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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, 2005
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: |
C-COR Incorporated Supplemental Executive Retirement 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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Financial Statements and Supplemental Schedule dated as of December 31, 2005 and 2004 (with Report of Independent Registered Public Accounting Firm thereon) | 2-10 |
B. Exhibits
23.1 | Consent of Independent Registered Public Accounting Firm |
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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.
C-COR Incorporated Supplemental Executive Retirement Plan | ||||
C-COR Incorporated | ||||
Plan Administrator | ||||
DATE: June 29, 2006 | By: | /s/ William T. Hanelly | ||
William T. Hanelly | ||||
Chief Financial Officer, Treasurer and Secretary |
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2005 AND 2004
&
REPORTOF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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FINANCIAL STATEMENTS: | ||
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
C-COR Incorporated Supplemental Executive Retirement
Plan and Board of Directors of C-COR Incorporated:
We have audited the accompanying statement of net assets available for benefits of C-COR Incorporated Supplemental Executive Retirement Plan as of December 31, 2005 and 2004, 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, 2005 and 2004, 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.
/s/ Parente Randolph, LLC
Wilkes-Barre, Pennsylvania
June 15, 2006
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
2005 | 2004 | |||||
INVESTMENTS: | ||||||
At quoted fair value: | ||||||
Mutual funds | $ | 1,455,947 | $ | 1,108,176 | ||
C-COR Incorporated common stock | 243,530 | 472,575 | ||||
At contract value, | ||||||
Investment contract with insurance company | 169,429 | 218,057 | ||||
Total investments | 1,868,906 | 1,798,808 | ||||
RECEIVABLES: | ||||||
Employer contribution | 8,755 | 3,127 | ||||
Employee contribution | 6,875 | 7,242 | ||||
Total assets | 1,884,536 | 1,809,177 | ||||
LIABILITIES | — | — | ||||
NET ASSETS AVAILABLE FOR BENEFITS | $ | 1,884,536 | $ | 1,809,177 | ||
See Notes to Financial Statements
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
2005 | 2004 | ||||||
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | |||||||
Investment (loss) income: | |||||||
Interest income | $ | 55,056 | $ | 16,493 | |||
Net (depreciation) appreciation in fair value of investments | (162,527 | ) | 17,887 | ||||
Total | (107,471 | ) | 34,380 | ||||
Contributions: | |||||||
Employer contributions | 61,878 | 61,061 | |||||
Employee contributions | 137,879 | 341,472 | |||||
Total | 199,757 | 402,533 | |||||
Net additions | 92,286 | 436,913 | |||||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | |||||||
Benefits paid to participants | 16,901 | 7,478 | |||||
Administrative expenses | 26 | — | |||||
Total deductions | 16,927 | 7,478 | |||||
Net increase | 75,359 | 429,435 | |||||
NET ASSETS AVAILABLE FOR BENEFITS: | |||||||
Beginning of year | 1,809,177 | 1,379,742 | |||||
End of year | $ | 1,884,536 | $ | 1,809,177 | |||
See Notes to Financial Statements
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
1. | DESCRIPTION OF PLAN |
The following brief description of the C-COR Incorporated Supplemental Executive Retirement Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
The Plan name was changed effective August 16, 2004 from C-COR.net Corp. Supplemental Executive Retirement Plan to C-COR Incorporated Supplemental Executive Retirement Plan.
GENERAL
The Plan is intended to provide the accumulation of supplemental funds for retirement on a tax-deferred basis for a select group of management employees or highly compensated employees. The Plan was established May 1, 1996, and was amended and restated effective January 1, 2003. Participation in the Plan is limited to eligible employees of C-COR Incorporated (the “Company”) who have completed 30 consecutive days of employment and who are designated by the Committee appointed by the Board of Directors (the “Committee”) to administer the Plan or the officer(s) of the Company authorized to act on the Committee’s behalf.
Assets of the Plan are subject to the claims of the general creditors of the Company in the event of bankruptcy or insolvency. Plan participants have no direct or secured claim in any asset of the Plan and have the status of general unsecured creditors of the Company with respect to any amounts due under the Plan.
CONTRIBUTIONS
EMPLOYEE PRE-TAX CONTRIBUTIONS
Participants may direct the Company to reduce their base salary by up to 30% (in whole percentages). In addition, participants may contribute up to 100% of their incentive plan compensation. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers 9 mutual funds, Company common stock and an insurance company investment contract as investment options for participants.
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C-COR INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
EMPLOYER MATCHING CONTRIBUTIONS
The Company may match eligible employee contributions. The employer matching rate percentage is determined annually by the Company’s Compensation Committee of the Board of Directors. In 2005 and 2004, the employer match was equal to one dollar for each dollar contributed to 6% of eligible compensation. Participants are eligible to contribute to both the C-COR Incorporated Retirement Savings and Profit Sharing Plan and the Plan. The employer match may not exceed a total of six percent between the two plans, with the match going first to the C-COR Incorporated Retirement Savings and Profit Sharing Plan.
EMPLOYER DISCRETIONARY CONTRIBUTIONS
Subject to the approval by the Company’s Compensation Committee of the Board of Directors, the Company may contribute a discretionary amount to the Plan. In October 2005, the Plan was amended to state the Company will pay discretionary contributions to each eligible participant equal to 8% of the participant’s base and bonus compensation that is paid each pay period. There were no employer discretionary contributions in 2004.
PARTICIPANT ACCOUNTS
Each participant’s account is credited with the participant’s contribution, the employer matching contribution and allocations of Plan earnings. 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. Employer matching contributions are vested at 100% starting January 1, 2003, based on approval by the Compensation Committee of the Board of Directors. The Compensation Committee of the Board of Directors will review and make a determination of the employer matching contributions on an annual basis. For years prior to 2003, employees become vested in the employer’s contribution 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 | 20 | % | |
2 years but less than 3 years | 40 | % | |
3 years but less than 4 years | 60 | % | |
4 years but less than 5 years | 80 | % | |
5 years or more | 100 | % |
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C-COR INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
PAYMENT OF BENEFITS
Benefits under the Plan are paid upon separation from service, death, disability, or retirement. Upon a participant’s death, the entire account balance will be paid to his/her beneficiary. Effective January 1, 2003, In-Service distributions were allowed in the Plan as well as Unscheduled Deferral distributions. Hardship withdrawals are permitted for “severe” financial hardships, as defined by the Plan. Payment of benefits shall be in the form of a lump-sum payment or in annual installments over a period not extending beyond the shorter of ten years or a participant’s life expectancy or the joint and last survivor expectancy of the participant and his/her beneficiary. Payment shall be determined each year based upon the amount of the participant’s accrued benefit as of the prior December and the remaining number of payment periods.
ADMINISTRATIVE COSTS
Certain administrative expenses of the Plan were paid by the Company in 2005 and 2004.
FORFEITED ACCOUNTS
Employer matching contributions that are forfeited are used to offset the amount of employer matching contributions to the Plan. There were no forfeitures used during 2005 or 2004.
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis of accounting.
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C-COR INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
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 VALUATIONAND 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 mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. C-COR Incorporated common stock is stated at market value as quoted on the National Association of Securities Dealers Automated Quotation System. Purchases and sales of securities 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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C-COR INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
3. | INVESTMENTS |
The following table presents investments at December 31, 2005 and 2004. Investments that represent five percent or more of the Plan’s net assets are separately identified.
2005 | 2004 | ||||||
Investments at quoted fair value: | |||||||
Mutual funds: | |||||||
Oppenheimer Global (Class A) | $ | 464,547 | $ | 332,115 | |||
S&P 500 Index | 267,411 | 213,047 | |||||
Artisan Mid Cap | 143,829 | 117,635 | |||||
Fidelity Advisors Equity Income | 182,044 | 233,784 | |||||
Janus Balanced | 177,211 | 60,293 | * | ||||
Other | 220,905 | 151,302 | |||||
Total | 1,455,947 | 1,108,176 | |||||
C-COR Incorporated common stock | 243,530 | 472,575 | |||||
Investment at contract value, Guaranteed Income Contract | 169,429 | 218,057 | |||||
Total investments | $ | 1,868,906 | $ | 1,798,808 | |||
* | Denotes less than 5% of Plan assets for the respective plan year. |
During the years ended December 31, 2005 and 2004, the Plan’s investments (including gains and losses on investments bought, sold, and held during the year) (depreciated) appreciated in value as follows:
2005 | 2004 | |||||||
Investments at quoted fair value: | ||||||||
Mutual funds | $ | 61,261 | $ | 110,878 | ||||
C-COR Incorporated common stock | (223,788 | ) | (92,991 | ) | ||||
Net (depreciation) appreciation in fair value | $ | (162,527 | ) | $ | 17,887 | |||
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C-COR INCORPORATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
NOTESTO FINANCIAL STATEMENTS
4. | INVESTMENT CONTRACTWITH INSURANCE COMPANY |
The Plan has an investment contract with Prudential Retirement Insurance and Annuity Company, (“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. 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 3.35% and 3.50% in 2005 and 2004, respectively. The crediting interest rate as of December 31, 2005 and 2004 was 3.35% and 3.50%, 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. No termination of this Plan shall alter the right of the participant (or his/her beneficiary) to payments of benefits previously credited to such participant’s contribution accounts under the Plan.
6. | TAX STATUS |
The Plan is a nonqualified deferred compensation plan which is exempt from most provisions of ERISA, as participation is limited to certain highly compensated members of management and employees who are selected for participation in the Plan. The Plan is not subject to any provisions of and is not qualified under Section 401(a) of the IRC.
7. | RELATED-PARTY TRANSACTIONS |
Plan investments include 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 the Company’s common stock.
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