United States
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the thirteen-week period ended: December 24, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________________
C-COR.net Corp.
--------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Pennsylvania 0-10726 24-0811591
- ------------------------------------------------------------------------------
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
</TABLE>
60 Decibel Road
State College, PA 16801
- --------------------------------------------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
(814) 238-2461
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.05 Par Value - 32,057,341 shares as of January 26, 2000.
<PAGE>
INDEX
C-COR.net Corp.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).
Condensed consolidated balance sheets -- June 25, 1999, and
December 24, 1999.
Condensed consolidated statements of operations -- thirteen weeks
ended December 24, 1999, and December 25, 1998; twenty-six weeks
ended December 24, 1999, and December 25, 1998.
Condensed consolidated statements of cash flows -- twenty-six
weeks ended December 24, 1999, and December 25, 1998.
Notes to condensed consolidated financial statements -- December
24, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Item 4. Submission of matters to a vote of shareholders.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PART I FINANCIAL INFORMATION
<TABLE>
Item 1. Financial Statements
<CAPTION>
C-COR.net Corp.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 24, June 25,
ASSETS 1999 1999
----------- ----------
(Unaudited)
(000's omitted)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 110,979 $ 4,695
Marketable securities and other short-trm investments 15,217 445
Accounts receivable 40,322 31,314
----------- ----------
166,518 36,454
----------- ----------
Inventories:
Raw materials 20,325 17,240
Work-in-process 3,549 3,038
Finished goods 6,966 3,287
----------- ----------
Total inventories 30,840 23,565
----------- ----------
Deferred taxes 6,801 6,335
Property held for sale, net 1,100 1,281
Other current assets 2,509 2,176
Net current assets of discontinued operations 379 433
----------- ----------
TOTAL CURRENT ASSETS 208,147 70,244
----------- ----------
PROPERTY, PLANT, AND EQUIPMENT, NET 28,150 27,792
INTANGIBLE ASSETS AND OTHER LONG-TERM ASSETS, NET 4,869 4,913
----------- ----------
TOTAL ASSETS $ 241,166 $ 102,949
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,641 $ 16,286
Accrued liabilities 12,301 16,242
Line-of-credit and short-term credit obligations 0 4,638
Current portion of long-term debt 203 832
----------- ----------
TOTAL CURRENT LIABILITIES 30,145 37,998
----------- ----------
LONG-TERM DEBT, less current portion 1,618 3,708
OTHER LONG-TERM LIABILITIES 2,723 1,329
----------- ----------
TOTAL LIABILITIES 34,486 43,035
----------- ----------
SHAREHOLDERS' EQUITY
Common Stock, $.05 par; authorized shares
100,000,000; issued shares of 33,090,770 on December 24, 1999
and 25,522,970 on June 25, 1999 1,654 1,276
Additional paid-in capital 187,060 44,649
Retained earnings 25,069 21,065
Accumulated other comprehensive loss (107) (96)
Unearned compensation (16) 0
Treasury stock (6,980) (6,980)
----------- ----------
TOTAL SHAREHOLDERS' EQUITY 206,680 59,914
----------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 241,166 $ 102,949
=========== ==========
<FN>
Note: The balance sheet at June 25, 1999, has been derived from supplemental
restated financial statements at that date which give effect to the merger
transactions with Convergence.com and Silicon Valley Communications, Inc.
Note: Shares issued have been adjusted to reflect a 2-for-1 stock split for all
shares of record as of December 22, 1999. The additional shares were
distributed on January 6, 2000.
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
C-COR.net Corp.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
December 24, December 25, December 24, December 25,
1999 1998 1999 1998
----------- ----------- ----------- -----------
(000's omitted, except per share data)
<S> <C> <C> <C> <C>
NET SALES $ 62,391 $ 39,651 $ 126,894 $ 74,305
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of sales 47,092 30,052 95,370 57,180
Selling, general and administrative
expenses 6,221 6,484 13,330 11,839
Research and product development costs 3,508 3,172 6,683 5,961
Merger-related costs 0 0 3,673 0
Interest expense 140 104 761 161
Investment income (844) (51) (891) (99)
Other expense (income) (38) 191 316 209
----------- ----------- ----------- -----------
56,079 39,952 119,242 75,251
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 6,312 (301) 7,652 (946)
INCOME TAX EXPENSE 2,369 691 3,690 1,162
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 3,943 (992) 3,962 (2,108)
DISCONTINUED OPERATIONS:
Gain on disposal of discontinued
business segment, less applicable
income tax expense 6 16 42 304
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 3,949 $ (976) $ 4,004 $ (1,804)
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE - BASIC:
Continuing operations $ 0.14 $ (0.04) $ 0.15 $ (0.09)
Discontinued operations 0.00 0.00 0.00 0.01
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER SHARE $ 0.14 $ (0.04) $ 0.15 $ (0.08)
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE - DILUTED:
Continuing operations $ 0.13 $ (0.04) $ 0.14 $ (0.09)
Discontinued operations 0.00 0.00 0.00 0.01
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER SHARE $ 0.13 $ (0.04) $ 0.14 $ (0.08)
=========== =========== =========== ===========
<FN>
Note: Net income per share amounts have been adjusted to reflect a 2-for-1 stock
split for all shares of record as of December 22, 1999. The additional
shares were distributed on January 6, 2000.
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
C-COR.net Corp.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Twenty-six Weeks Ended
December 24, December 25,
1999 1998
----------- -----------
(000's omitted)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 4,004 $ (1,804)
Adjustments to reconcile net income (loss) to net cash
and cash equivalents provided by operating
activities:
Depreciation and amortization 4,648 4,062
Amortization of debt discount 381 0
Amortization of unearned compensation 5 0
Gain on disposal of discontinued operations,
net of tax benefit (42) (304)
Provision for deferred retirement salary plan 301 239
Loss on sale and write-down of property, plant,
and equipment 333 62
Changes in operating assets and liabilities:
Accounts receivable (9,008) (5,576)
Inventories (7,275) (1,694)
Other assets 63 1,640
Accounts payable 1,355 4,004
Accrued liabilities (3,694) 532
Deferred income taxes 600 (886)
Discontinued operations - working capital changes
and noncash charges 96 (218)
----------- -----------
NET CASH AND CASH EQUIVALENTS (USED IN) PROVIDED BY OPERATING ACTIVITIES (8,233) 57
----------- -----------
INVESTING ACTIVITIES
Purchase of property, plant and equipment (4,995) (2,805)
Purchase of marketable securities and other short-term investments (14,772) (50)
Investment (501) 0
Proceeds from sale of property, plant, and equipment 2 0
Issuance of notes receivable, net 0 2
Change in other assets 0 83
NET CASH AND CASH EQUIVALENTS ----------- -----------
USED IN INVESTING ACTIVITIES (20,266) (2,770)
----------- -----------
FINANCING ACTIVITIES
Payment of debt and capital lease obligations (2,719) (4,659)
Proceeds from long-term debt borrowing 0 3,109
Proceeds from (payment on) short-term credit
facilities, net (5,019) 6,852
Tax benefit deriving from exercise and sale of stock option shares 2,775 0
Payment for issuance of convertible preferred stock 0 (45)
Proceeds from issuance of common stock to employee stock purchase plan 45 34
Proceeds from exercise of stock option shares 4,072 249
Proceeds from exercise of stock warrants 2,259 0
Proceeds from issuance of common stock, net 133,370 0
Purchase of treasury stock 0 (1,084)
NET CASH AND CASH EQUIVALENTS PROVIDED BY ----------- -----------
FINANCING ACTIVITIES 134,783 4,456
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 106,284 1,743
Cash and cash equivalents at beginning of period 4,695 3,030
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 110,979 $ 4,773
=========== ===========
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
C-COR.net Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying, unaudited, condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information, and in the opinion of management, contain all
adjustments (consisting only of normal, recurring adjustments) necessary to
fairly present the Company's financial position as of December 24, 1999, and the
results of its operations for the thirteen-week and twenty-six week periods then
ended. Operating results for the thirteen-week and twenty-six week period are
not necessarily indicative of the results that may be expected for the year
ending June 30, 2000. For further information, refer to financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended June 25, 1999.
2. DESCRIPTION OF BUSINESS
The Company designs and manufactures network distribution products and provides
technical services in support of two-way hybrid fiber coax (HFC) networks. The
Company has predominately operated in the Electronic Distribution Products
segment, which provides HFC equipment for signal distribution applications
primarily to the cable television (CATV) market. In order to expand the
Company's product offering in the Electronics Distribution Products segment, on
September 17, 1999, the Company completed a merger with Silicon Valley
Communications, Inc. ("SVCI"), whereby SVCI became a wholly owned subsidiary of
the Company. In addition, on July 9, 1999, the Company completed a merger with
Convergence.com Corporation ("Convergence.com"), whereby Convergence.com became
a wholly owned subsidiary of the Company. These transactions were accounted for
under the pooling-of-interest method of accounting and, accordingly, the
accompanying financial statements have been retroactively restated to give
effect to the Convergence.com and SVCI mergers for all periods presented. As a
result of the merger with Convergence.com, the Company now operates a separate
business segment called Broadband Management Services, which provides design,
activation, network management and optimization services, as well as ongoing
support, repair and maintenance to broadband operators in the United States.
3. BUSINESS COMBINATIONS
On July 9, 1999, the Company consummated a merger with Convergence.com a Georgia
corporation, whereby Convergence.com became a wholly owned subsidiary of the
Company. As consideration in the merger, each outstanding share of common stock
of Convergence.com was converted into one share of the Company's common stock
for an aggregate of 1,433,323 shares (2,866,646 shares on a post-split basis) of
the Company's common stock. Each outstanding warrant to acquire Convergence.com
common stock was converted into a warrant to acquire the Company's common stock
for an aggregate of warrants to acquire 366,930 shares (733,860 shares on a
post-split basis) of the Company's common stock. The merger was accounted for
under the pooling-of-interests method of accounting.
On September 17, 1999, the Company consummated a merger with SVCI a California
corporation, whereby SVCI became a wholly owned subsidiary of the Company. As
consideration in the merger, each outstanding share of common stock of SVCI was
converted into 0.094534 shares of the Company's common stock, resulting in the
issuance of 1,545,081 shares (3,090,162 shares on a post-split basis) of the
Company's common stock (subject to reduction pursuant to certain escrow
arrangements). Outstanding stock options and warrants to acquire SVCI common
stock were converted into stock options and warrants to acquire the Company's
common stock using the same conversion ratio (with appropriate adjustment to the
exercise price) for an aggregate of stock options and warrants to acquire
383,844 shares (767,688 shares on a post-split basis) of the Company's common
stock. The merger was accounted for under the pooling-of-interests method of
accounting.
The Company recorded a one-time charge of $3,673,000, ($3,113,000, net of tax)
related to the business combinations in the thirteen-week period ended September
24, 1999. The one-time charge includes the merger transaction costs, as well as
restructuring costs which included severance payments for approximately 40
employees affected by consolidation of positions and administrative functions
resulting from the mergers, and write-off of assets related to existing fiber
optic products that became redundant as a result of the acquisition of SVCI.
Both of these mergers were accounted for using the pooling-of-interests method
of accounting. This method requires that historical financial results of the
merged companies be combined and presented as if the companies had always
operated as one entity. Accordingly, the Company's financial statements are
presented on a restated combined basis for all periods presented.
4. PUBLIC OFFERING
On November 12, 1999, the Company completed a follow-on public offering of its
common stock, whereby 3,220,000 shares of common stock were issued and sold at a
price of $44.00 per share (this equates to 6,440,000 shares at $22.00 per share
on a post-split basis). This offering resulted in net proceeds (after deducting
issuance costs) to the Company of $133,370,000. The proceeds of the offering
were used for repayment of debt, and will also be used for strategic
investments, capital expenditures, working capital, and other general corporate
purposes.
5. STOCK SPLIT
On December 7, 1999 the Company's board of directors declared a two-for-one
stock split of the Company's common stock. The stock split was effective for all
shares of record as of the close of business on December 22, 1999. The
additional shares were distributed on January 6, 2000. In connection with the
stock split, the par value per share of common stock was reduced from $.10 to
$.05 and the authorized number of shares of common stock was proportionately
increased from 50,000,000 to 100,000,000.
6. ACCRUED LIABILITIES
<TABLE>
Accrued liabilities consisted of:
<CAPTION>
December 24, June 25,
1999 1999
---------------- ----------------
(000's omitted)
<S> <C> <C>
Accrued incentive plan expense $ 1,747 $ 2,285
Accrued vacation expense 1,713 2,000
Accrued salary expense 859 1,297
Accrued payroll and sales tax 1,535 1,519
Accrued warranty expense 1,891 1,742
Accrued workers compensation
self-insurance expense 1,908 1,724
Accrued merger-related costs 706 0
Accrued sales commissions and rebates payable 578 951
Accrued income taxes 299 3,304
Accrued other 1,065 1,420
---------------- ----------------
$12,301 $16,242
================ ================
</TABLE>
7. COMPREHENSIVE INCOME (LOSS)
The components of accumulated other comprehensive loss, net of tax, of the
Company are as follows:
<TABLE>
<CAPTION>
December 24, June 25,
1999 1999
----------- ----------
(000's omitted)
<S> <C> <C>
Foreign currency translation loss $ (101) $ (92)
Unrealized holding loss on marketable securities (6) (4)
---------- ----------
Accumulated other comprehensive loss $ (107) $ (96)
========== ==========
</TABLE>
The components of comprehensive income (loss) of the Company for the
thirteen-week, and twenty-six week periods ended December 24, 1999, and December
25, 1998, are as follows:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
------------------------------- -------------------------------
December 24, December 25, December 24, December 25,
1999 1998 1999 1998
------------- ------------ ------------- ------------
(000's omitted) (000's omitted)
<S> <C> <C> <C> <C>
Net income (loss) $ 3,949 $ (976) $ 4,004 $(1,804)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on equity securities 2 (5) (2) (5)
Foreign currency translation gain (loss) (9) 2 (9) 26
-------- -------- -------- --------
Other comprehensive income (loss) (7) (3) (11) 21
-------- -------- -------- --------
Comprehensive income (loss) $ 3,942 $ (979) $ 3,993 $(1,783)
======== ======== ======== ========
</TABLE>
8. NET INCOME (LOSS) PER SHARE
Basic earnings per share are computed based on the weighted average number of
common shares outstanding, excluding any dilutive options, and warrants.
Dilutive earnings per share are computed based on the weighted average number of
common shares outstanding plus the dilutive effect of options and warrants. The
dilutive effect of options and warrants is calculated under the treasury stock
method using the average market price for the period. Net income (loss) per
share is calculated for the periods presented as follows:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
December 24, December 25, December 24, December 25,
1999 1998 1999 1998
------------ ------------- ------------ -------------
(000's omitted, except per share data)
<S> <C> <C> <C> <C>
Basic:
Weighted average shares outstanding 28,117 24,133 26,284 24,194
------------ ------------ ----------- ------------
Total 28,117 24,133 26,284 24,194
Income (loss) from continuing operations $ 3,943 $ (992) $ 3,962 $ (2,108)
Gain from discontinued operations 6 16 42 304
------------ ------------ ----------- ------------
Net income (loss) $ 3,949 $ (976) $ 4,004 $ (1,804)
------------ ------------ ----------- ------------
Net income (loss) per share:
Continuing operations $ 0.14 $ (0.04) $ 0.15 $ (0.09)
Discontinued operations 0.00 0.00 0.00 0.01
------------ ------------ ----------- ------------
Net income (loss) per share $ 0.14 $ (0.04) $ 0.15 $ (0.08)
============ ============ =========== ============
Diluted:
Weighted average shares outstanding 28,117 24,133 26,284 24,194
Weighted average common stock
equivalents 3,144 0 2,392 0
------------ ------------ ----------- ------------
Total 31,261 24,133 28,676 24,194
Income (loss) from continuing operations $ 3,943 $ (992) $ 3,962 $ (2,108)
Gain from discontinued operations 6 16 42 304
------------ ------------ ----------- ------------
Net income (loss) $ 3,949 $ (976) $ 4,004 $ (1,804)
------------ ------------ ----------- ------------
Net income (loss) per share:
Continuing operations $ 0.13 $ (0.04) $ 0.14 $ (0.09)
Discontinued operations 0.00 0.00 0.00 0.01
------------ ------------ ----------- ------------
Net income (loss) per share $ 0.13 $ (0.04) $ 0.14 $ (0.08)
============ ============ =========== ============
</TABLE>
<PAGE>
9. SEGMENT INFORMATION
The Company adopted the Statement of Financial Accounting Standards No. 131,
"Disclosures About Segments of an Enterprise and Related Information" (Statement
131), in fiscal year 1999. For the thirteen-week and twenty-six-week periods
ended December 24, 1999, the Company operated in two industry segments; the
Electronic Distribution Products segment, which provides HFC equipment for
signal distribution applications, primarily to the CATV market, and the
Broadband Management Services segment, which provides HFC technical services and
Internet enabling technical services and support to broadband operators in the
United States. For the thirteen-week and twenty-six-week periods ended December
25, 1998, the Company also operated in two industry segments; the Electronic
Distribution Product segment, which at that time included HFC technical services
and the Broadband Management Services segment. For the fiscal year 2000, the
Company elected to change the reporting of its Broadband Management Services
segment, to include HFC technical services which were previously reported as
part of the Electronic Distribution Product segment during the thirteen-week and
twenty-six-week periods ended December 25, 1998. The Company believes it is
impracticable to disclose the impact of this change on a restated segment basis
for prior periods presented and does not believe the change to be significant.
Information about industry segments for the thirteen-week and the twenty-six
week periods ended December 24, 1999, and December 25, 1998, are as follows:
<TABLE>
<CAPTION>
Discontinued
Continuing Operations Operations
--------------------------------------------------------------
Digital
Electronic Broadband Fiber Optics
Distribution Management Transmission
Products Services Products Total
--------------------------------------------------------------
13 week period ended December 24, 1999
<S> <C> <C> <C>
Total revenue $58,447 $3,944 -- $62,391
Operating income 5,380 190 -- 5,570
Interest income 844
Interest expense 140
Income tax expense 2,369
Identifiable assets at December 24, 1999 236,054 5,112 1,001 242,167
Capital expenditures 1,327 478 -- 1,805
Depreciation and amortization 2,176 308 -- 2,484
13 week period ended December 25, 1998
Total revenue $39,393 $258 -- $39,651
Operating income (loss) 1,109 (1,166) -- (57)
Interest income 51
Interest expense 104
Income tax expense 691
Identifiable assets at December 25, 1998 90,187 815 1,069 92,071
Capital expenditures 1,496 235 -- 1,731
Depreciation and amortization 1,990 (13) -- 1,977
26 week period ended December 24, 1999
Total revenue $118,908 $7,986 -- $126,894
Operating income (loss) (A) 12,552 (1,041) -- 11,511
Interest income 891
Interest expense 761
Income tax expense (A) 3,690
Identifiable assets at December 24, 1999 236,054 5,112 1,001 242,167
Capital expenditures 4,010 985 -- 4,995
Depreciation and amortization 4,152 496 -- 4,648
26 week period ended December 25, 1998
Total revenue $73,151 $1,154 -- $74,305
Operating income (loss) 997 (1,672) -- (675)
Interest income 99
Interest expense 161
Income tax expense 1,162
Identifiable assets at December 25, 1998 90,187 815 1,069 92,071
Capital expenditures 2,550 255 -- 2,805
Depreciation and amortization 4,000 62 -- 4,062
<FN>
(A) Operating income and income tax expense excludes the impact of the one time
merger-related cost related to the Convergence.com Corporation and Silicon
Valley Communications, Inc. mergers.(See Note 3 - Notes to Condensed
Consolidated Financial Statements.)
</FN>
</TABLE>
The Company and subsidiaries operate in various geographic areas as indicated by
the following:
<TABLE>
<CAPTION>
U.S. Canada Europe Eliminations Total
----------------------------------------------------------------------------------
13 week period ended December 24, 1999
Sales to unaffiliated customers:
<S> <C> <C> <C> <C> <C>
Domestic $54,240 $0 $134 -- $54,374
Export 8,017 -- -- -- 8,017
Transfers between geographic areas 20 -- -- (20) 0
Total revenue 62,277 0 134 (20) 62,391
Operating income (loss) 6,125 (76) (479) -- 5,570
Interest income 844
Interest expense 140
Income tax expense 2,369
Identifiable assets at December 24, 1999 240,639 409 118 -- 241,166
Capital expenditures 1,805 0 0 -- 1,805
Depreciation and amortization 2,479 0 5 -- 2,484
13 week period ended December 25, 1998
Sales to unaffiliated customers:
Domestic $33,643 $116 $91 -- $33,850
Export 5,801 -- -- -- 5,801
Transfers between geographic areas 2 -- -- (2) 0
Total revenue 39,446 116 91 (2) 39,651
Operating income (loss) 18 (74) (1) -- (57)
Interest income 51
Interest expense 104
Income tax expense 691
Identifiable assets at December 25, 1998 89,782 865 355 -- 91,002
Capital expenditures 1,731 -- -- -- 1,731
Depreciation and amortization 1,969 3 5 -- 1,977
26 week period ended December 24, 1999
Sales to unaffiliated customers:
Domestic $112,113 $42 $177 -- $112,332
Export 14,562 -- -- -- 14,562
Transfers between geographic areas 32 -- -- (32) 0
Total revenue 126,707 42 177 (32) 126,894
Operating income (loss)(A) 12,323 (142) (670) -- 11,511
Interest income 891
Interest expense 761
Income tax expense (A) 3,690
Identifiable assets at December 24, 1999 240,639 409 118 -- 241,166
Capital expenditures 4,994 0 1 -- 4,995
Depreciation and amortization 4,638 0 10 -- 4,648
26 week period ended December 25, 1998
Sales to unaffiliated customers:
Domestic $65,060 $316 $131 -- $65,507
Export 8,798 -- -- -- 8,798
Transfers between geographic areas 54 -- -- (54) 0
Total revenue 73,912 316 131 (54) 74,305
Operating income (loss) (606) (97) 28 -- (675)
Interest income 99
Interest expense 161
Income tax expense 1162
Identifiable assets at December 25, 1998 89,782 865 355 -- 91,002
Capital expenditures 2,805 -- -- -- 2,805
Depreciation and amortization 4,046 6 10 -- 4,062
<FN>
(A) Operating income and income tax expense excludes the impact of the one time
merger-related cost related to the Convergence.com Corporation and Silicon
Valley Communications, Inc. mergers.(See Note 3 - Notes to Condensed
Consolidated Financial Statements.)
</FN>
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
General
The following discussion addresses the financial condition of the Company as of
December 24, 1999, and the results of operations for the thirteen-week and
twenty-six-week periods ended December 24, 1999, compared with the same periods
of the prior year. This discussion should be read in conjunction with the
Management's Discussion and Analysis section for the fiscal year ended June 25,
1999, included in the Company's Annual Report on Form 10-K.
Disclosure Regarding Forward-Looking Statements
Some of the information presented in this report, including, but not limited to
continuation of increased domestic spending for network upgrades, expectations
regarding international sales volume and investment in development of
international distribution channels, anticipated increased spending on product
development, the continued availability of capital resources, customer's demands
for network reliabilility, the Company's expectations in connection with the
mergers with Convergence.com Corporation ("Convergence.com") and Silicon Valley
Communications, Inc. ("SVCI"), continued delivery of fiber optic equipment to
AT&T Broadband and Internet Services, the company's ability to expand its
capacity for providing network design and other technical services as a result
of the asset purchase of Advanced Communications Services, Inc. ("ACSI") and
pending merger with Worldbridge Broadband Services, Inc. ("Worldbridge"), and
the Company's ability to continue successful implementation of Year 2000
measures, constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the Company believes
that its expectations are based on reasonable assumptions within the bounds of
its knowledge of its business and operations, there can be no assurance that
actual results will not differ materially from its expectations. Factors which
could cause actual results to differ from expectations include, among others,
the ability to integrate assets purchased from Advanced Communications Services,
Inc., the ability to consummate the merger with Worldbridge Broadband Services,
Inc., the ability to integrate both Convergence.com's and SVCI's businesses, the
timing of orders received from customers, the gain or loss of significant
customers, changes in the mix of products sold, continued industry
consolidation, the development of competing technology, changes in the cost and
availability of parts and supplies, fluctuations in warranty costs, new product
development activities, the Company's ability to successfully implement new
products and services and enhance existing products and services, economic
conditions affecting domestic and international markets, regulatory changes
affecting the telecommunications industry, in general, and the Company's
operations, in particular, competition and changes in domestic and international
demand for the Company's products and other factors which may impact operations
and manufacturing. For additional information concerning these and other
important factors which may cause the Company's actual results to differ
materially from expectations and underlying assumptions, please refer to the
Company's reports filed on Form 10-K and other reports and materials filed with
the Securities and Exchange Commission.
Results of Operations
Net sales for the thirteen-week period ended December 24, 1999, were
$62,391,000, an increase of 57% from the prior year's sales of $39,651,000 for
the same period. Net sales for the twenty-six-week period ended December 24,
1999, were $126,894,000, an increase of 71% from the prior year's sales of
$74,305,000 for the same period. The increased sales for the thirteen-week and
twenty-six-week periods were primarily attributable to increased capital
spending for cable network transmission equipment by domestic cable operators
and from increased sales of technical services related to design, activation and
support of cable networks. In addition, the Company has also broadened its
hybrid/fiber coax (HFC) network product lines to capture additional investments
being made by cable operators. These product line expansions include a full
range of fiber optics equipment including the Company's Navicor(TM) family of
node products, as well as a broad complement of advanced fiber optic headend
equipment and optical transmitters and receivers, acquired in its merger with
SVCI in September 1999.
Domestic sales, as a percentage of total consolidated sales, were 87% and 88%
for the thirteen-week and twenty-six-week periods ended December 24, 1999,
respectively. This compares to 85% and 88% for same respective period of the
prior year. Sales to domestic customers increased 61% during the thirteen-week
period ended December 24, 1999, and 72% for the twenty-six-week period, compared
to the same periods of the prior year. The increase resulted from increased
sales of HFC transmission equipment and related services caused by domestic
cable operators continuing to upgrade and rebuild their systems, principally to
offer new services including two-way internet access. These upgrades to existing
cable networks to provide two-way, interactive broadband services allow cable
operators to compete against other broadband communications technologies.
International sales, as a percentage of total consolidated sales, were 13% and
12% for the thirteen-week and twenty-six-week periods ended December 24, 1999,
respectively. This compares to 15% and 12% for same periods of the prior year.
Although a lower percentage of total consolidated sales, sales to international
customers increased 36% during the thirteen-week period ended December 24, 1999,
and 60% for the twenty-six-week period, compared to the same periods of the
prior year. The increase for the thirteen-week and twenty-six-week periods,
resulted from increased demand primarily from a customer in Canada. The Company
believes further investment will be necessary in developing its international
distribution channels and to provide localized versions of its products, in
order to supply comprehensive network solutions to operators in various
international markets. The Company expects international markets will represent
a substantial portion of its sales base, but believes demand will continue to be
highly variable.
The Company's backlog of sales orders at December 24, 1999, was approximately
$37.5 million, consisting of backlog from domestic and international customers
of 90% and 10%, respectively. The Company's backlog was approximately $43.4
million at the end of the prior thirteen-week period ended September 24, 1999,
which consisted of backlog from domestic and international customers of 86% and
14%, respectively. The Company booked approximately $56.4 million of new sales
orders during the thirteen-week ended December 24, 1999, resulting in a
book-to-bill ratio for the thirteen-weeks of .90. As a result of consolidation
of ownership of domestic cable systems, the Company's bookings and sales levels
are dependent upon the timing of orders from a limited number of large customer
accounts. The Company believes bookings from these customers can be influenced
by a variety of factors, including overall demand for cable services and the
acceptance of new broadband services, competitive pressures, cable operators'
access to financing and cable operators' annual budget cycles. Variations in the
timing of bookings and sales can cause significant fluctuations in thirteen-week
operating results.
Gross profit percentage for the thirteen-week period ended December 24, 1999,
was 24.5% versus 24.2% for the same period of the prior year. Gross profit
percentage for the twenty-six-week period ended December 24, 1999, was 24.8%
versus 23.0% for the same period of the prior year. Changes in product mix,
efficiencies resulting from higher production volume and ongoing efforts to
improve manufacturing automation initiatives contributed to the increase in the
gross profit percentage, while at the same time this contribution was offset by
the Company's strategic investment for expansion of its Network Operating
Center, as part of the Company's Broadband Management Services segment, during
the thirteen-week and twenty-six week periods, compared to the same periods of
the prior year.
Selling, general and administrative expenses for the thirteen-week period ended
December 24, 1999, were $6,221,000, a decrease of 4% over the prior year's total
of $6,484,000 for the same period. The decrease resulted from reductions in
various selling and administrative costs, including lower personnel costs after
consolidating certain positions and administrative functions, as a result of the
mergers with Convergence.com and SVCI. Selling, general and administrative
expenses for the twenty-six-week period ended December 24, 1999, were
$13,330,000, an increase of 13% over the prior year's total of $11,839,000 for
the same period. The increase was due to various selling and administrative
costs, including personnel costs associated with higher sales volumes and
expansion of the Company's technical customer services business unit and
domestic sales force during the prior year, resulting in increased expenditures,
compared to the same period of the prior year.
Research and product development costs for the thirteen-week period ended
December 24, 1999, were $3,508,000, an increase of 11% over the prior year's
total of $3,172,000 for the same period. Research and product development costs
for the twenty-six-week period ended December 24, 1999, were $6,683,000, an
increase of 12% over the prior year's total of $5,961,000 for the same period.
The increased expenditures resulted from higher personnel costs and additional
expenses primarily for development of fiber optic transmission products,
including transmitters, receivers and Erbium-Doped Fiber Amplifiers (EDFAs), for
advanced HFC networks. These products include the Company's new mini-fiber nodes
and multiplexing nodes, which currently are being used in a field trial of
AT&T's LightWire(TM) Neighborhood Broadband System in Salt Lake City, Utah. The
Company continues to develop network management products, including the
Company's CNM System 2 software. The Company believes the increasing size,
complexity, and traffic over cable networks requires consistent, reliable
network performance to meet customer demands. As a result, the Company believes
network operators will need to increase their investment in network management
services and software to address the various types of equipment and unique
characteristics of the different information types that will be delivered over
future HFC networks. The Company anticipates research and product development
expenses to increase in future periods, related to ongoing initiatives, although
these expenses may vary as a percentage of sales.
Interest expense for the thirteen-week period ended December 24, 1999, was
$140,000, compared to $104,000, for the same period of the prior year. Interest
expense for the twenty-six-week period ended December 24, 1999, was $761,000,
compared to $161,000, for the same period of the prior year. Interest expense
increased for the thirteen-week and twenty-six week periods as a result of an
increase in short-term borrowings on the Company's revolving line-of-credit
agreement and other short-term credit facilities during the periods. Included in
interest expense for the year-to-date period ended December 24, 1999, was
$381,000 of additional amortization related to the fair market value of warrants
issued in fiscal year 1999 in connection with certain debt financing
arrangements.
Investment income for the thirteen-week period ended December 24, 1999, was
$844,000, compared to $51,000 for the same period of the prior year. Investment
income for the twenty-six-week period ended December 24, 1999, was $891,000,
compared to $99,000 for the same period of the prior year. The increase in
investment income for the quarter and year-to-date periods result from
short-term investments of funds received in the Company's follow-on public
offering of 3,220,000 shares of common stock, completed on November 12, 1999.
(See Note 4).
Other income for the thirteen-week period ended December 24, 1999, was $38,000,
compared to other expense of $191,000 for the same period of the prior year.
Other expense for the thirteen-week period ended December 25, 1998, included a
loss on disposal of certain leasehold improvements and foreign exchange losses.
Other expense for the twenty-six-week period ended December 24, 1999 was
$316,000, compared to other expense of $209,000 for the same period of the prior
year. The increase in other expense for the twenty-six-week period resulted
primarily from adjustment of the carrying value of property held-for-sale, and
losses on disposal of property, plant, and equipment incurred in the first
quarter of fiscal year 2000.
The effective income tax rate for the thirteen-week period ended December 24,
1999, was 37.5%, compared to 229.6% for the same period of the prior year. The
higher effective tax rate for the thirteen-weeks ended December 25, 1998,
resulted from limited tax benefit related to operating losses for both SVCI and
Convergence.com. The effective income tax rate for the twenty-six-week period
ended December 24, 1999, was 48.2%, compared to 122.8% for the same period of
the prior year. The higher effective tax rate for the twenty-six weeks ended
December 24, 1999, is a result of permanent differences for non-deductible
business combination costs incurred in relation to the mergers with
Convergence.com and SVCI, in the first quarter of fiscal year 2000. The higher
effective tax rate for the twenty-six-weeks ended December 25, 1998, resulted
from limited tax benefit related to operating losses at both SVCI and
Convergence.com.
Liquidity and Capital Resources
As of December 24, 1999, cash and cash equivalents totaled $ 110,979,000, up
from $4,695,000 at June 25, 1999. The increase in cash and cash equivalents
resulted from net proceeds received from the follow-on public offering of common
stock completed on November 12, 1999. Net cash and cash equivalents used in
operating activities was $8,233,000 for the twenty-six-week period ended
December 24, 1999. This compares to cash and cash equivalents used in operating
activities of $57,000, for the same period of the prior year. The increase in
cash and cash equivalents used in operating activities for the twenty-six-week
period ended December 24, 1999 compared to the same period of the prior year,
was primarily due to business combination costs associated with the mergers of
Convergence.com and SVCI, and increased inventory purchases and accounts
receivables resulting from a higher level of production and sales volume during
the twenty-six-week period.
Net cash and cash equivalents used in investing activities was $20,266,000 for
the twenty-six-week period ended December 24, 1999, compared to $2,770,000 for
the same period of the prior year. The increase in cash and cash equivalents
used in investing activities was primarily due to purchases of marketable
securities and other short-term investments, as well as increased purchases of
property, plant and equipment to expand and automate the Company's manufacturing
operations. In addition, on October 6, 1999, the Company made an investment of
$501,000 in Fortress Technologies, Inc. ("Fortress"), a security networking
company. The investment is included in other long-term assets on the balance
sheet as of December 24, 1999, and is being carried at cost, as ownership
interest is less than 20%, and does not fall within the guidelines of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities" (Statement 115).
Net cash and cash equivalents provided by financing activities totaled
$134,783,000 for the twenty-six week period ended December 24, 1999. This
compares to net cash and cash equivalents provided by financing activities of
$4,456,000 for the same period of the prior year. The increase in cash provided
by financing activities resulted from net proceeds received through a follow-on
public offering of the Company's common stock. The Company's other financing
activities consisted primarily of borrowings and payments on short-term and
long-term debt, proceeds and tax benefits deriving from exercise and sales of
employee stock options, and proceeds from the exercise of warrants.
In December 1999, the Company amended its credit agreement established with
three banks under which it may borrow up to $70,000,000. The agreement has two
parts. First, $20,000,000 is available as a revolving line-of-credit, subject to
an aggregate sub-limit of $2,000,000 for issuance of letters of credit, which is
committed through November 30, 2000. The second part is a standby acquisition
facility, which enables the Company to borrow up to $50,000,000, for strategic
acquisitions and/or investments, which is also committed through November 30,
2000. A pricing matrix has been established for credit pricing on these
facilities which is a function of the Company's total funded indebtedness to
earnings before interest, taxes, depreciation and amortization (EBITDA) ratio.
Borrowings under this credit agreement bear interest at various rates, at the
Company's option. Borrowings on these facilities are unsecured, subject to a
negative pledge on all business assets, and the Company is required to maintain
certain financial ratios and indebtedness tests. As of December 24, 1999, the
Company had no borrowings outstanding under this credit agreement.
On November 12, 1999, the Company completed a follow-on public offering of its
common stock, whereby 3,220,000 shares of common stock were issued and sold at a
price of $ 44.00 per share (this equates to 6,440,000 shares at $22.00 per share
on a post-split basis). This offering resulted in net proceeds (after deducting
issuance costs) to the Company of $133,371,000. The proceeds of the offering
were used for repayment of debt, and will also be used for strategic
investments, capital expenditures, working capital, and other general corporate
purposes.
On November 12, 1999, the Company paid off the remaining balance of a term-loan
facility with a bank. The original principal balance of the loan was $3,000,000,
and required monthly principal payments of $50,000, plus interest through 2003.
The principal balance of the loan payoff on November 8, 1999 was $1,350,000.
Management believes that operating cash flow, proceeds received from the
follow-on public offering, as well as the aforementioned credit agreement, will
be adequate to provide for all cash requirements for the foreseeable future,
subject to requirements that additional growth or strategic development might
dictate.
Year 2000 Readiness Disclosure
With the changeover to the year 2000, the Company did not experience any
disruption to its operations, as a result of the issues associated with the
limitations of the programming code in many existing computer systems, whereby
the computer systems may not properly recognize or process date-sensitive
information. The Company's date-sensitive systems include test equipment,
computer systems embedded in production equipment, products containing computer
systems, business data processing systems, production management and planning
systems, and personal computers. Systems that do not properly recognize such
information could generate erroneous data or cause a system to fail. There can
be no assurance that there will not be future complications arising from Year
2000 issues.
The Company's program for addressing Year 2000 concerns, included an assessment
and evaluation of internal systems, which resulted in testing and remediation
efforts for Year 2000 compliance. In addition, the Company evaluated its
customers, vendors and service providers to determine the extent to which the
Company was vulnerable to any failure by these third-party providers and to
ascertain their readiness for the Year 2000.
The total estimated cost of assessing Year 2000 issues is difficult to determine
with accuracy, but its total costs did not exceed $500,000 and did not have a
material adverse impact on its operating results or financial condition.
Although the Company believes that it has successfully addressed any significant
disruption from Year 2000, it will continue to monitor all critical systems for
the appearance of delayed complications or disruptions, as well as continue to
monitor its suppliers and customers.
Subsequent Events
On January 11, 2000, the Company increased its investment in Fortress
Technologies, Inc. ("Fortress Technologies"), a security networking company,
from $501,000 to $3,500,000. The investment in Fortress represents approximately
a 5 percent ownership interest. In connection with the investment, the Company
and Fortress Technologies have agreed on key terms of a reseller agreement,
under which the companies will jointly offer a network-based security solution
for residential and business cable modem customers. In addition, the Company
will become the exclusive provider of this security solution to the domestic
broadband cable-operator market. The investment in Fortress is being carried at
cost, as ownership interest is less than 20%, and does not fall within the
guidelines of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (Statement 115).
On January 28, 2000, a wholly owned subsidiary of the Company purchased
substantially all the assets of Advanced Communications Services, Inc. ("ACSI"),
a provider of advanced network engineering services, for $3,640,000. The Company
did not assume any material liabilities of ACSI in the transaction. The Company
believes this purchase will enable it to expand its capacity for providing
network design, and field engineering services to broadband cable operators.
On January 19, 2000, the Company entered into a definitive merger agreement
under which Worldbridge Broadband Services, Inc. ("Worldbridge"), will become a
wholly-owned subsidiary of the Company. Under the merger agreement, the Company
will issue approximately 1,603,584 shares of its common stock to Worldbridge
Broadband Services, Inc. shareholders and convert options to acquire Worldbridge
stock into options to acquire approximately 196,416 shares of C-COR.net common
stock. The merger will be accounted for under the pooling of interest method of
accounting. The Company believes the merger will enable the Company to expand
its customer and geographic base for providing engineering and technical
services to cable operators in several locations in the United States. In
addition, the Company believes the merger will fulfill a key element of the
Company's business strategy to offer total network solutions to its customers,
and thereby improve its competitive position. The merger is expected to be
completed in the third quarter of fiscal year 2000.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
(Not Applicable)
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On December 7, 1999 the Company's board of directors declared a two-for-one
stock split of the Company's common stock. The stock split was effective for all
shares of record as of the close of business on December 22, 1999. The
additional shares were distributed on January 6, 2000. In connection with the
stock split, the par value per share of common stock was reduced from $.10 to
$.05 and the authorized number of shares of common stock was proportionately
increased from 50,000,000 to 100,000,000.
Item 4. Submission of matters to a vote of shareholders
The following share information related to matters submitted to a vote of
shareholders are represented on a pre-split basis.
The Company's annual meeting of shareholders was held on October 19, 1999. The
record date was September 7, 1999, on which there were 10,688,356 shares
outstanding and entitled to vote at such annual meeting. The following items
were submitted to a vote by shareholders.
1. The election of three directors for a term of three years.
2. The election of a director for a term of one year.
3. The approval of a proposed amendment to the Company's Amended and
Restated Articles of Incorporation, as amended, to increase the number
of authorized shares of common stock from 24,000,000 to 50,000,000
shares.
4. The approval of a proposed amendment to the Company's Amended and
Restated Articles of Incorporation, as amended, to eliminate the right
of shareholders to cumulate votes in the election of directors.
Mr. David A. Woodle, Mr. I.N. Rendall Harper, Jr., and Dr. Frank Rusinko, Jr.
were re-elected as directors of the Company until the year 2002, and Mr. Michael
J. Farrell was elected as a director until the year 2000.
The voting results for the for matters noted above are set forth as follows:
1. The election of three directors for a term of three years.
<TABLE>
<S> <C> <C>
Name of Nominee Votes For Votes Withheld
----------------------- --------- --------------
David A. Woodle 8,769,938 264,174
I.N. Rendall Harper, Jr. 8,774,338 259,774
Dr. Frank Rusinko, Jr. 8,774,338 259,774
</TABLE>
2. The election of a directors for a term of one year.
<TABLE>
<S> <C> <C>
Name of Nominee Votes For Votes Withheld
----------------------- --------- --------------
Michael J. Farrell 8,772,338 261,774
</TABLE>
3. The approval of a proposed amendment to the Company's Amended and
Restated Articles of Incorporation, as amended, to increase the number
of authorized shares of common stock from 24,000,000 to 50,000,000
shares.
<TABLE>
<S> <C> <C>
Votes For Votes Against Abstained
-------------- ------------- ---------
7,214,917 1,789,577 29,618
</TABLE>
4. The approval of a proposed amendment to the Company's Amended and
Restated Articles of Incorporation, as amended, to eliminate the right
of shareholders to cumulate votes in the election of directors.
<TABLE>
<S> <C> <C> <C>
Votes For Votes Against Abstained Non-Voting
-------------- ------------- --------- ----------
3,755,372 1,638,776 560,078 3,124,288
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
(3) (a) Amended and Restated Articles of Incorporation of Registrant (the
"Articles of Incorporation") filed with the Secretary of State of
the Commonwealth of Pennsylvania on February 19, 1981.
(3) (b) Amendment to the Articles of Incorporation of Registrant filed with
the Secretary of State of the Commonwealth of Pennsylvania on
November 14, 1986.
(3) (c) Amendment to the Articles of Incorporation filed with the Secretary
of State of the Commonwealth of Pennsylvania on September 21, 1995.
(3) (d) Amendment to the Articles of Incorporation filed with the Secretary
of State of the Commonwealth of Pennsylvania on July 9, 1999.
(3) (e) Statement with Respect to Shares of Series A Junior Participating
Preferred Stock filed with the Secretary of State of the
Commonwealth of Pennsylvania on August 30, 1999.
(3) (f) Amendment to the Articles of Incorporation filed with the Secretary
of State of the Commonwealth of Pennsylvania on October 20, 1999.
(3) (g) Amendment to the Articles of Incorporation filed with the Secretary
of State of the Commonwealth of Pennsylvania on December 22, 1999.
(27) Financial Data Schedule
Reports on Form 8-K
On October 13, 1999, the Registrant, filed a Form 8-K/A to amemd the Current
Report filed on September 24, 1999, reporting Pro-forma financial statements
associated with the acquisitions of Convergence.com Corporation and Silicon
Valley Communications, Inc.
On December 16, 1999, the Registrant, filed a Form 8-K dated December 8, 1999,
which included press releases reporting that its Board of Directors approved a
2-for-1 stock split of its common stock.
<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 thereunto duly authorized.
C-COR.net Corp.
(Registrant)
Date: February 7, 2000 /s/ William T. Hanelly
----------------------------------
Vice President-Finance,
Secretary & Treasurer
(Principal Financial Officer)
Date: February 7, 2000 /s/ Joseph E. Zavacky
----------------------------------
Controller & Assistant
Secretary
(Principal Accounting Officer)
<PAGE>
Exhibit 3 (a)
-------------
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
C-COR ELECTRONICS, INC.
The Articles of Incorporation of C-COR Electronics, Inc., as
heretofore amended or supplemented, are hereby amended and restated in their
entirety as follows:
1. The name of the corporation is:
C-COR Electronics, Inc.
2. The location and post office address of the registered office
of the corporation is:
60 Decibel Road
State College, Pa. 16801
3. The corporation has been incorporated for the following
purposes:
To have unlimited power to engage in and to do any
lawful act concerning any and all lawful business for
which corporations may be incorporated under the
Business Corporation Law, including, but not limited
to, design, manufacture, repair and provision of
service with respect to electronics components used
with cable television and other broadband
communications systems.
4. The term for which the corporation is to exist is:
Perpetual.
5.(a). The aggregate number of shares which the corporation should
have authority to issue is:
Eight Million (8,000,000) shares of Common Stock having
a par value of $.10 (ten cents) per share and Two
Million (2,000,000) shares of Preferred Stock, no par
value per share.
5.(b) The Board of directors may issue in one or more series, up to
2,000,000 shares of Preferred Stock, no par value, with full, limited, multiple,
fractional or no voting rights, and with such designations, preferences,
qualifications, privileges, limitations, restrictions, options, conversion
rights, and other special or relative rights as shall be fixed from time to time
by resolution of the Board of Directors.
Manner and Basis of Reclassifying Outstanding
Shares of Common Stock of the Corporation
-----------------------------------------
Upon the effectiveness of these Amended and Restated Articles of
Incorporation, each outstanding share of Common Stock, no par value, shall be
reclassified into 28 shares of Common Stock, $.10 par value.
<PAGE>
Exhibit 3 (b)
-------------
ARTICLES OF AMENDMENT - DOMESTIC BUSINESS CORPORATION
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
____________________________________________________________________
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (13 P.S. (S)1806), the
undersigned corporation, desiring to amend this Articles, does hereby certify
that:
1. The name of the corporation is:
C-COR ELECTRONICS, INC.
-------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement
to conform to the records of the Department):
60 Decibel Road
-------------------------------------------------------------
(Address) (Street)
STATE COLLEGE 16801
-------------------------------------------------------------
(City) (Zip Code)
3. The statute by or under which it was incorporated is:
ACT OF MAY 5, 1993, P.L. 364, AS AMENDED 16801
-------------------------------------------------------------
4. The date of its incorporation is JUNE 30, 1953
----------------------------
5. (Check, and if appropriate, complete one of the following):
x The meeting of the shareholders of the corporation at which the
-
amendment was adopted was held at the time and place and pursuant to the kind
and period of notice herein stated.
Time: The 22nd day of OCTOBER, 1986
---- ------- ----
Place: Nittany Lion Inn, State College, PA 16802
--------------------------------------------
Kind and period of notice: WRITTEN NOTICE MAILED SEPTEMBER 23, 1986
----------------------------------------
____________________________________________________________________
[_] The amendment was adopted by a consent in writing, setting
forth the action so taken, signed by all of the shareholders entitled to vote
thereon and filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
<PAGE>
(a) The total number of shares outstanding was:
3,017,470 SHARES OF COMMON STOCK
-----------------------------------------------------------------
(b) The number of shares entitled to vote was:
3,017,470 SHARES OF COMMON STOCK
-----------------------------------------------------------------
7. In the action taken by the shareholders:
(a) The total number of shares voted in favor of the amendment was:
1,814,622
---------------------------------------------------------
(b) The number of shares voted against the amendment was:
456,892
---------------------------------------------------------
8. The amendment adopted by the shareholders set forth in full, is as follows:
RESOLVED that the Amended and Restated Articles of Incorporation, of
C-COR Electronics, Inc. shall be amended by adding new Articles 6 and 7 to read
as set forth in Appendix A to the proxy statement for this meeting, such
amendment to become effective upon the filing thereof.
See Appendix A attached hereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be signed by a duly authorized officer and it corporate seal,
duly attested by another such officer, to be hereunto affixed this 5/th/ day of
November, 1986.
C-COR ELECTRONICS, INC.
<PAGE>
APPENDIX A
6.A. The provisions of this Article 6 shall apply notwithstanding any
provisions of these Articles of Incorporation or of the By-Laws of the
Corporation to the contrary.
B. Except as otherwise expressly provided in Paragraph C of this
Article 6:
(i) any merger or consolidation of the Corporation with or into
any other corporation;
(ii) any sale, lease, exchange or other disposition of all or
substantial all of the assets of the Corporation to or with any other
corporation, person or other entity; or
(iii) any issuance or transfer by the Corporation to any other
corporation, person other entity, in a single transaction or group or
series of related transactions, of any shares of capital stock of the
Corporation entitled to vote generally in elections of directors (or
warrants or options or securities convertible into such capital stock), if
the holders of such shares would be entitled to cast 5% or more of the
votes which all holders of shares of all classes of capital stock of the
Corporation, outstanding immediately prior to such transaction and entitled
to vote generally in elections of directors, would be entitled to cast,
shall require the affirmative vote of shareholders entitled to cast at least 66
2/3% of the votes which all holders of shares of all classes of capital stock of
the Corporation entitled to vote generally in elections of directors, voting
together for this purpose as one class, would be entitled to cast at any annual
or special meeting duly convened after notice to the shareholders of that
purpose, if as of the date of any action taken by the Board of Directors of the
Corporation with respect to any transaction described in clause (i), (ii) or
(iii) of this Paragraph B or as of the record date for the determination of
shareholders entitled to notice thereof and to vote thereon, such other
corporation, person or other entity referred to above is the beneficial owner,
directly or indirectly, of 10% or more of the outstanding shares of any class of
capital stock of the Corporation. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that some lesser
percentage may be specified, by law, in any agreement with any national
securities exchange or otherwise.
C. The provisions of this Article 6 shall not apply to any transaction
described in clause (i), (ii) or (iii) of Paragraph B of this Article 6 (i) if
such transaction shall have been approved by the affirmative vote of a majority
of the whole Board of Directors of the Corporation prior to the time such other
corporation, person or other entity became the beneficial owner, directly or
indirectly, of 10% or more of the outstanding shares of any class of capital
stock of the Corporation or (ii) if such transaction shall have been approved by
the affirmative vote of at least 80% of the whole Board of Directors of the
Corporation, in each case at any regular or special meeting duly convened after
notice to the directors of that purpose.
D. For the purposes of this Article 6, a corporation, person or other
entity shall be deemed to be the beneficial owner of any shares of any class of
capital stock of the Corporation (i) which it has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, or (ii) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (i) of this
Paragraph D), by any other corporation, person or other entity (a) with which it
or its affiliate or associate has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any securities of
the Corporation or (b) which is its affiliate or associate. For the purposes of
this Article 6 the outstanding shares of any class of capital stock of the
Corporation shall include shares deemed owned through the application of clauses
(i) and (ii) of this Paragraph D but shall not include any
<PAGE>
other shares which may be issuable pursuant to any agreement or upon exercise of
conversion rights, warrants or options, or otherwise.
E. For purposes of this Article 6, the terms "affiliate" and
"associate" are defined as those terms are defined in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934 as in effect on
June 30, 1986.
F. The Board of Directors of the Corporation, by the affirmative vote
of at least 80% of the whole Board of Directors, shall have the power to
determine for the purposes of this Article 6 on the basis of information then
known to it, (i) whether (a) any corporation, person or other entity
beneficially own, directly or indirectly, 10% or more of the outstanding shares
of any class of capital stock of the Corporation, (b) any corporation, person or
other entity is an affiliate or an associate of another, (c) any proposed sale,
lease, exchange or other disposition of part of the assets of the Corporation
involves substantially all of the assets of the Corporation, and (d) the Board
of Directors of the Corporation has approved any transaction and (ii) when any
of the facts set forth in clause (i) of this sentence has occurred. Any such
determination by the Board shall be conclusive and binding for all purpose of
this Article 6.
7. The Corporation reserves the right to amend, alter, add to or
repeal any provision contained in these Articles of Incorporation, in the manner
now or hereinafter prescribed by statute, and all rights conferred upon
shareholders are herein granted subject to this reservation; provided, however,
that no amendment to these Articles of Incorporation shall amend, alter, add to
or repeal any of the provisions of Article 6 unless the resolution effecting
such amendment, alteration, addition or repeal shall receive the affirmative
vote of shareholders entitled to cast at least 66 2/3% of the votes which all
holders of shares of all clauses of capital stock of the Corporation entitled to
vote generally in elections of directors, voting together for this purpose as
one class, would be entitled to cast at any annual or special meeting duly
convened after notice to the shareholders of that purpose.
<PAGE>
Exhibit 3 (c)
-------------
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DBCB:15-1915 (Rev 80)
In compliance with the requirements of 15 Pa. C. S. ss. 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is: C-COR Electronics, Inc.
-------------------------------------
- -------------------------------------------------------------------------
2. The (a) address of the corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and
the county of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
<TABLE>
<S> <C> <C> <C> <C>
(a) 60 Decibel Road State College PA 16801 Centre
----------------------------------------------------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o: -------------------------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county
in which the corporation is located for venue and official publication purposes.
3. The statute by or under which it was incorporated is: Pennsylvania Business Corporation Law of 1933
--------------------------------------------------------------
4. The date of its incorporation is: June 30, 1953
------------------------------------------------------------------------------------
5. (Check, and if appropriate complete, one of the following):
X The amendment shall be effective upon filing these Articles of Amendment in the Department of State
---
--- The amendment shall be effective on: ----------------------- at ------------------------------
Date Hour
6. (Check one of the following):
X The amendment was adopted by the shareholders (or members) pursuant to 15 Pa. C.S.(S).1914(a) and (b).
---
--- The amendment was adopted by the board of directors pursuant to 15 Pa. C.S. (S). 1914(c).
7. (Check, and if appropriate complete, one of the following):
--- The amendment adopted by the corporation, set forth in full, is as follows:
X The amendment adopted by the corporation as set forth in full in Exhibit A attached hereto and made a part hereof.
---
8. (Check if the amendment restates the Articles):
--- The restated Articles of Incorporation supersede the original Articles and all amendments thereto.
</TABLE>
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be signed by a duly authorized officer thereof this 21st day of
September, 1995.
C-COR ELECTRONICS, INC.
<PAGE>
EXHIBIT A
TO
ARTICLES OF AMENDMENT
OF
C-COR ELECTRONICS, INC.
7. The amendment adopted by the corporation, set forth in full is
as follows:
RESOLVED, that article 5(a) of C-COR Electronics, Inc.'s Amended and
Restated Articles of Incorporation which presently reads as follows:
5(a). The aggregate numbers of shares which the Corporation
should have authority to issue is:
Eight Million (8,000,000) shares of Common Stock having a par value of
$.10 (ten cents) per share and Two Million (2,000,000) shares of
Preferred Stock, no par value per share.be amended to read in full as
follows:
5(a). The aggregate number of shares which the corporation should have
authority to issue is:
Twenty Four Million (24,000,000) shares of Common Stock having a par
value of $.10 (ten cents) per share and Two Million (2,000,000) shares
of Preferred Stock, no par value per share.
<PAGE>
Exhibit 3 (d)
-------------
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DBCB:15-1915 (Rev 80)
In compliance with the requirements of 15 Pa. C. S. (S) 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is: C-COR Electronics, Inc.
-------------------------------------
--------------------------------------------------------------------
2. The (a) address of the corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the following
information to conform to the records of the Department):
<TABLE>
<S> <C>
(a) 60 Decibel Road State College PA 16801 Centre
------------------------------------------------------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o:------------------------------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county in
which the corporation is located for venue and official publication purposes.
3. The statute by or under which it was incorporated is: PA Business Corporation Law, Act of May 5, 1933, P L 364
----------------------------------------------------------------
4. The date of its incorporation is: June 30, 1953
-------------------------------------------------------------------------------------
5. (Check, and if appropriate complete, one of the following):
X The amendment shall be effective upon filing these Articles of Amendment in the Department of State
---
--- The amendment shall be effective on:------------------------------ at -----------------------------
Date Hour
6. (Check one of the following):
--- The amendment was adopted by the shareholders (or members) pursuant to 15 Pa. C.S. (S) 1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15 Pa. C.S.(S) 1914(c).
---
7. (Check, and if appropriate complete, one of the following):
X The amendment adopted by the corporation, set forth in full, is as follows:
---
"1. The name of the Corporation is C-COR.net Corp."
-------------------------------------------------------------------------------------------------------
_______________________________________________________________________________________________
_______________________________________________________________________________________________
--- The amendment adopted by the corporation as set forth in full in Exhibit A attached hereto and made a part hereof.
8. (Check if the amendment restates the Articles):
--- The restated Articles of Incorporation supersede the original Articles and all amendments thereto.
</TABLE>
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be signed by a duly authorized officer thereof this 9th day of
July, 1999.
C-COR ELECTRONICS, INC.
<PAGE>
Exhibit 3 (e)
-------------
STATEMENT WITH RESPECT TO SHARES
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
C-COR.net Corp.
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of the Articles of
Incorporation, a series of Preferred Stock, no par value per share, of the
Corporation be and hereby is created, and that the designation and number of
shares thereof and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series and the
qualifications, limitations and restrictions thereof are as follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount. There shall be a series of Preferred Stock that
shall be designated as "Series A Junior Participating Preferred Stock," and the
number of shares constituting such series shall be 200,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of Series
A Junior Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the holders of any shares
of any class or series of stock of the Corporation ranking prior and superior to
the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of any class or series of stock of
the Corporation ranking junior to the Series A Junior Participating Preferred
Stock in respect thereof, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the 15th day of February, May, August and
November, in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) the Adjustment Number (as defined
below) times the aggregate per share amount of all cash dividends, and the
Adjustment Number times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, par
value $.10 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. The
"Adjustment Number" shall initially be 100. In the event the Corporation shall
at any time after August 17, 1999 (the "Rights Declaration Date") (i) declare
and pay any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A Junior
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Participating Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to the
date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the shareholders of the Corporation.
(B) Except as required by law and by Section 10 hereof, holders of Series A
Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem
or purchase or otherwise acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled; or
(iii) purchase or otherwise acquire for consideration any shares of Series
A Junior Participating Preferred Stock, or any shares of stock ranking on a
parity with the Series A Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of Series A Junior
Participating Preferred Stock, or to such holders and holders of any such shares
ranking on a parity therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired promptly after the acquisition thereof. All such
shares shall upon their retirement become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
any conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the Corporation,
voluntary or otherwise, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Junior Participating Preferred
Stock shall have received an amount per share (the "Series A Liquidation
Preference") equal to the greater of (i) $1.00 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, or (ii) the Adjustment Number times the per share amount
of all cash and other property to be distributed in respect of the Common Stock
upon such liquidation, dissolution or winding up of the Corporation.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation into or with
another corporation nor the merger or consolidation of any other corporation
into or with the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.
7. Consolidation, Merger, Etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. No Redemption. Shares of Series A Junior Participating Preferred Stock
shall not be subject to redemption by the Company.
9. Ranking. The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Preferred Stock as to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding
up, unless the terms of any such series shall provide otherwise, and shall rank
senior to the Common Stock as to such matters.
10. Amendment. At any time that any shares of Series A Junior Participating
Preferred Stock are outstanding, the Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the outstanding
shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
11. Fractional Shares. Series A Junior Participating Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, this Statement is executed on behalf of the Corporation
this ___ day of August, 1999.
C-COR.net Corp.
By: /s/ David A. Woodle
---------------------------------------------
Name: David A. Woodle
Title: President and
Chief Executive Officer
<PAGE>
Exhibit 3 (f)
-------------
RESOLVED, that Article 5(a) of the Corporation's Amended and Restated
Articles of Incorporation, as amended, be amended and restated in its entirety
to read in full as follows:
5(a). The aggregate number of shares which the Corporation should have
authority to issue is Fifty Million (50,000,000) shares of Common Stock having a
par value of $.10 per share and Two Million (2,000,000) shares of Preferred
Stock, no par value per share.
RESOLVED, that the Corporation's Amended and Restated Articles of
Incorporation, as amended, be amended to add a new Article 8 thereto, which
shall read in full as follows:
8. The shareholders of the Corporation shall not have the right to cumulate
votes in the election of directors.
<TABLE>
<S> <C>
Microfilm Number Filed with the Department of State on
Entity Number
Secretary of the Commonwealth
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. Section 1915 (relating to articles of amendment), the undersigned
business corporation, desiring to amend its Articles, hereby states that:
1. The name of the corporation is: C-COR.net Corp._________________________________________________________________________
________________________________________________________________________________________________________________________
2. The (a) address of this corporation's current registered office in this Commonwealth or (b) name of its commercial
registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to
conform to the records of the Department):
(a) 60 Decibel Road, State College, PA 16801 Centre
Number and Street City State Zip County
(b) c/o: ____________________________________________________________________________________________________________________
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
3. The statute by or under which it was incorporated is: Business Corporation Law of 1933
4. The date of its incorporation is: June 30, 1953
5. (Check, and if appropriate complete, one of the following):
The amendment shall be effective upon filing these Articles of Amendment in the Department of State.
X The amendment shall be effective on: December 22, 1999 at 6:00 P.M., Philadelphia time
Date Hour
6. (Check one of the following):
The amendment was adopted by the shareholders (or members) pursuant to 15 Pa.C.S. Section 1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15 Pa.C.S. Section 1914(c).
7. (Check, and if appropriate complete, one of the following):
________ The amendment adopted by the corporation, set forth in full, is as follows:
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
X The amendment adopted by the corporation is set forth in full in Exhibit A attached hereto and made a part hereof.
DSCB:15-1915 (Rev 90)-2
8. (Check if the amendment restates the Articles):
The restated Articles of Incorporation supersede the original Articles and
all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer thereof
this 22nd day of December , 1999.
C-COR.net Corp.
(Name of Corporation)
BY: /s/William T. Hannelly
---------------------------------------
(Signature)
TITLE: William T. Hanelly, Vice President,
Secretary and Treasurer
EXHIBIT A:
RESOLVED, that Article 5(a) of the Corporation's Amended and
Restated Articles of Incorporation, as amended, be amended and restated
in its entirety to read in full as follows:
5(a). (i) The aggregate number of shares which the Corporation should have
authority to issue is One Hundred Million (100,000,000) shares of Common
Stock having a par value of $.05 per share and Two Million (2,000,000)
shares of Preferred Stock, no par value per share.
(ii) On the effective date of these Articles of Amendment to these
Amended and Restated Articles of Incorporation, as amended, of the
Corporation (the "Effective Date"), each share of Common Stock, par value
$.10 per share, issued and outstanding on the Effective Date (including
each share owned by the Corporation) shall be split and reclassified into
two shares of Common Stock, par value $.05 per share, which shall be
included in the 100,000,000 shares authorized herein.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUN-26-1999
<PERIOD-END> DEC-24-1999
<CASH> 110,979
<SECURITIES> 15,217
<RECEIVABLES> 41,427
<ALLOWANCES> 1,105
<INVENTORY> 30,840
<CURRENT-ASSETS> 208,147
<PP&E> 68,360
<DEPRECIATION> 40,210
<TOTAL-ASSETS> 241,166
<CURRENT-LIABILITIES> 30,145
<BONDS> 0
0
0
<COMMON> 1,654
<OTHER-SE> 205,026
<TOTAL-LIABILITY-AND-EQUITY> 241,166
<SALES> 62,391
<TOTAL-REVENUES> 62,391
<CGS> 47,092
<TOTAL-COSTS> 9,729
<OTHER-EXPENSES> (882)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 140
<INCOME-PRETAX> 6,312
<INCOME-TAX> 2,369
<INCOME-CONTINUING> 3,943
<DISCONTINUED> 6
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,949
<EPS-BASIC> .14
<EPS-DILUTED> .13
</TABLE>
