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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[ X ] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934 [Fee Required]
For the fiscal year ended December 31, 1996
or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
Commission file number: 0-25630
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
U.S. ROBOTICS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of the principal executive office:
U.S. Robotics Corporation
8100 North McCormick Boulevard
Skokie, Illinois 60076
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
U.S. Robotics Corporation Employee Stock Purchase Plan
By /s/ Steven T. Campbell Date June __, 1997
----------------------
Steven T. Campbell
Vice President and Controller, U.S. Robotics Corporation
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REQUIRED INFORMATION
Items 1-3. Financial Statements
Listed below are the financial statements included in Form 11-K for the U.S.
Robotics Corporation Employee Stock Purchase Plan:
- Report of Independent Certified Public Accountants
- Statement of Net Assets Available for Benefits as of December 31, 1996
and 1995
- Statement of Changes in Net Assets Available for Benefits for
the years ended December 31, 1996, 1995, and 1994
- Notes to the Financial Statements
Item 4. ERISA Requirements
The U.S. Robotics Corporation Employee Stock Purchase Plan is not subject to
the requirements of ERISA.
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
U.S. Robotics Corporation
We have audited the accompanying statement of net assets available for benefits
of the U.S. Robotics Corporation Employee Stock Purchase Plan (the Plan) as of
December 31, 1996 and 1995 and the related statement of changes in net assets
available for benefits for the years ended December 31, 1996, 1995 and 1994.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the years ended December 31, 1996, 1995 and 1994, in conformity
with generally accepted accounting principles.
GRANT THORNTON LLP
/s/ Grant Thornton LLP
----------------------
Chicago, Illinois
April 18, 1997 (except for Note G, as to which the date is May 8, 1997)
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Cash and cash equivalents $ 9,530
Contributions receivable $1,480,534 588,557
Investment in U.S. Robotics Corporation common stock
at market (106,702 and 79,746 shares, respectively;
at cost, $4,033,099 and $1,016,889 respectively) 7,682,513 3,498,939
---------- ----------
Net assets available for benefits $9,163,047 $4,097,026
========== ==========
</TABLE>
See accompanying notes.
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- --------
<S> <C> <C> <C>
Additions to net assets attributed to:
Interest $ 9,085 $ 1,206
Megahertz merger (See Note A) 535,088
Participant contributions $3,472,334 1,512,841 149,866
Unrealized appreciation of investments 4,756,253 3,180,843 38,921
---------- ---------- --------
Total additions 8,228,587 5,237,857 189,993
Deductions from net assets attributed to:
Participant withdrawals 3,162,566 1,498,044 2,038
---------- ---------- --------
Net increase during the period 5,066,021 3,739,813 187,955
Net assets available for benefits at
beginning of period 4,097,026 357,213 169,258
---------- ---------- --------
Net assets available for benefits at
end of period $9,163,047 $4,097,026 $357,213
========== ========== ========
</TABLE>
See accompanying notes.
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE A - SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION
U.S. Robotics Corporation, a Delaware Corporation ("USR"), was organized to
effect a corporate reorganization of U.S. Robotics, Inc. ("Robotics") whereby
Robotics became, on February 22, 1995, a wholly-owned subsidiary of a new
publicly-held parent corporation, USR. All of the outstanding shares of
Robotics at the time of the reorganization were converted into an equal number
of USR shares. Following the reorganization, the stockholders of USR had the
same voting, dividend and liquidation rights they had as stockholders of
Robotics. In conjunction with the reorganization, Robotics' name was changed
to U.S. Robotics Access Corp. ("Access"). USR and its subsidiaries, all of
which are wholly-owned, are collectively referred to as the "Company."
The U.S. Robotics Corporation Employee Stock Purchase Plan (the "Plan") was
approved by the Company's stockholders on February 22, 1995. Upon consummation
of the aforementioned reorganization, the Plan was substituted for the existing
Robotics Employee Stock Purchase Plan (the "Predecessor Plan"), which had been
approved and became effective on March 9, 1993. The Plan is substantially
similar to the Predecessor Plan. Accordingly, the accompanying financial
statements are reflective of the operations of the Plan as a continuation of
the Predecessor Plan.
On February 22, 1995, the stockholders of Robotics and shareholders of
Megahertz Holding Corporation ("Megahertz") each approved and adopted a plan of
merger which resulted in Megahertz becoming a wholly-owned subsidiary of the
Company. All of the outstanding shares of Megahertz were converted into shares
of the Company. On July 1, 1995, the Megahertz employee stock purchase plan
was merged into the Plan.
The financial statements of the Plan have been prepared in conformity with
generally accepted accounting principles as applied to employee stock purchase
plans and in accordance with the terms of the Plan. Interest income is
recorded when received.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of changes in net assets during the reporting period.
Actual results could differ from these estimates.
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE B - PLAN DESCRIPTION AND FUNDING POLICY
GENERAL
Under the Plan, employees of the Company who meet certain requirements will be
able to purchase shares of U.S. Robotics Corporation common stock ("Common
Stock") at a price equal to 85% of the fair market value of the stock at
prescribed dates. The maximum number of shares which may be sold under the Plan
is 2,000,000. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
On April 12, 1996, the Company's Board of Directors approved a two-for-one
split of the Company's common stock in the form of a 100 percent stock
dividend. Stockholders of record, including Plan participants, as of the close
of business on April 25, 1996, received one additional share for each share
held. The additional shares were distributed to stockholders on May 10, 1996.
The number of shares held by the Plan as of December 31, 1996 and 1995 as
disclosed in the Statement of Net Assets Available for Benefits and the maximum
number of shares which may be sold under the Plan as disclosed above reflect
the 1996 split.
ELIGIBILITY
Employees of the Company who have been employed by the Company for three
consecutive months and whose customary employment is more than twenty hours per
week are eligible to participate in the Plan. However, no employee who would
own upon exercise 5% or more of the total combined voting power of all classes
of stock, no outside director, and no employee who is subject to Section 16 of
the Securities Exchange Act of 1934 (and who is also a highly compensated
employee within the meaning of Section 414(q) of the Internal Revenue Code) is
eligible to participate.
OFFERINGS
From time to time, but not less frequently than once during any fiscal year, a
committee appointed by the Board of Directors of the Company ("the Committee")
may fix a date ("Offering Date") on which the Company will make an offer to all
eligible employees of options to purchase Common Stock ("an Offering"). In
order to participate in any Offering, an employee must complete and file with
the Committee a Subscription Agreement and any other papers prescribed by the
Committee by a date specified by the Committee following such Offering Date
(the "Subscription Date"). An eligible employee shall become a "participant"
under this Plan upon the filing of a Subscription Agreement. All Subscription
Agreements shall be dated and shall be effective as of the next available
Subscription Date.
METHOD OF PURCHASE AND PRICE DATE
A Participant shall pay for the shares of Common Stock by electing to authorize
payroll deductions to be made beginning the first pay period following the
Subscription Date and ending the last pay period of the Subscription Period
with such authorization being any whole number percentage or any specified even
dollar amount, up to but not more than 10% of the Participant's total
compensation as defined by the Plan (but not less than $30 per bi-weekly
payroll or $15 per weekly payroll, whichever is applicable). Certain
participants employed by foreign subsidiaries of the Company, or whose
employment is based in Canada, may also elect to pay for shares with one lump
sum payment not greater than ten percent of the Participant's total
compensation as defined by the Plan.
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
Each Offering shall be for a specified period of time to be fixed by the
Committee on the Offering Date and shall be for no less than one month and no
more than 27 months duration from the Offering Date. At times specified by the
Committee ("Price Dates"), the Participant shall become entitled to purchase
such number of shares of Common Stock as his accumulated payroll deductions or
lump-sum deposits during the period will purchase, at a price equal to the
lesser of (1) 85% of the fair market value of a share of Common Stock on the
Price Date; or (2) 85% of the fair market value of a share of Common Stock on
the Subscription Date. The fair market value on the Price Date or the
Subscription Date shall be the closing bid price of such shares on such date as
reported on the NASDAQ system or the last sales price of such shares on such
date on any stock exchange on which such shares are traded, or if there is no
such sale on that date, the last bid price prior thereto at which such sales
were quoted on the NASDAQ system or the last sales price prior thereto at which
such shares were traded on any stock exchange.
No Participant shall have the right to purchase more than an aggregate of
$25,000 of Common Stock under the Plan and any other employee stock purchase
plan of the Company described in Internal Revenue Code Section 423 in any
calendar year. The $25,000 limit is based upon the fair market value per share
of the Common Stock determined as of the time of the Subscription Date or the
equivalent option grant date under another employee stock purchase plan.
PARTICIPANTS' ACCOUNTS
Individual accounts shall be maintained for each Participant. All payroll
deductions or lump-sum payments of a Participant shall be credited to his or
her account under the Plan. A Participant may discontinue his or her
participation in the Plan, but no other change may be made during the
Subscription Period and, specifically, a Participant may not alter the rate of
his or her payroll deductions for the Offering.
TERMINATION OR AMENDMENT OF PLAN
The Plan will terminate automatically ten years from the effective date,
February 22, 1995, unless special action is taken to terminate the plan sooner.
The Board of Directors of the Company may at any time terminate or amend the
Plan. Certain amendments require stockholder approval. These include
increasing the number of authorized shares, changes in the class of employees
eligible to participate and increasing the contribution maximum above ten
percent of total compensation.
NOTE C - INVESTMENTS
The investment funds are allocated to the participants' accounts. Effective
October 1, 1995, employee contributions are withheld by the Company and remain
part of the general funds of the Company. Prior to this date, employee
contributions were placed in a money market fund held at Alex Brown & Sons,
Incorporated. Total interest income for the periods ended December 31, 1995
and 1994 as a result of this investment were $9,085 and $1,206 respectively.
Effective October 1, 1995, a Common Stock purchase is generally paid for from
amounts held by the Company. Prior to this date, Common Stock purchased was
generally paid for from the amounts held in the money market fund held at Alex
Brown & Sons, Incorporated. As of December 31, 1995, Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Custodian") has established an account for
the Common Stock allocable to each Participant. Common Stock is accounted for
as a Plan asset until distributed from these accounts.
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U.S. ROBOTICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE D - COMMON STOCK ISSUABLE
Participant contributions for the subscription period from October 1, 1996
through December 31, 1996 in the amount of $1,480,534 are shown as
Contributions Receivable in the Statement of Net Assets Available for Benefits
as of December 31, 1996. In January 1997, these contributions were used to
acquire 27,631 shares of Common Stock at 85% of the fair market value of $63.00
at October 1, 1996 ($53.55).
NOTE E - BALANCES PAYABLE TO FORMER PARTICIPANTS
In accordance with the American Institute of Certified Public Accountants
guidelines for defined contribution plans, balances payable to Plan
Participants, both active and terminated, are included in Net Assets Available
for Benefits until actually distributed. At December 31, 1996 and December 31,
1995, balances payable to Participants who elected partial or full withdrawals
were $876 and $0, respectively.
NOTE F - TAX STATUS
The Plan is intended to qualify as an employee stock purchase plan in
compliance with Section 423 of the Internal Revenue Code ("IRC"). The Plan is
not a qualified plan in accordance with IRC Section 401(a). In addition, the
Plan is not subject to the requirements of ERISA.
NOTE G - SUBSEQUENT EVENTS
On February 26, 1997, the Company executed a definitive merger agreement (the
"Merger Agreement") with 3Com Corporation ("3Com"). Pursuant to the Merger
Agreement, the Company will merge with and become a wholly owned subsidiary of
3Com. At the effective time of the merger, each outstanding share of the
Company's common stock will be converted into the right to receive 1.75 shares
of 3Com common stock. The respective obligations of the Company and 3Com to
effect the merger are subject to the satisfaction of certain conditions,
including, but not limited to, obtaining requisite shareholder and regulatory
approvals, the approval for quotation on The Nasdaq National Market of the 3Com
common stock to be issued pursuant to the merger, the absence of any injunction
prohibiting consummation of the merger, the accuracy of the representations and
warranties contained in the Merger Agreement, the receipt of certain legal
opinions with respect to tax matters and the receipt and confirmation of
certain accountants' letters with respect to the qualification of the merger as
a pooling of interests transaction.
On May 8, 1997, 3Com's Registration Statement on Form S-4, as amended, (the
"Registration Statement"), containing a Joint Proxy Statement and Prospectus
related to the merger, was declared effective by the Securities and Exchange
Commission. As indicated in the Registration Statement, special meetings of
the stockholders of the Company and of the shareholders of 3Com for the
purpose of considering and voting upon proposals to approve the merger will be
held on June 11, 1997. It is anticipated that the merger will be effected
during the Company's fiscal third quarter ending June 29, 1997.
The Company has agreed to take such action as is necessary to cause the Price
Date of the then current Offering under the Plan to be the last trading day on
which the Company's common stock is traded on The NASDAQ National Market
immediately prior to the merger date ("the Final Purchase Date"). On the Final
Purchase Date, the Company shall apply the funds credited as of such date under
the Plan within each participant's payroll withholding account to the purchase
of shares of the Company's common stock in accordance with the terms of the
Plan.
