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                                    FORM 8-K


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

        Date of Report (date of earliest event reported) January 1, 1998


                       ADVANCED MACHINE VISION CORPORATION
             (Exact name of registrant as specified in its charter)


                                   California
                 (State or other jurisdiction of incorporation)


                 0-20097                                 33-0256103
        (Commission File Number)            (I.R.S. Employer Identification No.)

           2067 Commerce Drive
             Medford, Oregon                                97504
(Address of principal executive offices)                  (Zip Code)

                                  541-776-7700
              (Registrant's telephone number, including area code)


          (Former name or former address, if changed since last report)



                            Total Number of Pages: 7

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Item 5.   Other Events

          A.  On January 1, 1998,  Advanced Machine Vision Corporation ("AMV" or
          the "Corporation") entered into new employment agreements with William
          J. Young, James Ewan and Alan R. Steel,  President and Chief Executive
          Officer of AMV,  President  and Chief  Executive  Officer of AMV's SRC
          VISION,  Inc.  subsidiary,  and  Vice  President,  Finance  and  Chief
          Financial Officer of AMV, respectively.

          B.  On  February  17,  1998,  the  Board  of   Directors  of  Advanced
          Machine Vision  Corporation  declared a dividend  distribution  of one
          preferred share purchase right (a "Right") for each outstanding  share
          of Class A Common  Stock and Class B Common  Stock,  without par value
          (the "Common Shares"), of the Corporation.  The dividend is payable to
          the  shareholders  of record on February 27, 1998 (the "Record Date"),
          and  with  respect  to  Common  Shares  issued  thereafter  until  the
          Distribution  Date (as defined  below) and, in certain  circumstances,
          with  respect to Common  Stock  issued  after the  Distribution  Date.
          Except as set forth below,  each Right,  when it becomes  exercisable,
          entitles the registered  holder to purchase from the  Corporation  one
          one-hundredth  of a share of Series A Junior  Participating  Preferred
          Stock, without par value (the "Preferred Shares"),  of the Corporation
          at a price of $15 per one  one-hundredth  of a  Preferred  Share  (the
          "Purchase Price"), subject to adjustment. The description and terms of
          the  Rights  are  set  forth  in  a  Rights   Agreement  (the  "Rights
          Agreement")  between the  Corporation  and American  Stock  Transfer &
          Trust  Company,  as Rights  Agent  (the  "Rights  Agent")  dated as of
          February 27, 1998.

               Initially,  the  Rights  will  be  attached  to all  certificates
          representing  Common Shares then  outstanding,  and no separate  Right
          Certificates  will be  distributed.  The Rights will separate from the
          Common  Shares  upon the  earliest  to  occur of (i) ten days  after a
          person or group of  affiliated  or  associated  persons  has  acquired
          beneficial  ownership of 20% or more of the outstanding  Common Shares
          (except  pursuant to a Permitted  Offer, as hereinafter  defined);  or
          (ii) 10 Business  Days (as defined in the Rights  Agreement)  (or such
          later date as the Board may determine)  following the commencement of,
          or  announcement  of an  intention to make, a tender offer or exchange
          offer  the  consummation  of which  would  result in a person or group
          becoming an Acquiring Person (as hereinafter defined) (the earliest of
          such dates being called the  "Distribution  Date").  A person or group
          whose acquisition of Common Shares causes a Distribution Date pursuant
          to clause (i) above is an  "Acquiring  Person." The date that a person
          or group becomes an Acquiring Person is the "Shares Acquisition Date."

               The Rights Agreement  provides that, until the Distribution Date,
          the Rights will be transferred  solely with the Common  Shares.  Until
          the  Distribution  Date (or earlier  redemption  or  expiration of the
          Rights),  new Common Share  certificates  issued after the Record Date
          upon  transfer  or new  issuances  of  Common  Shares  will  contain a
          notation  incorporating  the Rights Agreement by reference.  Until the
          Distribution Date (or earlier redemption or expiration of the Rights),
          the  surrender  for  transfer of any  certificates  for Common  Shares
          outstanding as of the Record Date,  even if such notation or a copy of
          this Summary of Rights is not attached  thereto,  will also constitute
          the  transfer  of  the  Rights   associated  with  the  Common  Shares
          represented by such certificate.  As soon as practicable following the
          Distribution Date, separate certificates evidencing the Rights ("Right
          Certificates")  will be mailed  to  holders  of  record of the  Common
          Shares as of the close of  business on the  Distribution  Date (and to
          each initial  record holder of certain  Common Shares issued after the
          Distribution  Date), and such separate Right  Certificates  alone will
          evidence the Rights.

               The Rights are not exercisable  until the  Distribution  Date and
          will  expire at the close of business on  February  26,  2008,  unless
          earlier redeemed by the Corporation as described below.

               In the event that any person becomes an Acquiring  Person (except
          pursuant  to a tender or exchange  offer which is for all  outstanding
          Common  Shares at a price and on terms  which a majority of members of
          the Board of Directors  (who are not also officers of the  Corporation
          or an Acquiring Person or affiliate or associate  thereof)  determines
          to be adequate and in the best  interests of the  Corporation  and its
          shareholders,  other than such  Acquiring  Person,  its affiliates and
          associates  (a  "Permitted  Offer"),  each  holder  of  a  Right  will
          thereafter  have the right  (the  "Flip-In  Right")  to  receive  upon
          exercise  the number of Common  Shares (or, in certain  circumstances,
          one  one-hundredths of a share of Preferred Shares or other securities
          of the  Corporation)  having a market value  (immediately  before such
          triggering  event) equal to two times the exercise price of the Right.
          At such time, all Rights that are beneficially  owned by the Acquiring
          Person or any affiliate,  associate or transferee thereof will be null
          and void.

               In the event that, at any time  following the Shares  Acquisition
          Date,  (i) the  Corporation  is acquired in a merger or other business
          combination transaction in which the holders of all of the outstanding
          Common Shares  immediately  before the consummation of the transaction
          are not  the  holders  of all of the  surviving  corporation's  voting
          power,  or (ii) more than 50% of the  Corporation's  assets or earning
          power are sold or transferred,  in either case with or to an Acquiring
          Person or any affiliate or associate or any other person in which such
          Acquiring Person, affiliate or associate has an interest or any person
          acting  on  behalf  of or  in  concert  with  such  Acquiring  Person,
          affiliate  or  associate,  or, if in such  transaction  all holders of
          Common  Shares  are not  treated  alike,  then each  holder of a Right
          (except Rights which  previously  have been voided as set forth above)
          shall  thereafter have the right (the  "Flip-Over  Right") to receive,
          upon exercise,  common shares of the acquiring  company having a value
          equal to two times the  exercise  price of the Right.  The holder of a
          Right will  continue  to have the  Flip-Over  Right only to the extent
          that the Flip-In Right has not previously been exercised.

               The Purchase  Price  payable and the number of Preferred  Shares,
          Common Shares or other securities issuable upon exercise of the Rights
          are subject to adjustment from time to time to prevent dilution (i) in
          the event of a stock  dividend on, or a  subdivision,  combination  or
          reclassification  of the  Preferred  Shares,  (ii)  upon the  grant to
          holders of the  Preferred  Shares of  certain  rights or  warrants  to
          subscribe for or purchase  Preferred  Shares at a price (or conversion
          price as the case may be), less than the then current  market price of
          the Preferred  Shares or (iii) upon the distribution to holders of the
          Preferred  Shares of evidences of  indebtedness  or assets  (excluding
          regular  quarterly  cash  dividends)  or  of  subscription  rights  or
          warrants (other than those referred to above).

               The  number  of   outstanding   Rights  and  the  number  of  one
          one-hundredths  of a Preferred  Share  issuable  upon exercise of each
          Right are also subject to  adjustment in the event of a stock split of
          the Common Shares or a stock  dividend on the Common Shares payable in
          Common Shares or subdivisions,  consolidations  or combinations of the
          Common Shares  occurring,  in any such case,  before the  Distribution
          Date.

               Preferred Shares purchasable upon exercise of the Rights will not
          be  redeemable.  Each  Preferred  Share will be  entitled to a minimum
          preferential  quarterly  dividend  payment of $1.00 per share but,  if
          greater,  will be entitled to an  aggregate  dividend per share of 100
          times  the  dividend  declared  per  Common  Share.  In the  event  of
          liquidation, the holders of the Preferred Shares will be entitled to a
          minimum   preferential   liquidation   payment   of  $100  per  share;
          thereafter,  and after the  holders  of the  Common  Shares  receive a
          liquidation  payment of $1.00 per share,  the holders of the Preferred
          Shares and the holders of the Common  Shares will share the  remaining
          assets in the ratio of 1 to 1 (as adjusted) for each  Preferred  Share
          and Common Share so held,  respectively.  Finally, in the event of any
          merger,  consolidation or other transaction in which Common Shares are
          exchanged,  each Preferred Share will be entitled to receive 100 times
          the amount  received per Common  Share.  These rights are protected by
          customary  antidilution  provisions.  In the event  that the amount of
          accrued and unpaid  dividends on the Preferred Shares is equivalent to
          six full quarterly dividends or more (whether or not consecutive), the
          holders of the  Preferred  Shares  shall  have the right,  voting as a
          class,  to elect two directors  until all cumulative  dividends on the
          Preferred  Shares have been paid through the last  quarterly  dividend
          payment  date  or  until  non-cumulative   dividends  have  been  paid
          regularly for at least one year.

               With certain exceptions, no adjustment to the Purchase Price will
          be required until cumulative  adjustments  require an adjustment of at
          least 1% in such Purchase Price. No fractional  Preferred  Shares will
          be  issued  (other  than  fractions  which  are one  one-hundredth  or
          integral  multiples of one  one-hundredth of a Preferred Share,  which
          may, at the election of the  Corporation,  be evidenced by  depository
          receipts) and in lieu thereof, a payment in cash will be made based on
          the market price of the  Preferred  Shares on the last Trading Day (as
          defined in the Rights Agreement) before the date of exercise.

               At any time before the earlier to occur of (i) a person  becoming
          an Acquiring  Person,  (ii) the expiration of the Rights,  or (iii) in
          certain   circumstances,   after  the  Shares  Acquisition  Date,  the
          Corporation  may  redeem  all but not less than all of the Rights at a
          price of $.0001 per Right (the  "Redemption  Price") which  redemption
          shall be effective upon the action of the Board of Directors.

               All of the  provisions of the Rights  Agreement may be amended by
          the Board of  Directors  of the  Corporation  before the  Distribution
          Date.  After the  Distribution  Date,  the  provisions  of the  Rights
          Agreement may be amended by the Board in order to cure any  ambiguity,
          defect or inconsistency, to make changes which do not adversely affect
          the  interests of holders of Rights  (excluding  the  interests of any
          Acquiring Person), or, subject to certain  limitations,  to shorten or
          lengthen any time period under the Rights Agreement.

Item 7.   Financial Statements and Exhibits

          (c)   Exhibits

          *    Rights Agreement dated February 27, 1998 between AMV and American
               Stock Transfer and Trust Company (incorporated  by reference to
               the Company's Form 8-A filed with the Securities and Exchange
               Commission on February 27, 1998).

          *    Employment Agreement between Alan R. Steel and the Company dated
               January 1, 1998.

          *    Employment Agreement between William J. Young and the Company
               dated January 1, 1998.

          *    Employment Agreement between William J. Young and SRC VISION,
               Inc. dated January 1, 1998.

          *    Employment Agreement between James Ewan and SRC VISION, Inc.
               dated January 1, 1998.


                                   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.


                                          ADVANCED MACHINE VISION CORPORATION




Date:   February 27, 1998                 By: /s/ Alan R. Steel
                                             -----------------------------------
                                              Vice President, Finance and
                                              Chief Financial Officer


<PAGE>




                                  Exhibit Index



4      Rights Agreement dated February 27, 1998 between AMV and American Stock
       Transfer and Trust Company (incorporated by reference to the Company's
       Form 8-A filed with the Securities and Exchange Commission on February
       27, 1998).

10.1   Employment Agreement between Alan R. Steel and the Company dated
       January 1, 1998.

10.2   Employment Agreement between William J. Young and the Company dated
       January 1, 1998.

10.3   Employment Agreement between William J. Young and SRC VISION, Inc. dated
       January 1, 1998.

10.4   Employment Agreement between James Ewan and SRC VISION, Inc. dated
       January 1, 1998.

