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AVID > SEC Filings for AVID > Form 8-K on 7-Jan-2014All Recent SEC Filings

Show all filings for AVID TECHNOLOGY, INC.

Form 8-K for AVID TECHNOLOGY, INC.


7-Jan-2014

Entry into a Material Definitive Agreement, Changes in Registrant's Certify


Item 1.01 Entry into a Material Definitive Agreement.
On January 6, 2014, Avid Technology, Inc. (the "Company") entered into a Rights Agreement (the "Rights Agreement"), dated as of the same date, with Computershare Trust Company, N.A. as Rights Agent (the "Rights Agent"). In connection with the Rights Agreement, the Board of Directors ("Board") of the Company has declared a dividend distribution of one right ("Right") for each outstanding share of common stock of the Company (the "Common Stock") to stockholders of record at the close of business on January 17, 2014 (the "Record Date"). Each Right entitles the registered holder to purchase from the Company a unit consisting of one ten-thousandth of a share (a "Unit") of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the "Series A Preferred Stock") at an exercise price of $40 per Unit, subject to adjustment. The Rights Agent also serves as the transfer agent, registrar and dividend paying agent for the Company's stock. A press release issued by the Company on January 7, 2014 announcing the declaration of the Rights is filed as Exhibit 99.1 to this report and is incorporated herein by reference.
Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a distribution date will occur (the date of a distribution is referred to herein as a "Distribution Date") upon the earlier of (i) 10 business days (or such later date as the Board shall determine) following a public announcement by the Company that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 15% or more of the outstanding shares of Common Stock (the "Stock Acquisition Date"), other than as a result of repurchases of stock by the Company, certain inadvertent actions by institutional or certain other stockholders or beneficial ownership by certain Exempt Persons or (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. An "Exempt Person" is any person or group which beneficially owned 15% or more of the Common Stock at the time of public announcement of the Rights Agreement unless and until such person or group acquires beneficial ownership of additional shares of Common Stock representing one percent or more of the Common Stock then outstanding. The determination of whether a person has become an "Acquiring Person" will be made by deeming such person to be the beneficial owner of any securities in respect of which such person or group of affiliated or associated persons has certain derivative positions with respect to securities of the Company. Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until after the Distribution Date and will expire at the next annual meeting of the Company's stockholders unless the Rights are earlier redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will be delivered to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except for shares of Common Stock issued pursuant to exercises of stock options or as awards under an employee plan or arrangement granted or awarded as of the Distribution Date or upon the exercise, conversion or exchange of securities issued by


. . .



Item 4.01 Changes in Registrant's Certifying Accountant.

(a) On December 31, 2013, the Audit Committee ("Audit Committee") of the Board of Directors of the Company dismissed Ernst & Young LLP ("Ernst & Young") as the Company's independent registered public accounting firm.

In a Form 8-K dated May 17, 2013, the Company reported that the Audit Committee had concluded, after discussions with the Company's management, that the Company's unaudited interim consolidated financial statements for the quarterly periods ended (i) September 30, 2012 and 2011, (ii) June 30, 2012 and 2011, and
(iii) March 31, 2012 and 2011, as well as its audited consolidated financial statements for the years ended December 31, 2011, 2010 and 2009 should no longer be relied upon because of certain errors in the application of U.S. generally accepted accounting principles (US GAAP). Because of the pending restatement of the above referenced consolidated financial statements, the related audit reports of Ernst & Young on the consolidated audited financial statements have been withdrawn. When originally issued, Ernst & Young's audit reports on these audited financial statements did not contain any adverse opinion or disclaimer of opinion and such reports were not qualified or modified as to any issues of uncertainty, audit scope or accounting principles.

During the Company's fiscal years ended December 31, 2012 and December 31, 2011, and during the interim periods subsequent to December 31, 2012 to the date hereof, there were no disagreements between Ernst & Young and the Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Ernst & Young's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its reports. During the Company's fiscal years ended December 31, 2012 and December 31, 2011, and during the subsequent interim periods to the date hereof , there were no "reportable events" as that term is defined in Item 304(a)(1)(v) of Regulation S-K except for the identification of material weaknesses in the Company's internal control over financial reporting as described in Item 4 of the


Company's Form 10-Qs for the quarterly periods ended September 30, 2012, June 30, 2012 and March 31, 2012 and Item 4.02 of the Company's Form 8-K dated May 17, 2013. As of the date of this Report on Form 8-K, material weaknesses in the Company's internal control over financial reporting continue to exist.

The Audit Committee is continuing to work with the Company's management and outside advisors with the goal to implement internal control over financial reporting that are adequate and effective.

The Audit Committee has authorized Ernst & Young to respond fully to the inquiries of the Company's successor auditor, Deloitte & Touche LLP ("Deloitte"). The Company has furnished a copy of the above disclosure to Ernst & Young and requested that Ernst & Young furnish the Company with a letter addressed to the SEC stating whether or not Ernst & Young agrees with such disclosure. A copy of Ernst & Young's letter is attached as Exhibit 16.1 to this current report on Form 8-K.
(b) On December 31, 2013 the Audit Committee engaged Deloitte as its independent registered public accounting firm effective immediately. Deloitte was engaged to audit the Company's consolidated financial statements to be included in its next Form 10-K, which will reflect the effects of the previously announced restatement. The Company's decision to change its independent registered public accounting firm reflects its desire to complete the pending restatement of its financial statements in an effective manner. The Company continues to work to complete the restatement of its financial statements in order that it can file its overdue SEC periodic reports as soon as practicable.



Item 5.03 Amendments to Articles of Incorporation or By-laws; Change in Fiscal
Year.
The Company filed an Amended Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock (the "Certificate of Designations") on January 7, 2014 with the Secretary of State of the State of Delaware, which was effective upon filing. A copy of the Certificate of Designations is attached hereto as Exhibit 3.1 and incorporated herein by reference.



Item 7.01 Regulation FD Disclosure
The Company issued a press release on January 7, 2014 announcing, among other items, the change in its auditors, a possible delisting from NASDAQ, and certain business and financial updates.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.
Limitation on Incorporation by Reference. The information furnished in this Item 7.01, including the press release attached hereto as Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in the press release attached as Exhibit 99.1 hereto, the press release contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the press release regarding these forward-looking statements.




Item 9.01. Financial Statements and Exhibits.

(d)          Exhibits.

Exhibit
Number       Description
             Amended Certificate of Designations, Preferences and Rights of
3.1          Series A Junior Participating Preferred Stock
             Rights Agreement, dated as of January 6, 2014, between Avid
             Technology, Inc. and Computershare Trust Company, N.A. as Rights
4.1          Agent, including all exhibits thereto
16.1         Letter from Ernst & Young LLP dated January 7, 2014
99.1*        Press release dated January 7, 2014.

*Document furnished herewith


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