
Our board of directors recommends that our stockholders vote FOR the election of Ms. Daley and Messrs. Asmar, Silvers, and Wallace.
Nominees for Directors for a One-Year Term That Will Expire at our Annual Meeting in 2021
Set forth below is information regarding each director nominee, including his or her age as of April 1, 2020 and information about his or her specific experience, qualifications, attributes or skills that led the board to conclude that he or she should serve as a director of Avid.
Christian A. Asmar, 37, became a director in 2019. Mr. Asmar is co-founder and Managing Partner of Impactive Capital, one of our largest stockholders.  Prior to founding Impactive Capital in 2018, Mr. Asmar spent eight years at Blue Harbour Group, a $3 billion activist investment firm where he was a Managing Director and Investing Partner.  At Blue Harbour, he led many of the firm’s investments where he advised CEOs and boards of public companies on capital allocation, ESG issues, and strategic considerations.  Prior to joining Blue Harbour, Mr. Asmar was a founding team member of Morgan Stanley Infrastructure Partners.  Prior to his tenure at Morgan Stanley Infrastructure Partners, he worked in the Investment Banking division at Morgan Stanley.  Mr. Asmar is a member of New America Alliance, and graduated magna cum laude from Princeton University with a B.S.E. in Operations Research & Financial Engineering and minors in Finance, Engineering & Management Systems and Robotics & Intelligent Systems. We believe Mr. Asmar's extensive experience in capital allocation and investments as well as his perspective as a major investor in the company make him well-qualified to serve as a member of our board of directors and as a member of our nominating and governance committee.
Mr. Asmar became a director in accordance with the terms of a support agreement entered into by the company on October 31, 2019 with Impactive Capital LP (“Impactive”), one of our largest shareholders, and Mr. Asmar, pursuant to which we agreed to (i) increase the size of our board from nine to ten directors, (ii) appoint Mr. Asmar as a Class III director and (iii) nominate Mr. Asmar for election as a director at the 2020 annual meeting of stockholders.

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Impactive has agreed that neither it nor any of its affiliates will pay any compensation to Mr. Asmar with respect to his service on the board or any committee thereof. In addition, Impactive has agreed that Mr. Asmar will promptly tender his resignation from the board if Impactive and its affiliates beneficially own less than one half of the number of shares of the company’s common stock owned as of the date of the support agreement. The support agreement provides for a standstill period, during which Impactive has agreed to vote its shares in favor of the company’s nominees of existing directors for election to our board and in accordance with any recommendations of our board on certain other matters. The standstill period extends to the earliest to occur of (i) May 15, 2020, (ii) the date of the 2020 annual meeting of stockholders and (iii) ten business days after such date, if any, that Impactive provides written notice to the company that the company materially breached any of its commitments under the support agreement where the company has not cured such breach within ten business days after such written notice. The support agreement provides for a lock-up period, during which Impactive and Mr. Asmar have agreed not to “short-sell” any of the company’s securities. The lock-up period extends to the earliest to occur of (i) the date of the 2021 annual meeting of stockholders (or such longer period as Mr. Asmar or, in certain cases, a replacement designee who is also a principal of Impactive, continues to serve on the board) and (ii) ten business days after such date, if any, that Impactive provides written notice to the company that the company materially breached any of its commitments under the support agreement where the company has not cured such breach within ten business days after such written notice.
Elizabeth M. Daley, 77, became a director in February 2005. Dr. Daley has been Dean of the School of Cinematic Arts at the University of Southern California since 1991. Dr. Daley has extensive management and leadership experience, which includes her over 20 years of experience as Dean of the University of Southern California School of Cinematic Arts, one of the most prestigious and influential film schools in the world. Dr. Daley is embedded into the media and production sectors and brings to our board truly unique insights into the film industry, our education market, the future of digital media, emerging trends in digital media and the needs of our customers. Dr. Daley is one of the most widely recognized and respected women in our industry. She has been honored by American Women in Radio and Television and received the Women in Film Business Leadership Award, acknowledging extraordinary contributions by women behind the camera. Dr. Daley is an active and engaged board member, who makes frequent and valuable contributions to board discussions and decisions, and is a valued member of our compensation committee and nominating and governance committee.
Daniel B. Silvers, 43, became a director in March 2018.  Mr. Silvers is the Founder and has been the Managing Member of Matthews Lane Capital Partners LLC, an investment firm, since June 2015.  He has also served as Chief Executive Officer and a Director of Leisure Acquisition Corp., a special purpose acquisition company, since September 2017 as well as Executive Vice President and Chief Strategy Officer of Inspired Entertainment, Inc., a company involved in the gaming equipment supplier industry, where he is also a member of the Office of the Executive Chairman, since December 2016. He is the former President of SpringOwl Asset Management LLC, an investment management firm, a position he held from March 2009 to June 2015 (including predecessor entities). From April 2009 to October 2010, Mr. Silvers also served as President of Western Liberty Bancorp, an acquisition oriented holding company that acquired and recapitalized a community bank in Las Vegas, Nevada. Mr. Silvers joined a predecessor of SpringOwl from Fortress Investment Group, a leading global alternative asset manager, where he worked from 2005 to 2009. At Fortress, Mr. Silvers’ primary focus was to originate and oversee due diligence on and asset management for real estate and gaming investments in Fortress’ Drawbridge Special Opportunities Fund. Prior to joining Fortress, Mr. Silvers was a senior member of the real estate, gaming and lodging investment banking group at Bear, Stearns & Co., Inc.  Mr. Silvers previously served on the board of directors of International Game Technology, bwin.party digital entertainment plc, Universal Health Services, Inc., Forestar Group, Inc., PICO Holdings, Inc., Ashford Hospitality Prime, Inc. and India Hospitality Corp. Mr. Silvers holds a B.S. in Economics, as well as an M.B.A with a concentration in Finance, from The Wharton School of the University of Pennsylvania. We believe Mr. Silvers is well-qualified to serve as a member of our board of directors and as a member of our strategy committee due to his extensive experience in corporate finance, capital allocation, capital markets and public company governance.
John P. Wallace, 54, became a director in May 2017. Mr. Wallace retired as the President and CEO of Deluxe Entertainment Services Group, Inc., a global provider of digital services and technology solutions for content creation and delivery, after serving in this position from 2015 to November 2019. In October 2019, Deluxe filed voluntary petitions with the U.S. Bankruptcy Court to reorganize under Chapter 11 of the Federal Bankruptcy Code. Prior to joining Deluxe, Mr. Wallace worked from 1988 to 2015 at NBCUniversal, Inc. is several capacities, including from 2011 to 2015 as the President of Operations and Technical Services for NBCUniversal and from 2008 to 2011 as President of the Television Stations Division. Mr. Wallace is an accomplished senior media executive with a 25-plus year track record of successful strategic and tactical operations leadership, making him well-suited to serve as the chair of our audit committee and as a member of our strategy committee.

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CONTINUING DIRECTORS
Set forth below is information regarding each continuing director, including his or her age as of April 1, 2020 and information about his or her specific experience, qualifications, attributes or skills that led the board to conclude that he or she should serve as a director of Avid.
Class I Directors (terms to expire at our 2021 annual meeting)
Nancy Hawthorne, 68, became a director in October 1997 and was Chair of our board from March to May 2018. Ms. Hawthorne also served as our lead independent director from January 2008 to December 2011, and assumed that role again from October 2014 to March 2018. Ms. Hawthorne has been a Partner of Hawthorne Financial Advisors, a financial advisory and investment firm, since June 2014. Previously, Ms. Hawthorne served as Chair and Chief Executive Officer of Clerestory, LLC; Chief Executive Officer and Managing Partner of Hawthorne, Krauss & Associates, LLC, a provider of consulting services to corporate management; and as Executive Vice President and Chief Financial Officer and Treasurer of Continental Cablevision. Ms. Hawthorne also serves as a member of the audit committee and nominating and governance committee of Brighthouse Financial; as a director and member of the audit committee and a member of the nominating and governance committee of Charles River Associates; and as the chair of THL Credit, Inc. as well as a member of its nominating and governance committee and audit committee. As a former senior executive at Continental Cablevision and MediaOne, Ms. Hawthorne brings deep industry expertise to Avid's board, especially on the distribution side of the value chain and in her experience with subscription and recurring revenue business models. Ms. Hawthorne’s financial management and outside board experience enhance her contributions to our board. She also brings a broad understanding of corporate governance and risk management to the board, which helps our board understand and focus on critical issues in these areas. Additionally, her financial expertise and experience qualify her as an audit committee financial expert. Ms. Hawthorne brings valuable insight in her role as the chair of our nominating and governance committee and as a member of our audit committee and a financial expert. Ms. Hawthorne also offers a unique perspective, having served as our interim CEO from July to December 2007.
Michelle Munson, 47, became a director in August 2019. Since 2017, Ms. Munson has been the co-founder and CEO of Eluvio, Inc., a software company developing technologies for a content-centric Internet with solutions for the management and distribution of large form video content.  Prior to Eluvio, Ms. Munson founded Aspera, Inc. in 2004, and led that company as CEO for 13 years including through its acquisition by IBM in 2014.  Ms. Munson co-invented the EMMY® Award-winning Aspera FASP transport technology, which is used widely for high-speed file transfer in media operations.  Ms. Munson is a fellow of the Society of Motion Picture and Television Engineers; won the 2016 Charles S. Swartz Award from the Hollywood Professional Association; and was named 2016 Woman Entrepreneur of the Year by the International Association of Broadcasting Manufacturers. As the co-founder of two successful media technology companies, Ms. Munson brings unique industry expertise to Avid's board. Ms. Munson's technical knowledge and management enhance her contributions to our board.
Peter Westley, 56, became a director in January 2016 and was appointed Chair of our board in May 2018. Mr. Westley is a managing partner at Blum Capital Partners, L.P., a leading investment firm that is one of our largest stockholders. Mr. Westley has been a partner at Blum Capital Partners since 2012 and has nearly 30 years of experience in financial services working with media and technology companies. He is also a member of the board of Tideline Marine Group and a board observer at Curiosity Stream, LLC. His prior experience includes serving as a managing director in the Technology and Media Groups at Salomon Smith Barney, partner and head of the media and internet investment banking at ThinkEquity Partners, LLC, and managing director and head of media and internet banking at North Point Advisors. He was also a member of the audit committee of Payless Holdings, LLC, and an alternate member of the board of Xtralis Group Holdings Limited. Our board benefits from Mr. Westley's 30 years of experience in financial services working with media and technology companies and he brings financial expertise, industry knowledge and leadership experience that the board believes will add new perspective to the board and amplify the company's capability to provide greater value to stockholders. We also benefit from the stockholder perspective he lends as a managing partner of Blum Capital Partners, L.P. His experience and background qualify him as an audit committee financial expert and he currently serves as the chair of our strategy committee and a valued member of our audit committee.
Class II Directors (terms to expire at our 2022 annual meeting)
Robert M. Bakish, 56, became a director in October 2009. Mr. Bakish is currently the President & Chief Executive Officer of ViacomCBS. Prior to the recombination of Viacom and CBS, he was the President and Chief Executive

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Officer of Viacom, Inc. since December 2016; prior to that he was Acting President and CEO of Viacom Inc. from November 2016 to December 2016; prior to that he was President and CEO of Viacom International Media Networks, a division of Viacom Inc., since January 2007. From July 2004 to January 2007, Mr. Bakish was Executive Vice President, Operations, of Viacom Enterprises, a subsidiary of Viacom. Prior to that, he served as MTV Networks’ Executive Vice President and Chief Operating Officer, Advertising Sales and was chairman of the Cable Television Advertising Bureau. Previously, Mr. Bakish was a partner with Booz Allen & Hamilton in its Media and Entertainment practice. Mr. Bakish's extensive experience at Viacom gives him unique insights into the broadcast industry and international markets. He brings a strong commercial perspective and voice of the customer to Avid's board. This has been very valuable as Avid is implementing its long-term transformational strategy to adapt to the rapidly changing media industry. The board also values his expertise in strategic planning and business development as well in his role, since 2011, as the chair of our compensation committee and as a member of our strategy committee.
Paula E. Boggs, 60, became a director in July 2015. Ms. Boggs is the founder and owner of Boggs Media, LLC.   A former executive at the Starbucks Coffee Company, she led the global law department of Starbucks from 2002 to 2012, and was Corporate Secretary of the Starbucks Foundation. Prior to that, Ms. Boggs was a Vice President of Legal for products, operations and information technology at Dell Computer Corporation from 1997 to 2002 and also held the role of Senior Deputy General Counsel starting in June 1997. Before joining Dell, Ms. Boggs was a partner with the law firm of Preston Gates & Ellis LLP from 1995 to 1997. She currently sits on the American Bar Association Board of Governors and is the vice chair of the audiences and communities committee and a member of the nominating committee of the Seattle Symphony.  She was previously on the board of Premera Blue Cross and chair of its compensation committee; a member of the Nominating/Trusteeship, Audit/Compliance and Executive Committees of Johns Hopkins University’s board of trustees; a member of the Executive Committee of KEXP Radio, an affiliate of National Public Radio and the University of Washington; a member of the audit committee for School of Rock LLC; a member of the President's Committee for the Arts and the Humanities from 2013 through 2017; a member of the White House Council for Community Solutions from 2010 to 2012; a member of the audit and nominating committee of the American Red Cross; and a member of the board of Sterling Financial Inc. The board believes Ms. Boggs' extensive governance and Fortune 500 experience with high growth companies is important as our company focuses on governance, internal controls and operational success. Ms. Boggs also brings important insights into the media sector as a result of her accomplished music career, as a voting member of the Recording Academy and as a Seattle Symphony board member. We also benefit from the 18 years she served as a Johns Hopkins University Trustee where she chaired the audit committee.  Her combination of governance expertise, media sector insights and audit committee experience makes her a particularly valuable member of our audit and compensation committees.
Jeff Rosica, 58, was appointed Chief Executive Officer (CEO) and President in February 2018 and was appointed to our board in March 2018. Prior to being appointed our CEO and President, Mr. Rosica served as our President. He joined our company as Senior Vice President of Worldwide Field Operations in January 2013. In January 2016, Mr. Rosica was appointed Senior Vice President, Chief Sales and Marketing Officer and, in December 2016, was appointed President. From early 2002 until joining us, Mr. Rosica served in various capacities with Grass Valley, LLC, a broadcast equipment supplier, most recently as Executive Vice President, Chief Sales and Marketing Officer. Prior to that, Mr. Rosica was Vice President and General Manager of Phillips Broadcast from 1996. In his role as CEO and President, Mr. Rosica brings a unique perspective to the board.
DIRECTOR COMPENSATION
Our company uses a combination of cash and equity-based compensation to attract and retain individuals to serve on our board. We only compensate outside directors for their service on our board. An outside director is a member of our board who is not:
an employee of our company or any subsidiary of our company;
a significant stockholder, meaning the beneficial owner of 10% or more of our outstanding common stock; or
a controlling stockholder, member or partner of a significant stockholder.
In developing our director compensation program, we considered market data from a peer group of companies identical to those used to benchmark executive compensation.

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During fiscal year 2019, Mr. Rosica did not qualify as an outside director because he was our CEO. Accordingly, Mr. Rosica did not receive any compensation for his service on our board.
Our board’s outside directors receive cash compensation as set forth below:
 
 
Chair Retainer
 
Other Members Retainer
 
 
 
Board of Directors
 

$100,000

 

$50,000

Audit Committee
 
26,000

 
12,000

Compensation Committee
 
18,750

 
9,000

Nominating and Governance Committee
 
12,500

 
5,250

Strategy Committee
 
18,750

 
9,000

In addition to the cash compensation described above, outside directors are entitled to receive equity compensation. Our board reviews equity compensation for outside directors periodically.
Under our 2014 Stock Incentive Plan, we may grant options, restricted stock, restricted stock units, or a combination of these awards upon an outside director’s initial election to our board of directors and annually for his or her continued service on the board. The 2014 Stock Incentive Plan limits the “expected value” of these awards to a dollar amount determined by our compensation consultant based on a review of compensation paid by peer companies; this dollar amount for any award may not exceed $230,000 as of the date of grant. The expected value of an option or stock appreciation right is the value of the award on the date of grant, as determined by our board of directors using a reasonable valuation method. The expected value for restricted stock and restricted stock units is the fair market value of our common stock covered by the award on the date of grant.
Stock options granted to outside directors generally vest in full on the first anniversary of the date of grant. Restricted stock and restricted stock units granted to outside directors may not vest before the earlier of the next annual meeting of stockholders or the first anniversary of the date of grant, except in extraordinary circumstances (including a director’s death or disability, a director’s attainment of mandatory retirement age or retirement following at least seven years of service, certain corporate transactions, and other nonrecurring significant events that affect us, a director, or the 2014 Stock Incentive Plan). In May 2019, we made an annual grant to our directors of 23,958 restricted stock units which vests upon the earlier of the date of our annual meeting of stockholders in 2020 or May 31, 2020.

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Director Compensation Table for Fiscal Year 2019
The following table sets forth a summary of the compensation we paid to our outside directors for service on our board in 2019.
Name
Fees Earned
or Paid in
Cash(1)

Restricted
Stock Unit
Awards(2)

Total

Christian A. Asmar(3)

$9,385


$57,882


$67,267

Robert M. Bakish

$77,750


$114,863


$192,613

Paula E. Boggs

$68,502


$114,863


$183,365

Elizabeth M. Daley

$64,250


$114,863


$179,113

Nancy Hawthorne

$74,500


$114,863


$189,363

Michelle Munson(4)

$24,772


$86,557


$111,329

John H. Park(5)

$37,582


$—


$37,582

Daniel B. Silvers

$64,980


$114,863


$179,843

John P. Wallace

$85,000


$114,863


$199,863

Peter M. Westley

$130,750


$114,863


$245,613

(1)
Cash amounts included in the table above represent the portion of the annual board/committee member fees and board/committee chair fees earned during our 2019 fiscal year.
(2)
The amount shown represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation, of restricted stock unit awards granted to each of our outside directors in 2019. The grant date fair value represents fair market value less par value of $0.01 per share. The fair market value was determined by multiplying the total number of shares of common stock underlying the restricted stock units by $8.55, the closing price of our common stock on Nasdaq on the grant date, May 2, 2019. The fair market value for Mr. Asmar’s initial grant was determined by multiplying the total number of shares of common stock underlying the restricted stock units by $6.47, the closing price of our common stock on Nasdaq on the grant date, November 5, 2019. The fair market value for Ms. Munson’s initial grant was determined by multiplying the total number of shares of common stock underlying the restricted stock units by $10.21, the closing price of our common stock on Nasdaq on the grant date, August 1, 2019. As of December 31, 2019, the outside directors held the following vested restricted stock units: Mr. Asmar: 0; Mr. Bakish: 107,016; Ms. Boggs: 72,164; Dr. Daley: 108,016; Ms. Hawthorne: 108,016; Ms. Munson: 0; Mr. Park: 0; Mr. Silvers: 27,733; Mr. Wallace: 44,981; and Mr. Westley: 15,782. Please see Note L, “Capital Stock” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 regarding the assumptions and methodologies used to value these restricted stock units. 
(3)
Mr. Asmar joined the board effective October 31, 2019.
(4)
Ms. Munson joined the board effective July 31, 2019.
(5)
Mr. Park retired from the board effective July 31, 2019. All unvested restricted stock units were forfeited upon retirement.
Stock Ownership Guidelines for Outside Directors
Our board has adopted stock ownership guidelines for outside directors that are intended to further align the interests of our outside directors with those of our stockholders. Under the guidelines in effect in 2019, our outside directors were expected to hold shares of common stock equal in value to a multiple of three times the cash retainer paid to the director in respect of such director's board membership, excluding any cash retainer paid for committee service. For purposes of these guidelines, stock ownership includes:
stock owned outright, including stock owned jointly with a spouse or separately by a spouse and/or children;
shares held in a trust for the economic benefit of the outside director or his or her spouse or children;
restricted stock and restricted stock units; and

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shares underlying fully-vested options.
All of our outside directors who have served on our board for three years have met our stock ownership guidelines. See the section of this proxy statement entitled "Beneficial Ownership Information - Security Ownership of Certain Beneficial Owners and Management" for more detailed information on the beneficial ownership of our directors.
EXECUTIVE OFFICERS
Our executive officers are elected annually by the board and serve at the discretion of the board. Our current executive officers and their ages as of April 1, 2020 are as follows:
Executive Officer
 
Age
 
Position(s) with our company
Jeff Rosica
 
58
 
Chief Executive Officer and President
Kenneth L. Gayron
 
50
 
Chief Financial Officer and Executive Vice President
Jason A. Duva
 
47
 
Chief Legal and Administrative Officer and Executive Vice President
Dana Ruzicka
 
48
 
Chief Product Officer and Senior Vice President
Tom Cordiner
 
50
 
Chief Revenue Officer and Senior Vice President
Jeff Rosica is our Chief Executive Officer and President. Please see “Continuing Directors” above for Mr. Rosica's biography.
Kenneth L. Gayron joined our company as Chief Financial Officer and Executive Vice President in May 2018. Mr. Gayron most recently served as CFO and interim CEO for Numerex Corporation, a single source, leading provider of managed enterprise solutions enabling the Internet of Things, from March 2016 to February 2018. Prior to his tenure with Numerex, Mr. Gayron served as CFO of Osmotica Pharmaceutical Corp., a global specialty pharmaceutical company, from October 2013 to February 2016.  Prior to Osmotica, Mr. Gayron acted as Vice President - Finance and Treasurer for Sensus, Inc., a global smart grid communications company, from February 2011 until September 2013.  From April 2009 until January 2011, Mr. Gayron served as Treasurer of Nuance Communications, a software/services company.  From 1992 until 2009, Mr. Gayron held positions of increasing responsibility with investment banks, including UBS, Bank of America and CIBC.
Jason A. Duva is our Chief Legal and Administrative Officer and Executive Vice President. He served as our General Counsel, Senior Vice President of Strategic Initiatives and Corporate Secretary from May 2017 to May 2018 and as our Senior Vice President, General Counsel and Corporate Secretary from March 2016 to May 2017. Prior to that, Mr. Duva served as our Vice President, General Counsel and Corporate Secretary since October 2011. Mr. Duva joined Avid in 2005 as Corporate Counsel and from 2008 to 2011 served as Assistant General Counsel. Prior to joining Avid, Mr. Duva worked at the law firm of Testa, Hurwitz & Thibeault LLP, where he represented numerous hardware, software, and entertainment companies, along with individual artists and arts organizations.
Dana Ruzicka has served as our Senior Vice President and Chief Product Officer since May 2018 and prior to that he served as Vice President and Chief Product Officer since August 2015. Mr. Ruzicka has been with the company for more than 20 years. Most recently he managed the company's Tier 3 growth initiative. Prior to that, he was Vice President of Segment Strategy and Planning at Avid.  Mr. Ruzicka has also served in additional senior leadership roles at Avid, including Vice President of Post Solutions and Vice President Strategic Alliances.
Tom Cordiner has served as our Chief Revenue Officer and Senior Vice President since March 2019, prior to which he served as our Senior Vice President of Global Sales since December 2016. Prior to this position, Mr. Cordiner served as our Vice President of International Sales from January 2013 to December 2016. Mr. Cordiner originally joined Avid as out Vice President of Sales for the EMEA region in January 2012. Before joining Avid, Mr Cordiner was vice president, sales and business development at Technicolor, responsible for the international markets in the broadcast, media and telecoms sectors.

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GOVERNANCE OF THE COMPANY
We are committed to ensuring high standards of corporate governance. Some examples of this commitment are set forth below:
Our board consists of ten members, nine of whom are independent directors within the meaning of Nasdaq's listing standards.
All members of our board’s committees are independent directors.
We have corporate governance guidelines that are published on the investor relations section of our website at http://ir.avid.com, which among other things, lay out the responsibilities and qualification standards for directors, the criteria for director nominations, the board meeting process, our directors’ access to officers and employees and independent advisers, and the duties of our chair and, if applicable, lead independent director.
Our corporate governance guidelines also require our directors to (i) limit the number of other public company boards on which they serve so that they are able to devote adequate time to their duties to the company, and (ii) submit their resignation should they lose their current employment position.
Our corporate governance guidelines further require that any nominee for director who does not receive a majority vote in an uncontested election must promptly tender his or her resignation to the board, which will consider whether to accept the resignation.
We have stock ownership guidelines for our CEO, our other executive officers and our non-employee directors that are described in this proxy statement under “Stock Ownership Guidelines and Director Compensation - Stock Ownership Guidelines for Outside Directors.”
Our independent directors regularly convene meetings without management present.
Independent directors approve director nominations and executive officer compensation.
Our audit committee reviews and approves all related-party transactions.
We have a code of business conduct and ethics which is distributed annually to our employees.
Waivers of our code of business conduct and ethics for our executive officers or directors must be approved by our board of directors and disclosed publicly.
In addition to our governance efforts discussed herein, a statement regarding our environmental and social efforts is available on the investor relations section of our website at http://ir.avid.com.
Corporate Governance Guidelines
The board has adopted corporate governance guidelines to assist it in the exercise of its duties and responsibilities and to serve the best interest of our stockholders, and a code of business conduct and ethics that applies to all of our employees, officers and directors. Our corporate governance guidelines address, among others, the responsibilities and qualification standards for directors (including a policy for holdover directors), the criteria for director nominations, the board meeting process, our directors’ access to officers and employees and independent advisers, and the duties of our chair and if applicable lead independent director. Our corporate governance guidelines can be accessed from the corporate governance page in the investor relations section of our website at http://ir.avid.com.
Board Leadership Structure
The board oversees our chief executive officer and other senior management in the competent and ethical operation of the company and assures that the long-term interests of the stockholders are being served.
The board periodically reviews its leadership structure to determine whether the roles of chair and chief executive officer should be separated or combined, based on its judgment as to the structure that best serves the interests of our company and our stockholders. The board believes that the current separation of the chair and chief executive officer roles allows Mr. Rosica to focus his time and energy on operating and managing the company. Our board continues to evaluate our leadership structure and may make appropriate changes in the future. 

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The chair of the board presides over meetings of the board and serves as a liaison between the directors and management.
Risk Oversight
The Board's Role
The management of risk is an integral part of board deliberations throughout the year. Management is responsible for the day-to-day management of risks our company faces, while the board, as a whole and through its committees, has responsibility for the oversight of risk management. A fundamental part of risk oversight is to understand the risks that we face, the steps management is taking to manage those risks and to assess our appetite for risk. Risk management systems, including our internal auditing procedures, internal control over financial reporting and corporate compliance programs, are designed in part to inform management about our material risks. The board believes that full and open communication between management and the board are essential for effective risk management and oversight. The board and its committees receive regular presentations from senior management on strategic matters involving our operations and areas of material risk to our company, including operational, financial, legal, regulatory, and strategic risks, among others. The board and its committees also discuss with management strategies, financial performance, legal developments, key challenges and risks and opportunities for our company. The involvement of the board in the oversight of our strategic planning process is a key part of the board's assessment of the risks inherent in our corporate strategy. Our management uses an enterprise risk management process to identify and assess, and, to the extent practicable, manage and mitigate material risks to our company.
While the board oversees the risk management process, our board’s committees assist the board in fulfilling its oversight responsibilities in certain areas of risk. The audit committee focuses on financial risk, including the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The nominating and governance committee manages risks associated with corporate governance, board organization, membership and structure.
Compensation Risk Assessment
At the compensation committee’s direction, our Chief Human Resources Officer and other members of the human resources and finance departments assisted in a risk assessment of our compensation programs for 2019, including our executive compensation programs. Based on this assessment, we believe that our compensation programs’ design promotes the creation of long-term value and discourages behavior that leads to excessive risk. The compensation committee reviewed and discussed the assessment, and the compensation committee concurred with management’s assessment, that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on our business.
Director Independence
Nine of the ten members of our board are “independent” directors, and all of the board’s committees are composed entirely of “independent” directors, as such term is defined in Nasdaq's listing standards. There are no family relationships among any of our directors and executive officers. The board determined that the following directors are “independent,” according to the above definition: Messrs. Asmar, Bakish, Silvers, Wallace and Westley, Dr. Daley and Mses. Boggs, Hawthorne and Munson. In reaching its determination as to the independence of Messrs. Asmar, Silvers and Westley, the board considered each director's relationship with significant stockholders of the Company, Impactive Capital, LLC, Cove Street Capital, LLC and Blum Capital Partners, L.P., respectively. As CEO, Mr. Rosica is not an "independent" director.
In addition, after having considered relevant factors, including Mr. Westley’s relationship with one of Avid’s largest stockholders, the board has determined that the audit committee is composed entirely of “independent” directors, as such term is defined in Rule 10A-3 under the Exchange Act, as no member of the audit committee accepts directly or indirectly any consulting, advisory or other compensatory fee from the company other than his or her director compensation, or otherwise has an affiliate relationship with the company. Also, each of the members of the compensation committee qualifies as independent under Nasdaq standards and Rule 10C-1 under the Exchange Act. Under these standards, the board considered that none of the members of the compensation committee

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accepts directly or indirectly any consulting, advisory or other compensatory fee from the company other than his or her director compensation, and that none has any affiliate relationship with the company or other relationships that would impair the director’s judgment as a member of the compensation committee.
Board Meetings
Our board met seven times and acted by written consent three times in 2019. The non-management directors, all of whom are independent, met in an executive session chaired by the lead independent director at the conclusion of every regularly scheduled board meeting and at such other board and committee meetings as desired by the independent directors. During 2019, each of our directors attended at least 75 percent of the total number of meetings of the board of directors and all committees of the board of directors on which he or she served.
While we encourage our directors to attend our annual meetings of stockholders, we do not have a policy requiring their attendance. All of our then-serving directors attended our 2019 annual meeting of stockholders.
Board Committees
Our board has a standing audit committee, compensation committee, nominating and governance committee and strategy committee. Each committee operates under a charter that has been approved by our board. Each committee reviews its charter periodically and recommends any proposed revisions to our board for approval. The charters of the audit committee, the compensation committee and the nominating and governance committee can be accessed from the corporate governance page in the investor relations section of our website at http://ir.avid.com. Members of each committee are generally elected by our board upon recommendation from our nominating and governance committee. Committee meetings may be called by the chair of a committee or our chair. Each of the committees is authorized to retain independent legal, accounting and other advisors, and to approve compensation for their services.
The table below provides information regarding membership of board committees as of the date of this proxy statement. Each of the committees is comprised solely of independent directors, as defined by Nasdaq listing standards.
Independent Director
 
Audit
 
Compensation
 
Nominating and Governance
 
Strategy
Christian A. Asmar
 
 
 
 
 
x
 
 
Robert M. Bakish
 
 
 
Chair
 
 
 
x
Paula E. Boggs
 
x
 
 
 
x
 
 
Elizabeth M. Daley
 
 
 
x
 
x
 
 
Nancy Hawthorne
 
x
 
 
 
Chair
 
 
Michelle Munson
 
 
 
x
 
 
 
 
Daniel B. Silvers
 
 
 
x
 
 
 
x
John P. Wallace
 
Chair
 
 
 
 
 
x
Peter M. Westley
 
x
 
 
 
 
 
Chair
Audit Committee
Our board has determined that each of Ms. Hawthorne and Messrs. Wallace and Westley qualify as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. In addition, our board has determined that the members of our audit committee meet the additional independence criteria required for audit committee membership under Rule 10A-3 under the Exchange Act.
The audit committee’s responsibilities include:
appointing, as well as approving, the compensation and assessing the independence of, our independent registered public accounting firm;
overseeing the work of our independent registered public accounting firm, including reviewing certain reports required to be made to the audit committee by the independent registered public accounting firm;

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overseeing the work of our internal audit function, including approving the internal audit annual plan submitted by our internal auditors;
reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
reviewing, approving and ratifying related person transactions;
monitoring our internal control over financial reporting, disclosure controls and procedures; and
meeting independently with our internal auditing staff, our independent registered public accounting firm and management.
Our audit committee met four times in 2019 and acted by written consent once in 2019.
Compensation Committee
Our compensation committee oversees the design and development of our executive compensation programs and determines CEO compensation consistent with the overall objectives of the program, as described below. The compensation committee also approves compensation for our named executive officers (the "NEOs") other than the CEO (the "other NEOs"). In addition, all members of the compensation committee were independent directors under Rule 10C-1 under the Exchange Act.
The compensation committee’s responsibilities include:
administering our executive officer compensation and bonus programs;
determining the CEO’s compensation;
approving compensation for other NEOs;
administering our equity incentive plans and other long-term incentive plans;
annually reviewing and approving an appropriate peer group against which executive compensation is compared;
annually reviewing and approving corporate financial performance goals and individual performance goals relevant to the compensation of our executive officers;
reviewing and discussing the Compensation Discussion and Analysis in this proxy statement and recommending it for board approval;
evaluating compensation policies and practices in relation to risk management; and
reviewing and making recommendations to our board with respect to director compensation.
Our compensation committee met four times and acted by written consent once in 2019.
Compensation Committee Interlocks and Insider Participation. No member of the compensation committee is, or has ever been, an officer or employee of the company. Furthermore, during 2019, none of our executive officers served as a member of the compensation committee (or other board committee performing equivalent functions) or as a director of another entity where an executive officer of such entity served on our compensation committee or board.
For further information about our processes and procedures for the consideration and determination of executive and director compensation, please see “Executive Compensation - Compensation Discussion and Analysis” below.
Nominating and Governance Committee
The nominating and governance committee’s responsibilities include:
identifying individuals qualified to become members of our board;
recommending to our board persons to be nominated for election as directors and to each of the committees of our board;
developing and recommending to our board corporate governance principles; and
overseeing an evaluation of our board.

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Our nominating and governance committee met six times and acted by written consent once in 2019.
Strategy Committee
The strategy committee’s responsibilities include reviewing, evaluating and making recommendations to our board with regard to potential strategic opportunities. Our strategy committee met once in 2019.
Director Nomination Process
The process followed by our nominating and governance committee to identify and evaluate director candidates consists of reviewing recommendations from members of our board, search firms that we engage from time to time, and others (including stockholders) and evaluating biographical and background information relating to potential candidates.
In considering whether to recommend a particular candidate for inclusion on our board’s slate of recommended director nominees, including existing directors, our nominating and governance committee considers the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s integrity, business acumen, knowledge of our business and industry, age, experience and commitment to participate as a director, as well as the diversity of our board and conflicts of interest that would impair the candidate’s ability to act in the interests of all stockholders. Our nominating and governance committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for all prospective nominees. Our corporate governance guidelines also provide that the nominating and governance committee will review with the board the requisite skills and criteria for new board members as well as the composition of the board as a whole, including the consideration of diversity, age, skills, experience, geographic representation, gender, race and national origin, and other experience in the context of the needs of the board. Our nominating and governance committee treats diversity as one of the criteria to be considered by the committee, but has not adopted any formal or informal diversity policy. Our nominating and governance committee believes that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow our board to fulfill its responsibilities. Our nominating and governance committee monitors the qualification, composition and diversity of our board through the board evaluation process.
Our Amended and Restated By-Laws require stockholders to provide notice to Avid of the nomination of directors not less than 90 days nor more than 120 days prior to the anniversary date of our prior year's annual meeting. However, if our annual meeting is called for a date that is not within 25 days before or after the anniversary date of the prior year’s annual meeting, notice by the stockholder must be received no later than the close of business on the tenth day following the earlier of either the day on which the notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made. If the annual meeting concludes as scheduled on April 30, 2020, notice of any nomination of directors for election at the 2020 annual meeting of stockholders must be received no earlier than December 31, 2020 and no later than January 30, 2021.
Our Amended and Restated By-Laws require a stockholder proposing a director nomination to accompany the request with certain additional information concerning the stockholder and the nominee(s) proposed, including, among other things, (i) biographical and stock ownership information (including derivative and hedging interests as to our common stock) of the proponent stockholder and the nominee(s) (and certain affiliates or associates of each of the proponent stockholder and the nominee(s)), (ii) arrangements and understandings (including financial arrangements and compensation) between the proponent stockholder (and certain affiliates or associates of the proponent stockholder) and any other person, including the nominee(s), with respect to our common stock, and (iii) any other information relating to the proponent stockholder or the nominee(s) that would be required to be disclosed in a proxy statement pursuant to Section 14 of the Exchange Act.
Stockholders may recommend an individual to our nominating and governance committee for consideration as a potential director candidate by submitting the individual’s name, together with the information referred to above, to the Nominating and Governance Committee, Avid Technology, Inc., c/o Corporate Secretary, 75 Network Drive, Burlington, Massachusetts 01803, or by email to Avid.Secretary@avid.com.
Assuming that appropriate biographical and background material has been provided on a timely basis, our nominating and governance committee evaluates stockholder-recommended candidates by substantially following the same process, and considering the same criteria, as it follows for candidates submitted by others. If our board decides to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy materials for the next annual meeting.

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Board Evaluation
Our nominating and governance committee leads the board in a periodic evaluation of its performance as a board of directors. Our corporate governance guidelines provide that the board from time to time evaluate its performance to determine whether the board, its committees and its individual members are functioning effectively. Our board continuously monitors the needs of the company and strives to ensure that its composition reflects those needs.
Related Person Transaction Policy
Our board has adopted a written policy and procedures for the review of any transaction, arrangement or relationship in which our company is a participant, the amount involved exceeds $120,000, and one of our executive officers or other officers elected by the board, directors, or 5% stockholders (or their immediate family members), whom we refer to as “related persons,” has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” he or she must report the proposed related person transaction to our General Counsel. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review is not practicable, our audit committee may ratify the related person transaction. Any related person transactions that are ongoing in nature will be reviewed annually by the audit committee.
A related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by our audit committee after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, our audit committee will review and consider:
the related person’s interest in the transaction;
the approximate dollar value of the transaction;
the approximate dollar value of the related person’s interest in the transaction;
whether the transaction was undertaken in the ordinary course of business;
whether the terms of the transaction are no less favorable to our company than terms that could be reached with an unrelated third party;
the purpose, and the potential benefits to our company, of the transaction; and
any other information regarding the transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.
Our audit committee may approve or ratify the transaction only if it determines that, under the circumstances, the transaction is not inconsistent with our company’s best interests. During 2019, there were no related person transactions proposed or required to be disclosed.
Communication with our Board of Directors
Our board of directors will give appropriate attention to written communications that are submitted by our stockholders, and will respond if and as appropriate. Our chair, with the assistance of our General Counsel, is primarily responsible for communications with stockholders and for providing copies or summaries of those communications to our other directors. Stockholders who wish to send communications to our board of directors should address those communications to the Board of Directors, Avid Technology, Inc., c/o Corporate Secretary, 75 Network Drive, Burlington, Massachusetts 01803, or by email to Avid.Secretary@avid.com.

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EXECUTIVE COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides information regarding our executive compensation philosophy, the elements of our executive compensation program and the factors that were considered in making compensation decisions for our NEOs. The following executive officers were our NEOs for fiscal 2019:
Jeff Rosica, Chief Executive Officer and President;
Kenneth L. Gayron, Chief Financial Officer and Executive Vice President;
Jason A. Duva, Chief Legal and Administrative Officer and Executive Vice President;
Dana Ruzicka, Chief Product Officer and Senior Vice President; and
Tom Cordiner, Chief Revenue Officer and Senior Vice President.
Executive Summary
2019 Business & Financial Performance Highlights
During 2019, we made significant and demonstrable progress on our strategy. Below are some highlights of our 2019 business and financial performance:
We achieved both GAAP profitability and positive free cash flow for the first time since 2012;
Our stock price rose over 80% during 2019 and our total shareholder return during the year was over 50%;
We began shipping Media Composer 2019, the next-generation of our flagship video editing product, that has been redesigned and reimagined for today’s and tomorrow’s generation of media makers, including a new user interface experience, a next-generation media engine, a new finishing and delivering workflows, and customizable tool sets;
We began shipping the new Avid S4 audio control surface that brings the power and workflows of Avid’s industry-leading Pro Tools | S6 control surface to budget-conscious audio professionals and small- to mid-size music and audio post facilities;
We began shipping the new Avid S1 audio control surface, designed for music mixing, audio post and video production artists, bringing the power of Avid’s high-end consoles in a portable, slimline surface that’s an easy fit for any space or budget;
We introduced the new MediaCentral l Publisher, enabling media companies to create content, add graphics and branding, and publish news and sports videos quickly to social media to boost viewership and drive additional revenues;
We achieved a major milestone in the development of cloud-based solutions for media production, with the introduction of cloud-based versions of its NEXIS storage file system, Media Composer, and MediaCentral;
We introduced enterprise licensing including unlimited, on-demand virtualized licenses to support rapid scaling of editing resources on a moments' notice to address changing end-user demand from marketing, sports, documentary and home entertainment work groups; and
As of year-end 2019, we had over 187,000 paid cloud-enabled software subscriptions for our creative software tools and the Avid First freemium versions of the creative software tools had been downloaded over 1.9 million times.
2019 Say-on-Pay Vote
In May 2019, our stockholders approved our say-on-pay proposal with over 96% percent of the votes cast in favor of our executive compensation program. Our executive compensation programs use the metrics that are meaningful to our business priorities and stockholders. Consistent with this principle, we use a combination of performance-based restricted stock units ("RSUs") and time-based RSUs in our compensation programs. This equity-based instrument mix mitigates potential stockholder dilution attributable to equity grants, while improving the alignment between compensation and successful execution relative to measures that we believe will drive stockholder value

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creation and that our stockholders have indicated reflect their priorities. We continue to regularly engage with our stockholders on a number of topics, including our business strategy, financial performance, executive compensation and the financial measures used for our performance-based pay. As evidenced by our 2019 say-on-pay vote results, our stockholders have been supportive of our compensation strategy.
2019 Executive Compensation Program Highlights
Highlights of our 2019 executive compensation program include:
The Majority of Executive Compensation is Tied to Performance and the Creation of Stockholder Value. The compensation committee structures our executive compensation packages so that the majority of executive compensation is tied to performance-based metrics, with a smaller portion being paid in base salary. For 2019, the percentage of targeted pay tied to performance, which includes annual performance-based cash awards and long-term equity incentives, for our CEO was 54.5%. In 2018, in addition to his regular equity grant, Mr.Rosica was awarded an additional equity grant of $2,000,000 as a new CEO incentive to more closely align our CEO with our stockholders. This grant was intended to be in lieu of an equity grant for 2019 and Mr. Rosica was not granted any long-term incentive equity in 2019, thereby reducing his percentage of targeted pay directly tied to 2019 performance for the year. For 2019, the percentage of targeted pay tied to performance, again including annual performance-based cash awards and long-term equity incentives, for our our NEOs other than our CEO was 81.1% for our CFO, 74.2% for our Chief Legal and Administrative Officer, 72.9% for our Chief Product Officer, and 72.5% for our Chief Revenue Officer.
Long Term Incentives. Our practice is to provide a significant portion of our executive compensation in the form of equity-based awards, which align executives' interest with the creation of stockholder value. Excluding our CEO who did not receive an equity-based award in 2019 as a result of the new CEO incentive grant received in 2018 as described above, in 2019 our NEOs received, on average, 53% of their total direct compensation (base salary, annual cash incentive compensation and grant date fair value of equity-based awards) in the form of equity-based awards.
Annual Executive Bonus Plan Structure Aligned with Creation of Stockholder Value.
Our 2019 Annual Executive Bonus Plan (the "2019 Executive Bonus Plan") used the financial metrics of Revenue, Free Cash Flow and Adjusted EBITDA. Free Cash Flow and Adjusted EBITDA are defined under "Annual Performance-Based Cash Awards."
The pre-determined, objective plan metrics were chosen in consideration of input received during our stockholder outreach and because the compensation committee believed these metrics reflected management performance.
The 2019 Executive Bonus Plan used multiple metrics which our compensation committee believes provided a comprehensive assessment of our executives' success in driving long-term stockholder value creation, particularly during a time when EBITDA growth was challenged by the run-off from the amortization of non-cash deferred Revenue from pre-2011 transactions, and while the company was intensely focused on the generation of Revenue and Free Cash Flow.
Metrics and the related target levels are generally established in the first quarter of each year based on our annual operating plan and what the board believes is a challenging level of performance that the company could achieve if the operational strategies are successfully executed.
We believe that the 2019 Executive Bonus Plan provided an effective means to align compensation with achievement relative to our performance goals. As discussed in more detail below, based on our 2019 performance, as measured by the three performance metrics used in the 2019 Executive Bonus Plan and certain adjustments discussed in detail below, the compensation committee awarded annual cash bonuses to our NEOs at a level equal to 20.6% of target. This below-target payout percentage reflected our 2019 performance and is in line with previous trends, evidencing the rigorous targets our compensation committee has historically set and continues to set.
Vesting of Performance-Based Equity in 2019.

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The vesting of the first tranche of the performance-based RSUs granted in 2019 is based on the company's total shareholder return ("TSR") as it relates to the TSR of the Russell 2000 Index for the period from March 15, 2019 to March 15, 2020.
The company's TSR during the performance period for the first tranche of the performance-based RSUs granted in 2019 relative to the TSR of the Russell 2000 Index over the same period was 35.80%, resulting in 150% of the target amount of the performance-based RSUs vesting in 2020.
No Discretionary Bonuses. Our compensation committee did not approve any discretionary cash bonus payments to our NEOs during 2019.
Good Governance in our Executive Compensation Programs and Practices
The following highlights examples of good corporate governance incorporated in our executive compensation programs:
Independent Compensation Consultant. The compensation committee engaged an independent executive compensation consultant, Pearl Meyer & Partners ("Pearl Meyer"), to advise and provide counsel on key compensation decisions and actions during 2019.
Appropriate Peer Group and Market Referencing. We utilize a group of peer companies that we believe are appropriate from the perspectives of industry, business focus, size, gross margins, research and development expense and international sales. We review and adjust our peer group annually and adjust the make-up when needed to ensure that the peer group remains appropriate for benchmarking purposes.
Annual Advisory Vote to Approve Executive Compensation. We seek advisory approval of our executive compensation at each annual meeting of stockholders.
No Excise Tax Gross-Ups. None of our NEOs are entitled to tax gross-ups or gross-ups for golden parachute payments (Internal Revenue Code ("IRC") Section 280G) or for non-qualified deferred compensation (IRC Section 409A).
No Guaranteed Bonuses, Limited Perquisites. We do not offer guaranteed performance bonuses and we provide few fringe benefits. We do not offer company planes, personal security (other than for travel and lodging, and where appropriate), financial planning advice, tax preparation services or social and country club memberships. We did, however, pay for personal security services for our CEO for a short period of time in November 2019 as a result of threats to the safety and security of Mr. Rosica arising directly as a result of his position as our CEO. See "Other Benefits and Perquisites" for more detail.
Double-Trigger Change-in-Control Provisions. Each of the change-in-control severance agreements with our NEOs provides for “double-trigger” payments or benefits. As such, contractual change-in-control benefits are payable only in the event of a qualifying termination of employment within a specified period of time after a change-in-control.
Stock Ownership Guidelines. Our NEOs are subject to stock ownership guidelines, which further align the interests of our NEOs with our stockholders and encourage our NEOs to manage from an owner’s perspective. Those of our executives who have been employed by us long enough to be required to meet the guidelines have met our stock ownership guidelines.
Risk Assessment. We conduct an annual comprehensive risk assessment of our compensation programs. Based on this assessment, we believe that our programs are structured in a manner to motivate strong performance with appropriate risk taking, while discouraging excessive risk taking. The details of this risk assessment can be found in the section of this proxy statement under “Governance of the Company - Risk Oversight.
No Option Repricing. Our 2014 Stock Incentive Plan does not permit repricing of stock options or other equity awards without stockholder approval, has no evergreen provision, no liberal share recycling features and does not provide for automatic acceleration of unvested awards in the event of a change-in-control.

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Compensation Philosophy and Objectives
How We Determine NEO Compensation
The compensation committee oversees our executive compensation programs with advice from its independent compensation consultant. We generally establish the performance targets for our NEOs during the first quarter of each fiscal year based on our annual operating plan, which is reviewed by our board of directors. Our operating plan reflects what our management and board of directors believe we could achieve if we successfully execute our operational strategies. The financial performance targets used for purposes of executive compensation are generally set based on the operating plan targets for performance. Our compensation decisions also consider published industry survey and peer group data and reflect the individual performance of each executive officer.
Role of our Compensation Committee
Our compensation committee oversees the design and development of our executive compensation programs and determines CEO compensation consistent with the overall objectives of the program. The compensation committee also determines compensation for the other NEOs, based on the recommendations from the CEO. For 2019, all members of the compensation committee were independent directors under Nasdaq’s listing standards.
Role of our CEO
Our CEO provides strategic direction for our company, including with regard to compensation matters. During 2019, our CEO met periodically with the compensation committee and the compensation committee's independent compensation consultant to discuss changes to our NEO compensation programs, to discuss the 2019 Executive Bonus Plan, to evaluate the performance of the other NEOs, and to make recommendations regarding the form and amount of any changes to the compensation opportunities for the other NEOs. The ultimate decisions in 2019 regarding NEO compensation were, however, made by the compensation committee. Our CEO did not participate in our compensation committee’s deliberations or voting on his compensation. Our CEO met with the compensation committee to review the structure of our 2020 executive compensation programs and to make recommendations regarding the form and amount of any changes to the compensation opportunities for the other NEOs. Our CEO did not and will not participate in deliberations or voting on his compensation.
Role of our Independent Compensation Consultant
Each year, our compensation committee engages an independent compensation consultant to advise the compensation committee on executive officer and board compensation which, since October 2009, has been Pearl Meyer. Pearl Meyer acts primarily as an advisor to our compensation committee, but may also provide advice to management from time to time on matters presented by management to our compensation committee with the knowledge and consent of our compensation committee. Our compensation committee has the sole authority to engage and terminate its compensation consultant.
The nature and scope of the assignments for Pearl Meyer for 2019 regarding executive compensation included:
reviewing our peer group to determine the appropriateness of its composition;
preparing executive compensation pay studies and competitive assessments to compare our executive compensation to our peer group and published industry survey data;
providing input on structuring of performance-based awards; and
advising on regulatory changes and their potential impact on our executive compensation programs.
The compensation committee has considered and assessed all relevant factors including, but not limited to, those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to Pearl Meyer. Based on this review, we are not aware of any conflict of interest affecting the work performed by Pearl Meyer.

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Market Data and Peer Group Analysis
For purposes of comparing our executive compensation program with market practices, our compensation committee, with the assistance of its independent compensation consultant, reviews executive compensation benchmarks from a peer group of publicly-traded companies, which we refer to as the “Avid Peer Group.”
At least annually, our compensation committee reviews the companies in the Avid Peer Group to confirm that they remain appropriate benchmarks. During its annual review, the compensation committee seeks, when practical, to maintain consistency in the peer group from year to year. In 2018, the compensation committee, with the assistance of Pearl Meyer, analyzed each company in the peer group to ensure that it still generally fits our selection criteria and that the peer group’s financial summary statistics are generally aligned with our current size operating profile and business focus. In recognition of the company's current annual revenue and valuation, we focused on companies offering comparable services, products, and product complexity, of a comparable size with respect to revenue (approximately 0.5 to 2 times that of our company), with market capitalization generally less than $2.5 billion, and of comparable ownership structure. As a result of its review of the Avid Peer Group in 2019, the committee removed Cray Inc., Extreme Networks, Inc., RealNetworks, Inc., Limelight Networks Inc., and TiVO Corporation. The committee added Altair Engineering Inc., Box, Inc., Calix, Inc., IMAX Corporation, OneSpan Inc., and Ribbon Communications, Inc., leaving a peer group of 14 companies consisting of the following companies:
3D Systems Corporation
Carbonite, Inc.
OneSpan Inc.
Altair Engineering Inc.
Harmonic, Inc.
Progress Software Corporation
Box, Inc.
IMAX Corporation
Ribbon Communications Inc.
Brightcove Inc.
MicroStrategy Incorporated
Shutterstock, Inc.
Calix, Inc.
Monotype Imaging Holdings Inc.
 
In addition to reviewing the executive compensation practices of companies in the Avid Peer Group, our compensation committee, with the assistance of Pearl Meyer, also reviews executive compensation from published industry compensation surveys for purposes of comparing our executive compensation program with market practices. We refer to these surveys collectively as the “published industry survey data.”
Our compensation committee reviews the executive compensation practices of companies in the Avid Peer Group and the published industry survey data to determine whether our NEOs' base salary, total annual cash compensation and total direct compensation (base salary, annual cash incentive compensation and grant date fair value of equity-based awards) are within a reasonably competitive range. Our compensation committee uses target percentiles from the Avid Peer Group and published industry survey data as one factor when setting NEO compensation, but also considers the experience, performance levels and potential performance levels of the executive officer, challenges facing the company and changes in duties and responsibilities. Our compensation committee believes that if an executive officer contributed to the achievement of performance goals established by the compensation committee, then the executive officer should have the opportunity to receive compensation that is competitive with comparable industry norms. Therefore, the compensation committee considers the compensation levels of our executive officers in comparison to the percentiles from survey data for similarly situated executives, but such percentiles do not on their own drive our compensation levels - rather, they are used as a market reference.

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Elements of Executive Compensation
Compensation Elements
Our executive compensation program has the following elements:
Element
Description
Base Salary
Fixed annual cash amount based on competitive salary data
Annual Performance-Based Cash Bonuses
Variable annual cash payment based on the achievement of pre-established company goals designed to drive growth, improve profitability and cash flow and ultimately stockholder value
Long-Term Equity Awards
Time-based and performance-based equity-based awards
Other Benefits
Benefits provided to full-time employees generally (e.g. 401(k), health and insurance benefits, and employee stock purchase plan), and limited non-cash compensation designed to attract and retain NEOs and provide a competitive compensation package
Post-Employment Payments
Contingent in nature and payable only if an NEO’s employment is terminated as specified in employment agreements and offer letters
Compensation Mix
In accordance with our pay-for-performance philosophy, the following chart illustrates the designed mix of target pay for our 2019 NEOs amongst each element of direct compensation, comprised of 2019 base salary, target bonus for 2019 and the grant date fair value of long-term equity-based incentives awarded in 2019.
https://cdn.kscope.io/d3b079ae2240f1946cd0f8a14c3f2739-chart-4f29155f713250faa0ba05.jpg
(1) In 2018, the compensation committee approved an additional equity grant of $2,000,000 to Mr. Rosica as a new CEO incentive intended to be in lieu of a 2019 grant. Mr. Rosica was not granted any long-term incentive equity in 2019, thereby increasing the ratio of his pay not directly tied to company performance for the year. See "The 2019 Executive Compensation Programs in Detail - Long-Term Equity Incentive Compensation" for more detail.

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As shown in the chart above, for 2019, approximately 54.5% of Mr. Rosica's; 81.1% of Mr. Gayron's; 74.2% of Mr. Duva's; 72.5% of Mr. Cordiner's; and 72.9% of Mr. Ruzicka's direct compensation (comprised of the elements shown above) was designed to align with stockholder value by being directly tied to company performance or being in the form of equity compensation. We intend to continue to tie a majority of executive compensation to the company's financial and operating performance. A description of the equity awards granted to our NEOs is provided below under “The 2019 Executive Compensation Programs in Detail - Long Term Equity Incentive Compensation.”
In awarding long-term equity incentives for 2019 to our NEOs (other than the CEO), the compensation committee determined a dollar value for each NEO's award, then converted this amount into RSUs (half of which were time-based and half of which were performance-based) using a stock price of $6.23 as of March 15, 2019, the date of approval.
The 2019 Executive Compensation Program in Detail
Base Salaries
Consistent with our compensation committee’s philosophy of tying executive compensation to our financial performance, our executives receive a relatively small percentage of their overall target compensation in the form of base salary. Base salaries for our executive officers are reviewed on an annual basis, as well as at the time of a promotion or other change in responsibilities.
None of our NEOs received an adjustment to their base salary in 2019. Positioning of our NEOs salaries varies by individual, reflecting individual-specific factors such as time in role, prior job, pay history and performance. Based on these factors, the salaries of our NEOs in aggregate were positioned in close proximity to the market median of the Avid Peer Group and published industry survey data. The below chart shows the year-over-year comparison of base salaries.
Executive
 Annualized FYE 2018 Base Salary
Annualized FYE 2019 Base Salary
% Increase
Rationale
Jeff Rosica
$
550,000

$
550,000

—%
N/A
Kenneth L. Gayron
$
370,000

$
370,000

—%
N/A
Jason A. Duva
$
390,000

$
390,000

—%
N/A
Dana Ruzicka
$
340,000

$
340,000

—%
N/A
Tom Cordiner
$
370,849

$
370,849

—%
N/A


 



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Annual Performance-Based Cash Awards
Each year, we adopt an executive bonus plan that provides for cash incentive payments to our executive officers upon the achievement of certain performance objectives set forth in the plan. The performance objectives are generally reviewed and evaluated based on our annual operating plan. Our executive bonus plan is designed to provide an annual variable cash incentive to motivate participants to achieve company performance objectives and to reward participants for their achievements when those objectives are met. Executive bonus plan results and payment amounts are generally determined following the subject year, after audited financials have been completed and announced, and any earned amounts may be paid at any time after the filing of the company’s annual report and before December 31 of the year following the plan year, in management’s discretion.
Fiscal Year 2019 Executive Bonus Plan. On March 13, 2019, our compensation committee adopted an Executive Bonus Plan for 2019 (the "2019 Executive Bonus Plan"). For purposes of the 2019 Executive Bonus Plan, the performance metrics were weighted as follows: Free Cash Flow, 40%; Revenue, 30%; and Adjusted EBITDA, 30%. The compensation committee set the 2019 performance metrics at levels meaningfully above our 2018 performance, which required significant growth and a continued stringent implementation of our efficiency initiatives.
The compensation committee believes that these three performance measures correlate strongly with stockholder value and that using a combination of these metrics provides a more effective way to measure our executive team's ability to create sustainable EBITDA growth and successfully manage our liquidity. Adjusted EBITDA and Revenue measure profitability, Revenue measures top-line growth, and Free Cash Flow measures our financial flexibility at a time in which our board and our stockholders are focused on liquidity.
For purposes of the 2019 Executive Bonus Plan, Adjusted EBITDA is defined as net income or loss before interest, taxes, depreciation, stock-based compensation, and amortization, adjusted for certain non-operating charges, such as restructuring, mergers and acquisitions, and management change expenses (among others). Free Cash Flow is defined as GAAP operating cash flow less capital expenditures.
Each of the performance objectives had a threshold, target and maximum level of payment opportunity associated with payouts equal to 50%, 100% and 200% of target opportunity, respectively. For performance in between threshold and target, or in between target and maximum, payouts are interpolated. The target payout level for Mr. Rosica was 120% of his base salary; for Messrs. Gayron and Duva was 65% of their base salary; and for Mr. Ruzicka was 50% of his base salary. Mr. Cordiner's 2019 Non-Equity Compensation plan is comprised of two main components where half of his target variable compensation is a result of the 2019 Executive Bonus Plan and the other half is a function of his sales performance. For the component of Mr. Cordiner's variable compensation that is a result of the 2019 Executive Bonus Plan, his target payout level is 80% of his base salary.
The maximum payment opportunity for each of our executives was set at 200% of the target opportunity. Failure to attain the threshold goal for each performance objective results in forfeiture of the associated opportunity. The payment amount to be earned by each NEO under the 2019 Executive Bonus Plan was determined based on three variables: (1) the participant’s annual incentive target opportunity, which is based on a percentage of the participant’s base salary, as described above; (2) the compensation committee’s assessment and certification of our performance compared with the targets for each of the above-referenced performance objectives, with any adjustments applied; and (3) relative weightings for each performance objective.
At the time our compensation committee approved the 2019 Executive Bonus Plan, it believed each of the target levels was aggressive but achievable based on the company’s annual operating plan for 2019. The compensation committee believed that using a combination of several metrics provided a more comprehensive assessment of our executives' success in driving long-term stockholder value creation, particularly during a time when EBITDA growth is challenged by the run off from the amortization of non-cash deferred Revenue from pre-2011 transactions and while the company focuses on the generation of Revenue and Free Cash Flow.
The following table sets forth the performance metric target levels approved by the compensation committee in March 2019 and the actual levels achieved, calculated in accordance with the 2019 Executive Bonus Plan (all in millions).
Levels
Adjusted EBITDA(1)
Free Cash Flow
Revenue(1)
Threshold
$
57.0

$
17.0

$
417.3

Target
$
66.5

$
23.0

$
427.1

Maximum
$
76.5

$
28.8

$
448.5

Actual
$
60.6

$
12.5

$
415.4


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(1) Adjusted EBITDA and Revenue targets are set and measured using constant exchange rates in order to eliminate the effects of exchange rate fluctuations and to correlate with our annual operating plan. Threshold, target and maximum levels for Adjusted EBITDA and Revenue were adjusted for the extraordinary event described below.
The 2019 Executive Bonus Plan permits the compensation committee to adjust the calculation of the performance metrics if an extraordinary event or circumstance during the year would distort the performance criteria set by the committee. The compensation committee set the original threshold, target and maximum levels based on the company's estimates set in late 2018. In early 2019, however, as a result of a change in accounting estimate, the company increased its reserve against subscription-based revenue which had not been included in the original estimates used to determine the threshold, target and maximum levels. As this change in accounting estimate could not have been foreseen when the 2019 bonus targets were set in late 2018, the compensation committee determined it was appropriate to make a downward adjustment of $3.5 million to both the Adjusted EBITDA and Revenue threshold, target, and maximum levels.

As a result of the adjustments described above, the compensation committee determined that the company achieved the threshold performance level for Adjusted EBITDA. Based on these levels of achievement, the compensation committee determined that the appropriate level of payout under the 2019 Executive Bonus Plan would be 20.6% of target.
Payouts under 2019 Executive Bonus Plan. Below are each NEO’s target and approved bonus payouts under the 2019 Executive Bonus Plan, based on the 20.6% achievement of the target performance level.
Named Executive Officer
2019 Annual Incentive Payout Target
Target
(% of base salary)
Actual 2019 Annual Incentive Payout
Jeff Rosica
Chief Executive Officer and President
$
660,000

120%
$
135,960

Kenneth L. Gayron
Chief Financial Officer and Executive Vice President
$
240,500

65%
$
49,543

Jason A. Duva
Chief Legal and Administrative Officer and Executive Vice President
$
253,500

65%
$
52,221

Dana Ruzicka
Chief Product Officer and Senior Vice President
$
170,000

50%
$
35,220

Tom Cordiner (1) Chief Revenue Officer and Senior Vice President
$
296,800

80%
$
61,141

(1) Mr. Cordiner's 2019 Non-Equity Compensation Plan is comprised of two main components where half of his target variable compensation is a result of the 2019 Executive Bonus plan and the other half is a function of his sales performance.
Long-Term Equity Incentive Compensation
Long-term equity incentive compensation is intended to represent the largest portion of total compensation for our executive officers. Generally, our compensation committee awards equity-based awards to our executive officers when they join our company or are promoted, in recognition of past performance and for retention purposes. The compensation committee bases these awards on the executive officer’s job level and experience, the requirements and importance of the position, individual contributions, and the need to retain qualified officers, particularly during a challenging period. The compensation committee also considers compensation for similar roles based on the Avid Peer Group and published industry survey data. Our long-term incentive awards are generally a mix of time and performance-based RSUs.
2019 Equity Grants. In March 2019, the compensation committee approved the grant of RSUs to our NEOs as set forth below. 50% of the granted RSUs are subject to time-based vesting and 50% of the granted RSUs are subject to performance-based vesting. Mr. Rosica did not receive a grant of RSUs in 2019 as he was granted an additional long-term equity incentive award of $2,000,000 in 2018 as a new CEO incentive. This new CEO incentive grant was intended to promote greater alignment between our CEO and stockholders and to be in lieu of a 2019 long-term equity incentive grant.

28





NEO
Title
No. of time-based RSUs (1)
Target No. of performance-based RSUs (2)
Jeff Rosica (3)
Chief Executive Officer and President
Kenneth L. Gayron
Chief Financial Officer and Executive Vice President
100,321
100,321
Jason A. Duva
Chief Legal and Administrative Officer and Executive Vice President
64,205
64,205
Dana Ruzicka
Chief Product Officer and Senior Vice President
52,166
52,166
Tom Cordiner
Chief Revenue Officer and Senior Vice President
52,166
52,166
(1) Time-based. The time-based RSUs vest as follows: 33.33% vest on the first anniversary of the grant date and an additional 8.33% vest every three months thereafter.
(2) Performance-based. The performance-based RSUs shown in the table above are subject to three-year vesting where the final payout is based on the company's total shareholder return relative to the TSR of the Russell 2000 Index.
(3) Mr. Rosica did not receive a grant of RSUs in 2019 as he was granted an additional long-term equity incentive award of $2,000,000 in 2018 as a new CEO incentive intended to be in lieu of a 2019 long-term equity incentive grant.
The performance-based RSUs (the "Performance RSUs") vest based on a relative total shareholder return ("TSR") measurement. The Performance RSUs are subject to three-year vesting (the "Measurement Period") where final payout is based on the company's TSR relative to the TSR of the Russell 2000 Index (the "Index"). The company's TSR will be measured against the Index's TSR for the separate one-, two-, and three-year measurement periods (each a "Performance Period") that comprise the Measurement Period. If, during the first one- and two-year Performance Periods, the company's TSR at least equals the Index's TSR, then one-third and two-thirds, respectively, of the total Performance RSUs awarded to each executive may be accelerated and vest for such Performance Period. Vesting for each Performance Period will be adjusted up or down based on the difference between the TSR of the Company and of the Index multiplied by a scaling factor of two. Any Performance RSUs that vest in either of the first one- or two-year Performance Periods will be subtracted from the Performance RSUs that are eligible for vesting in later Performance Periods.
Any vested RSUs are settled solely in shares.
TSR is calculated using the volume weighted average stock price for any 20 consecutive trading days prior to March 15 of each Performance Period. Vesting for each Performance Period is capped at 150% of the target Performance RSUs awarded to each executive. Additionally, a maximum of 100% of the target Performance RSUs awarded to an executive may vest if the company's TSR is negative an no Performance RSUs will vest if both the company's TSR and its TSR relative to the Index are negative.
The company's TSR (calculated as described above) for the Performance Period of March 15, 2019 to March 15, 2020 was 35.80% and the Index's TSR for the same Performance Period was -22.10%, resulting in a relative TSR of 57.90%. Consequently, 150% of the target amount of Performance RSUs vested as of March 15, 2020 for this Performance Period.
Except to the extent an NEO’s employment agreement provides otherwise, vesting of performance-based RSUs is conditioned on the NEO being employed by the company on the date the final vesting determination is made. Any shares that have not vested by March 15, 2022 will be forfeited.
Employment and Severance Agreements with our NEOs
Our executive officers are entitled to benefits in the event their employment terminates under specified circumstances. Our compensation committee believes the severance and change-in-control benefits offered are appropriate to properly incentivize the executive during a change-in-control process and consideration of the time expected to take an executive officer to find alternative employment. Our company also benefits under these arrangements by requiring the executive officer to sign a general release of claims against the company and that includes non-competition and non-solicitation provisions as a condition to receiving severance or change-in-control benefits. Our compensation committee believes these arrangements also protect stockholder interests by enhancing our executive officers’ focus during a potential or actual change-in-control by providing incentives to

29





executive officers to remain with the company despite uncertainties about their future role at the company while a transaction is under consideration or pending.
Mr. Rosica's Employment Agreement
Term. Mr. Rosica's agreement was effective as of February 26, 2018. His employment may be terminated at any time, subject to the terms and conditions of his agreement.
Bonus. Mr. Rosica's annual target cash bonus is equal to 120% of his annual base salary. His maximum annual cash bonus is 200% of his target opportunity.
Other Benefits. Mr. Rosica is entitled to benefits available to other full-time employees (such as Flexible Paid Time Off ("FPTO"), 401(k), health insurance benefits, life insurance and employee stock purchase plan).
Severance. The agreement provides that, if Mr. Rosica's employment is terminated by the company without cause, or by him for good reason, as defined in the agreement, other than in connection with a change of control of the company, he will, subject to signing a release, be entitled to receive, in addition to any unpaid salary, benefits and bonus earned for the preceding year, (i) 12 months base salary, (ii) an amount equal to his target annual cash bonus, and (iii) a pro-rata portion of his bonus at target level for the year of termination, each paid in accordance with the company's regular payroll schedule, plus (y) a lump sum payment equal to 12 times the monthly amount we pay for health benefits, and (z) outplacement services.
In addition, any time-based vesting equity awards held by Mr. Rosica will vest as to an additional number of shares equal to the number of shares that would have vested if he had continued working for 12 months after the date of termination. Performance based awards continue to vest through the end of the fiscal year of termination.
The agreement also provides that if Mr. Rosica's employment is terminated by the company without cause or by him for good reason within 12 months after a change of control of the company, Mr. Rosica will, subject to signing a release, be entitled to receive, in addition to any unpaid salary, benefits and bonus earned for the preceding year, (i) 24 months base salary, (ii) an amount equal to two times his target annual cash bonus, and (iii) a pro-rata portion of his bonus at target level for the year of termination, each paid in a lump sum, plus (y) a lump sum payment equal to 24 times the monthly amount we pay for health benefits, and (z) outplacement services.
In addition, any time-based vesting equity awards held by Mr. Rosica will vest immediately. Performance based awards will vest immediately at target levels as determined by the compensation committee of the board.
In the event of his disability, Mr. Rosica will be entitled to receive his base salary for one year, payable in accordance with the company's regular payroll schedule, and (ii) any earned but unpaid bonus earned for the preceding year, payable in a lump sum.
Non-compete. Mr. Rosica is subject to a non-competition obligation extending for either 12 or 24 months after the termination of Mr. Rosica’s employment, depending upon the circumstances of his termination.
Employment Agreement and Offer Letters with our Other Current Executive Officers
The employment terms of our other current executive officers are governed by employment agreements or offer letters, which generally provide for the executive’s salary, sign-on bonus, if any, bonus eligibility, initial equity awards, and other benefits. The Executive's annual cash bonus is generally set at a target of 50% to 70% of base salary, with a maximum annual cash bonus of 200% of target bonus. Our other executives are entitled to FPTO and benefits available to other full-time employees (such as 401(k), health insurance benefits, life insurance and employee stock purchase plan).
The offer letters also provide that if we terminate the executive’s employment in the executive's role without cause (as defined in the offer letter), the executive, subject to signing a release of claims against the company, will be entitled to receive, in addition to any unpaid salary and benefits an amount equal to (i) six or twelve months base salary, (ii) pro-rated annual incentive bonus for the year in which the termination occurs, provided that such bonuses are paid to other officers who remained employed by the company, and (iii) cash payments in lieu of health benefits for six or twelve months following the termination date. In the event of a termination by the company without cause within 12 months after a change-in-control of the company, the executive is entitled to an additional six months of base pay and vesting of 100% of any unvested equity awards. The executive is subject to a non-competition obligation extending for either 12 or 18 months after the termination of his or her employment, depending upon the circumstances of his or her termination.

30





Please see “Compensation Tables - Potential Payments upon Termination or Change-in-Control” for current values of the severance benefits provided to our NEOs.
Stock Ownership Guidelines
The Company's stock ownership guidelines require our executive officers to hold our common stock in an amount at least equal to a multiple of their base salary as determined by their position. The guidelines range from one times base salary for certain of our executive officers to six times base salary for our CEO, and our executive officers are expected to comply with them within five years. Additionally, our executive officers are required to meet the stock ownership guidelines at all times within five years of becoming an executive officer of the Company. For purposes of these guidelines, stock ownership includes restricted stock and restricted stock units, but does not include unexercised options. All of our NEOs who have been subject to the guidelines for five years have met the guidelines’ expectations regarding their stock ownership.
Anti-Hedging and Anti-Pledging Policy
The Company has an Anti-Hedging and Anti-Pledging Policy which prohibits directors and officers of the Company from directly or indirectly hedging against future declines in the market value of any securities of the Company through the purchase of financial instruments designed to offset such risk. This policy also prohibits directors and officers of the Company from pledging any securities of the Company as collateral for loans.
Other Benefits and Perquisites
In general, other benefits and perquisites are not a significant part of our compensation program. In special cases, such as in connection with the hiring of executive officers, we have from time to time reimbursed our executive officers for reasonable expenses associated with relocation and associated tax payments and paid sign-on bonuses. We believe these benefits were necessary in order to attract these individuals to join our company and are consistent with market practices.
As a result of threats to the safety and security of Mr. Rosica arising directly as a result of his position as our CEO, the company paid for personal security services at Mr. Rosica's residence for a short period of time in November 2019. The company required these security measures during this short period of time for the company's benefit because of the importance of Mr. Rosica to the company, and we believe that the costs of these security services were appropriate and necessary. Although we do not consider the security services to have provided Mr. Rosica with a personal benefit for the reasons described above, such costs are reported as other compensation to Mr. Rosica in the "All Other Compensation" column in the "Summary Compensation Table" below.
None of our current NEOs is entitled to tax gross-up payments for payments and benefits provided to them. We eliminated legacy gross-up for COBRA payments to one of our executives in 2015. We do not provide our executive officers with other benefits, including financial planning advice, tax preparation services or club memberships.
Our U.S.-based executive officers benefit from the company's FPTO policy which, subject to business needs, provides for salary continuation for absences due to vacation, the employee’s illness or need for preventive care, or that of a family member, the death of an immediate family member, or jury duty. Under the FPTO program, FPTO does not accrue and therefore, the executive is not entitled to any payout of FPTO upon separation from the company.
Our U.S.-based executive officers are also eligible to participate in all of our U.S. employee benefit plans, in each case on the same basis as other U.S. employees who work at least 20 hours per week. These benefits include health and dental insurance, life and disability insurance, and a 401(k) plan. We match 50% of the employee contributions to our 401(k) plan up to a maximum of 6% of the participating employee’s eligible compensation, resulting in a maximum company match of 3% of the participating employee’s eligible compensation, subject to certain additional statutory limitations. We also offer an employee stock purchase plan that allows participants to purchase shares of our common stock at a 15% discount from the fair market value of our common stock at the end of each applicable offering period. Our non-U.S.-based executive officers are entitled to such employee benefits as statutorily prescribed in their home countries and to certain other market prevalent practices.

31





Non-Qualified Deferred Compensation
Historically, our executive officers, along with our U.S.-based vice presidents and members of our board of directors, were eligible to participate in a non-qualified deferred compensation plan, which we established to provide participants with the opportunity to defer the receipt of up to 60% of their base salary and all or a portion of their bonuses or director’s fees, as applicable. As of December 31, 2019, we had an obligation of $0.5 million under the plan. Effective with respect to compensation for services performed after 2013, we have indefinitely suspended the non-qualified deferred compensation plan and have not offered any of our employees or directors an opportunity to participate in it.
Tax and Accounting Considerations
In structuring our executive compensation programs, our compensation committee takes into account the impact of various tax and accounting rules, including the impact of Section 409A, Section 280G and Section 162(m) of the Internal Revenue Code, as well as Accounting Standards Codification (ASC) Topic 718.
Section 162(m) provides that a public company may not deduct, for federal income tax purposes, compensation in excess of $1,000,000 paid to certain executive officers for any one calendar year. Prior to the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), this deduction limitation did not apply to certain “performance-based compensation” within the meaning of Section 162(m) and related guidance. However, the Tax Act eliminated the “performance-based compensation” exemption for tax years beginning after December 31, 2017, other than with respect to grandfathered amounts. Due to these changes, we cannot guarantee that previously awarded compensation that was intended to satisfy the "performance-based compensation" exemption will be fully deductible if paid after December 31, 2017. In addition, the Tax Act significantly expanded the definition of "covered employees" under Section 162(m), such that after December 31, 2017, all of our named executive officers (including our chief financial officer) will be subject to the limitation on deductibility under Section 162(m).
Our compensation committee has not adopted a policy requiring all executive compensation to be fully deductible. However, the limitation on deductibility imposed by Section 162(m) is one of the considerations we take into account in designing our executive compensation programs. Our compensation committee reserves the right to use its judgment to authorize compensation payments that are not deductible by reason of the Section 162(m) limitation when it believes these payments are appropriate.  Neither the company nor the compensation committee warrants that any compensation payable to an executive or other employee will be deductible.
Compensation Committee Report
The following report of the compensation committee is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation by language in any such filing.
The compensation committee consists of four non-employee directors: Robert M. Bakish, Elizabeth M. Daley, Michelle Munson, and Daniel B. Silvers, each of whom is independent under Nasdaq listing standards. The compensation committee has certain duties and powers as described in its charter adopted by the board of directors. A copy of the charter can be accessed from the corporate governance page in the investor relations section of the company’s website at www.avid.com.





The compensation committee has reviewed and discussed with management the disclosures contained in the section of this proxy statement, entitled “Executive Compensation - Compensation Discussion and Analysis.” Based on this review and discussion, the compensation committee recommended to our board of directors that the section entitled “Executive Compensation - Compensation Discussion and Analysis” be included in this proxy statement for our annual meeting.
 
Compensation Committee

Robert M. Bakish, Chair
Elizabeth M. Daley Michelle Munson
Daniel B. Silvers

32





COMPENSATION TABLES
Summary Compensation Table
The following table presents information regarding compensation of each of the NEOs during 2019, 2018, and 2017. A description of our compensation policies and practices as well as a description of the components of compensation payable to our named executive officers is included above under “Executive Compensation - Compensation Discussion and Analysis.
Name and Principal Position
Year
 Salary(1)
 Bonus(2)
 Stock Awards (3)
 Option Awards
 Non-Equity Incentive Plan Compensation(4)
 Change in pension value and nonqualified deferred compensation earnings
 All Other Compensation(5)
 Total
Jeff Rosica (6)
2019
$
550,000

$

$

$

$
135,960

$

$
28,269

$
714,229

CEO and President
2018
$
550,000

$

$
3,893,930

$

$
391,380

$

$
5,972

$
4,841,282


2017
$
450,000

$

$
850,979

$

$
360,000

$

$
3,870

$
1,664,849


















Kenneth L. Gayron
2019
$
370,000

$

$
1,352,313

$

$
49,543

$

$
9,692

$
1,781,548

Chief Financial Officer and Executive Vice President
2018
$
216,308

$

$
499,019

$

$
142,617

$

$
1,590

$
859,534


2017
$

$

$

$

$

$

$

$


















Jason A. Duva
2019
$
390,000

$

$
865,483

$

$
52,221

$

$
9,311

$
1,317,015

Chief Legal and Administrative Officer and Executive Vice President
2018
$
390,000

$

$
764,522

$

$
150,325

$

$
9,199

$
1,314,046


2017
$
360,000

$

$
425,485

$

$
391,396

$

$
7,750

$
1,184,631


















Dana Ruzicka
2019
$
340,000

$

$
703,197

$

$
35,220

$

$
6,834

$
1,085,251

Chief Product Officer and Senior Vice President
2018
$
340,000

$

$
631,763

$

$
100,810

$

$
6,672

$
1,079,245


2017
$
325,000

$

$
348,902

$

$
130,000

$

$
6,573

$
810,475


















Tom Cordiner
2019
$
370,849

$

$
703,197

$

$
61,141

$

$
13,114

$
1,148,301

Chief Revenue Officer and Senior Vice President
2018
$
368,148

$

$
477,823

$

$
295,243

$

$
13,114

$
1,154,328


2017
$
360,048

$

$

$

$
197,713

$

$
13,114

$
570,875

(1) The amount reported in the "Salary" column reflects the base salary paid to the NEOs during the fiscal year.
(2) Bonus: The company did not pay any discretionary bonuses in 2019.
(3) Stock Awards: See the tables below “Outstanding Equity Awards at 2019 Fiscal Year End” for details on vesting of the awards.
This column was prepared assuming none of the RSUs will be forfeited. The amounts reflected in this column do not reflect actual value realized by the NEO but represent the aggregate grant date fair value of RSU awards. The fair value of RSU awards (both with time- and performance-based vesting) is based on the intrinsic value of the awards at the date of grant, as the awards have a purchase price of $0.01 per share. In all cases, the amounts reflected above represent the maximum fair value of the performance-based portion of such awards as of the date of grant, assuming payout were to occur based on the achievement of maximum performance, except with respect to RSUs granted prior to 2019 that vest based on a performance-based schedule tied to our stock price and the incremental improvement in our annual return on equity over a base-year amount. The grant date fair value of the RSU awards granted were computed in accordance with FASB ASC Topic 718, Compensation-Stock Compensation as described in Note L, “Capital Stock,” of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019. The grant date fair value of all performance-based RSU awards was determined under FASB ASC Topic 718 using a Monte Carlo simulation model which simulates a range of possible future stock prices and estimates the probabilities of the potential payouts.

33





(4) Non-Equity Incentive Plan Compensation: These amounts were approved for payment pursuant to the terms of our executive bonus plans for 2019, 2018 and 2017. For a summary of how bonuses were calculated under the 2019 Executive Bonus Plan, see “Annual Performance-Based Cash Awards.” Mr. Cordiner's 2019 Non-Equity Compensation plan is comprised of two main components where half of his target variable compensation are a result of the 2019 Executive Bonus plan and the other half a function of sales performance.
(5) All Other Compensation: Includes the following for each of the NEOs: company match on 401(k), imputed income for group term life insurance and, for Mr. Cordiner only, commuter allowance, and, for Mr. Rosica only, personal security paid for by the company.
(6) In 2018, the compensation committee approved an additional equity grant of $2,000,000 to Mr. Rosica as a new CEO incentive intended to be in lieu of a 2019 grant. Mr. Rosica was not granted any long-term incentive equity in 2019, thereby decreasing his total compensation for 2019 compared to 2018. See "The 2019 Executive Compensation Programs in Detail - Long-Term Equity Incentive Compensation" for more detail.
:
Name
Year
Commuter Allowance(a)

Company Match on 401(k) (b)
Imputed Income for Group Term Life Insurance
Other (c)
Jeff Rosica
2019
$

$
8,450

$
5,419

$
14,400


2018
$

$
1,269

$
4,703

$


2017
$

$

$
3,870

$

Kenneth L. Gayron
2019
$

$
8,450

$
1,242

$


2018
$

$
854

$
736

$


2017
$

$

$

$

Jason A. Duva
2019
$

$
8,105

$
1,206

$


2018
$

$
8,010

$
1,189

$


2017
$

$
6,962

$
788

$

Dana Ruzicka
2019
$

$
5,700

$
1,134

$


2018
$

$
5,550

$
1,122

$


2017
$

$
5,500

$
1,073

$

Tom Cordiner
2019
$
13,114

$

$

$


2018
$
13,114

$

$

$


2017
$
13,114

$

$

$

(a) Commuter allowance reflects car allowance provided to Mr. Cordiner.
(b) Company match on 401(k) for all US based executives. Mr. Cordiner, based in the UK, reflects company match to UK pension scheme.
(c) Represents personal security paid for by the company for Mr. Rosica. See "Other Benefits and Perquisites" for more detail.
Grants of Plan-Based Awards for Fiscal Year 2019
The following table sets forth information regarding all plan-based awards granted to our NEOs during the fiscal year ended December 31, 2019. The equity awards to our NEOs shown below were granted under our 2014 Stock Incentive Plan and are also reported in the table entitled "Outstanding Equity Awards at 2019 Fiscal Year-End." For additional information regarding the equity and non-equity incentive plan awards, please refer to “The 2019 Executive Compensation Program in Detail - Annual Performance-Based Cash Awards" and "Long-Term Equity Incentive Compensation.

34





Name
Grant Date
Approval Date
Estimated Potential Payout Under Non-Equity Incentive Plan Awards
All Other Stock Awards: Number of Shares of Stock or Units
Grant Date Total Fair Value of Stock and Option Awards(4)
Threshold
Target
Maximum
Jeff Rosica








(1
)


$330,000
$660,000
$
1,320,000


$

Kenneth L. Gayron








(1
)


$120,250
$240,500
$
481,000



(2
)
3/15/2019
3/15/2019



76,243

$
474,231

(2
)
3/15/2019
3/15/2019



24,077

$
149,759

(3
)
3/15/2019
3/15/2019



76,243

$
553,524

(3
)
3/15/2019
3/15/2019



24,077

$
174,799

Jason A. Duva









(1
)


$126,750
$253,500
$
507,000




(2
)
3/15/2019
3/15/2019



64,205

$
399,355

(3
)
3/15/2019
3/15/2019



64,205

$
466,128

Dana Ruzicka








(1
)


$85,000
$170,000
$
340,000



(2
)
3/15/2019
3/15/2019



52,166

$
324,473

(3
)
3/15/2019
3/15/2019



52,166

$
378,724

Tom Cordiner









(1
)


$130,000
$260,000
$
520,000





(2
)
3/15/2019
3/15/2019



52,166

$
324,473

(3
)
3/15/2019
3/15/2019



52,166

$
378,724

(1) These awards represent estimated potential payouts under our 2019 Executive Bonus Plan. Bonus awards under this plan are determined as the result of formulas contained in the plan, which are described in detail under “Annual Performance-Based Cash Awards.” Amounts actually paid under these awards for 2019 performance are shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. Mr. Cordiner's 2019 Non-Equity Compensation plan is comprised of two main components where half of his target variable compensation is a result of the 2019 Executive Bonus plan and the other half a function of sales performance.
(2) These time-based RSUs were awarded in March 2019. For a summary of the vesting conditions, see the section titled "Long-Term Equity Incentive Compensation."
(3) These performance-based RSUs were awarded in March 2019. For a summary of the performance vesting conditions for fiscal year 2019, see the section titled “Long-Term Equity Incentive Compensation."
(4) The grant date fair value of the RSU awards granted on March 15, 2019 were computed in accordance with FASB ASC Topic 718, Compensation-Stock Compensation as described in Note L, “Capital Stock,” of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019. The amounts reflected above represent the maximum fair value of the performance-based portion of such RSU awards as of the date of grant, assuming payout were to occur based on the achievement of maximum performance, except with respect to the RSU awards that vest based on a performance-based schedule tied to our relative total shareholder return (rTSR) to the Russell 2000 index. The grant date fair value of all RSU awards was determined under FASB ASC Topic 718.

35





Outstanding Equity Awards at 2019 Fiscal Year End
The following tables set forth information regarding the outstanding equity awards held by each of our NEOs at December 31, 2019.
Outstanding Option Awards at December 31, 2019
Name
Number of Securities Underlying Unexercised Options-Exercisable(1)
Number of Securities Underlying Unexercised Options-Unexercisable
Option Exercise Price
Option Expiration Date
Jeff Rosica






(1
)
37,000


$
7.66

1/7/2020

(1
)
63,000


$
7.66

1/7/2020

(1
)
180,000


$
7.40

5/14/2021

Kenneth L. Gayron











$


Jason A. Duva








(1
)
105,000


$
7.82

5/14/2021

(1
)
105,000


$
7.40

5/14/2021

Dana Ruzicka




(1
)
25,000


$
7.70

8/15/2021

Tom Cordiner








(1
)
30,000


$
7.70

8/15/2021

Grants Expired
(1) These options are fully vested.



36





Outstanding Stock Awards at December 31, 2019
Name
Number of Shares or Units of Stock that Have Not Vested(1)
Market Value of Shares or Units of Stock that Have Not Vested(7)
Jeff Rosica
 
 
(2
)
8,177

$
70,159

(2
)
78,621

$
674,568

(3
)
226,757

$
1,945,575

(4
)
13,396

$
114,938

(5
)
151,171

$
1,297,047

Kenneth L. Gayron
 
 
(2
)
49,022

$
420,609

(2
)
100,320

$
860,746

(6
)
100,320

$
860,746

Jason A. Duva
 
 
(2
)
4,089

$
35,084

(2
)
31,448

$
269,824

(2
)
64,205

$
550,879

(4
)
5,358

$
45,972

(6
)
64,205

$
550,879

Dana Ruzicka
 
 
(2
)
3,353

$
28,769

(2
)
15,724

$
134,912

(2
)
24,511

$
210,304

(2
)
52,166

$
447,584

(4
)
2,679

$
22,986

(6
)
52,166

$
447,584

Tom Cordiner
 
 
(2
)
19,655

$
168,640

(2
)
52,166

$
447,584

(4
)
3,349

$
28,734

(6
)
52,166

$
447,584

(1) See "Potential Payments upon Termination or Change-in-Control" for a description of circumstances in which these awards may be accelerated.
(2) Time-based RSUs vest as follows: (i) 33.3% of the shares vest on the first anniversary of the vesting start date (as determined by our compensation committee based on the date such grant would have been made in the absence of the restatement), and (ii) 8.33% every three months thereafter.    
(3) Time-based RSUs vest as follows: (i) 33.3% of the shares vest on the second anniversary of the vesting start date (as determined by our compensation committee based on the date such grant would have been made in the absence of the restatement), and (ii) 8.33% every three months thereafter.    
(4) These Performance-based RSUs will vest depending on (a) a Conversion Rate Trigger ("CRT"), determined based on the Company's achievement of a Conversion Rate and (b) Stock Price Triggers ("SPT") based on increases in the Company's stock price. For a summary of the performance vesting conditions, see the section entitled “Long-Term Equity Incentive Compensation."
(5) These Performance-based RSUs will vest depending on the achievement of Avid's relative Total Shareholder Return ("TSR") against the Russell 2000 Index over a three-year period from March 15, 2018 to March 15, 2021.  For a summary of the performance vesting conditions, see the section entitled “Long-Term Equity Incentive Compensation."
(6) These Performance-based RSUs will vest depending on the achievement of Avid's relative Total Shareholder Return ("TSR") against the Russell 2000 Index over a three-year period from March 15, 2019 to March 15, 2022.  For a summary of the performance vesting conditions, see the section entitled “Long-Term Equity Incentive Compensation."
(7) This amount was determined by multiplying the total number of shares of common stock underlying the restricted stock units by $8.58, the closing price of our common stock on Nasdaq on December 31, 2019. 


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Option Exercises and Stock Vested for Fiscal Year 2019
The following table sets forth the number of shares acquired upon exercise of stock options by our NEOs in 2019 and the value realized upon exercise, and the number of restricted stock units that vested for our NEOs in 2019 and the aggregate dollar amount realized by our NEOs upon the vesting of the restricted stock units.
 
OPTION AWARDS
 
STOCK AWARDS
 
Name
Number of Shares Acquired on Exercise (1)
Value Realized on Exercise (2)
Number of Shares Acquired on Vesting(3)
Value Realized on Vesting(4)
Jeff Rosica
0
0
552,768

$
3,813,673

Kenneth L. Gayron
0
0
49,017

$
378,003

Jason A. Duva
0
0
181,561

$
1,310,038

Dana Ruzicka
0
0
137,533

$
1,041,239

Tom Cordiner
0
0
99,528

$
631,902

(1) This amount represents the total number of options that were exercised.
(2) This amount is determined by the difference between the sales price of our common stock on the Nasdaq of the underlying options on the exercise date and the exercise price of the options.
(3) This amount represents the total number of shares that vested; however, the company withheld a portion of the shares to satisfy tax withholdings obligations.
(4) This amount was determined by multiplying the total number of shares of common stock underlying the restricted stock units by the closing price of our common stock on Nasdaq on the date the RSUs vested less $0.01 per share.
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination Other Than Following a Change-in-Control
The following table sets forth the estimated benefits that each of our NEOs, would be entitled to receive upon termination of his employment (other than a termination in connection with a change-in-control) if we terminated the NEO’s employment without cause or the NEO terminated his employment for good reason, as provided in his executive employment agreement or offer letter. These disclosed amounts assume that the NEO’s employment terminated on December 31, 2019. The amounts disclosed in the table are estimates only and do not necessarily reflect the actual amounts that would be paid to our NEOs, which amounts would only be known at the time that they become eligible for payment following their termination. In order for a NEO to be eligible to receive any of the payments and benefits detailed in the below table, he must execute a general release of claims against our company, excluding any claims relating to the company’s obligations with respect to certain severance payments, and continue to abide by the non-competition and non-solicitation obligations in accordance with the terms of his employment.

Named Executive Officer
Severance Amount (1)
Early Vesting of Stock Options
Early Vesting of Restricted Stock and Restricted Stock Units
Other (2)
Total
Jeff Rosica
$
1,210,000

 [no acceleration]
 [no acceleration]
$
47,825

$
1,257,825

Kenneth L. Gayron
$
610,500

 [no acceleration]
 [no acceleration]
$
37,825

$
648,325

Jason A. Duva
$
643,500

 [no acceleration]
 [no acceleration]
$
37,825

$
681,325

Dana Ruzicka
$
340,000

 [no acceleration]
 [no acceleration]
$
8,480

$
348,480

Tom Cordiner (3)
$
370,849

 [no acceleration]
 [no acceleration]
$

$
370,849

(1) The amount represents (i)(a) 12 months annual base salary for Messrs. Rosica, Gayron and Duva and (b) six months annual base salary for Messrs. Cordiner and  Ruzicka, in both cases, in effect on the date of termination, plus (ii) target annual cash incentive compensation for

38





the year of termination multiplied by a pro-ration percentage reflecting the number of months during the year the executive served (the table above reflects an assumed payout ratio at target bonus).  Mr. Rosica is also eligible to receive an amount equal to his annual target bonus. Messrs.  Rosica, Duva, Gayron and Ruzicka are entitled to the payment if they are terminated without cause other than due to long-term disability, or they resign for "Good Reason" as set forth in their offer letters. 
(2) Includes (i) $30,000 for outplacement services for Mr. Rosica and $20,000 for outplacement for Messrs. Duva and Gayron and (ii) payments in lieu of medical benefits continuation for each NEOs as follows: 12 months for each of Messrs. Rosica, Duva and Gayron for an amount of $17,825, and six months for Mr. Ruzicka for an amount of $8,480. 
(3) In addition to the amount shown, Mr. Cordiner would be entitled to his pro-rated target sales commission.
Potential Payments Upon Termination Following a Change-in-Control or During a Potential Change-in-Control
The following table sets forth the estimated benefits that each of our NEOs as of December 31, 2019 would be entitled to receive if his employment were terminated by us without cause or if he terminates his employment with us for good reason within 12 months after a change-in-control of our company. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to our NEOs, which would only be known at the time that they become eligible for payment and would only be payable if a change-in-control of our company were to occur. The table below reflects the amount that could be payable under the various arrangements assuming that the change-in-control of our company occurred on December 31, 2019 and the NEO’s employment was immediately terminated. In order for a NEO to be eligible to receive any of the below payments and benefits, he must execute a general release of claims against our company, excluding any claims relating to the company’s obligations with respect to certain severance payments, and continue to abide by the non-competition and non-solicitation obligations in accordance with the terms of his employment.
Named Executive Officer
Severance Amount(1)
Early Vesting of Stock Options(2)
Early Vesting of Restricted Stock and Restricted Stock Units(2)
Other(3)
Total
Jeff Rosica
$
2,420,000

$

$
2,687,166

$
47,825

$
5,154,991

Kenneth L. Gayron
$
915,750

$

$
1,279,861

$
37,825

$
2,233,436

Jason A. Duva
$
965,250

$

$
854,789

$
37,825

$
1,857,864

Dana Ruzicka
$
510,000

$

$
820,612

$
8,480

$
1,339,092

Tom Cordiner (4)
$
556,274

$

$
357,221

$

$
913,495


(1) For Mr Rosica, this amount represents (i) 24 months annual base salary in effect on the date of termination, plus (ii) two times the target annual cash incentive compensation for the year of termination, plus (iii) plus a pro-rated percentage (based on full months elapsed in the then current year).
For Messrs. Duva and Gayron, this amount represents (i) 18 months base salary in effect on the date of termination, plus (ii) one and a half times the target annual cash incentive compensation for the year of termination, plus (iii) the target annual cash incentive compensation for the year of termination multiplied by a pro-ration percentage reflecting the number of months during the year the executive served.
For Messrs. Cordiner and Ruzicka, this amount represents (i) 12 months base salary in effect on the date of termination, plus (ii) one times the target annual cash incentive compensation for the year of termination, plus (iii) the target annual cash incentive compensation for the year of termination multiplied by a pro-ration percentage reflecting the number of months during the year the executive served.
(2) Messrs. Rosica, Gayron, Duva, Ruzicka and Cordiner would be entitled to full acceleration of vesting with respect to time-based equity held on the assumed termination date, December 31, 2019. This amount equals with respect to RSUs, the number of shares of restricted stock units that would have vested based on the acceleration multiplied by $8.58, representing the closing price of our common stock on Nasdaq on December 31, 2019 less $0.01 per share.
(3) Includes (i) $30,000 for outplacement services for Mr. Rosica and $20,000 for outplacement for Messrs. Duva and Gayron and (ii) payments in lieu of medical benefits continuation for each NEOs as follows: 12 months for each of Messrs. Rosica, Duva and Gayron for an amount of $17,825 and six months for Mr. Ruzicka for an amount of $8,480. 
(4) In addition to the amount shown, Mr. Cordiner would be entitled to his pro-rated target sales commission.
Potential Payments Upon Termination Due to Death or Disability
Upon termination of employment due to death or disability, each NEO or his or her estate would be entitled to receive an amount equal to his or her annual base salary in effect on the date of death or disability, and an

39





additional 12 months of vesting on all time-based unvested options, restricted stock and restricted stock units. For example, upon his death or disability, Mr. Rosica or his estate would be entitled to receive $2,292,658. This amount represents Mr. Rosica's annual base salary in effect on the date of death or disability (currently $550,000) plus (ii) the value to Mr.Rosica of 12 months of acceleration of time-based unvested options, restricted stock and restricted stock units. In the event of disability, the payment amount is offset by any benefit payable under the company’s long-term disability plan.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information with respect to stock options and other equity awards under our equity compensation plans as of December 31, 2019.
Plan Category
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)
WeightedAverage Exercise Price of Outstanding Options, Warrants and Rights(2)
Number of Securities Available for Future Issuance Under Equity Compensation Plans(3)
Equity Compensation Plans Approved by Security Holders(4)
3,207,198

$
8.46

1,642,460
 
Equity Compensation Plans Not Approved by Security Holders

$

 
Total
3,207,198

$
8.46

1,642,460
 
(1)
Includes only stock options and restricted stock units outstanding under our equity compensation plans since no warrants or other rights were outstanding as of December 31, 2019.
(2)
The weighted average exercise price of outstanding options does not take into account restricted stock units, which have a de minimis purchase price.
(3)
Excludes the number of securities to be issued upon the exercise of outstanding options, warrants and rights.
(4)
Includes Amended and Restated 2005 Stock Incentive Plan, and 2014 Stock Incentive Plan.
CEO PAY RATIO

Pursuant to Item 402(u) of Regulation S-K, we are required to provide the following information with respect to fiscal 2019:
The median of the annual total compensation of all employees of our company (other than Mr. Rosica, our CEO), was $88,247;
Mr. Rosica's annual total compensation was $713,828; and
The ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees for 2019 was 8.1 to 1.
We employed the following methodology, material assumptions, adjustments and estimates to identify the median paid employee and determine such employee’s annual total compensation:
Employee Population Measurement Date: We used December 1, 2019 as the date to determine our employee population. As of this date, our employee population consisted of approximately 1,440 individuals working at our parent company and consolidated subsidiaries, with 42% of these individuals located in the Americas, 37% located in Europe, and 21% located in various countries in Asia Pacific.
Compensation Time Period: We measured compensation for the above employees using the 12-month period ending December 31, 2019.
Consistently Applied Compensation Measure: To find the annual total compensation of all our employees (other than our CEO), we used the base salary plus target incentives from our internal HR system. To calculate the annual salary for the hourly population, the rate per hour was multiplied by the number of regularly scheduled hours per week, which was then multiplied by 52 weeks. The annual salary, not full-time equivalent, was used for any part-time employees. For any employees hired during the 2019 calendar year, an annualized salary was used for calculation purposes.
Determining Median Employee. Using this methodology, we determined that our median employee was a full-time, salaried employee located in the United States, with wages and overtime pay for the12-month period ending December 31, 2019, in the amount of $83,469.
Determining Median Employee’s Pay for CEO Ratio: With respect to our median employee, we then identified and calculated the elements of such employee’s compensation for fiscal year 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation in the amount of $88,247. The difference between such employee’s wages and overtime pay and the employee’s annual total compensation represents a 401(k) match, imputed income for group term life insurance, and the estimated value of such employee’s annual bonus payment for 2019. The estimated bonus would be representative of the annual program that is reflected in the proxy for the CEO.
Determining CEO’s Pay for CEO Ratio: With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column (column j) of our 2019 Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report.
In 2018, the compensation committee approved an additional equity grant of $2,000,000 to Mr. Rosica as a new CEO incentive intended to be in lieu of a 2019 grant. Mr. Rosica was not granted any long-term incentive equity in 2019, thereby decreasing his annual total compensation, and therefore, the ratio of his annual total compensation to that of our median employee for 2019, a compared to 2018. See "The 2019 Executive Compensation Programs in Detail - Long-Term Equity Incentive Compensation" for more detail.


40





PROPOSAL 2 - RATIFICATION OF THE SELECTION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal Summary
On March 4, 2020, we appointed BDO USA, LLP ("BDO") as our independent registered public accounting firm for the fiscal year ending December 31, 2020. We are asking stockholders to ratify our audit committee’s selection.
We are not required to have the stockholders ratify the selection of BDO as our independent auditor. We nonetheless are doing so because we believe it is a matter of good corporate practice. If the stockholders do not ratify the selection, the audit committee will reconsider whether or not to retain BDO, but may retain such independent auditor. Even if the selection is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interest of the company and its stockholders.
Representatives of BDO are expected to be present at the annual meeting. They will have the opportunity to make a statement if they so desire and will also be available to respond to appropriate questions from our stockholders.
Board Recommendation
Our board of directors recommends that our stockholders vote FOR the ratification of the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.


41





PROPOSAL 3 - Amendment of the Company's 2014 Stock Incentive Plan to increase the number of shares authorized for issuance
Proposal Summary
We believe stock-based incentive compensation aligns the interests of our key employees, executive officers, outside directors, consultants and advisors with the interests of our stockholders. On October 29, 2014, our stockholders approved our 2014 Stock Incentive Plan, which we refer to as the 2014 Plan. The 2014 Plan was amended in 2017 and again in 2018 to increase the number of shares of common stock available under the 2014 Plan.
The 2014 Plan currently authorizes 8,040,000 shares of common stock (subject to adjustment for stock splits and similar events) for issuance. No shares previously authorized under our Amended and Restated 2005 Stock Incentive Plan were carried over to the 2014 Plan, and no further awards were granted under the Amended and Restated 2005 Stock Incentive Plan after the adoption of the 2014 Plan. As of December 31, 2019, there remained 1,624,460 shares authorized and available for issuance under the 2014 Plan and 1,171 people were eligible to participate in the 2014 Plan.
We are asking our stockholders to approve an amendment to the 2014 Plan to increase the shares authorized for issuance under the 2014 Plan by an additional 1,400,000 shares so that we may continue to provide stock-based incentive compensation to attract, retain and reward key individuals who are critical to our long-term success. This amendment to the 2014 Plan will enable our board to award incentive and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards to our employees, executive officers, outside directors, consultants and advisers. Awards to all of these individuals, except for outside directors, may be performance-based.
If stockholders do not approve the proposal to increase the number of shares of common stock available under the 2014 Plan, the company expects that it will have an insufficient number of shares available to make equity-based compensation a meaningful part of our employees’ and officers’ overall compensation beginning in 2020. As such, the company believes its ability to retain and attract talented personnel will be adversely affected due to the ability of the company’s competitors to offer long-term equity compensation to those individuals. Additionally, we would have to consider providing additional cash compensation to our key employees to maintain competitive levels of compensation. Furthermore, our ability to align compensation with the interests of stockholders would be greatly diminished.
This amendment to the 2014 Plan (which we refer to collectively, with the remainder of the 2014 Plan, as the "Amended and Restated 2014 Plan"), which would increase the shares authorized for issuance under the plan by an additional 1,400,000 shares, was recommended by the compensation committee and approved by our board on March 4, 2020 and March 5, 2020, respectively, subject to stockholder approval.
On March 5, 2020, the last reported bid price of our common stock was $7.11 per share.
Board Recommendation
Our board of directors recommends that the stockholders vote “FOR” approval of the amendment to our 2014 Stock Incentive Plan to increase by an additional 1,400,000 shares the number of shares authorized for issuance under the Plan.
Highlights of the Amended and Restated 2014 Plan
The following plan highlights, and the plan description that follows, are qualified in their entirety by reference to the full text of the Amended and Restated 2014 Plan, a copy of which is attached as Appendix A to this proxy statement.
Our board of directors believes that the following features of the Amended and Restated 2014 Plan are closely aligned with the interests of our stockholders and are consistent with sound corporate governance practices:
Option Exercise Price Must Not Be Lower Than Fair Market Value. The Amended and Restated 2014 Plan prohibits the granting of stock options or stock appreciation rights with exercise prices lower than 100% of

42





the fair market value of the underlying shares on the date of grant, except for substitute awards made in connection with a merger or other corporate transaction.
No Repricings Without Stockholder Approval. Other than in connection with a stock split or similar change in the number of outstanding shares, the Amended and Restated 2014 Plan prohibits the repricing of stock options and stock appreciation rights without the approval of stockholders.
Limited Grants of Awards to Outside Directors. We may grant options, restricted stock, restricted stock units, or a combination of these awards upon an outside director’s initial election to our board of directors and annually for his or her continued service on the board. The Amended and Restated 2014 Plan limits the “expected value” of these awards to a dollar amount determined by our compensation consultant based on a review of compensation paid by peer companies; this dollar amount for any award may not exceed $230,000 as of the date of grant. The expected value of an option or SAR is the value of the award on the date of grant, as determined by our board of directors using a reasonable valuation method. The expected value for restricted stock and restricted stock units is the fair market value of our common stock covered by the award on the date of grant.
Duration of Stock Options. Options and SARs may not be exercised more than ten years after grant.
Share Counting. Shares tendered to us by a participant in the Amended and Restated 2014 Plan to purchase shares of common stock upon the exercise of an award or to satisfy tax withholding obligations, including shares retained from the award creating the tax obligation, will not be available for the future grant of awards. Also, shares that we purchase on the open market do not become available for issuance as future awards under the Amended and Restated 2014 Plan. For options and stock appreciation rights that may be settled in common stock, the full number of shares subject to the option or stock appreciation right will be counted against the shares available under the Amended and Restated 2014 Plan regardless of the number of shares actually used to settle such option or stock appreciation right upon exercise.
Section 162(m) of the Internal Revenue Code. The Amended and Restated 2014 Plan was structured so that awards under it can qualify as “performance-based” compensation under Section 162(m) of the Internal Revenue Code and therefore be exempt from the cap under Section 162(m) on the amount of compensation that can be deducted for federal income tax purposes. The “performance-based” compensation exemption, however, was repealed as part of the Tax Cuts and Jobs Act of 2017. All future awards (i.e., awards that are not grandfathered under prior law) will count towards the $1,000,000 cap on deductible pay for covered employees.
Description of the Amended and Restated 2014 Plan
Authorized Shares and Share Counting

If approved by stockholders, the Amended and Restated 2014 Plan would authorize 9,440,000 shares of common stock for issuance pursuant to awards. For purposes of counting the number of shares available:
All shares of common stock covered by independent SARs (i.e., SARs not granted in tandem with an option) that may be settled in common stock (including SARs that may be settled in either cash or common stock) will be counted against the number of shares available for the grant of awards. Independent SARs that may be settled only in cash will not be counted against the number of shares available for the grant of awards.
If any award (i) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of common stock subject to the award being repurchased by us at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any shares of common stock not being issued, the unused shares of common stock covered by the award will again be available for the grant of awards; provided, however, that in the case of options and SARs that may be settled in common stock (including options and SARs that may be settled in common stock or cash), the full number of shares subject to the option or SAR will be counted against the shares available under the Amended and Restated 2014 Plan regardless of the number of shares actually used to settle such option or SAR upon exercise.
Shares of common stock tendered to us by a participant in the Amended and Restated 2014 Plan to purchase shares of common stock upon the exercise of an award or to satisfy tax withholding obligations,

43





including shares retained from the award creating the tax obligation, will not be added back to the number of shares available for the future grant of awards.
Shares of common stock repurchased by us on the open market using the proceeds from the exercise of an award will not increase the number of shares available for future award grants.
Types of Awards

The Amended and Restated 2014 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-statutory stock options, restricted stock, restricted stock units, SARs and other stock-based awards.
Incentive Stock Options and Non-statutory Stock Options. Optionees receive the right to purchase a specified number of shares of common stock at a specified option price and subject to such other terms and conditions as are set forth in the stock option agreement. The exercise price for options may not be less than 100% of the fair market value of our common stock on the date of grant (or, if the exercise price is to be determined after the grant date, the exercise price may not be less than 100% of the fair market value on that future date). The exercise period for any option must expire no later than ten years after the date of grant. In accordance with tax requirements, additional restrictions apply to the exercise price and expiration date of incentive stock options granted to optionees holding more than 10% of the voting power of our company. Such options may not be granted at an exercise price less than 110% of the fair market value on the date of grant and must expire no later than five years after the date of grant.
Without stockholder approval, no outstanding option may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of that option, except in connection with a stock split or similar event. Our board of directors may not, without stockholder approval, cancel any outstanding options and grant in substitution for those options new options under the Amended and Restated 2014 Plan covering the same or a different number of shares of common stock and having an exercise price per share lower than the then-current exercise price per share of the canceled options (except for substitute awards made in connection with a merger or other corporate transaction). In addition, no option may contain any provision entitling the holder of the option to the automatic grant of additional options in connection with the exercise of the original option. The Amended and Restated 2014 Plan permits the following forms of payment of the exercise price of options:
Cash or check;
Net share settlement or a similar procedure;
Surrender of certain shares of common stock to us;
Any other lawful means acceptable to us; or
Any combination of these forms of payment.
Stock Appreciation Rights. A stock appreciation right, or SAR, is an award entitling the holder on exercise to receive an amount of common stock or cash determined in whole or in part by reference to appreciation, from and after the date of grant, in the fair market value of a share of common stock. SARs may be based solely on appreciation in the fair market value of our common stock or on a comparison of appreciation with some other measure of market growth, such as appreciation in a recognized market index.
The exercise price for any SAR may not be less than 100% of the fair market value of our common stock on the date of grant (and, if the exercise price is to be determined after the grant date, the exercise price may not be less than 100% of the fair market value on that future date). The exercise period for any SAR must expire no later than ten years after the date of grant. Without stockholder approval, no outstanding SAR may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of the outstanding SAR, except in connection with a stock split or similar event. Our board of directors may not, without stockholder approval, cancel any outstanding SAR and grant in substitution for that SAR a new award under the Amended and Restated 2014 Plan covering the same or a different number of shares of common stock and having an exercise price per share lower than the then-current exercise price per share of the canceled SAR (except for substitute awards made in connection with a merger or other corporate transaction).

44





Restricted Stock and Restricted Stock Unit Awards. Restricted stock awards grant recipients shares of common stock, subject to our right to repurchase all or part of those shares from the recipient (or to require forfeiture of such shares if issued at no cost) if the conditions specified in the applicable award are not satisfied before the end of the applicable restriction period. Restricted stock unit awards entitle the recipient to receive shares of common stock in the future, or an amount of cash equal to the value of shares of common stock to be delivered in the future subject to specified vesting conditions determined by our board of directors.
Other Stock-Based Awards. The Amended and Restated 2014 Plan allows our board of directors to grant other stock-based awards having such terms and conditions as our board of directors may determine, including the grant of shares based upon certain conditions or to be delivered in the future and the grant of securities convertible into shares of common stock.
Vesting Conditions
Awards granted under the Amended and Restated 2014 Plan may vest on the basis of the passage of time, on the achievement of specified performance criteria, or a combination of both. Restricted stock, restricted stock unit, and other stock-based awards that vest solely on the passage of time generally may not vest before the first anniversary of the date of grant. However, subject to the requirements of Section 162(m) of the Internal Revenue Code (for certain grandfathered performance-based awards), our board of directors or its designee has discretion to accelerate vesting in extraordinary circumstances, including a participant’s change in employment status, certain corporate transactions, a participant’s estate planning needs, and other nonrecurring significant events that affect us, a participant, or the Amended and Restated 2014 Plan.

Eligibility to Receive Awards
Our employees, officers, outside directors, consultants and advisers are eligible to be granted awards under the Amended and Restated 2014 Plan. The maximum number of shares of common stock with respect to which awards may be granted or paid to any participant under the Amended and Restated 2014 Plan is 1,000,000 shares per calendar year. The maximum amount payable to a participant pursuant to performance-based awards settled in cash is $7,000,000 per calendar year. As of March 5, 2020, approximately 1,171 persons would be eligible to receive awards under the Amended and Restated 2014 Plan, including all of our executive officers and nine outside directors. The granting of awards under the Amended and Restated 2014 Plan is discretionary, and we cannot now determine the number or type of awards to be granted in the future to any particular person or group.
Outside directors may receive awards only pursuant to Section 7 of the Amended and Restated 2014 Plan, which provides for an initial award upon an outside director’s commencement of service on our board of directors, and annual awards thereafter. The expected value of each award will be determined in consultation with our compensation consultant based on a review of compensation paid by peer companies; the expected value of each award, as defined above, will not exceed $230,000 as of the date of grant.
Stock options granted to outside directors generally vest in full on the first anniversary of the date of grant. Restricted stock and restricted stock units granted to outside directors may not vest before the first anniversary of the date of grant, except in extraordinary circumstances (including a director’s death or disability, a director’s attainment of mandatory retirement age or retirement following at least seven years of service, certain corporate transactions, and other nonrecurring significant events that affect us, a director, or the Amended and Restated 2014 Plan).

Administration
The Amended and Restated 2014 Plan will be administered by our board of directors. Our board of directors has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the Amended and Restated 2014 Plan and to interpret the provisions of the Amended and Restated 2014 Plan and award agreements entered into under the Amended and Restated 2014 Plan. Our board of directors may delegate authority under the Amended and Restated 2014 Plan to a committee or subcommittees of our board of directors. Our board of directors has authorized our compensation committee to administer certain aspects of the Amended and Restated 2014 Plan, including the granting of awards to executive officers. In addition, our board of directors may delegate to one or more of our employees the power to grant awards to one or more employees, subject to such guidelines as the board may establish. No employee may grant awards to any of our executive officers (as defined by Rule 3b-7 under the Exchange Act) or officers (as defined by Rule 16a-1 under the Exchange Act).


45





Subject to any limitations contained in the Amended and Restated 2014 Plan or applicable law, our board of directors, our compensation committee, our chief executive officer, or any other employee or committee to which our board of directors delegates authority, as the case may be, selects the recipients of awards and determines:
The number of shares of common stock covered by options and the dates upon which the options become exercisable;
The exercise price of options and SARs, which may not be less than 100% of the fair market value of our common stock on the date of grant (except for substitute awards made in connection with a merger or other corporate transaction);
The duration of options and SARs, which may not exceed ten years; and
The number of shares of common stock subject to any restricted stock, restricted stock unit or other stock-based award and the terms and conditions of those awards, including conditions for repurchase, issue price and repurchase price, if applicable.
Our board of directors is required to make appropriate adjustments in connection with the Amended and Restated 2014 Plan and any outstanding awards to reflect stock splits, reverse stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in capitalization. The Amended and Restated 2014 Plan also contains provisions addressing the consequences of any reorganization event, which is defined as:
Any merger or consolidation of our company with or into another entity as a result of which all of our common stock is converted into or exchanged for the right to receive cash, securities or other property or is canceled;
Any exchange of all of our common stock for cash, securities or other property pursuant to a share exchange transaction; or
The liquidation or dissolution of our company.
In connection with a reorganization event, our board of directors may take any one or more of the following actions with respect to awards, other than awards of restricted stock, under the Amended and Restated 2014 Plan:
Provide that awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation;
Provide that a participant’s unexercised awards will terminate immediately before the consummation of the reorganization event unless exercised by the participant within a specified period;
Provide that outstanding awards will become exercisable, realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part before or upon the reorganization event;
For a reorganization event under the terms of which holders of common stock will receive upon consummation of that event a cash payment, which we refer to as the acquisition price, for each share surrendered in the reorganization event, make or provide for a cash payment to a participant equal to the excess, if any, of the acquisition price times the number of shares of common stock subject to the participant’s awards (to the extent the exercise price does not exceed the acquisition price) over the aggregate exercise price of all outstanding awards and any applicable tax withholdings, in exchange for the termination of the awards;
Provide that, in connection with the liquidation or dissolution of our company, awards will convert into the right to receive liquidation proceeds (if applicable, net of the exercise price and any applicable tax withholdings); and
Any combination of the foregoing.
With regard to restricted stock awards, upon the occurrence of a reorganization event, other than the liquidation or dissolution of our company, our repurchase and other rights under outstanding restricted stock awards will inure to the benefit of the acquiring or succeeding corporation (subject to the authority of our board of directors to accelerate vesting, as described above). Unless our board of directors determines otherwise, such rights will apply to the cash,

46





securities or other property that the common stock was converted into or exchanged for pursuant to the reorganization event in the same manner and to the same extent as they applied to the common stock subject to the award of restricted stock. Upon the occurrence of a reorganization event involving the liquidation or dissolution of our company, except to the extent specifically provided to the contrary in the restricted stock agreement or any other agreement between a participant and us, all restrictions and conditions on all awards of restricted stock then outstanding will automatically be deemed terminated or satisfied.
Amendment or Termination
No award may be made under the Amended and Restated 2014 Plan after October 29, 2024, but awards previously granted may extend beyond that date. Our board of directors may at any time amend, suspend or terminate the Amended and Restated 2014 Plan. However, without the approval of our stockholders, no amendment may:

Materially increase the number of shares authorized under the Amended and Restated 2014 Plan (except in connection with a stock split or similar event);
Materially expand the class of participants eligible to participate in the Amended and Restated 2014 Plan;
Expand the types of awards provided under the Amended and Restated 2014 Plan; or
Make any other changes that require stockholder approval under Nasdaq rules.


In addition, if at any time the approval of our stockholders is required for any other modification or amendment under Section 422 of the Internal Revenue Code with respect to incentive stock options, our board of directors may not affect such modification or amendment without such approval.
If our stockholders do not approve the adoption of the amendment, the 2014 Plan will have insufficient shares remaining for awards thereunder. In such event, our board of directors will consider whether to adopt alternative arrangements based on its assessment of our needs.

U.S. Federal Income Tax Consequences
The following summarizes the U.S. federal income tax consequences that will generally arise with respect to awards granted under the Amended and Restated 2014 Plan. This summary is based on the U.S. tax laws in effect as of the date of this proxy statement. This summary assumes that all awards granted under the Amended and Restated 2014 Plan will be either exempt from or compliant with Section 409A of the Internal Revenue Code. Changes to U.S. tax laws could alter the tax consequences described below. This is not intended to be a complete analysis and discussion of the federal income tax treatment of awards, and does not discuss estate, gift, employment, and net investment income taxes or the tax laws of any municipality, state, or foreign country. We (or a designated payer) will generally satisfy any statutory tax withholding obligations in connection with the exercise or payment of an award and may require the participant to pay taxes required to be withheld as a condition to exercise or receipt of an award.
Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. A participant will not recognize ordinary income upon exercise of an incentive stock option; however, a participant may be liable for payment of alternative minimum tax in connection with the exercise of an incentive stock option. A participant must be an employee of ours or of our 50% or more-owned corporate subsidiaries in order for an option to qualify as an incentive stock option. In addition, a participant must exercise the option no later than three months after termination of employment for any reason other than permanent and total disability or death. If a participant’s employment terminates due to permanent and total disability, the participant has one year to exercise an incentive stock option. If a participant’s employment terminates due to death, the participant’s estate (or the person who inherited the option by bequest or inheritance) has one year to exercise the incentive stock option. If an incentive stock option is not exercised by the deadlines described above, the option is treated as an non-statutory option for income tax purposes, as described below.
A participant will have income upon the sale of shares of common stock acquired under an incentive stock option at a profit (if sales proceeds exceed the exercise price). The type of income will depend on when the participant sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after the option was exercised, all of the profit will be long-term capital gain. If a participant sells the stock before satisfying these waiting periods, the participant will have engaged in a disqualifying disposition, in which case the

47





participant will realize (a) ordinary income equal to the excess, if any, of the lesser of the proceeds received or the value of the shares on the date of exercise over the exercise price and (b) capital gain equal to the excess, if any, of the proceeds received over the value of the shares on the date of exercise. The capital gain will be long-term if the participant has held the stock for more than one year and otherwise will be short-term. If a participant sells the stock at a loss (sales proceeds are less than the exercise price), the loss will be a capital loss. This capital loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Non-statutory Stock Options. A participant will not have income upon the grant of a non-statutory stock option. A participant will have ordinary income upon the exercise of a non-statutory stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon the sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Stock Appreciation Rights. A participant will not have income upon the grant of a stock appreciation right. A participant will have ordinary income upon the exercise of a stock appreciation right equal to the value of the stock and/or cash received on the day the participant exercised the stock appreciation right less the exercise price. Upon the sale of any stock acquired from exercising a stock appreciation right, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the stock appreciation right was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Restricted Stock. A participant will not have income upon the grant of shares of stock that are restricted unless the participant makes an election under IRC Section 83(b) within 30 days of the date of grant. Shares are considered “restricted” for tax purposes if they are nontransferable and subject to a substantial risk of forfeiture. If a timely Section 83(b) election is made, then a participant will have ordinary income on the date of grant equal to the value of the stock on the date of grant less any purchase price paid by the participant for the restricted stock. If shares are forfeited before the restrictions lapse, the participant will not be entitled to a corresponding deduction. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. Any capital gain or loss will be long-term if the participant held the stock for more than one year from the date of grant and otherwise will be short-term.
If the participant does not make a Section 83(b) election, the participant will recognize ordinary income on the earliest date on which either the substantial risk of forfeiture lapses or the stock becomes transferable in an amount equal to the value of the stock on such date less any purchase price paid by the participant for the stock. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the date on which either the substantial risk of forfeiture lapses or the stock becomes transferable. Any capital gain or loss will be long-term if the participant held the stock for more than one year from the vesting date and otherwise will be short-term.
Restricted Stock Units. On the date of delivery of cash or stock pursuant to a restricted stock unit, a participant will have ordinary income equal to the amount of cash or the fair market value of the stock on such date less any purchase price. A participant is not permitted to make a Section 83(b) election for a restricted stock unit. If the restricted stock unit is settled in stock, then the participant will have capital gain or loss when the stock is sold, equal to the sales proceeds less the value of the stock on the date that such stock was delivered to the participant. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Other Stock-Based Awards. The tax consequences associated with stock any other stock-based awards granted under the Amended and Restated 2014 Plan will vary depending on the specific terms of the award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award and the participant’s holding period and tax basis for the award or underlying common stock.
Tax Consequences to Us.  We may be entitled to a federal income tax deduction when a participant has ordinary income for the same amount as the participant’s ordinary income. However, IRC Section 162(m) imposes a $1 million annual limit on the amount of compensation that we may deduct with respect to our chief executive officer, chief financial officer, our three highest-paid officers other than the chief executive officer and chief financial officer is capped at $1,000,000 per covered officer per year, and certain other employees and former employees.


48





INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Independent Registered Public Accounting Firm Fees
The following table summarizes the aggregate fees and related expenses paid by us to BDO for professional services rendered for the audit of the financial statements for the years ended December 31, 2018 and 2019, respectively.
 
in Thousands
 
2019
2018
Audit Fees
$
2,791

$
2,864

Audit-Related Fees
$

$

Tax Fees
$
10

$
113

All Other Fees
$
694

$
254

Total
$
3,495

$
3,231

Audit Fees. The audit fees listed were for professional services rendered by BDO in connection with work done in preparation of the audits of the consolidated financial statements included in our annual reports on Form 10-K, audit of our internal control over financial reporting for and as of the years ended December 31, 2018 and 2019, reviews of the consolidated financial statements included in our Quarterly Reports on Form 10-Q, subsidiary audits, issuance of consents, and assistance with the review of documents filed with the SEC.
Tax Fees. The tax fees listed were for services related to tax compliance, tax advice and tax planning services rendered, with respect to 2019, by BDO. Tax compliance services include primarily the preparation or review of original and amended tax returns. Tax advice and tax planning services relate to tax advice concerning mergers and acquisitions, a U.S. research tax credit study, legal entity restructuring, consultations regarding transfer pricing, tax assistance provided to expatriate employees and other general tax advice.
The other fees listed for 2018 and 2019 were paid to BDO in connection with statutory audits for certain of our international subsidiaries and consulting services provided.
All of these services were approved by our audit committee.
Pre-Approval Policies and Procedures
Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. These policies generally provide that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by our audit committee. Any pre-approved audit or non-audit services are detailed as to the particular type of services to be provided and are generally subject to a maximum dollar amount.
Audit Committee Report
The audit committee assists our board in its oversight of our financial reporting process. The audit committee’s responsibilities are more fully described in its charter, which can be accessed from the corporate governance page in the investor relations section of our website at http://ir.avid.com.
The audit committee has reviewed the company’s audited consolidated financial statements for the fiscal year ended December 31, 2019 and has discussed these consolidated financial statements with management. The company’s management is responsible for internal control and the financial reporting process. The audit committee regularly discusses the reports relating to internal control over financial reporting submitted to the audit committee by the internal auditor, who has unrestricted access to the audit committee. The company’s independent registered public accounting firm is responsible for performing an independent audit of (i) the company’s consolidated financial statements, and (ii) the effectiveness of the company’s internal control over financial reporting in accordance with

49





the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), and for issuing reports thereon.
The audit committee reviewed and discussed with the independent registered public accounting firm the audited consolidated financial statements for the fiscal year ended December 31, 2019 and the matters required to be discussed by the auditing standards of the PCAOB.
The independent registered public accounting firm provided the audit committee with the written disclosures and the letter required by the PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and the committee has discussed with the independent registered public accounting firm its independence from the company.
Based on its discussions with the company’s management and the independent registered public accounting firm, as well as its review of the representations and information provided by management and the independent registered public accounting firm, the audit committee recommended to the board that the audited consolidated financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019.
 
AUDIT COMMITTEE
 
John P. Wallace, Chair
Paula E. Boggs
Nancy Hawthorne
Peter M. Westley


50





PROPOSAL 4 - NON-BINDING ADVISORY VOTE TO APPROVE COMPENSATION PAID TO NAMED EXECUTIVE OFFICERS
Proposal Summary
In accordance with Section 14A of the Exchange Act, we are providing our stockholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in the section titled “Executive Compensation - Compensation Discussion and Analysis” and in the Compensation Tables and any related narrative discussion contained in this proxy statement.
As an advisory vote, this proposal is not binding. However, our compensation committee and board of directors value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future executive compensation decisions.
As we describe in detail in the “Executive Compensation - Compensation Discussion and Analysis,” we believe our executive compensation program embodies a pay for performance philosophy that advances our business strategy and aligns the interests of our executives with our stockholders.
Significant milestones of 2019 include:
We achieved both GAAP profitability and positive free cash flow for the first time since 2012;
Our stock price rose over 80% during 2019 and our total shareholder return during the year was over 50%;
We began shipping Media Composer 2019, the next-generation of our flagship video editing product, that has been redesigned and reimagined for today’s and tomorrow’s generation of media makers, including a new user interface experience, a next-generation media engine, a new finishing and delivering workflows, and customizable tool sets;
We began shipping the new Avid S4 audio control surface that brings the power and workflows of Avid’s industry-leading Pro Tools | S6 control surface to budget-conscious audio professionals and small- to mid-size music and audio post facilities;
We began shipping the new Avid S1 audio control surface, designed for music mixing, audio post and video production artists, bringing the power of Avid’s high-end consoles in a portable, slimline surface that’s an easy fit for any space or budget;
We introduced the new MediaCentral l Publisher, enabling media companies to create content, add graphics and branding, and publish news and sports videos quickly to social media to boost viewership and drive additional revenues;
We achieved a major milestone in the development of cloud-based solutions for media production, with the introduction of cloud-based versions of its NEXIS storage file system, Media Composer, and MediaCentral;
We introduced enterprise licensing including unlimited, on-demand virtualized licenses to support rapid scaling of editing resources on a moments' notice to address changing end-user demand from marketing, sports, documentary and home entertainment work groups; and
As of year-end 2019, we had over 187,000 paid cloud-enabled software subscriptions for our creative software tools and the Avid First freemium versions of the creative software tools had been downloaded over 1.9 million times.

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Our compensation committee has focused on designing our executive compensation programs to align with stockholder value and ensure that we are focused on executing on our transformation to create stockholder value. As discussed in “The 2019 Executive Compensation Program in Detail” in CD&A, our executive compensation program provides an effective means to align executive compensation with achievement relative to specific financial and operational performance goals, as well as with long-term stockholder returns. For example, based on the company’s 2019 performance, as measured by financial and operational metrics, the compensation committee awarded annual performance-based cash awards to our named executive officers at a level equal to 20.6% of target. This payout percentage below target reflected our 2019 performance and evidences the rigorous targets our compensation committee has historically set and continues to set.
We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our philosophy, policies and practices as described in this proxy statement. Our board of directors is asking stockholders to approve on an advisory, non-binding basis, the following resolution:
RESOLVED, that the stockholders of Avid Technology, Inc. approve, on an advisory basis, our named executive officer compensation, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, in this proxy statement.
Board Recommendation
Our board of directors recommends that our stockholders vote to approve our compensation for our named executive officers by voting FOR the resolution above in Proposal 4.

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BENEFICIAL OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners and Management
The following table provides information with respect to the beneficial ownership of our common stock as of January 31, 2020 (unless otherwise noted) by:
each person known by us to beneficially own (or have a right to acquire within 60 days) more than 5% of the outstanding shares of our common stock;
each of our directors;
each executive officer named in the "Summary Compensation Table" (each a “named executive officer,” or “NEO”); and
all of our directors and named executive officers as a group.
Percentage ownership calculations are based on 41,975,170 shares of common stock outstanding as of January 31, 2020.
Beneficial Owner
 
Number of Shares
Beneficially Owned(1)

 
Percentage of
Common Stock
Outstanding(1),(2)
Greater than 5% Stockholders





Blum Capital Partners, L.P.(3)
909 Montgomery Street, Suite 400
San Francisco, CA 94133

6,555,367


15.6
%
Impactive Capital LP(4)
152 West 57th Street, 17th Floor
New York, NY 10019

3,895,445


9.3
%
The Vanguard Group(5)
100 Vanguard Blvd.
Malvern, PA 19355

2,947,281


7.0
%
Directors(6)




Christian A. Asmar



*

Robert M. Bakish

777,243


1.9
%
Paula E. Boggs

72,164


*

Elizabeth M. Daly

108,359


*

Nancy Hawthorne

108,243


*

Michelle Munson



*

Daniel B. Silvers

27,733


*

John P. Wallace

44,981


*

Peter M. Westley

15,782


*

Named Executive Officers(6)






Jeff Rosica

755,458


1.8
%
Kenneth L. Gayron

68,888


*

Jason A. Duva

429,703


1.0
%
Dana Ruzicka

274,620


*

Tom Cordiner

147,749


*

All directors and 2019 named executive officers as a group

2,830,923


6.7
%
*
Less than 1%.
(1)
The inclusion of any shares of common stock deemed beneficially owned does not constitute an admission of beneficial ownership of those shares. The persons named in the table have, to our knowledge, sole voting and investment power with respect to all shares shown as beneficially owned by them, except as noted in the footnotes below.
(2)
Any shares that a person or entity has the right to acquire within 60 days after January 31, 2020 are deemed to be outstanding for the purpose of calculating the percentage of outstanding common stock owned by that person or entity, but not for the purpose of calculating the percentage ownership of any other person or entity.

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(3)
Amount and nature of ownership listed is based solely upon information contained in a Schedule 13D/A filed with the SEC by Blum Capital Partners L.P. and various entities affiliated with it on March 13, 2020. The shares are deemed to be beneficially owned by various entities for which Blum Capital Partners L.P. serves as an investment adviser. As of March 13, 2020, Blum Capital Partners L.P. had sole dispositive power and voting power over 6,515,857 shares; Richard C. Blum & Associates, Inc., had sole dispositive and voting power over 6,555,367 shares; Blum Strategic GP III, L.L.C had sole dispositive and voting power over 3,528,619 shares; Blum Strategic GP III, L.P. had sole dispositive and voting power over 3,528,619 shares; BCP III AIV A, L.P. had sole dispositive and voting power over 3,528,619 shares; Blum Strategic GP IV, L.L.C had sole dispositive and voting power over 2,987,238 shares; Blum Strategic GP IV, L.P. had sole dispositive and voting power over 2,987,328 shares; and BCP IV AIV A, L.P. had sole dispositive and voting power over 2,987,338 shares.
(4)
Amount and nature of ownership listed is based solely upon information contained in a Schedule 13D/A filed with the SEC by Impactive Capital LP on March 7, 2020. As of October 31, 2019, Impactive Capital LP had shared voting power over 3,895,445 shares and shared dispositive power over 3,895,445.
(5)
Amount and nature of ownership listed is based solely upon information contained in Schedule 13G/A filed with the SEC by The Vanguard Group on February 12, 2020. As of December 31, 2019, The Vanguard Group had sole dispositive power over 2,889,155 shares, sole voting power over 58,126 shares and shared dispositive power over 58,126 shares.
(6)
Includes the following shares of Common Stock subject to options exercisable or restricted stock units vesting within 60 days after January 31, 2020: Mr. Rosica: 279,479; Mr. Gayron: 41,605; Mr. Duva: 241,777; Mr. Ruzicka: 52,969; Cordiner: 51,317, and all current directors, and named executive officers as a group: 667,147.  
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and the holders of more than 10% of our common stock to file with the SEC initial reports of ownership of our common stock and other equity securities on a Form 3 and reports of changes in ownership on a Form 4 or a Form 5. To our knowledge, based solely on a review of copies of reports filed by the persons required to file these reports and written representations from those persons, we believe that all reports required to be filed pursuant to Section 16(a) were timely filed with respect to the year ended December 31, 2019 with the exception of two reports: (1) a Form 4 reporting a transaction of Tom Cordiner that occurred on July 15, 2019 was filed late on July 22, 2019 due to administrative error and (2) a Form 4 reporting a transaction of Christian Asmar that occurred on September 1, 2019 was filed late on September 6, 2019 due to administrative error.

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Appendix A
Avid Technology, Inc.
Amended and Restated
2014 Stock Incentive Plan
1. Purpose
The purpose of this Amended and Restated 2014 Stock Incentive Plan (the “Plan”) of Avid Technology, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align their interests with those of the Company’s stockholders.
2. Definitions
Unless the context clearly indicates otherwise, the following terms, when used in the Plan in capitalized form, shall have the meanings set forth below.
Award means an Option, SAR, Restricted Stock, Restricted Stock Units or Other Stock-Based Award granted under the Plan.
Award Agreement means (i) a written agreement (which may be electronic), including any amendment thereto, that sets forth the terms of an Award, or (ii) the document (written or electronic) evidencing an Award.
Board means the Board of Directors of Avid Technology, Inc.
Change in Control means:
(a) Subject to paragraphs (b) and (c), below, the first to occur of the following events:
(1) Any person (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of stock that, together with other stock held by such person, possesses more than 50 percent of the combined voting power of the Company's then-outstanding stock;
(2) Any person (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) ownership of stock of the Company possessing 30 percent or more of the combined voting power of the Company's then-outstanding stock;
(3) Any person (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) assets from the Company that have a total gross fair market value equal to 40 percent or more of the total gross fair market value of all of the assets of the Company immediately prior to such

55




acquisition or acquisitions (where gross fair market value is determined without regard to any associated liabilities); or
(4) During any 12-month period, a majority of the members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of their appointment or election.
(b) A Change in Control shall not be deemed to occur by reason of:
(1) The acquisition of additional control of the Company by any person or persons acting as a group that is considered to “effectively control” the Company (within the meaning of guidance issued under Section 409A of the Code); or
(2) A transfer of assets to any entity controlled by the shareholders of the Company immediately after such transfer, including a transfer to (A) a shareholder of the Company (immediately before such transfer) in exchange for or with respect to its stock, (B) an entity, 50 percent or more of the total value or voting power of which is owned (immediately after such transfer) directly or indirectly by the Company, (C) a person or persons acting as a group that owns (immediately after such transfer) directly or indirectly 50 percent or more of the total value or voting power of all outstanding stock of the Company, or (D) an entity, at least 50 percent of the total value or voting power of which is owned (immediately after such transfer) directly or indirectly by a person described in clause (C), above.
(c) If a Participant is party to an employment agreement, offer letter, or other similar agreement with the Company that contains a definition of “Change in Control” or a similar term, a Change in Control shall not be deemed to have occurred with respect to such Participant unless the requirements for a Change in Control under both the Plan and such employment agreement, offer letter, or other similar agreement are satisfied.
Code means the Internal Revenue Code of 1986, as amended.
Committee means a committee or subcommittees of the Board to which the Board delegates any or all of its powers under the Plan pursuant to Section 4(b) (Appointment of Committees). For Awards that are intended to qualify as Performance-Based Compensation under Section 162(m) of the Code, Committee means the committee described in Section 12(j) (Performance Awards).
Common Stock means the common stock, $.01 par value per share, of Avid Technology, Inc.
Company means Avid Technology, Inc. Except where the context otherwise requires, the term Company also includes any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code and any other business venture (including joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board.
Covered Employee means any person who is, or whom the Committee, in its discretion, determines may be, a covered employee under Section 162(m)(3) of the Code.
Designated Beneficiary means the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by a Participant, Designated Beneficiary means the Participant’s estate.



Divided Equivalent means a contractual right to receive payments equivalent to the amount of dividends paid with respect to shares of Common Stock.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Expected Value means (a) for an Option or SAR, the value of the Award, as determined by the Board using a reasonable valuation method, on the date of grant, and (b) for Restricted Stock and Restricted Stock Units, the Fair Market Value of the shares of Common Stock covered by the Award, determined as of the date of grant.
Fair Market Value means, with respect to a share of Common Stock as of any date, unless the Board expressly determines otherwise, (i) if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of determination; or (ii) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTC Bulletin Board market data vendor as listed on the OTC Bulletin Board website (otcbb.com) on the date of determination. If the Common Stock is not publicly traded, the Board shall determine the Fair Market Value for purposes of the Plan using any measure of value that it determines to be appropriate (including relying on appraisals); such measure of value shall be determined in a manner consistent with the valuation principles under Section 409A of the Code, except as the Board may expressly determine otherwise. For any date that is not a trading day, the Fair Market Value of a share of Common Stock shall be determined by using the applicable price for the immediately preceding trading day. The Board may substitute a particular time of day or other measure of price if appropriate because of exchange or market procedures or may, it its sole discretion, use weighted averages either on a daily basis or such longer period as is consistent with Options and SARs being exempt from Section 409A of the Code. The Board has sole discretion to determine the Fair Market Value for purposes of this Plan, and all Awards are conditioned on the Participant’s agreement that the Board’s determination is conclusive and binding even though others might make a different determination.
GAAP means generally accepted accounting principles in the United States.
Incentive Stock Option means an Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code.
Nasdaq means The Nasdaq Stock Market or any successor thereto.
Nonstatutory Stock Option means an Option that is not an Incentive Stock Option.
Option means an option to purchase Common Stock.
Other Stock-Based Award means an Award of shares of Common Stock or an Award that is valued in whole or in part by reference to, or is otherwise based on, shares of Common Stock or other property, including an Award entitling recipients to receive shares of Common Stock to be delivered in the future, granted under Section 10 (Other Stock-Based Awards) and not otherwise described by the terms of the Plan.
Outside Director means a member of the Board who is not, on the date of determination, (i) an employee of the Company or any subsidiary of the Company, (ii) the beneficial owner of 10% or more of the outstanding Common Stock of the Company (a “Significant Stockholder”), or (iii) a controlling stockholder, member or partner of a Significant Stockholder.



Participant means a person who receives an Award under the Plan. An individual shall continue to be a Participant for so long as such Award is outstanding and not forfeited.
Performance Award means an Award for which vesting, exercisability, payment, or settlement is conditioned on the achievement of performance objectives.
Performance-Based Compensation means “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code.
Plan means the Avid Technology, Inc. 2014 Stock Incentive Plan, as set forth herein and amended from time to time.
Reorganization Event has the meaning set forth in Section 11(b) (Reorganization Events).
Restricted Stock means an Award entitling the recipient to acquire shares of Common Stock, subject to the right of the Company to repurchase from the Participant all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) if conditions specified by the Board in the applicable Award are not satisfied prior to the end of a specified restriction period.
Restricted Stock Award means an Award of Restricted Stock or Restricted Stock Units.
Restricted Stock Unit means an Award of a contractual right entitling the recipient to receive shares of Common Stock or an amount of cash equal to the value of shares of Common Stock, subject to satisfying specified vesting conditions.
Securities Act means the Securities Act of 1933, as amended.
Stock Appreciation Right or SAR means an Award entitling the holder, upon exercise, to receive an amount in Common Stock or cash determined in whole or in part by reference to appreciation, from and after the date of grant, in the value of a share of Common Stock.
3. Eligibility
All of the Company’s employees, officers, directors, consultants and advisors are eligible to receive Awards under the Plan.
4. Administration and Delegation
(a) Administration by Board of Directors. The Plan shall be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award Agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.



(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to a Committee. All references in the Plan to the “Board” shall mean the Board or a Committee or the officers referred to in subsection (c) below (Delegation to Officers), to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Awards to one or more employees of the Company or any of its present or future subsidiary corporations, and to exercise such other powers under the Plan as the Board may determine, subject to any limitations under the Plan and such guidelines as the Board may establish; provided, however, that no employee shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Exchange Act) or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act).
5. Stock Available for Awards
(a) Number of Shares; Share Counting.
(1)     Authorized Number of Shares. Subject to adjustment under Section 11 (Adjustments for Changes in Common Stock and Certain Other Events), Awards may be made under the Plan for up to 9,440,000 shares of Common Stock. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
(2) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan:
(i) All shares of Common Stock covered by independent SARs (i.e., SARs not granted in tandem with an Option) that may be settled in Common Stock (including SARs that may be settled in either cash or Common Stock) shall be counted against the number of shares available for the grant of Awards without regard to the number of shares of Common Stock actually issued upon settlement of such SARs. Independent SARs that may be settled only in cash shall not be so counted;
(ii) If any Award (A) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (B) results in any Common Stock not being issued, the unused Common Stock covered by such Award shall again be available for the grant of Awards; provided, however, that in the case of Options and SARs that may be settled in Common Stock (including Options and SARs that may be settled in Common Stock or cash), the full number of shares subject to the Option or SAR shall be counted against the shares available under the Plan regardless of the number of shares actually used to settle such Option or SAR upon exercise;
(iii) Shares of Common Stock tendered to the Company by a Participant to (A) purchase shares of Common Stock upon the exercise of an Award or (B) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards; and
(iv) Shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.



(b) Sub-limits.
(1)         Section 162(m) Per-Participant Limit. Subject to adjustment under Section 11 (Adjustments for Changes in Common Stock and Certain Other Events), the maximum number of shares of Common Stock with respect to which Awards may be granted or paid to any Participant under the Plan shall be 1,000,000 per calendar year; the full number of authorized shares per individual shall be available for Options, SARs, or any other type of Award, provided that the aggregate number of shares under all Awards granted to the Participant during the year does not exceed the limit. For purposes of the foregoing limit, the combination of an Option in tandem with a SAR shall be treated as a single Award. The per‑Participant limit described in this paragraph (1) shall be construed and applied consistently with the Performance-Based Compensation exemption under Section 162(m) of the Code.
(2) No Award-Specific Limits. All of the authorized shares of Common Stock described in paragraph (a)(1), above (Authorized Number of Shares), shall be available for any type of Award permitted by the Plan.
6. Stock Options
(a) General. The Board may grant Options and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable.
(b) Incentive Stock Options. All of the shares of Common Stock available under Section 5 shall be available for Incentive Stock Options. An Incentive Stock Option may be granted only to an employee of Avid Technology, Inc., any of Avid Technology, Inc.’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board, including the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of each Option and specify such exercise price in the applicable Award Agreement; provided, however, that the exercise price for a share shall not be less than 100% of the Fair Market Value of such share on the date of grant. Should the Board approve the grant of an Option with an exercise price to be determined on a future date, the exercise price shall not be less than 100% of the Fair Market Value on such future date. For an Incentive Stock Option granted to an individual who, at the time of grant, owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of Avid Technology, Inc. or a related corporation, the exercise price per share shall be no less than 110% of the Fair Market Value of the share on the grant date.
(d) Limitation on Repricing and Buyout. Unless such action is approved by the Company’s stockholders, (1) no outstanding Option granted under the Plan may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option (other than adjustments pursuant to Section 11 (Adjustments for Changes in Common Stock and Certain Other Events)); (2) the Board shall not cancel any outstanding Option and grant in substitution therefor a new Award covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the canceled option; and (3) without limiting the Board’s authority under Section 11, the Board shall not authorize the purchase or buyout any



outstanding Option where the exercise price of such Option is lower than the then-current Fair Market Value of Common Stock.
(e) No Reload Rights. No Option granted under the Plan shall contain any provision entitling the optionee to the automatic grant of additional Options in connection with any exercise of the original Option.
(f) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement; provided, however, that no Option shall be granted for a term in excess of ten years (or, for an individual who, at the time of grant, owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of Avid Technology, Inc. or a related corporation, five years).
(g) Exercise of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in subsection (h), below (Payment Upon Exercise), for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option shall be delivered by the Company following exercise as soon as practicable.
(h) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:
(1) In cash or by check, payable to the order of the Company;
(2) Through net share settlement or a similar procedure involving the withholding of shares subject to the Option with a value equal to the exercise price;
(3) By delivery of shares of Common Stock owned by the Participant valued at their Fair Market Value; provided that (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 Participant for such 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;
(4) to the extent permitted by applicable law and by the Board, by payment of such other lawful consideration as the Board may determine; or
(5) by any combination of the above permitted forms of payment.
(i) Substitute Options. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Options in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Options contained in the other sections of this Section 6 or in Section 3 (Eligibility).
7. Director Awards
(a) Initial Grant. Upon the commencement of service on the Board by any individual who is an Outside Director, the Company shall grant to such person (1) a Nonstatutory Stock Option, (2) a Restricted Stock Award or (3) a combination of a Nonstatutory Stock Option and a Restricted Stock Award. The number of shares underlying, and the form of, each Award under this subsection (a) shall be



determined by the Board in its discretion; provided that the Expected Value of the aggregate Awards granted to an Outside Director under this subsection (a) shall not exceed a dollar amount determined by the Company’s compensation consultant based on a review of compensation paid by peer companies, which dollar amount shall not exceed $230,000 as of the date of grant.
(b) Make-up Grants for 2013. As soon as practicable after the effective date of the Plan, the Company shall grant to each Outside Director who was an Outside Director on December 31, 2013, an Award that entitles such member to receive 7,500 shares of Common Stock. Such Award shall be immediately vested and shall not count against the Expected Value limitation for annual grants under subsection (c), below (Annual Grant).
(c) Annual Grant. For each calendar year after 2013, on a date determined by the Board, the Company shall grant to each Outside Director who has served as a director of the Company for at least six months prior to the date of grant (i) a Nonstatutory Stock Option, (ii) a Restricted Stock Award or (iii) a combination of a Nonstatutory Stock Option and a Restricted Stock Award. The number of shares underlying, and the form of, each Award under this subsection (c) shall be determined by the Board in its discretion; provided that the Expected Value of the aggregate Awards granted to an Outside Director under this subsection (c) for a year shall not exceed a dollar amount determined by the Company’s compensation consultant based on a review of compensation paid by peer companies, which dollar amount shall not exceed $230,000 as of the date of grant.
(d) Terms of Director Options. Options granted under this Section 7 shall:
(1) Have an exercise price per share no less than the 100% of the Fair Market Value of a share on the date of grant;    
(2) Except as set forth in subsection (e), below (Special Vesting Rules), and Section 11(b) (Reorganization Events), vest in full on the first anniversary of the date of grant; provided that (i) the individual is serving on the Board on such date, (ii) no additional vesting shall take place after the Participant ceases to serve as a director and (iii) the Board may provide for accelerated vesting to the extent permitted by paragraph (e)(3), below;
(3) Expire no later than the earlier of (i) ten years after the date of grant or (ii) twelve months following cessation of service on the Board; and
(4) Contain such other terms and conditions as the Board shall determine.
(e) Special Vesting Rules.
(1) The Board may, in its discretion, either at the time an Award is made or at any time thereafter, waive its right to repurchase shares of Common Stock (or waive the forfeiture thereof) or accelerate vesting or remove or modify any part or all of the restrictions applicable to an Award; provided that the Board may exercise such rights only in extraordinary circumstances as described in Section which shall include (A) death or disability of the Participant, (B) attainment of mandatory retirement age or retirement following at least seven years of service, (C) a merger, consolidation, sale, reorganization, recapitalization, or Change in Control or (D) any other nonrecurring significant event affecting the Company, a Participant or the Plan.
(2) Special Vesting Schedule for Grants in 2014. All Awards granted to Outside Directors during 2014 pursuant to the annual grant provisions of subsection (c), above (Annual Grant), shall vest on the earlier of the date of the Company’s annual shareholder meeting for 2015 or May 31, 2015; and all



Awards granted pursuant to subsection (b), above (Make-up Grants for 2013), shall be immediately vested on the date of grant.
(f) Limitations on Awards to Outside Directors. Outside Directors shall not be granted Awards under the Plan other than pursuant to, and subject to the limitations set forth in, this Section 7 of the Plan.
8. Stock Appreciation Rights
(a) General. The Board may grant SARs and determine the number of shares of Common Stock to be covered by each SARs. SARs may be based solely on appreciation in the Fair Market Value of Common Stock or on a comparison of such appreciation with some other measure of market growth such as appreciation in a recognized market index. The date as of which such appreciation or other measure is determined shall be the exercise date unless another date is specified by the Board in the SAR Award.
(b) Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan.
(1) Tandem Awards. When SARs are expressly granted in tandem with Options, (i) the SAR shall be exercisable only at such time or times, and to the extent, that the related Option is exercisable (except to the extent designated by the Board in connection with a Reorganization Event) and shall be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the SAR shall terminate and no longer be exercisable upon the termination or exercise of the related Option, except to the extent designated by the Board in connection with a Reorganization Event and except that a SAR granted with respect to less than the full number of shares covered by an Option shall not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the SAR; (iii) the Option shall terminate and no longer be exercisable upon the exercise of the related SAR; and (iv) the SAR shall be transferable only with the related Option.
(2) Independent SARs. A SAR not expressly granted in tandem with an Option shall become exercisable at such time or times, and on such conditions, as the Board may specify in the SAR Award.
(c) Exercise Price. The Board shall establish the exercise price of each SAR and specify such price in the applicable SAR agreement. The exercise price per share shall not be less than 100% of the Fair Market Value of a share on the date of grant; provided that if the Board approves the grant of a SAR with an exercise price to be determined on a future date, the exercise price shall not be less than 100% of the Fair Market Value on such future date.
(d) Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement; provided, however, that no SAR shall be granted for a term in excess of ten years.
(e) Exercise of SARs. SARs may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with any other documents required by the Board.
(f) Limitation on Repricing and Buyouts. The limitations on repricing and buyout of Options set forth in Section 6(d), above (Limitation on Repricing), shall also apply with respect to SARs.
(g) Dividends and Dividend Equivalents. No ordinary cash dividends or Dividend Equivalents shall be paid or credited to any Participant with respect to any Stock Appreciation Right.



9. Restricted Stock; Restricted Stock Units
(a) General. The Board may grant Restricted Stock Awards.
(b) Limitations on Vesting.
(1) Except as provided in paragraph (2), below, and Section 11(b) (Reorganization Events), Restricted Stock Awards that vest solely based on the passage of time shall not vest prior to the first anniversary of the date of grant. This paragraph (1) shall not apply to Performance Awards.
(2) Notwithstanding any other provision of this Plan, the Board may, in its discretion, either at the time a Restricted Stock Award is made or at any time thereafter, waive its right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify any part or all of the restrictions applicable to the Restricted Stock Award; provided that the Board’s authority with respect to Awards that are intended to qualify as Performance-Based Compensation under Section 162(m) of the Code shall be limited by the requirements of Section 162(m) and the Board may exercise such waiver, removal, and modification rights only in extraordinary circumstances which shall include (A) Termination of Status described in Section 12(d), (B) estate planning needs of the Participant, (C) a merger, consolidation, sale, reorganization, recapitalization, or Change in Control, or (D) any other nonrecurring significant event affecting the Company, a Participant or the Plan.
(c) Terms and Conditions. The Board shall determine the terms and conditions of any such Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue price, if any.
(d) Additional Provisions Relating to Restricted Stock.
(1) Stock Certificates. The Company may require that any stock certificates issued in respect of Restricted Stock shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary.
(2) Dividends. Participants holding shares of Restricted Stock shall be entitled to all ordinary cash dividends paid with respect to such shares. All dividends or distributions with respect to Restricted Stock shall be subject to the same restrictions on transfer and risk of forfeiture as the shares of Restricted Stock with respect to which they were paid.
(e) Additional Provisions Relating to Restricted Stock Units.
(1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market Value of one share of Common Stock, as provided in the applicable Award Agreement. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant.
(2) Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock U