April 10, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
RE: C-COR ELECTRONICS, INC.
Gentlemen:
C-COR Electronics, Inc. (the "Registrant") hereby transmits for
filing via EDGAR, the Registrant's Current Report on Form 8-K
dated March 31, 1995. The Current Report on Form 8-K was
inadvertently filed on paper with the Commission on
April 6, 1995.
Sincerely,
/s/ Jack B. Andrews
Vice President-Finance,
Secretary and Treasurer
JBA/jld
Attachment
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1995
C-COR ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-10726 24-0811591
(State or other juris- (Commission file (IRS Employer
diction of incorporation) number) Identification No.)
60 Decibel Road, State College, Pennsylvania 16801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, includin area code (814) 238-2461
Not applicable
(Former name or former address, if changed since last report)
(1)
<PAGE>
Item 5. Other Events
On or about March 31, 1995, a purported shareholder of
the Registrant filed a complaint in the United States District
Court for the Eastern District of Pennsylvania against the
Company and one of its executive officers alleging that, during
the period January 17, 1995 through March 24, 1995, the
defendants knowingly or recklessly omitted material information
about the Registrant in violation of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and common law. The
complaint seeks permission to proceed as a class action on behalf
of certain persons who purchased shares of the Registrant's
Common Stock during the period January 17, 1995 through
March 24, 1995 and who were allegedly damaged. The complaint
seeks compensatory damages in an unspecified amount and costs and
expenses relating to the complaint, including reasonable
attorneys' fees.
Item 7. Financial Statements and Exhibits
(c) (28) Complaint, McCarthy v. C-COR Electronics, Inc.
et al., CA 95-CV-1911, filed March 31, 1995
(E.D. Pa.)
(2)
<PAGE>
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.
C-COR ELECTRONICS, INC.
Dated: April 10, 1995 By: /s/ Jack B. Andrews
Jack B. Andrews
Vice President-Finance,
Secretary & Treasurer
(3)
<PAGE>
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
- --------------------------------- CIVIL ACTION NO.
JAMES and ELIZABETH MCCARTHY,
Plaintiffs, 95-CV-1911
v. JURY TRIAL DEMANDED
C-COR ELECTRONICS, INC. and
RICHARD E. PERRY,
Defendants.
- --------------------------------
CLASS ACTION COMPLAINT
Plaintiffs, individually and on behalf of all other persons
similarly situated, by their undersigned attorneys, for their
complaint, allege as follows:
NATURE OF ACTION
1. Plaintiffs bring this action as a class action on behalf
of themselves and all other persons who purchased the common
stock of C-COR Electronics, Inc. ("C-COR" or the "Company") on
the open market during the class period, as defined below, to
recover damages caused by defendants' violation of the federal
securities laws and the common law.
JURISDICTION AND VENUE
2. The jurisdiction of this Court is based upon Section 27
of the Securities and Exchange Act of 1934 (the "Exchange Act")
[15 U.S.C. 78aa], and 28 U.S.C. 1331. The Court also has
supplemental jurisdiction pursuant to 28 U.S.C. 1367(a) over the
state law claims alleged herein because they are so related to
the federal claims that they form part of the same case or
controversy.
(1)
<PAGE>
3. The claims asserted herein arise under Sections 10(b)
and 20(a) of the Exchange Act, 15 U.S.C. 78j(b) and 78t(a), and
the rules and regulations promulgated thereunder by the
Securities and Exchange Commission ("SEC"), including Rule 10b-5,
17 C.F.R. 240.10b-5, and under the common law.
4. Venue is proper in this District, pursuant to Section 27
of the Exchange Act and 28 U.S.C. 1391(c), because C-COR is a
Pennsylvania corporation and may be sued in a Federal District
within Pennsylvania and many of the acts complained of, including
the preparation and dissemination of materially false and
misleading corporate documents, occurred in this District.
5. In connection with the conduct complained of herein,
defendants, directly or indirectly, used the means and;
instrumentalities of interstate commerce, including the mails,
interstate telephone communications, and the facilities of the
national securities exchanges.
THE PARTIES
6. Plaintiffs James and Elizabeth McCarthy purchased 150
shares of the common stock of C-COR on March 9, 1995.
7. Defendant C-COR is a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania with its
principal offices located at 60 Decibel Road, State College,
Pennsylvania 16801. C-COR designs and manufactures high-quality
electronic equipment used in a variety of communication networks
worldwide. Its common stock is listed and traded on the NASDAQ.
During the class period, C-COR traded actively in an efficient,
open and well-informed market which assimilated the information
disseminated publicly by defendants.
8. Defendant Richard E. Perry ("Perry") is and has been, at
relevant times, Chairman of the Board, and Chief Executive
Officer of C-COR.
(2)
<PAGE>
9. Defendant Perry, as the senior officer and board
chairman of the Company, is a controlling person of C-COR within
the meaning of Section 20 of the Exchange Act. By reason of his
positions with the Company, he was able to and did, directly or
indirectly, in whole or in material part, control the content of
various reports and filings with the SEC and public statements
issued both by himself and by or on behalf of C-COR. He
participated in and approved the issuance of such reports and
statements at or about the time of their issuance. As a result
of the foregoing, he was responsible for the truthfulness and
accuracy of the Company's public reports and releases described
herein.
10. Each of the defendants either knew or recklessly
disregarded the fact that the misleading statements and omissions
complained of herein would adversely affect the integrity of the
market for the Company's stock and would artificially inflate the
price of the common stock. Each of the defendants acted
knowingly or in such a reckless manner as to constitute a fraud
and deceit upon plaintiffs and the members of the Class.
11. Defendants are liable, jointly and severally, as direct
participants in the wrongs complained of herein.
CLASS ALLEGATIONS
12. Plaintiffs bring this action as a class action pursuant
to Federal Rules of Civil Procedure 23(a) and (b) (3) on behalf
of a class consisting of all persons who purchased C-COR common
stock on the open market during the period from January 17, 1995
to March 24, 1995, inclusive (the "Class Period"), and who
suffered damages thereby. Excluded therefrom are the defendants,
members of the individual defendant's family, any entity in which
any defendant has a controlling interest or is a parent or
subsidiary or affiliate and the officers, directors, employees,
affiliates, legal representatives, heirs, predecessors,
successors and assigns of any of the defendants (the "Class").
(3)
<PAGE>
13. The members of the Class are so numerous that joinder of
all members is impracticable. While the exact number of Class
members is unknown to the plaintiffs at this time and can only be
ascertained through appropriate discovery, plaintiffs believe
there are, at a minimum, hundreds of members of the Class who
traded during the Class Period. C-COR has approximately 9.3
million shares of common stock outstanding, held by approximately
660 record holders. During the Class Period, volume trading on
the NASDAQ in C-COR common stock, totaled approximately 5.4
million shares.
14. Common questions of law and fact exist as to all members
of the Class and predominate over any questions affecting solely
individual members of the Class. Among the questions of law and
fact common to the Class are:
(a) whether the federal securities laws and/or the
common law were violated by defendants' acts as alleged herein;
(b) whether the documents, releases and statements
disseminated to the investing public during the Class Period
omitted and/or misrepresented material facts;
(c) whether defendants acted willfully or recklessly in
omitting to state and/or misrepresenting material facts;
(d) whether the market price of C-COR common stock
during the Class Period was artificially inflated because of the
non-disclosures and/or misrepresentations complained of herein;
and
(e) whether the members of the Class have sustained
damages and, if so, what is the proper measure of damages.
15. Plaintiffs' claims are typical of the claims of the
members of the Class as plaintiffs and members of the Class
sustained damages arising out of defendants' wrongful conduct in
violation of federal law and the common law complained of herein.
(4)
<PAGE>
16. Plaintiffs will fairly and adequately protect the
interests of the members of the Class and have retained counsel
competent and experienced in class and securities litigation.
Plaintiffs have no interests antagonistic to or in conflict with
those of the Class.
17. A class action is superior to other available methods
for the fair and efficient adjudication of this controversy since
joinder of all members of the Class is impracticable.
Furthermore, because the damages suffered by individual Class
members may be relatively small, the expense and burden of
individual litigation make it impossible for the Class members
individually to redress the wrongs done to them. There will be
no difficulty in the management of this action as a class action.
18. Plaintiffs will rely, in part, upon the presumption of
reliance established by the fraud-on-the-market doctrine in that:
(a) defendants made public misrepresentations or failed
to disclose facts during the Class Period;
(b) the omissions and misrepresentations were material;
(c) the common stock of the Company traded in an
efficient market;
(d) the misrepresentations alleged would tend to induce
a reasonable investor to misjudge the value of the Company's
securities; and
(e) plaintiffs and the members of the Class purchased
C-COR common stock during the time the defendants failed to
disclose or misrepresented material facts and before the time the
true facts were disclosed, without knowledge of the omitted or
misrepresented facts.
(5)
<PAGE>
19. Based upon the foregoing, plaintiffs and the members of
the Class are entitled to a presumption of reliance upon the
integrity of the market for, at least the purpose of class
certification, as well as for ultimate proof of the claims on
their merits. Plaintiffs will also rely, in part, upon the
presumption of reliance established by a material omission.
SUBSTANTIVE ALLEGATIONS
20. Commencing on January 17, 1995 with a press release
issued by defendants directly to the media announcing
C-COR's strong results for the second quarter, ended December 23,
1994, defendants stated to the market that C-COR's revenues for
the third quarter, ended March 1995, and for the fourth quarter,
ended June 24, 1995, would continue to be strong. In their press
release, defendants reported that C-COR's revenues increased to
$29,730,000, almost double the prior year's second quarter, and
that C-COR's net income rose to $1,945,000 up from $1 million in
the prior year's second quarter. In the press release,
defendants stated:
Commenting on the second quarter results, Mr. Perry
stated "We are very pleased with the continued
success at C-COR. The earnings per share are
nearly double what they were a year ago the same
quarter. Expansion plans are on schedule in our
two Pennsylvania facilities. The State College
move went smoothly during the annual holiday
shutdown, and the Reedsville facility is currently
being equipped so deliveries can begin in late
January. We are hiring and training employees for
that location now."
21. In the press release defendants voluntarily chose to
discuss the results that they expected for the third and fourth
quarters of fiscal 1995. In the press release, defendants, in a
statement made by defendant Perry, stated that:
Looking ahead, we expect strong revenues for the
second half of the year, although in the third
(6)
<PAGE>
quarter, the earnings are expected to reflect the
start-up costs for Reedsville. We anticipate a
strong fourth quarter and continue to have a record
backlog.
22. On January 19, 1995, PR Newswire Association, Inc., and
Dow Jones each published stories based on the defendants'
January 17, 1995 press release, and each highlighted defendant
Perry's statements, quoted in paragraph 21 hereof. PR Newswire
stated that:
Richard E. Perry, Chairman and Chief Executive
Officer of C-COR Electronics, Inc. (NASDAQ-NNM:
CCBL), has announced today that C-COR expects
continued revenue growth in its fiscal year 1995
third and fourth quarters, based on a record
backlog from both domestic and international
ordering.
Dow Jones stated that:
C-COR Electronics, Inc. (CCBL) expects continued
revenue growth in the third and fourth quarters of
fiscal 1995, which ends June 24.
In a press release, the company based its outlook
on a "record backlog from both domestic and
international ordering."
23. On February 6, defendants filed with the SEC, C-COR's
Form 10-Q for the second fiscal quarter ended December 23, 1994.
Defendants stated in the Management's Discussion and Analysis
that expenses increased in the first six months of fiscal 1995
because of "efforts to ramp up C-COR's production capacity in
fiscal year 1995." Defendants further stated that the increase
in sales volume more than offset the increased expenses over the
first six months of fiscal year 1995. Defendants then stated
that accounts receivable and inventories had increased, and
described the impact of those increases on C-COR's business in
the ensuing fiscal quarters, stating that:
(7)
<PAGE>
Accounts receivable increased $2,355,000 and
inventories increased $5,339,000 over the first six
months of fiscal year 1995. The increase in
receivables is directly attributable to the
aforementioned increase in C-COR's sales volume
over the last two quarters. Inventory increased as
a result of C-COR's ramp-up efforts to meet
increased production demands as well as making
"strategic" investments in certain raw material
parts which were forecast to be in short supply in
the future.
24. Defendants also stated that C-COR had completed its new
90,000 square foot manufacturing facility in January 1995 and
entered into a lease-purchase agreement for another 60,000 square
foot manufacturing facility.
25. In the aftermath of defendants' filing of C-COR's Form
10-Q, the market price of C-COR stock began to rise, reflecting
the defendants' statements about their expectation for revenue
growth in the third and fourth quarters and C-COR's growth in
receivables, inventories and manufacturing capacity to enable
C-COR to service this revenue growth and benefit financially from
increased sales in the third and fourth quarters of fiscal 1995.
26. Defendants' statements as alleged in paragraphs 20
through 23, however, were false and misleading and omitted
material facts because defendants knew or recklessly disregarded
the facts that C-COR was experiencing shortages in components,
extended test times for products before they could be shipped,
delays in development of products, and increased costs associated
with its two new manufacturing plants, all of which were
preventing C-COR from shipping products in a timely fashion and
in sufficient volumes in the third quarter of fiscal 1995 to
enable C-COR to achieve the record growth defendants stated C-COR
would achieve. As a result of these existing and known problems,
defendants knew or recklessly disregarded the material facts that
C-COR would not be able to reach the stated increased growth in
revenues, would not be able to offset the increased expenses with
increased sales volume, would continue to experience increased
(8)
<PAGE>
costs at its two new manufacturing facilities and, therefore,
would not be able to reach increased growth in revenues and
earnings as defendants publicly stated C-COR would record in the
third fiscal quarter of 1995.
27. Without disclosing the adverse material facts set forth
in paragraphs 26 and 30 herein, defendant Perry, after the Form
10-Q was filed on February 6, 1995 and the stock price of C-COR
had risen, commenced selling off, to unwitting class members, his
holdings of C-COR common stock, taking advantage of and
benefiting from his own misrepresentations of material fact, as
alleged above in paragraphs 20 through 23. During the period
February 16 through February 23, 1995, defendant Perry sold
approximately 15-20% of his holdings, 20,000 shares, at prices
between $26.50 and $28.50 per share.
28. Suddenly, without any prior warning and in stark
contrast to defendants' prior statements, as quoted above,
defendants revealed on March 27, 1995 that C-COR's revenues and
earnings for the third quarter ended March 1995 would be lower
than they had previously stated. Defendant Pery now admitted
that growth in revenues and earnings would be down due to reduced
shipments because of component shortages, extended test times,
development delays and start-up costs at C-COR's two new
manufacturing plants. Defendant Perry further admitted that "our
plants continue to face challenges in the production and testing
areas." (PR Newswire, March 27, 1995, emphasis added).
29. The market reaction was swift. At the close of the
market on March 27, 1995, the price of C-COR common stock had
fallen 15% or $3.25 per share, to close at $19 on increased
volume of more than 1.5 million shares.
30. During the Class Period, defendants knew or should have
known, but for their reckless disregard of facts known or
available to them, that C-COR would experience a material
shortfall in revenue and earnings during the third quarter from
the growth levels defendants had stated C-COR would achieve by
reason of the facts alleged in paragraph 26 hereof and that:
(9)
<PAGE>
(a) C-COR was experiencing shortages in components;
(b) C-COR was experiencing extended test times for
products before they could be shipped;
(c) C-COR was experiencing delays in development of
products; and
(d) C-COR was experiencing increased costs associated
with its two new manufacturing plants.
31. As a result of defendants' foregoing misrepresentations
of and failures to disclose material facts, the price of C-COR
common stock was artificially inflated throughout the Class
Period.
32. Accordingly, the foregoing reports and public
announcements issued by or on behalf of defendants, as alleged in
paragraphs 20 through 23 above, were materially false and
misleading, as alleged in paragraphs 26 and 30 above, throughout
the Class Period. Defendants made statements which they knew or
had reason to know were false and misleading, and omitted to
state material facts necessary to make those statements not
misleading. Defendants also issued statements for which they had
no reasonable basis and failed to timely correct those statements
throughout the Class Period.
33. The foregoing undisclosed and misrepresented material
facts are the type of information which, because of SEC
regulations, regulations of the national stock exchanges and
customary business practice, is expected by investors and
securities analysts to be disclosed and is known by corporate
officials and their legal and financial advisors to be the type
of information which is expected to and must be disclosed.
(10)
<PAGE>
COUNT I
(Against All Defendants For Violations of Sections
10(b) and 20 of the Exchange Act and Rule 10b-5)
34. Plaintiffs repeat and reallege the allegations contained
in paragraphs 1 through 33 above as if fully set forth herein.
35. Throughout the Class Period, defendants individually and
in concert, directly and indirectly, used the means or
instrumentalities of interstate commerce or of the mails to
engage and participate in a continuous course of conduct and
conspiracy to conceal and misrepresent adverse material
information about C-COR. Defendants employed devices, schemes
and artifices to defraud and engaged in acts, practices and a
course of conduct designed to assure investors that such approval
would be forthcoming, which included the making of or
participation in the making of untrue statements of material
facts and omitting to state material facts necessary in order to
make the statements made about status of the approval process in
the light of the circumstances under which they were made, not
misleading, and engaged in transactions, practices and courses of
business which operated as a fraud and deceit upon the purchasers
of C-COR common stock during the Class Period.
36. Throughout the Class Period, defendants issued, caused
to be issued or participated in the preparation and issuance of
public statements, identified above, which presented a materially
misleading picture about the Company and failed to correct those
public statements throughout the Class Period.
37. Defendants had actual knowledge of the
misrepresentations and omissions of material facts set forth
herein, or acted with reckless disregard for the truth in that
they failed to ascertain and to disclose such facts, even though
they were available to them, and to correct throughout the Class
Period the statements they had made.
38. By virtue of the foregoing, defendants have violated
Section 10(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder, and defendant Perry is also liable as a controlling
person pursuant to Section 20(a) of the Exchange Act.
(11)
<PAGE>
39. As a result of the deceptive practices and false and
misleading statements and omissions described above, the market
price of C-COR common stock was artificially inflated throughout
the Class Period.
40. Plaintiffs and the Class, relying on the integrity of
the market in C-COR common stock and/or defendants'
misrepresentations, purchased C-COR common stock during the Class
Period at artificially inflated prices and were damaged. Had the
plaintiffs and the Class known the truth concerning the
misrepresented and omitted facts described herein, they would not
have purchased C-COR common stock at the prices they did or at
all. At the time of the purchases by plaintiffs and the members
of the Class, the true value of C-COR common stock was
substantially less than the prices paid by plaintiffs and the
Class. Accordingly, plaintiffs and the members of the Class have
been damaged.
COUNT II
(Against All Defendants For Negligent
Misrepresentation)
41. Plaintiffs repeat and reallege the allegations contained
in paragraphs 1 through 8, 11 through 31, and 33 above as if
fully set forth in this paragraph.
42. Among the direct and proximate causes of the
misrepresentations of and omissions to state material facts in
the public statements and reports set forth in the paragraphs
above and a reasonably foreseeable result thereof, was the
negligence and carelessness of the defendants.
43. Defendants, in the course of their business, profession
and employment and having a pecuniary interest in the purchase of
C-COR common stock by plaintiffs and the other members of the
Class, supplied false information for the guidance of plaintiffs
and the other members of the Class in making investment decisions
with respect to C-COR common stock. Defendants failed to
exercise reasonable care and competence in obtaining and
communicating such information.
(12)
<PAGE>
44. Defendants provided the aforesaid information pursuant
to a public duty which was created to benefit and protect the
investing public, including plaintiffs and the other members of
the Class, in making investment decisions with respect to, among
other things, C-COR common stock.
45. It was specifically foreseeable and the defendants knew
and specifically intended that C-COR announcements, filings,
reports, statements and releases would be distributed to the
investing public and to plaintiffs and the Class and defendants
knew or could reasonably foresee that such information would be
relied on by the investing public and the market in making
investment decisions with respect to C-COR. Defendants owed a
duty to plaintiffs and the other members of the Class to
disseminate accurate, truthful and complete information.
46. At the time of said misrepresentations and omissions,
plaintiffs and other members of the Class were ignorant of their
falsity and believed them to be true. In justifiable reliance on
said misrepresentations and upon the fidelity, integrity and
superior knowledge and expertise of the defendants, and in
ignorance of the true facts, plaintiffs and other members of the
Class were induced to and did purchase C-COR common stock at
artificially inflated prices. Had plaintiffs and the other
members of the Class known the true facts, they would not have
taken such action. By reason thereof, they have been damaged.
47. As a direct, proximate and reasonable foreseeable result
of the foregoing conduct, plaintiffs and each member of the Class
suffered damages.
WHEREFORE, plaintiffs on behalf of themselves and the Class,
pray for judgment as follows:
A. Declaring this action to be a proper class action
maintainable pursuant to Rule 23 of the Federal Rules of Civil
Procedure and plaintiffs to be proper class representatives;
(13)
<PAGE>
B. Awarding plaintiffs and the Class compensatory damages,
together with appropriate prejudgment interest at the maximum
rate allowable by law;
C. Awarding plaintiffs and the Class their costs and
expenses for this litigation including reasonable attorney's fees
and other disbursements; and
D. Awarding plaintiffs and the Class such other and further
relief as may be just and proper under the circumstances.
DEMAND FOR JURY TRIAL
Plaintiffs demand trial by jury.
Dated: March 31, 1995 LEVIN FISHBEIN SEDRAN & BERMAN
By: /s/ Arnold Levin
Arnold Levin (I.D. No. 02280)
320 Walnut Street, Suite 600
Philadelphia, PA 19106
(215) 592-1500
Attorneys for Plaintiffs
OF COUNSEL:
SAVETT FRUTKIN PODELL & RYAN, P.C.
Stuart H. Savett (I.D. No. 03669)
Robert P. Frutkin (I.D. No. 21366)
320 Walnut Street, Suite 508
Philadelphia, PA 19106
(215) 923-5400
LAW OFFICES OF JAY S. COHEN
Jay S. Cohen (I.D. No. 19333)
Five Cynwyd Road
Bala Cynwyd, PA 19004
(610) 668-8931
(14)
<PAGE>
