Avid Technology, Inc. Nonstatutory Stock Option Agreement

Exhibit 10.2

Avid Technology, Inc.

Nonstatutory Stock Option Agreement

This Nonstatutory Stock Option Agreement (the “Agreement”) is entered into as of December 19, 2007 (the “Grant Date”), by and between Avid Technology, Inc., a Delaware corporation (the “Company”), with its principal executive offices at Avid Technology Park, One Park West, Tewksbury, MA 01876, and Gary G. Greenfield (the “Optionee”), an individual residing at 9800 Bent Cross Drive, Potomac, Maryland 20854.

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

1.              Grant of Option . The Company hereby grants to the Optionee on the Grant Date an option to purchase seven hundred twenty-five thousand (725,000) shares of common stock, $0.01 par value per share, of the Company (“Common Stock”) at an exercise price of $25.42 per share (the “Exercise Price”) and subject to the terms and conditions set forth herein.

2.              Vesting Schedule . Except as otherwise provided herein, this option may be exercised in whole or in part prior to the seventh (7 ^th ) anniversary of the Grant Date (the “Final Exercise Date”), subject to the vesting schedule set forth below. The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible, it shall continue to be exercisable, in whole or in part, with respect to all shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Sections 3 or 9.

(a)            One hundred thousand (100,000) shares subject to this option shall vest on a time-based schedule in equal 6.25% increments every three months, with the first vesting date on March 19, 2008 and the last vesting date on December 19, 2011, as long as Executive is employed by the Company on each such vesting date;

(b)            One hundred fifty thousand (150,000) shares subject to this option shall vest at the end of the first 20 consecutive trading day period following December 19, 2007 during which the Common Stock, as quoted on Nasdaq (or on such other exchange as such shares may be traded), trades (without regard to the closing price) at a price per share of at least twice the Exercise Price, as adjusted for stock splits and stock dividends; and

(c)            One hundred fifty thousand (150,000) shares subject to this option shall vest at the end of the first 20 consecutive trading day period following the Effective Date during which the

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Common Stock, as quoted on Nasdaq (or on such other exchange as such shares may be traded), trades (without regard to the closing price) at a price per share of at least three times the Exercise Price, as adjusted for stock splits and stock dividends.

(d)            Three hundred twenty-five thousand (325,000) shares subject to this option (the “ROE Option Shares”) shall vest in accordance with the following table, based upon improvement in the Company’s Return on Equity, or ROE (as defined below), in calendar year periods, commencing with calendar year 2008. Improvements for each calendar year shall be measured against a baseline ROE for the 12-month period ended September 30, 2007 (“Baseline”).

The Board (excluding Executive if he is a member of the Board) shall make the final determination of ROE and the ROE percentage point improvement for purposes hereof for each calendar year no later then the 1st day of March following the end of such calendar year. The determination of ROE shall be based upon the Company’s audited financial statements for the applicable calendar year and the unaudited financial statements for the Baseline period. The ROE Option Shares, if any, that are not vested at the end of the seventh calendar year (2014) shall be forfeited.

“Return on Equity” or “ROE” shall be determined using the Company’s published non-GAAP net income, adding the provision for income taxes and subtracting the non-GAAP related tax adjustments for the applicable period and dividing by the average common stockholder equity during the same period.

Notwithstanding the foregoing, the ROE Option Shares shall vest in full at the end of the first 20 consecutive trading day period following December 19, 2007 during which the Common Stock, as quoted on Nasdaq (or on such other exchange as such shares may be traded), trades (without regard to the closing price) at a price per share at least four times the Exercise Price, as adjusted for stock splits and stock dividends.

(a)            Form of Exercise . Each election to exercise this option shall be in a manner as determined by the Company from time to time, and shall be accompanied by payment in full in accordance with Section 4 for the number of shares for which the option is exercised. Prior to April 1, 2008, the Company shall provide the Optionee with instructions as to how this option may be exercised. Any change to such instructions shall be communicated to the Optionee in writing before such change takes effect. The Optionee may purchase fewer than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten (10) whole shares.

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

(c)            Termination of Relationship with the Company . If the Optionee ceases to be an Eligible Optionee for any reason, then, except as provided in Sections 3(d)-(g) below, the right to exercise this option shall terminate three (3) months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Optionee was entitled to exercise this option on the date of such cessation.

(d)            Exercise Period Upon Death or Disability . If the Optionee dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he is an Eligible Optionee and the Company has not terminated such relationship for Cause (as defined in the Employment Agreement (defined in Section 3(g)), this option shall be exercisable, within the period of one (1) year following the date of death or disability of the Optionee, by the Optionee (or, in the case of death, by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Optionee on the date of his death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

(e)            Discharge for Cause . If the Optionee, prior to the Final Exercise Date, is discharged by the Company for Cause (as defined in the Executive Employment Agreement, dated December 18, 2007, between the Optionee and the Company, or any successor agreement thereto (the “Employment Agreement”)), the right to exercise this option shall terminate immediately upon the effective date of such discharge.

(f)             Effect of Breach of Covenants . Notwithstanding anything to the contrary in Sections 3(c) and (d), if the Optionee, prior to the Final Exercise Date, violates the non-competition, non-solicitation or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Optionee and the Company, the right to exercise this option shall terminate immediately upon such violation.

(g)            Employment Agreement . Notwithstanding anything to the contrary in this Section 3 or in Section 9, this option shall be subject to any applicable, superseding right-to-

exercise and vesting terms set forth in the Employment Agreement; provided, however, that in no event shall the right to exercise this option extend beyond the Final Exerci