AVID TECHNOLOGY, INC. Metropolitan Technology Park One Park West Tewksbury, MA 01876 July 6, 1998 OFIS Filer Support SEC Operations Center 6432 General Green Way Alexandria, VA 22312-2413 Ladies and Gentlemen: Pursuant to regulations of the Securities and Exchange Commission, submitted herewith for filing on behalf of Avid Technology, Inc. is the Company's Form 8-K dated the 6th day of July, 1998. This filing is being effected by direct transmission to the Commission's EDGAR System. Very truly yours, /s/ Frederic G. Hammond Frederic G. Hammond General CounselSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): JUNE 15, 1998 AVID TECHNOLOGY, INC. (Exact Name of Registrant as Specified in Its Charter) MASSACHUSETTS 0-21174 04-2977748 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation or Organization) File Number) Identification No.) METROPOLITAN TECHNOLOGY PARK, ONE PARK WEST TEWKSBURY, MASSACHUSETTS 01876 (Address of Principal Executive Offices) (Zip Code) 978-640-6789 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. On June 15, 1998, Avid Technology, Inc. ("Avid") entered into a Stock and Asset Purchase Agreement (the "Agreement") with Microsoft Corporation ("Microsoft") and its wholly owned Canadian subsidiary, Softimage Inc. ("Softimage"). Under the terms of the Agreement, Avid will acquire from Microsoft the outstanding capital stock of Softimage as well as certain assets and rights relating to the Softimage business. The Agreement provides for Avid to pay $79 million in cash to Microsoft and to issue to Microsoft (i) a subordinated note (the "Note") in the amount of $5 million, (ii) 2,344,490 shares of Common Stock and (iii) a ten year warrant to purchase 1,155,235 shares of Common Stock at an exercise price of $47.65 per share. In addition, Avid will issue options, with a nominal exercise price, to Softimage employees to purchase up to 1,911,846 shares of Common Stock ("Avid Options") to replace unvested Microsoft options that will be forfeited in the transaction. The principal amount of the Note would be increased by $39.71 for each share underlying expired Avid Options. Consummation of the transaction is subject to applicable regulatory and other approvals and conditions. SIGNATURES 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. AVID TECHNOLOGY, INC. Dated: July 6, 1998 By: /s/ William L. Flaherty ----------------------- William L. Flaherty Senior Vice President of Finance, Chief Financial Officer and Treasurer