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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 |
For the calendar plan year ended December 31, 2004
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-10726
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Worldbridge Broadband Services 401(k) Plan
B. | Name of the issuer of the securities help pursuant to the plan and the address of its principal executive offices: |
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801-7530
Notices and communications from the Securities and Exchange
Commission relative to this report should be forwarded to:
David A. Woodle
President and CEO
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
(814) 238-2461
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REQUIRED INFORMATION
A. Financial Statements
Financial Statements and Supplemental Schedule
dated as of December 31, 2004 and 2003 (with
Independent Registered Public Accounting Firm Report thereon)
B. Exhibits
23.1 Consent of Independent Registered Public Accounting Firm
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WORLDBRIDGE BROADBAND SERVICES
401(k) PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2004AND 2003
&
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
&
SUPPLEMENTAL SCHEDULE
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PAGE | ||
1 | ||
FINANCIAL STATEMENTS: | ||
2 | ||
3 | ||
4 | ||
SUPPLEMENTAL SCHEDULE, | ||
SCHEDULE H, LINE 4I – SCHEDULE OF ASSETS (HELD AT END OF YEAR) | 11 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Worldbridge Broadband Services 401(k) Plan and
Board of Directors of C-COR Incorporated:
We have audited the accompanying statement of net assets available for benefits of Worldbridge Broadband Services 401(k) Plan as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Parente Randolph, PC
Wilkes-Barre, Pennsylvania
June 6, 2005
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WORLDBRIDGE BROADBAND SERVICES
401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 | 2003 | |||||
INVESTMENTS: | ||||||
At estimated fair value: | ||||||
Pooled separate accounts | $ | 1,177,979 | $ | 1,072,341 | ||
Participant loans | 98,669 | 88,107 | ||||
1,276,648 | 1,160,448 | |||||
At quoted fair value, | ||||||
C-COR Incorporated common stock | 228,272 | 282,895 | ||||
At contract value, | ||||||
Investment contract with insurance company | 318,729 | 386,720 | ||||
Total investments | 1,823,649 | 1,830,063 | ||||
RECEIVABLES: | ||||||
Employer contribution | 3,065 | — | ||||
Employee contributions | 8,501 | — | ||||
Total assets | 1,835,215 | 1,830,063 | ||||
LIABILITIES, | ||||||
Excess contributions payable to employees | 34,514 | 23,952 | ||||
NET ASSETS AVAILABLE FOR BENEFITS | $ | 1,800,701 | $ | 1,806,111 | ||
See Notes to Financial Statements
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WORLDBRIDGE BROADBAND SERVICES
401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 | 2003 | ||||||
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | |||||||
Investment income: | |||||||
Interest income | $ | 14,509 | $ | 17,546 | |||
Net appreciation in fair value of investments | 102,158 | 428,928 | |||||
Total | 116,667 | 446,474 | |||||
Contributions: | |||||||
Employer contribution | 65,542 | 55,557 | |||||
Employee contributions | 197,803 | 202,809 | |||||
Rollover contributions | 21,106 | 1,505 | |||||
Total | 284,451 | 259,871 | |||||
Total additions | 401,118 | 706,345 | |||||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | |||||||
Distributions | 335,088 | 469,922 | |||||
Administrative expenses | 6,244 | 8,185 | |||||
Total deductions | 341,332 | 478,107 | |||||
TRANSFER TO OTHER PLAN | 65,196 | 45,301 | |||||
Net (decrease) increase | (5,410 | ) | 182,937 | ||||
NET ASSETS AVAILABLE FOR BENEFITS: | |||||||
Beginning of year | 1,806,111 | 1,623,174 | |||||
End of year | $ | 1,800,701 | $ | 1,806,111 | |||
See Notes to Financial Statements
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WORLDBRIDGE BROADBAND SERVICES 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
1. | DESCRIPTION OF PLAN |
The following brief description of the Worldbridge Broadband Services 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
GENERAL
The provisions of the Plan are intended to satisfy the requirements of Section 401(k) of the Internal Revenue Code (“IRC”). The Plan was established October 1, 1997. Employees become eligible to participate in the Plan commencing on the earlier of 30 consecutive days of employment or completion of 1,000 hours of service. The Plan covers substantially all employees of Broadband Network Services, Inc. d/b/a Worldbridge Broadband Services, Inc. (the “Company”), a wholly-owned subsidiary of C-COR Incorporated (“C-COR”). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
CONTRIBUTIONS
EMPLOYEE PRE-TAX CONTRIBUTIONS
Participants may direct the Company to reduce their compensation, as defined in the Plan, up to a maximum amount established by the Internal Revenue Service annually. Non-highly compensated (“NHC”) participants may reduce their compensation by 1% to 100% (in whole percentages) and highly compensated (“HC”) participants may reduce their compensation by 1% to 15% (in whole percentages). Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers 19 pooled separate accounts, C-COR common stock and an insurance investment contract as investment options for participants.
EMPLOYER MATCHING CONTRIBUTIONS
The Company may match eligible employee contributions. The employer matching rate percentage is determined annually by C-COR’s Compensation Committee of the Board of Directors. The employer match was equal to fifty cents for each one dollar contributed up to 6% of eligible compensation in 2003. In 2004, the Plan was declared a “safe harbor” Plan and the match was dollar for dollar on the first 3% of eligible compensation and fifty cents on the dollar for the next 1% to 3% of eligible compensation, up to a total contribution of 6%.
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
EMPLOYER DISCRETIONARY CONTRIBUTIONS
Subject to the approval by C-COR’s Compensation Committee of the Board of Directors, the Company may contribute a discretionary amount to the Plan. The discretionary contribution is subject to an allocation formula based on compensation, and requires employment on the last day of the Plan year. There were no employer discretionary contributions in 2004 or 2003.
PARTICIPANT ACCOUNTS
Each participant’s account is credited with the participant’s contribution and allocations of (a) the employer’s matching and discretionary contributions (if applicable) and (b) allocations of plan earnings. In addition, each participant’s account is charged with an allocation of the administrative expenses incurred by the Plan. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
VESTING
Participants are vested immediately in their contributions plus actual earnings thereon. During Plan year 2004, employees are 100% vested in the employer contributions as the Plan is a Safe Harbor Plan. The Compensation Committee of the Board of Directors will review and make a determination on the Safe Harbor classification on an annual basis. For years prior to 2004, employees become vested in the employer contributions portion of their account according to the following schedule:
YEARS OF CREDITED SERVICE | PERCENT VESTED | ||
Less than 1 year | 0 | % | |
1 year but less than 2 years | 25 | % | |
2 years but less than 3 years | 50 | % | |
3 years but less than 4 years | 75 | % | |
4 years or more | 100 | % |
For vesting calculations for transfer of assets to the Plan related to acquisitions, the Plan maintains the prior plan’s vesting schedule for these transferred accounts.
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
PARTICIPANT LOANS
Participants may borrow up to 50% of their vested account balance, with a maximum aggregate balance of $50,000 per participant. Loans are stated at the unpaid principal balance, which approximates fair value, and interest accrues at a rate of prime plus 1% at the time of the loan. The loans are secured by the balance in the participant’s account. Interest rates ranged from and 5.00% to 10.00% at December 31, 2004 and 2003, which are commensurate with local prevailing interest rates. Principal and interest is paid ratably through payroll deductions.
PAYMENT OF BENEFITS
Benefits under the Plan are paid upon separation from service, death, total and permanent disability, or retirement. Upon a participant’s death, the entire account balance will be paid to his/her beneficiary. Hardship withdrawals are permitted for “severe” financial hardships, as defined by the Plan.
FORFEITED ACCOUNTS
Employer matching contributions and employer discretionary contributions that are forfeited are used to offset administrative expenses and employer contributions. Administrative expenses and employer contributions were offset by $20,053 and $24,299 in 2004 and 2003, respectively, from forfeited nonvested accounts.
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis of accounting.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in various combinations of investment funds. Investment funds are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits, and changes therein, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan’s investments are stated at fair value except for the investment contract with an insurance company, which is valued at contract value, which approximates fair value. The Plan’s pooled separate accounts are valued at estimated fair value based on the net unit value as determined by Prudential Retirement Insurance and Annuity Company (“Prudential”), the custodian of the Plan. C-COR’s common stock is valued at quoted fair value based on market value as quoted on the National Association of Securities Dealers Automated Quotation System. Participant loans are stated at cost, which is estimated fair value. Purchases and sales of investments are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
3. | INVESTMENTS |
The following table presents investments at December 31, 2004 and 2003. Investments that represent five percent or more of the Plan’s net assets are separately identified.
2004 | 2003 | |||||
Investments at estimated fair value: | ||||||
Pooled separate accounts: | ||||||
Mid Cap Growth Artisan Partners | $ | 236,447 | $ | 226,264 | ||
Dryden S&P 500 Index | 152,735 | 157,948 | ||||
Morgan Stanley Large Cap Growth | 123,498 | |||||
Oppenheimer Global CL A | 194,314 | 174,111 | ||||
Prudential Lifetime 40 | 100,448 | 95,147 | ||||
Prudential Lifetime 30 | 92,962 | |||||
Turner Investment Large Cap Growth | 142,120 | |||||
Other | 258,953 | 295,373 | ||||
Participant loans | 98,669 | 88,107 | ||||
1,276,648 | 1,160,448 | |||||
Investments at quoted fair value, C-COR Incorporated common stock | 228,272 | 282,895 | ||||
Investment at contract value, Guaranteed Income Contract | 318,729 | 386,720 | ||||
Total investments | $ | 1,823,649 | $ | 1,830,063 | ||
During the years ended December 31, 2004 and 2003, the Plan’s investments (including gains and losses on investments bought, sold, and held during the year) appreciated (depreciated) in value as follows:
2004 | 2003 | ||||||
Investments at estimated fair value, Pooled separate accounts | $ | 136,794 | $ | 235,500 | |||
Investments at quoted fair value, C-COR Incorporated common stock | (34,636 | ) | 193,428 | ||||
Net appreciation in fair vaIue | $ | 102,158 | $ | 428,928 | |||
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
4. | INVESTMENT CONTRACTWITH INSURANCE COMPANY |
The Plan has an investment contract with Prudential, and contributions are maintained in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The contract is included in the financial statements at contract value as reported to the Plan by Prudential. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield of the Prudential Guaranteed Income Contract was 2.85% and 3.05% in 2004 and 2003, respectively. The crediting interest rate as of December 31, 2004 and 2003 was 2.90% and 2.80%, respectively.
5. | PLAN TERMINATION |
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts, and any unallocated assets of the Plan will be allocated to participant accounts and distributed in such a manner as the Company may determine.
6. | TAX STATUS |
The Company has adopted a prototype non-standardized profit sharing plan, which received a letter dated July 28, 2004 from the Internal Revenue Service that it was designed in accordance with the applicable sections of the Internal Revenue Code (“IRC”). The Plan has been amended since the date of the letter. The Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and is exempt from federal income taxes.
7. | RELATED-PARTY TRANSACTIONS |
Plan investments include units of pooled separate accounts and a general account administered by Prudential. Prudential is the custodian of the Plan and, therefore, these transactions qualify as party-in-interest transactions. Additionally, the Plan maintains investments in C-COR common stock.
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WORLDBRIDGE BROADBAND SERVICES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
8. | LIABILITIES |
The Plan has a liability at December 31, 2004 of $34,514 and December 31, 2003 of $23,952 related to excess contributions. The excess contributions were returned prior to March 15 in 2005 and 2004, respectively.
9. | PLAN ADMINISTRATIVE EXPENSES |
Administrative expenses for the Plan are paid by the Company and from the forfeiture account.
10. | TRANSFER TO OTHER PLAN |
During 2004, four employees of the Company became employees of C-COR Incorporated. These employees transferred their participant balances in the Plan totaling $65,196 to the C-COR Incorporated Retirement Savings and Profit Sharing Plan.
During 2003, two employees of the Company became employees of C-COR. These employees transferred their participant balances in the Plan totaling $45,301 to the C-COR Incorporated Retirement Savings and Profit Sharing Plan, formerly the C-COR.net Corp. Retirement Savings and Profit Sharing Plan.
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WORLDBRIDGE BROADBAND SERVICES
401(k) PLAN
EIN: 24-0811591 PLAN NUMBER: 004
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004
(a) | (b) | (c) | (d) | (e) | ||||||
IDENTITY OF ISSUE | DESCRIPTION OF INVESTMENT | COST | CURRENT VALUE | |||||||
* | C-COR Incorporated | Common stock | N/R | $ | 228,272 | |||||
* | Prudential Retirement & Investment Services | Guaranteed Income Contract | N/R | 318,730 | ||||||
* | Pooled separate accounts: | |||||||||
* | Mid Cap Growth Artisan Partners | N/R | 236,447 | |||||||
* | Oppenheimer Global CL A | N/R | 194,314 | |||||||
* | Dryden S & P Index | N/R | 152,735 | |||||||
* | Turner Investment Large Cap Growth | N/R | 142,120 | |||||||
* | Prudential Lifetime 40 | N/R | 100,448 | |||||||
* | Prudential Lifetime 30 | N/R | 92,962 | |||||||
* | T.Rowe Price Equity Income Adv SH | N/R | 70,253 | |||||||
* | Core Bond Enhanced Index PIM | N/R | 59,768 | |||||||
* | Nations International Val CL A | N/R | 36,235 | |||||||
* | Templeton Growth | N/R | 29,067 | |||||||
* | Prudential Lifetime 20 | N/R | 22,966 | |||||||
* | American Century Equity Income INV | N/R | 11,589 | |||||||
* | Small Value/Perkins Wolf McDonnell | N/R | 9,857 | |||||||
* | Oakmark Equity and Income CL I | N/R | 9,854 | |||||||
* | Prudential Lifetime 50 | N/R | 5,159 | |||||||
* | Prudential Lifetime 60 | N/R | 2,785 | |||||||
* | Turner Investment Partners Balanced | N/R | 761 | |||||||
* | Time Square Small Cap Growth | N/R | 330 | |||||||
* | American Century International Growth | N/R | 328 | |||||||
* | PARTICIPANT LOANS | Participant loans with various rates of interest from 5.0% to 10.00% | $ | 0 | 98,669 | |||||
TOTAL | $ | 1,823,649 | ||||||||
* | Parties-in-interest, as defined by ERISA |
N/R - Participant directed investment; cost not required to be reported
See Notes to Financial Statements
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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.
Worldbridge Broadband Services 401(k) Plan | ||||
C-COR Incorporated | ||||
Plan Administrator | ||||
DATE: June 28, 2005 | By: | /s/ William T. Hanelly | ||
William T. Hanelly | ||||
Chief Financial Officer, Treasurer and Secretary |
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