AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1996
REGISTRATION STATEMENT NO. 333-3128
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AVID TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-2977748
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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METROPOLITAN TECHNOLOGY PARK
ONE PARK WEST
TEWKSBURY, MASSACHUSETTS 01876
(508) 640-6789
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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DANIEL A. KESHIAN, PRESIDENT
AVID TECHNOLOGY, INC.
METROPOLITAN TECHNOLOGY PARK
ONE PARK WEST
TEWKSBURY, MASSACHUSETTS 01876
(508) 640-6789
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPY TO:
MARK G. BORDEN, ESQ.
HALE AND DORR
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this form is registering additional securities pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: 333- [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: 333- [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), SHALL DETERMINE.
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PROSPECTUS (Subject to Completion)
Issued May 23 , 1996
717,003 Shares
Avid Technology, Inc.
LOGO
COMMON STOCK
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THE SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE (THE "COMMON STOCK"), OF
AVID TECHNOLOGY, INC. ("AVID" OR THE "COMPANY") COVERED BY THIS PROSPECTUS
ARE ISSUED AND OUTSTANDING SHARES WHICH MAY BE OFFERED AND SOLD, FROM TIME
TO TIME, FOR THE ACCOUNT OF CERTAIN STOCKHOLDERS OF THE COMPANY (THE
"SELLING STOCKHOLDERS"). SEE "SELLING STOCKHOLDERS." THE SHARES OF
COMMON STOCK COVERED BY THIS PROSPECTUS WERE ISSUED TO THE SELLING
STOCKHOLDERS IN PRIVATE PLACEMENTS MADE IN CONNECTION WITH THE
ACQUISITIONS BY AVID OF (I) ELASTIC REALITY, INC., COMPLETED ON
MARCH 29, 1995 AND (II) PARALLAX SOFTWARE LIMITED AND 3 SPACE
SOFTWARE LIMITED, COMPLETED ON MARCH 29, 1995. ALL OF THE
SHARES OFFERED HEREUNDER ARE TO BE SOLD BY THE SELLING
STOCKHOLDERS. THE COMPANY WILL NOT RECEIVE ANY OF THE
PROCEEDS FROM THE SALE OF THE SHARES BY THE SELLING
STOCKHOLDERS.
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THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
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THE SELLING STOCKHOLDERS MAY FROM TIME TO TIME SELL THE SHARES COVERED BY
THIS PROSPECTUS ON THE NASDAQ NATIONAL MARKET IN ORDINARY BROKERAGE
TRANSACTIONS, IN NEGOTIATED TRANSACTIONS, OR OTHERWISE, AT MARKET
PRICES PREVAILING AT THE TIME OF SALE OR AT NEGOTIATED PRICES.
SEE "PLAN OF DISTRIBUTION." THE COMMON STOCK IS QUOTED ON
THE NASDAQ NATIONAL MARKET UNDER THE SYMBOL AVID.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices located at 7 World Trade Center,
Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials
also may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common
Stock of the Company is traded on the Nasdaq National Market. Reports and
other information concerning the Company may be inspected at the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.
C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the shares of Common Stock
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits and schedules thereto, as
certain items are omitted in accordance with the rules and regulations of the
Commission. For further information pertaining to the Company and the shares
of Common Stock offered hereby, reference is made to such Registration
Statement and the exhibits and schedules thereto, which may be inspected
without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of which may be obtained from the
Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference:
(1) the description of Avid's capital stock contained in Avid's Registration
Statement on Form 8-A filed on February 2, 1993; (2) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995; and (3) the
Company's Current Report on Form 10-Q for the fiscal quarter ended March 31,
1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the termination of the offering of the Common Stock registered
hereby shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits
specifically incorporated by reference into such documents). Requests for such
copies should be directed to the Director of Investor Relations of the
Company, Metropolitan Technology Park, One Park West, Tewksbury, Massachusetts
01876; telephone (508) 640-6789.
The Company was incorporated in the State of Delaware in September 1987. The
Company's principal executive offices are located at Metropolitan Technology
Park, One Park West, Tewksbury, Massachusetts 01876, and its telephone number
is (508) 640-6789.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
2
RISK FACTORS
In evaluating the Company's business, prospective investors should carefully
consider the following factors, in addition to the other information contained
in this Prospectus.
Reliance on Media Composer. To date, a substantial majority of the Company's
net revenues has been attributable to the sale and support of its Media
Composer family of digital editing systems. Although the Company has expanded
its product line to include additional products targeting additional markets,
it expects that it will continue to depend in large part on sales and support
of Media Composer systems. The Company has sold its Media Composer systems
primarily to professional editors, many of whom will require only one or a
limited number of systems. Accordingly, the Company's ability to increase
sales of Media Composer systems will depend in large part on its ability to
expand its customer base. Any competitive, technological or other factor
adversely affecting sales of Media Composer systems would have an adverse
effect on the Company's business and results of operations.
Potential Fluctuations in Operating Results. The Company's future results of
operations may fluctuate significantly based upon numerous factors including,
without limitation, the timing of new product introductions, the mix of
products sold, levels of international sales, activities of competitors,
acquisitions, the availability of key components, purchasing patterns and
inventory levels in its distribution channels, the rate of customer acceptance
of new products and adoption of random access digital production and editing
technology, pricing and sales promotion strategies undertaken by the Company
or its competitors, timing of new hires and changes in foreign currency
exchange rates. The Company does not maintain significant levels of backlog
orders. As a result, quarterly revenues and operating results generally depend
on the volume and timing of orders received during the quarter, which are
difficult to forecast. The Company has experienced certain seasonality in its
business related to the timing of the annual conference of the National
Association of Broadcasters ("NAB"), which is typically held in March or
April. Customers often defer purchase decisions during the Company's first
fiscal quarter in anticipation of new product introductions to be made at the
NAB conference. As a result, the Company has generally experienced greater
revenues during the fiscal quarters following the NAB conference. In addition,
the Company incurs significant expenses during its first and second fiscal
quarters in connection with the NAB conference. Therefore, if revenues are
below expectations prior to or following the NAB conference, Avid's results of
operations, particularly on a quarter-to-quarter basis, are likely to be
adversely affected. There can be no assurance that the Company will be
profitable on a quarter-to-quarter basis.
The Company's gross margin has fluctuated, and may continue to fluctuate,
based on factors such as the mix of products sold, the proportion of third-
party hardware included in the systems sold by the Company, the distribution
channels through which products are sold, the timing of new product
introductions, the offering of product upgrades, price discounts and other
sales promotion programs, the costs of swapping or fixing products released to
the market with errors or flaws and sales of third-party computer hardware to
its distributors. The Company's systems and software products typically have
higher gross margins than storage devices and product upgrades. However, the
Company expects that its all digital broadcast newsroom systems are likely to
have lower margins than the Company's other systems as a result of the higher
proportion of third-party hardware, including servers and storage devices,
incorporated in such systems. The Company from time to time adds functionality
and features that add cost to its systems. If such additions are accomplished
through the use of more, or more costly, third-party hardware, and if the
Company does not increase the price of such systems to offset such increased
costs, the Company's gross margins may be adversely affected.
The Company expects to attempt to continue the installation of a small
number of beta sites for advanced "all-digital newsrooms," which incorporate a
variety of the Company's products, as well as computers purchased from Silicon
Graphics, Inc. ("SGI") and storage devices purchased from other third-party
vendors. Because some of the products and technology in these installations
are new and untested in live broadcast environments, the Company has provided
discounts to these customers. In addition, because some of the products and
technology in these installations are new and untested in live broadcast
environments, the Company has incurred greater than expected costs in
completing these initial installations. As a result, the Company believes that
the gross margins on the approximately $8 million in revenues yet to be
recognized from the sale of these initial all-digital newsrooms will be
substantially lower than the Company's overall gross margin. Revenues and
3
costs associated with these initial installations will be recognized upon the
acceptance of the systems by the customers. While there can be no assurance
that any or all of the systems will be accepted, or that the Company will not
incur further unexpected costs in completing the installations, the Company
believes that the systems will be accepted in the second quarter of 1996. The
Company's overall gross margin percentage is likely to be reduced in the
quarter or quarters in which the revenues and expenses associated with these
initial installations are recognized.
The Company's operating expense levels are based, in part, on its
expectations of future revenues. Therefore, if revenue levels fail to meet
internal expectations, the Company's operating results are likely to be
adversely affected and there can be no assurance that the Company will be able
to maintain profitability.
Transition to PCI. The Company's Media Composer and Pro Tools families of
products currently operate only on Apple computers. Apple has adopted the PCI
bus standard for data transfer for its computers. The Company believes certain
of its prospects and customers have delayed purchases or have purchased PCI
bus systems from competing vendors. The Company began shipping Media Composer
products based on the PCI bus standard in March 1996 and currently expects to
begin shipping Pro Tools products based on the PCI bus in the second quarter
of 1996. To the extent that the Company is delayed in making this transition
of the Pro Tools products, customers may continue to elect to delay purchases.
Any delay or failure of the Company to modify these Pro Tools products to
conform to the PCI bus standard, any failure of the PCI bus products to obtain
market acceptance, the delay or deferral of customer purchase decisions, the
cost of any upgrade programs to PCI bus that are implemented by the Company,
the inability of the Company to secure an adequate supply of Apple computers
or PCI-compatible video processor boards to include in its systems or
difficulty or delay by third-party developers in developing applications for
use on PCI-bus based Pro Tools products could have a material adverse effect
on the Company's business and results of operations.
Expansion into New Markets. The Company has expanded its product line to
address the digital media production needs of the television broadcast news
market and the emerging market for multimedia production tools. The Company
has limited experience in serving these markets, and there can be no assurance
that the products developed by the Company for such markets will achieve
widespread customer acceptance. A significant portion of the Company's future
growth will depend on customer acceptance in these and other new markets. Any
failure of such products to achieve such acceptance could have a material
adverse effect on the Company's future results of operations.
Management of Growth. The Company has experienced a period of rapid growth,
which has placed a significant strain on its resources. The Company has in the
past experienced personnel transitions among its senior managers and expects
transitions from time to time in the future as the Company's organizational
structure continues to evolve. In addition, many of the Company's key
employees have not had experience in managing organizations of the Company's
size or larger. To manage effectively any future growth, the Company will be
required to continue to improve its operational and financial systems and to
expand, train and manage its employee base. The loss of key employees, any
delay or failure in attracting new employees or any failure by the Company to
manage any future growth effectively could have a material adverse effect on
the Company's business.
The Company recently began converting its core information systems to a new
system developed by Systems, Applications and Products. Any difficulties in
this system conversion could delay the shipment of orders, the release of
invoices or collection of receivables which may have an adverse effect on the
Company's operations and cash flows.
Highly Competitive Markets. The markets for digital media editing and
production systems are intensely competitive and subject to rapid change. In
the video and film production and post-production markets, the Company has
encountered competition primarily from other vendors that offer similar
digital editing hardware and software products based on standard computer
platforms, including Amtel, Data Translation, Discreet Logic, D/VISION, Fast
America, ImMix (a subsidiary of Scitex America), Lightworks USA (a subsidiary
of Tektronix), Quantel (a subsidiary of Carlton Communications PLC) and
Softimage (a subsidiary of Microsoft). The Company also competes with larger
vendors, such as Sony, Matsushita and Tektronix, that generally have offered
4
analog-based products. The Company expects that competition from these vendors
will increase to the extent that such vendors develop and introduce digital
media products, as well as new versions of their analog products. For example,
Sony has announced the development of a digital nonlinear editing product that
is expected to compete with the Company's Media Composer and NewsCutter
systems. In the broadcast news market, the Company competes primarily with
larger vendors, such as Sony, Matsushita, Dynatech, The Grass Valley Group (a
subsidiary of Tektronix) and BTS. The Company expects that competition from
these vendors will increase to the extent such vendors develop and introduce
digital or new analog-based products. The Company also competes in certain
segments of this market with other providers of digital media products,
including Data Translation and ImMix. In the music production and post-
production markets, the Company competes primarily with traditional analog
tape-based system suppliers, including AMS, Fairlight, Fritz Studer, Otari,
Sony, Tascam, and Yamaha; digital tape-based system suppliers, including
Alesis, Roland Corporation and Tascam and other disk-based digital audio
production system suppliers, including Sonic Solutions. In addition, companies
such as Creative Technology currently provide low cost (under $500) digital
audio playback cards targeted primarily at the personal computer game market.
There can be no assurance that these companies will not introduce products
that are more directly competitive with the Company's products. The Company
may face competition in any or all of these markets in the future from
computer manufacturers, such as Digital Equipment, Hewlett-Packard, IBM and
SGI, as well as from software vendors, such as Microsoft, Oracle and Sybase.
All of these companies have announced their intentions to enter some or all
the Company's target markets, including especially the broadcast news market.
In addition, certain developers of shrink-wrapped digital media software
products, such as Adobe and Macromedia, either offer or have announced video
and audio editing products which may compete with certain of the Company's
products. Many current and potential competitors of the Company have
substantially greater financial, technical and marketing resources than the
Company. Competitors may be able to develop products comparable or superior to
those of the Company or adapt more quickly than the Company to new
technologies or evolving customer requirements. Accordingly, there can be no
assurance that the Company will be able to continue to compete effectively in
its target markets or that future competition will not adversely affect its
business and results of operations.
Introduction of New Products and Product Transitions. The Company's future
success will depend in part upon its ability to enhance its existing products
and to develop and introduce new products on a timely basis to meet changing
customer requirements and emerging industry standards in the digital media
production markets. The Company has announced the introduction of several new
products, including the Avid Media Fusion and Avid Media Spectrum systems,
which have been designed to operate on computers from SGI, including systems
based on SGI's Reality Engine 2 ("RE2") graphics subsystem technology. The
Avid Media Fusion and Avid Media Spectrum systems are expected to be generally
available for commercial sale during the second quarter of 1996. SGI has
recently introduced new systems, based on its Infinite Reality ("IR") graphics
subsystem technology, which are designed generally to replace RE2-based
systems. Any delay in the completion or introduction of the Avid Media Fusion
and Avid Media Spectrum systems, the failure of these products to achieve
market acceptance, the delay or deferral of customer purchase decisions, the
delay or failure of the Company to modify its products to operate on the IR
code base, the cost of any upgrade programs from RE2-based systems to IR-based
systems that may be implemented by the Company, or the inability of the
Company to secure an adequate supply of RE2-based systems could have a
material adverse effect on the Company's business and results of operations.
The Avid Media Fusion system has also been designed to run on SGI's Indigo
Impact workstations. Certain other digital media tools suppliers have recently
publicly reported difficulty in procuring such computers. The inability of the
Company to secure an adequate supply of Indigo Impact workstations or related
components could have a material adverse effect on the Company's business and
results of operations.
The Company has from time to time developed new products, or upgraded
existing products that incorporate advances in enabling technologies such as
PCI bus. The Company believes that further advances will occur in bus
architectures and other enabling technologies, such as microprocessors,
computers, operating systems, storage devices and digital media formats. The
Company may be required, based on market demand, to upgrade existing products
or develop other products that incorporate these further advances. There can
be no assurance
5
that the Company will be successful in developing such products, or that they
will gain market acceptance, if developed. Any failure to develop such
products in a timely way or to gain market acceptance for them could have a
material adverse effect on the Company's business and results of operations.
The introduction of new or enhanced products also requires the Company to
manage the transition from older products in order to minimize disruptions in
customer ordering patterns, avoid excessive levels of older product inventory
and ensure that adequate supplies of new products can be delivered to meet
customer demand. New product introductions could contribute to quarterly
fluctuations in operating results as orders for new products commence and
orders for existing products decline.
Dependence on Key Suppliers. The Company is dependent upon sole source
suppliers for certain key components used in its products. Products purchased
by the Company from sole source vendors include computers from Apple and SGI;
a video processor board manufactured by Truevision; video compression chips
manufactured by C-Cube Microsystems; a small computer systems interface
("SCSI") accelerator board from ATTO Technology; a 3D digital video effects
board from Pinnacle Systems, certain storage devices from Ciprico, Inc. and an
application specific integrated circuit ("ASIC") from AMI. The Company
purchases these sole source components pursuant to purchase orders placed from
time to time. The Company generally does not carry significant inventories of
these sole source components and it has no guaranteed supply arrangements.
These purchasing arrangements can result in delays in obtaining products from
time to time. No assurance can be given that sole source suppliers will devote
the resources necessary to support the enhancement or continued availability
of such components or that any such supplier will not encounter financial
difficulties. While Avid has obtained certain manufacturing rights from
Truevision, there can be no assurance that such manufacturing rights would
enable the Company to obtain an alternative source of supply if Truevision
were unable for any reason to satisfy the Company's requirements for video
processor boards. While the Company believes that alternative sources of
supply for its sole source components could be developed, its business and
results of operations could be materially adversely affected if it were to
encounter an extended interruption in its sources of supply.
Risks Associated with International Operations. International sales have
represented a significant portion of the Company's sales. The international
business and financial performance of the Company may be affected by
fluctuations in foreign exchange rates, difficulties in managing accounts
receivable, tariff regulations and difficulties in obtaining export licenses.
A substantial majority of the Company's international sales are made by its
subsidiaries in local currencies, principally British Pounds, German Marks,
Japanese Yen, Italian Lire and French Francs. However, sales of products by
the Company's manufacturing facilities to its international subsidiaries are
generally denominated in U.S. Dollars. The matching of local currency accounts
receivable and U.S. Dollar intercompany accounts payable could expose the
Company to risks of currency fluctuations. The Company seeks to reduce the
effects of such foreign currency fluctuations upon its financial results by
engaging in hedging transactions. Specifically, the Company typically sells
forward the local currency equivalent of the expected intercompany payables of
its international subsidiaries, and then covers the forward contract at
maturity with an offsetting purchase of the local currency. The forward
exchange contracts generally have maturities of one month. While the Company
seeks through these hedging transactions to reduce the risk of foreign
currency fluctuations, unfavorable changes in applicable exchange rates or
unexpected changes in intercompany payables could adversely affect the
Company's results of operations.
Acquisitions. Acquisitions of complementary businesses are an active part of
the Company's overall strategy. The Company has consummated six acquisitions
of other businesses since January 1993, five of which occurred between October
1994 and March 1995. The Company continually evaluates potential acquisition
and investment opportunities. There can be no assurance that acquired
products, technologies and businesses will be effectively assimilated into the
Company's business or product offerings or that the Company will be able to
retain key employees of acquired companies. In addition, the Company may incur
significant expenses to complete any such acquisitions and investments and to
support the acquired products, technologies or businesses. Acquisitions will
require the dedication of certain management resources, which may temporarily
divert efforts from the day-to-day business of the Company. There can be no
assurance that any acquired products, technologies or businesses will
contribute to the Company's revenues or earnings to any material extent.
6
Dependence on Proprietary Technology. The success of the Company is heavily
dependent upon its proprietary technology. The Company relies on a combination
of trade secret, patent, contract, copyright and trademark law to establish
and protect its proprietary rights in its products and technology. Although
the Company believes that its products and their use do not infringe on the
proprietary rights of third parties, it has from time to time received, and
may receive in the future, communications from third parties asserting that
the Company's products infringe, or may infringe, on the proprietary rights of
third parties. There can be no assurance that any such claims will not result
in protracted and costly litigation or require the Company to obtain a license
to intellectual property rights of third parties, which license may not be
available on favorable terms, if at all. Also, the Company may seek to
institute legal proceedings against third parties to protect its own patent or
other intellectual property rights, and any such proceedings could result in
substantial cost and diversion of effort by the Company.
Stock Price Volatility. The trading price of the Company's Common Stock may
be subject to fluctuations in response to quarter-to-quarter variations in
operating results, changes in earnings estimates by analysts, announcements of
technological innovations or new products by the Company or its competitors,
general conditions in the digital media industry and other events or factors.
For example, shares of the Company's Common Stock sold for as high as $49.25
in November 1995 and as low as $16.25 in December 1995. In addition, the stock
market in general, and the shares of technology companies in particular, have
experienced extreme price fluctuations in recent years. This volatility has
had a substantial effect on the market prices of securities issued by many
companies for reasons unrelated to the operating performance of the specific
companies. These broad market fluctuations may adversely affect the market
price of the Company's Common Stock.
Class Action Lawsuits. In December of 1995, six purported shareholder class
action complaints were filed naming the Company and certain of its officers
and directors as defendants. Principal allegations contained in the complaints
included claims that the defendants violated federal securities laws and state
common law by allegedly making false and misleading statements that were not
true when made and by allegedly failing to disclose material information that
was required to be disclosed, purportedly causing the value of the Company's
stock to be artificially inflated. The lawsuits were brought on behalf of all
persons who bought the Company's stock at various times between the summer of
1995 and December 20, 1995, including persons who bought the Company's stock
pursuant to its September 21, 1995 public offering. The plaintiffs have
indicated that they intend to file, but have not yet filed, an amended
complaint consolidating the actions. The original complaints seek unspecified
damages for the decline of the value of the Company's stock during the
putative class period. Although the Company believes that it and the other
defendants have meritorious defenses to the allegations made by the plaintiffs
and intends to contest these lawsuits vigorously, an adverse resolution of
this litigation could have a material adverse effect on the Company's
consolidated financial position or results of operation in the period in which
the litigation is resolved.
7
THE COMPANY
Avid develops, markets, sells and supports a wide range of disk-based
systems for capturing, creating, manipulating and distributing digital media.
Avid's digital, nonlinear video and film editing systems are designed to
improve the productivity of video and film editors by enabling them to edit
moving pictures and sound in a faster, easier, more creative and more cost-
effective manner than traditional analog tape-based systems. Avid also
develops and sells digital media recording, editing and playback systems and
newsroom automation systems for the television broadcast news and commercial
insertion markets and digital audio systems for the music and audio production
and post-production markets. Avid's products are used worldwide in media
production and post-production facilities; film studios; network and
affiliate, independent and cable television stations; recording studios;
advertising agencies; government and educational institutions; and corporate
video departments.
The Company's executive offices are located at Metropolitan Technology Park,
One Park West, Tewksbury, Massachusetts 01876 (telephone: (508) 640-6789). The
Company was organized in September 1987. As used in this Prospectus, the terms
the "Company" and "Avid" refer to Avid Technology, Inc., a Delaware
corporation, and its subsidiaries.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
THE MERGERS
In March 1995, Avid acquired through merger Elastic Reality, Inc. ("Elastic
Reality"), and Parallax Graphics Software Limited and 3 Space Software Limited
(together, "Parallax"). Elastic Reality develops and markets digital image
manipulation software and Parallax develops and markets paint and compositing
software, in each case primarily for feature film and television commercial
production and post-production markets.
Pursuant to an Agreement and Plan of Merger dated March 29, 1995 (the
"Elastic Reality Merger Agreement") by and among the Company, ERTE Acquisition
Corporation, Elastic Reality and Perry Kivolowitz and Daniel Esenther, the
stockholders of Elastic Reality, effective March 29, 1995, ERTE Acquisition
Corporation was merged with and into Elastic Reality. As a result of the
merger, Elastic Reality became a wholly owned subsidiary of Avid. In the
merger, former stockholders of Elastic Reality received a total of 217,717
shares of Avid Common Stock, 108,000 of which were registered for resale
pursuant to a registration statement filed with the Commission in June 1995.
Pursuant to a Share Purchase Agreement dated March 29, 1995 (the "Parallax
Merger Agreement") by and among the Company and the stockholders of Parallax,
the Company acquired all of the issued and outstanding shares of Parallax. As
a result of the acquisition, Parallax became a wholly owned subsidiary of
Avid. In the acquisition, former stockholders of Parallax received a total of
1,305,358 shares of Avid Common Stock, 326,340 of which were registered for
resale pursuant to a registration statement filed with the Commission in June
1995.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue up to 50,000,000 shares of Common Stock,
$.01 par value per share. Holders of Common Stock are entitled to one vote for
each share held on all matters submitted to a vote of stockholders and do not
have cumulative voting rights. Accordingly, holders of a majority of the
shares of Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election. Holders of Common Stock are
entitled to receive ratably such dividends, if any, as may be declared by the
Board
8
of Directors out of funds legally available therefor, subject to any
preferential dividend rights of any outstanding Preferred Stock. Upon the
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive ratably the net assets of the Company available
after the payment of all debts and other liabilities and subject to the prior
rights of any outstanding Preferred Stock. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the shares offered by the Company in this
offering will be, when issued and paid for, fully paid and nonassessable. The
rights, preferences and privileges of holders of Common Stock are subject to,
and may be adversely affected by, the rights of the holders of shares of any
series of Preferred Stock which the Company may designate and issue in the
future.
STOCKHOLDER RIGHTS PLAN
The Company adopted a Stockholder Rights Plan on February 29, 1996 (the
"Rights Plan"). Pursuant to the Rights Plan, each share of Common Stock has an
associated right (a "Right"). Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-thousandth of a share
(a "Unit") of Series A Junior Participating Preferred Stock (the "Series A
Stock"), at a purchase price of $115 in cash per Unit, subject to adjustment
(the "Purchase Price").
Until the Distribution Date (or earlier redemption or expiration of the
Rights), which will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 30% or more of such outstanding shares of Common Stock,
the Rights will be attached to all Common Stock certificates and will be
transferred with and only with the Common Stock. The Rights are not
exercisable until the Distribution Date. After the Distribution Date, separate
certificates representing the Rights will be mailed to holders of record on
the Distribution Date. Until a Right is exercised, the holder thereof has no
rights with respect thereto as a stockholder of the Company.
In certain circumstances specified in the Rights Plan, including certain
circumstances occurring after any person or group becomes an Acquiring Person,
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person, will thereafter have the right to receive upon exercise, in lieu of a
number of one-thousandths of a share of Series A Stock, shares of Common Stock
of Avid having a market value of two times the Purchase Price and in the event
that the Company is acquired in a business combination transaction or 50% or
more of its assets are sold, each holder of a Right will thereafter have the
right to receive, upon exercise, that number of shares of Common Stock of the
acquiring company which at the time of the transaction would have a market
value of two times the Purchase Price.
The Rights have certain anti-takeover effects, in that they would cause
substantial dilution to a person or group that attempts to acquire a
significant interest in the Company on terms not approved by the Board of
Directors. The Board of Directors of the Company may in certain circumstances
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment. The Rights, if not earlier redeemed, will expire on
February 28, 2006.
PREFERRED STOCK
The Company is authorized to issue up to 1,000,000 shares of Preferred
Stock, $.01 par value per share. The Board of Directors is authorized, subject
to any limitations prescribed by law, without further stockholder approval, to
issue such shares of Preferred Stock in one or more series. Each such series
of Preferred Stock shall have such rights, preferences, privileges and
restrictions, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences, as shall be determined by
the Board of Directors. In connection with the adoption of the Rights Plan,
the Board of Directors authorized the issuance of up to 500,000 shares of
Series A Stock. Each share of Series A Stock when, and if, issued would
entitle the holder thereof to a
9
minimum preferential quarterly dividend payment of $10 per share and would
entitle the holder to an aggregate of 1,000 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders thereof would
be entitled to a minimum preferential liquidation payment of $1,000 per share
and an aggregate payment of 1,000 times the payment made per share of Common
Stock. In the event of a merger, consolidation or other transaction in which
Common Stock is exchanged, each share of Series A Stock would be entitled to
receive 1,000 times the amount received per share of Common Stock.
The purpose of authorizing the Board of Directors to issue Preferred Stock
and determine its rights and preferences is to eliminate delays associated
with a stockholder vote on specific issuances. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from attempting to acquire, a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue any shares of Preferred
Stock.
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAWS PROVISIONS
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware ("Delaware Law"). In general, this statute
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
after the date of the transaction in which the person becomes an interested
stockholder, unless the business combination is approved in a prescribed
manner. An "interested stockholder" is a person who, together with affiliates
and associates, owns (or within the prior three years did own) 15% or more of
the corporation's voting stock.
The Company has included in its Third Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") provisions to eliminate the
personal liability of its directors for monetary damages resulting from
breaches of their fiduciary duty to the extent permitted by the Delaware Law
and to indemnify its directors and officers to the fullest extent permitted by
Section 102(b)(7) of Delaware Law.
The Company's Certificate of Incorporation and Amended and Restated By-laws
(the "By-laws") provide that any action required or permitted to be taken by
the stockholders of the Company may be taken only at a duly called annual or
special meeting of the stockholders. These provisions could have the effect of
delaying until the next stockholders' meeting stockholder actions which are
favored by the holders of a majority of the outstanding voting securities of
the Company, especially since special meetings of stockholders may be called
only by the Chairman of the Board of Directors or President of the Company.
These provisions may also discourage another person or entity from making a
tender offer for the Company's Common Stock, because such person or entity,
even if it acquired a majority of the outstanding voting securities of the
Company, would be able to take action as a stockholder only at a duly called
stockholders' meeting, and not by written consent. In addition, the By-laws
provide for the division of the Board of Directors into three classes as
nearly in size as possible with staggered three-year terms. This
classification could have the effect of making it more difficult for a third
party to acquire, or discourage a third party from acquiring, control of the
Company.
Delaware Law provides generally that the affirmative vote of a majority of
the shares entitled to vote on any matter is required to amend a corporation's
By-laws, unless a corporation's By-laws require a greater percentage. The
Company's By-laws require the affirmative vote of the holders of at least 66
2/3% of the outstanding voting stock of the Company to amend or repeal the
requirement that stockholders may not take action by written consent in lieu
of a meeting. Such 66 2/3% stockholder vote would be in addition to any
separate class vote that might in the future be required by the Board of
Directors pursuant to the terms of any Preferred Stock that might be
outstanding at the time any such changes are submitted to stockholders.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is The First
National Bank of Boston.
10
SELLING STOCKHOLDERS
The Selling Stockholders are former stockholders of Elastic Reality and
Parallax. The shares of Common Stock covered by this Prospectus were issued to
the Selling Stockholders in connection with the acquisition of such companies
by Avid. See "The Mergers."
The following table sets forth the name and the number of shares of Common
Stock beneficially owned by each Selling Stockholder as of March 15, 1996, the
number of the shares to be offered by each Selling Stockholder pursuant to
this Prospectus and the number of shares to be beneficially owned by each
Selling Stockholder if all of the shares offered hereby by such Selling
Stockholder are sold as described herein. Except as noted below, the Selling
Stockholders have not held any position or office with, been employed by, or
otherwise had a material relationship with, the Company or any of its
predecessors or affiliates (other than as stockholders of Elastic Reality or
Parallax prior to the acquisitions thereof and as stockholders of Avid
subsequent to the acquisitions of such companies).
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO OFFERING NUMBER OF AFTER OFFERING
--------------------- SHARES OF ---------------------
NAME OF SELLING PERCENTAGE OF COMMON STOCK PERCENTAGE OF
STOCKHOLDER NUMBER COMMON STOCK OFFERED HEREBY NUMBER COMMON STOCK
- --------------- ------- ------------- -------------- ------- -------------
Gareth H. Griffith(1)... 685,315 3.3% 456,877 228,438 1.17%
J. Martin Poole(2)...... 116,953 * 76,690 40,263 *
Nigel G. Hall(2)........ 66,085 * 44,057 22,028 *
Andrew H. Ballingall(3). 32,423 * 21,212 11,211 *
Dominic H. Jackson(3)... 32,423 * 21,212 11,211 *
Christopher Steele(2)... 34,423 * 21,212 13,211 *
D. F. Mark Burton(2).... 17,143 * 17,143 0 *
Perry S. Kivolowitz(4).. 68,859 * 29,300 39,559 *
Daniel G. Esenther(5)... 64,858 * 29,300 35,558 *
- --------
* Less than 1%
(1) Mr. Griffith served as Managing Director of Parallax and is currently an
employee of the Company.
(2) Served as an employee and a director of Parallax and is currently an
employee of the Company.
(3) Served as an employee of Parallax and is currently an employee of the
Company.
(4) Mr. Kivolowitz served as President and a director of Elastic Reality. He
is currently an employee of the Company.
(5) Mr. Esenther served as Vice President and director of Elastic Reality. He
is currently an employee of the Company.
11
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in the over-the-counter
market or otherwise, at prices related to the then current market price or in
negotiated transactions, including pursuant to an underwritten offering or one
or more of the following methods: (a) purchases by a broker-dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (b) ordinary brokerage transactions and transactions in which a
broker solicits purchasers; and (c) block trades in which a broker-dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction. The Company
has been advised by the Selling Stockholders that they have not made any
arrangements relating to the distribution of the shares covered by this
Prospectus. In effecting sales, broker-dealers engaged by the Selling
Stockholders may arrange for other broker-dealers to participate. Broker-
dealers will receive commissions or discounts from the Selling Stockholders in
amounts to be negotiated immediately prior to the sale. The Merger Agreements
provide that the Company will indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act.
In offering the shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers and any other participating broker-dealers
who execute sales for the Selling Stockholder may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with
such sales, and any profits realized by the Selling Stockholders and the
compensation of such broker-dealer may be deemed to be underwriting discounts
and commissions. In addition, any shares covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus. None of the shares covered by this Prospectus
presently qualify for sale pursuant to Rule 144.
The Company has advised the Selling Stockholders that during such time as
they may be engaged in a distribution of Common Stock included herein they are
required to comply with Rules 10b-6 and 10b-7 under the Exchange Act (as those
Rules are described in more detail below) and, in connection therewith, that
they may not engage in any stabilization activity in connection with Avid
securities, are required to furnish to each broker-dealer through which Common
Stock included herein may be offered copies of this Prospectus, and may not
bid for or purchase any securities of the Company or attempt to induce any
person to purchase any Avid securities except as permitted under the Exchange
Act. The Selling Stockholders have agreed to inform the Company when the
distribution of the shares is completed.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account
in which the participant has a beneficial interest, any of the securities that
are the subject of the distribution. Rule 10b-7 governs bids and purchases
made in order to stabilize the price of a security in connection with a
distribution of the security.
This offering will terminate on the earlier of (a) 12 months after the
effective date of this Prospectus or (b) the date on which all shares offered
hereby have been sold by the Selling Stockholders.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Hale and Dorr, Boston, Massachusetts.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1995 and
1994 and the related consolidated statements of income, stockholders' equity
(deficit), and cash flows for each of the three years in the period ended
December 31, 1995, incorporated by reference in this Prospectus and elsewhere
in this registration statement, have been incorporated herein in reliance on
the report of Coopers & Lybrand L.L.P.,
12
independent accountants, given on the authority of that firm as experts in
accounting and auditing. In its report, Coopers & Lybrand L.L.P. states that
with respect to the consolidated financial statements and related schedules of
Digidesign, Inc. for the year ended March 31, 1994, its opinion is based on
the report of other independent auditors, namely Ernst & Young LLP.
The consolidated financial statements and schedules of Digidesign, Inc. for
the year ended March 31, 1994 referred to in both of the Avid Technology,
Inc.'s Current Reports on Form 8-K, dated January 6, 1995 and June 14, 1995,
were audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon, included therein and incorporated by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance on such report given on their authority as experts in
accounting and auditing.
13
LOGO
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Nature of Expense
SEC Registration Fee............................................. $ 5,177
Legal (including Blue Sky) and Accounting Fees and Expenses...... 20,000
Miscellaneous.................................................... 4,823
-------
TOTAL.......................................................... $30,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware provides
that a corporation has the power to indemnify a director, officer, employee or
agent of the corporation and certain other persons serving at the request of
the corporation in related capacities against amounts paid and expenses
incurred in connection with an action or proceeding to which he is or is
threatened to be made a party by reason of such position, if such person shall
have acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful, provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.
Article SIXTH of the Registrant's Third Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") provides that no director
shall be liable to the Registrant or its stockholders for monetary damages for
breach of his fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law or (iv) for any transaction in which the
director derived an improper personal benefit.
Article ELEVENTH of the Certificate of Incorporation provides that a
director or officer of the Registrant (a) shall be indemnified by the
Registrant against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement incurred in connection with any litigation or
other legal proceeding (other than an action by or in the right of the
Registrant) brought, or threatened to be brought, against him by virtue of his
position as, or his agreement to become, a director or officer of the
Registrant or by virtue of his serving, or agreeing to serve, at the request
of the Registrant, as a director, officer, or trustee of, or in a similar
capacity with a corporation, trust or other enterprise, if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful and
(b) shall be indemnified by the Registrant against all expenses (including
attorneys' fees) incurred in connection with any action by or in the right of
the Registrant brought, or threatened to be brought, against him by virtue of
his position as, or his agreement to become, a director or officer of the
Registrant or by virtue of his serving, or agreeing to serve, at the request
of the Registrant, as a director, officer, or trustee of, or in a similar
capacity with a corporation, trust or other enterprise, if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Registrant, except that no indemnification shall be made
with respect to any such matter as to which such person shall have been
adjudged to be liable to the Registrant, unless a court determines that,
despite such adjudication but in view of all of the circumstances, he is
entitled to indemnification of such expenses. Notwithstanding the foregoing,
to the extent that a director or officer has been successful, on the merits or
otherwise, including, without limitation, the dismissal of an action without
prejudice or the settlement of an action without admission of liability, he is
required to be indemnified by the Registrant against all expenses
II-1
(including attorneys' fees) incurred in connection therewith. Expenses shall
be advanced to a director or officer at his request, provided that he
undertakes to repay the amount advanced if it is ultimately determined that he
is not entitled to indemnification for such expenses.
Indemnification is required to be made unless the Board of Directors of the
Registrant or independent legal counsel determines that the applicable
standard of conduct required for indemnification has not been met. In the
event of a determination by the Board of Directors or independent legal
counsel (who may be regular legal counsel to the Registrant) that the director
or officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent
to the right of indemnification, the director or officer must give the
Registrant notice of the action for which indemnity is sought and the
Registrant has the right to participate in such action or assume the defense
thereof.
Article ELEVENTH of the Certificate of Incorporation further provides that
the indemnification provided therein is not exclusive, and provides that in
the event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers, the Registrant must
indemnify those persons to the fullest extent permitted by such law as so
amended.
The Company has a Directors and Officers liability policy that insures the
Company's officers and directors against certain liabilities.
ITEM 16. EXHIBITS.
See Exhibit Index included immediately preceding the Exhibits to this
Registration Statement, which is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that are incorporated by reference in this
Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Corporation pursuant to the indemnification provisions described herein, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF TEWKSBURY, COMMONWEALTH OF MASSACHUSETTS ON THE
21ST DAY OF MAY, 1996.
Avid Technology, Inc.
/S/ William J. Miller
By: _________________________________
WILLIAM J. MILLER, CHAIRMAN OF
THE BOARD OF DIRECTORS AND CHIEF
EXECUTIVE OFFICER
II-4
SIGNATURE TITLE DATE
/S/ William J. Miller Chairman of the May 21, 1996
____________________________________ Board and Chief
Executive Officer
WILLIAM J. MILLER (Principal
Executive Officer)
Vice President and
/s/ Jonathan H. Cook* Chief Financial May 21, 1996
____________________________________ Officer (Principal
JONATHAN H. COOK Financial and
Accounting Officer)
/s/ William S. Kaiser* Director May 21, 1996
____________________________________
WILLIAM S. KAISER
/s/ William E. Foster* Director May 21, 1996
____________________________________
WILLIAM E. FOSTER
/s/ Peter C. Gotcher* Director May 21, 1996
____________________________________
PETER C. GOTCHER
/s/ Robert M. Halperin* Director May 21, 1996
____________________________________
ROBERT M. HALPERIN
/s/ Paul A. Maeder* Director May 21, 1996
____________________________________
PAUL A. MAEDER
/s/ Curt A. Rawley* Vice-Chairman of May 21, 1996
____________________________________ the Board
CURT A. RAWLEY
/s/ William J. Warner* Director May 21, 1996
____________________________________
WILLIAM J. WARNER
/s/ Frederic G. Hammond
*By: __________________________
FREDERIC G. HAMMOND
ATTORNEY-IN-FACT
II-5
EXHIBIT DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- ----
3.1 --Certificate of Amendment of the Third Amended and Restated
Certificate of Incorporation of the Company (incorporated by
reference to the Company's Quarterly Report on Form 10Q as
filed with the Commission on May 15, 1995, File No. 0-21174)...
3.2 --Third Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to the Company's
Registration Statement on Form S-8 as filed with the Commission
on June 9, 1995, File No. 33-64126.............................
3.3 --Amended and Restated By-laws of the Company (incorporated by
reference from the Company's Registration Statement on Form S-1
(File No. 33-57796) as declared effective by the Commission on
March 11, 1993)................................................
3.4 --Certificate of Designations establishing Series A Junior
Participating Preferred Stock (the "Certificate of
Designations") (incorporated by reference to the Company's
Annual Report on Form 10-K as filed with the Commission on
April 1, 1996, File No. 0-21174)...............................
3.5 --Certificate of Correction to Certificate of Designations
(incorporated by reference to the Company's Annual Report on
Form 10-K as filed with the Commission on April 1, 1996, File
No. 0-21174)...................................................
4.1 --Rights Agreement by and between the Company and The First
National Bank of Boston, as Rights Agent, dated February 29,
1996 (incorporated by reference to the Company's Current Report
on Form 8-K as filed with the Commission on March 8, 1996, File
No. 0-21174)...................................................
*5.1 --Opinion of Hale and Dorr.......................................
23.1 --Consent of Coopers & Lybrand L.L.P. ...........................
23.2 --Consent of Ernst & Young LLP...................................
23.3 --Consent of Hale and Dorr (included in Exhibit 5.1).............
*24.1 --Power of Attorney..............................................
- --------
* Previously filed.
II-6
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- ----
3.1 --Certificate of Amendment of the Third Amended and Restated
Certificate of Incorporation of the Company (incorporated by
reference to the Company's Quarterly Report on Form 10Q as
filed with the Commission on May 15, 1995, File No. 0-21174)...
3.2 --Third Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to the Company's
Registration Statement on Form S-8 as filed with the Commission
on June 9, 1995, File No. 33-64126.............................
3.3 --Amended and Restated By-laws of the Company (incorporated by
reference from the Company's Registration Statement on Form S-1
(File No. 33-57796) as declared effective by the Commission on
March 11, 1993)................................................
3.4 --Certificate of Designations establishing Series A Junior
Participating Preferred Stock (the "Certificate of
Designations") (incorporated by reference to the Company's
Annual Report on Form 10-K as filed with the Commission on
April 1, 1996, File No. 0-21174)...............................
3.5 --Certificate of Correction to Certificate of Designations
(incorporated by reference to the Company's Annual Report on
Form 10-K as filed with the Commission on April 1, 1996, File
No. 0-21174)...................................................
4.1 --Rights Agreement by and between the Company and The First
National Bank of Boston, as Rights Agent, dated February 29,
1996 (incorporated by reference to the Company's Current Report
on Form 8-K as filed with the Commission on March 8, 1996, File
No. 0-21174)...................................................
*5.1 --Opinion of Hale and Dorr.......................................
23.1 --Consent of Coopers & Lybrand L.L.P. ...........................
23.2 --Consent of Ernst & Young LLP...................................
23.3 --Consent of Hale and Dorr (included in Exhibit 5.1).............
*24.1 --Power of Attorney..............................................
- --------
* Previously filed.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Avid Technology, Inc. on Form S-3 (File No. 333-3128) of our report dated
February 12, 1996, on our audits of the consolidated financial statements and
financial statement schedule of Avid Technology, Inc. as of December 31, 1995
and 1994, and for each of the three years in the period ended December 31,
1995, which report is included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995. We also consent to the reference to our firm
under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 20, 1996
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related
Prospectus of Avid Technology, Inc. for the registration of 717,003 shares of
its common stock and to the incorporation by reference therein of our report
dated April 21, 1994, with respect to the consolidated financial statements
and schedules of Digidesign, Inc. referred to in both of the Avid Technology,
Inc.'s Current Reports on Form 8-K dated January 6, 1995 and June 13, 1995,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Jose, California
May 20, 1996
