<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
Amendment No. 1 to
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
COMMISSION FILE NO. 0-24303
COHERENT COMMUNICATIONS SYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-2162982
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
44084 RIVERSIDE PARKWAY
LANSDOWNE BUSINESS CENTER
LEESBURG, VIRGINIA 22075
(703) 729-6400
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
None Not applicable
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
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. [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
495 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [X]
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 13, 1997, was approximately $153,044,650 based on the
sale price of the Common Stock on March 13, 1997, of $16.75 as reported by the
NASDAQ National Market System. As of March 13, 1997, the registrant had
outstanding 15,146,522 shares of its Common Stock, par value $.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held on May 15, 1997 are incorporated herein by reference in Part III, Items
10, 11, 12 and 13.
<PAGE> 2
Coherent Communications Systems Corp.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Annual Report on
Form 10-K:
1. Consolidated Financial Statements:
The consolidated financial statements filed as a part of this
report are listed in the "Index to Consolidated Financial
Statements and Financial Statement Schedule" at Item 8.
2. Consolidated Financial Statement Schedule:
The consolidated financial statement schedule filed as part of
this report is listed in the "Index to Consolidated Financial
Statements and Financial Statement Schedule" at Item 8.
Schedules other than those listed on the accompanying Index to
Consolidated Financial Statements and Financial Statement Schedule
are omitted for the reason that they are either not required, not
applicable, or the required information is included in the
consolidated financial statements or notes thereto.
(b) REPORTS ON FORM 8-K None.
(c) Exhibits:
The following is a list of exhibits required by Item 601 of
Regulation S-K filed as part of this report. Where so indicated by
footnote, exhibits which were previously filed are incorporated by
reference. Exhibits incorporated by reference, the location of the
exhibit in the previous filing is indicated in parentheses. All
other exhibits are being filed with this report.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3(i) - Certificate of Incorporation of the Company, as amended by
a Certificate of Amendment.(3) (Exhibit 3.1(i))
3(ii) - By-laws of the Company as amended.(5)(Exhibit 3(ii))
4.1 - Specimen stock certificate representing the Common
Stock.(3)(Exhibit 4.1)
10.1 - Administrative Services Agreement dated as of December 1,
1993, between the Company and Safeguard Scientifics,
Inc.(3)(Exhibit 10.1)
10.2 - Asset Purchase Agreement dated as of March 18, 1987
between COMSAT Telesystems, Inc. and the
Company.(1)(Exhibit 10.2)
*10.3 - 1982 Stock Option Plan.(1)(Exhibit 10.3)
*10.4 - 1993 Equity Compensation Plan, as amended and restated.
*10.4.1 - Stock Ownership Plan(5)(Exhibit 10.4.1)
10.4.2 - Compensation Plan for Outside Directors
*10.5 - Form of Non-Qualified Stock Option Agreement of the
Company for Employees.(2)(Exhibit 10.5)
*10.6 - Form of Non-Qualified Stock Option Agreement of the
Company for Directors.(2)(Exhibit 10.6)
*10.7 - Form of Incentive Stock Option Agreement of the Company
for Employees.(2)(Exhibit 10.7)
10.8 - Lease dated as of February 1, 1980, as amended, between
LE-AX Corp. and the Company, for the property at 60
Commerce Drive, Hauppauge, New York.(1)(Exhibit 10.8)
</TABLE>
2
<PAGE> 3
Coherent Communications Systems Corp.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(c) Exhibits (continued):
10.9.1 - Lease dated as of July 31, 1992 between Linpro Lansdowne
Two Limited Partnership and the Company, for the property
at 44084 Riverside Parkway, Leesburg, Virginia.(1)(Exhibit
10.9.1)
10.9.2 - Sublease dated as of August 1993 between G.D. Searle & Co.
and the Company, for the property at 44084 Riverside
Parkway, Leesburg, Virginia.(1)(Exhibit 10.9.2)
10.9.3 - Lease dated August 9, 1996 by and between Opus East,,
L.L.C., Landlord, and the Company for the premises located
in Loudon County, Virginia known as University Center.
10.10 - Lease dated as of October 15, 1990 between Kibswell
Holdings Limited and the Company, for the property at Unit
B The Quadrant, Barton Lane, Abingdon,
England.(1)(Exchange 10.10)
10.11 - Tax Agreement dated January 1, 1983 between Safeguard
Scientifics, Inc. and the Company.(1)(Exhibit 10.11)
*10.12 - Severance and Non-Competition Agreement dated as of
February 10, 1994 between Daniel McGinnis and the
Company.(1)(Exhibit 10.12)
10.13 - Form of Demand Promissory Note of Safeguard Scientifics,
Inc., dated April 2, 1993, payable to the Company, as
amended by letter Agreement dated January 12,
1994.(1)(Exhibit 10.13)
10.14 - Form of Promissory Note of the Company payable to
Safeguard Scientifics, Inc. with respect to the redemption
of redeemable convertible preferred stock.(3)(Exhibit
10.14)
10.15 - Supply and License Agreement dated February 7, 1992,
between the Company and TRT Telecommunications
Radioelectriques et Telephoniques.(1)(Exhibit 10.15)
10.16 - International Distribution Agreement dated as of January
2, 1992 between the Company and Cohpac Communications
Systems Pty Limited.(1)(Exhibit 10.16)
10.17 - North America Value Added Reseller Agreement dated as of
December 7, 1992 between the Company and Wandel &
Goltermann Inc.(1)(Exhibit 10.17)
*10.18 - Management Incentive Compensation Plan, as adopted by the
Company.(2)(Exhibit 10.18)
10.19 - License Agreement, effective as of June 1, 1994, between
the Company and Systems Technology Associates, Inc.
(3)(Exhibit 10.19)
10.20 - Value Added Reseller Agreement dated December 31, 1992 as
amended June 13, 1995 between the Company and Nokia
Telecommunications Oy(5)(Exhibit 10.21)**
10.21 - Memorandum of Understanding dated February 27,1997 between
the Company and Nokia Telecommunications Oy**
11.0 - Computation of net income per share.
3
<PAGE> 4
Coherent Communications Systems Corp.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(c) Exhibits (continued):
21.0 - Subsidiaries of registrant.
23.0 - Consent of KPMG Peat Marwick LLP
27.0 - Financial Data Schedule.
- - ----------------
(1) Filed on March 31, 1994 as an exhibit to the Company's Registration
Statement on Form S-1 (No.33-77160) and incorporated by reference.
(2) Filed on May 24, 1994 as an exhibit to the Company's Registration Statement
on Form S-1 Amendment #1 (No.33-77160) and incorporated by reference.
(3) Filed on June 10, 1994 as an exhibit to the Company's Registration Statement
on Form S-1 Amendment #2 (No.33-77160) and incorporated by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated by reference.
(5) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and incorporated by reference.
* Management contract or compensatory plan or arrangement.
** Confidential portions of the exhibit have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
4
<PAGE> 5
Coherent Communications Systems Corp.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this to be signed on its
behalf by the undersigned, thereunto duly authorized.
COHERENT COMMUNICATIONS SYSTEMS CORPORATION
By: /s/ Melba G. Chan
----------------------------------------
Melba G. Chan,
Chief Financial Officer
Date: October 15, 1997
5
<PAGE> 6
Coherent Communications Systems Corp.
EXHIBIT INDEX
The following is a list of exhibits required by Item 601 of Regulation S-K filed
as part of this Report. Where so indicated by footnote, exhibits which were
previously filed are incorporated by reference. For exhibits incorporated by
reference, the location of the exhibit in the previous filing is indicated in
parentheses. The page numbers listed refer to the page numbers where such
exhibits are located using the sequential numbering system specified by Rule
0-3.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3(i) - Certificate of Incorporation of the Company, as amended by
a Certificate of Amendment.(3) (Exhibit 3.1(i))
3(ii) - By-laws of the Company as amended.
4.1 - Specimen stock certificate representing the Common
Stock.(3)(Exhibit 4.1)
10.1 - Administrative Services Agreement dated as of December 1,
1993, between the Company and Safeguard Scientifics,
Inc.(3)(Exhibit 10.1)
10.2 - Asset Purchase Agreement dated as of March 18, 1987
between COMSAT Telesystems, Inc. and the
Company.(1)(Exhibit 10.2)
*10.3 - 1982 Stock Option Plan.(1)(Exhibit 10.3)
*10.4 - 1993 Equity Compensation Plan, as amended and restated.
*10.4.1 - Stock Ownership Plan(5)(Exhibit 10.4.1)
10.4.2 - Compensation Plan for Outside Directors
*10.5 - Form of Non-Qualified Stock Option Agreement of the
Company for Employees.(2)(Exhibit 10.5)
*10.6 - Form of Non-Qualified Stock Option Agreement of the
Company for Directors.(2)(Exhibit 10.6)
*10.7 - Form of Incentive Stock Option Agreement of the Company
for Employees.(2)(Exhibit 10.7)
10.8 - Lease dated as of February 1, 1980, as amended, between
LE-AX Corp. and the Company, for the property at 60
Commerce Drive, Hauppauge, New York.(1)(Exhibit 10.8)
10.9.1 - Lease dated as of July 31, 1992 between Linpro Lansdowne
Two Limited Partnership and the Company, for the property
at 44084 Riverside Parkway, Leesburg, Virginia.(1)(Exhibit
10.9.1)
10.9.2 - Sublease dated as of August 1993 between G.D. Searle & Co.
and the Company, for the property at 44084 Riverside
Parkway, Leesburg, Virginia.(1)(Exhibit 10.9.2)
10.9.3 - Lease dated August 9, 1996 by and between Opus East,,
L.L.C., Landlord, and the Company, for the premises
located in Loudon County, Virginia known as University
Center.
10.10 - Lease dated as of October 15, 1990 between Kibswell
Holdings Limited and the Company, for the property at Unit
B The Quadrant, Barton Lane, Abingdon,
England.(1)(Exchange 10.10)
10.11 - Tax Agreement dated January 1, 1983 between Safeguard
Scientifics, Inc. and the Company.(1)(Exhibit 10.11)
*10.12 - Severance and Non-Competition Agreement dated as of
February 10, 1994 between Daniel McGinnis and the
Company.(1)(Exhibit 10.12)
</TABLE>
6
<PAGE> 7
Coherent Communications Systems Corp.
10.13 - Form of Demand Promissory Note of Safeguard Scientifics,
Inc., dated April 2, 1993, payable to the Company, as
amended by letter Agreement dated January 12,
1994.(1)(Exhibit 10.13)
10.14 - Form of Promissory Note of the Company payable to
Safeguard Scientifics, Inc. with respect to the redemption
of redeemable convertible preferred stock.(3)(Exhibit
10.14)
10.15 - Supply and License Agreement dated February 7, 1992,
between the Company and TRT Telecommunications
Radioelectriques et Telephoniques.(1)(Exhibit 10.15)
10.16 - International Distribution Agreement dated as of January
2, 1992 between the Company and Cohpac Communications
Systems Pty Limited.(1)(Exhibit 10.16)
10.17 - North America Value Added Reseller Agreement dated as of
December 7, 1992 between the Company and Wandel &
Goltermann Inc.(1)(Exhibit 10.17)
*10.18 - Management Incentive Compensation Plan, as adopted by the
Company.(2)(Exhibit 10.18)
10.19 - License Agreement, effective as of June 1, 1994, between
the Company and Systems Technology Associates, Inc.
(3)(Exhibit 10.19)
10.20 - Value Added Reseller Agreement dated December 31, 1992 as
amended June 13, 1995 between the Company and Nokia
Telecommunications Oy (5)(Exhibit 10.21)**
10.21 - Memorandum of Understanding dated February 27,1997 between
the Company and Nokia Telecommunications Oy**
11.0 - Computation of net income per share.
21.0 - Subsidiaries of registrant.
23.0 - Consent of KPMG Peat Marwick LLP
27.0 - Financial Data Schedule
- - ----------------
(1) Filed on March 31, 1994 as an exhibit to the Company's Registration
Statement on Form S-1 (No.33-77160) and incorporated by reference.
(2) Filed on May 24, 1994 as an exhibit to the Company's Registration Statement
on Form S-1 Amendment #1 (No.33-77160) and incorporated by reference.
(3) Filed on June 10, 1994 as an exhibit to the Company's Registration Statement
on Form S-1 Amendment #2 (No.33-77160) and incorporated by reference.
(4) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 and incorporated by reference.
(5) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and incorporated by reference.
* Management contract or compensatory plan or arrangement.
** Confidential portions of the exhibit have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
7
<PAGE> 1
Coherent Communications Systems Corp.
[Coherent Communications Systems Corp. LOGO] NTEC0297
MEMORANDUM OF UNDERSTANDING
<TABLE>
<CAPTION>
------------------------------------------
TABLE 1 - NOKIA PRICING
------------------------------------------
CHANNEL CHANNEL
PRICE $ VOLUMES
------------------------------------------
<S> <C> <C>
1997
1998
1999
------------------------------------------
</TABLE>
Based upon the estimated volumes as specified in Table 1 Coherent
agrees to the above pricing to be effective immediately. In addition to
this the following items were agreed in principal and will be finalised
in an amendment to Agreement No. H7810/92 no later than April 4th 1997.
1. Coherent has received Nokias best estimate to purchase the volume
requirements for 1997, 1998 and 1999, a total of channels.
2. The Products to be supplied are the NIEC, IDEC2X and/or EC2X.
3. The NIEC will be supplied with no further modifications to the
specification, until .
The EC2X will be released to Production for shipments
expected . In accordance with the PDA all Beta
units will be shipped for which payment shall be made in
full.
4. The IDEC2X Product Specification will be the same as that for the
NIEC but with the EC5 ASICs replaced by the HDRP and the
additional feature specification as described in Attachment A. If
the future software and hardware options are required by Nokia
then these are to be agreed and the relevant prices for these
additional features will be agreed.
An NRE charge of is payable for the development of the
IDEC2X, payable in three installments in accordance with the
following milestones:
Signing of the PDA - not later than end of April 4th 1997
Delivery of Beta units at a cost of per unit.
8
<PAGE> 2
Coherent Communications Systems Corp.
Delivery of first Production Units .
[Coherent Communications Systems Corp. LOGO] NTEC0297
5. Both parties agree to include a statement in the amendment to
Agreement No. H 7810/92 to the effect that based upon the volume
requirements contained herein, Nokia will not source an
alternative product for the applications for which Coherent are
already supplying Product.
6. Delivery Times - Agreement No. H 7810/92
Clause 2.7.2
Each month Nokia will provide a forecast for with an
Authorisation to Manufacture covering . This
commitment to deliver is based upon the following:
weeks firm
weeks of the volume can be rescheduled up to
weeks of the volume can be rescheduled up to
This clause replaces 2.8.1.
7. Payment Terms
Payment terms as specified in Nokia's Netting Payment System will
become affective during 1997. Payments will be made within
maximum. Until such change the current payment terms
will remain effective.
For new orders the invoicing shall be as follows to reflect the
charge for a Software Licence:
Hardware Software Licence (ILS-NIEC)
NIEC and IDEX2X
9
<PAGE> 3
Coherent Communications Systems Corp.
EC2X
ILS-NIECx is a Software Fee and Licence to use. Each order for
Hardware must be accompanied by an order for an equal number of
Software Licences which will be invoiced at the same time.
[Coherent Communications Systems Corp. LOGO] NTEC0297
MEMORANDUM OF UNDERSTANDING FOR PROPOSED AMENDMENTS TO AGREEMENT NO.
H7810/92
In Witness Whereof, the Parties have agreed these minutes and both
parties do hereby sign in Espoo on 26th February, 1997.
SIGNED FOR AND ON BEHALF OF SIGNED FOR AND ON BEHALF OF
NOKIA TELECOMMUNICATIONS OY COHERENT COMMUNICATIONS
SYSTEMS CORPORATION
/s/ /s/
--------------------------- ---------------------------
Erkki Sipila Miles Pratt
/s/ /s/
--------------------------- ---------------------------
Vesa Sarkikangas Simon Taylor
10
<PAGE> 4
Coherent Communications Systems Corp.
ATTACHMENT A NIECO297
DIFFERENCE/NEW FEATURE COMMENTS
The to be used for
echo cancellation on the EC2X/IDEC2X
is intended to have
that will eliminate the need for
that was used on the
NIEC. However, will still
be provided so that may
be replaced.
PERFORMANCE MONITORING PERFORMANCE MONITORING
(new features)
The EC2X/IDEC2X shall provide
of the circuit on a
basis under Motherboard/EC2X/IDE2X
communications interface command.
The EC2X/IDEC2X shall provide
of the circuit on a
basis under
Motherboard/EC2X/IDE2X
communications interface command.
The EC2X/IDEC2X shall provide
of the circuit
on a basis under
Motherboard/EC2X/IDE2X
communications interface command.
The EC2X/IDEC2X shall provide
of the circuit
on a basis
under Motherboard/EC2X/IDE2X
communications interface command.
Note: provides the
"hooks" for providing .
The EC2X/IDEC2X shall report
on a communications interface
command.
(New future software and Hardware option)
The IDEC2X shall provide for the
facility for implementation
as a future software and hardware
option. The implementation
platform (hardware) shall support a
total
of .
(New future software option)
The EC2X shall provide for the
facility for implementation
as a future software option.
11
