UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 26, 2005
AVID TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-21174 04-2977748
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
Avid Technology Park, One Park West, Tewksbury, MA 01876
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code: (978) 640-6789
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
/ / Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
/ / Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
/ / Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
/ / Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
On January 1, 2006, Avid Technology, Inc. (the "Company") will be required to
adopt Statement of Financial Accounting Standards No. 123(R) - Share-Based
Payment ("SFAS No. 123(R)"), which requires the Company to recognize the
compensation cost related to share-based payment transactions, including the
issuance of stock options, in the Company's financial statements. Currently, the
Company accounts for its share-based payment transactions using the intrinsic
value method under the provisions of APB 25 and is not required to recognize
compensation cost in the Company's financial statements.
In anticipation of the adoption of SFAS No. 123(R), on October 26, 2005, the
Company's Board of Directors approved a partial acceleration of the vesting of
all outstanding options to purchase the Company's common stock that were granted
on February 17, 2005 so that all of such stock options became exercisable as to
an additional number of shares equal to the number that would have been
exercisable as of December 31, 2007. As a result, vesting was accelerated for
options to purchase 371,587 shares of the Company's common stock, par value $.01
per share, with an exercise price of $65.81 per share, including options to
purchase 157,624 shares of the Company's common stock held by the Company's
executive officers. No options to purchase shares of the Company's common stock
held by the Company's non-employee directors were included in this acceleration.
The decision to accelerate vesting of these options was made to avoid
recognizing compensation cost in the Company's future statements of operations
upon the effectiveness of SFAS 123(R). It is estimated that the maximum future
compensation expense that would have been recorded in the Company's statements
of operations had the vesting of these options not been accelerated is
approximately $4.9 million. The Company will disclose the impact of the
acceleration in its December 31, 2005 financial statements within its pro forma
footnote disclosures, as permitted under the transition guidance provided by the
Financial Accounting Standards Board.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 1, 2005 AVID TECHNOLOGY, INC.
(Registrant)
By: /s/ Carol E. Kazmer
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Carol E. Kazmer
Vice President and General Counsel
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