-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6NTt9Cab3OhLa6OCqsZP8iYZwposMToPMDm1cn0tO4n6DkvgDT1iAw98XWUk3d9 mDT1pJD21V4LcC4wb22hVg== 0000950148-96-001437.txt : 19960719 0000950148-96-001437.hdr.sgml : 19960719 ACCESSION NUMBER: 0000950148-96-001437 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960718 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEKELEC CENTRAL INDEX KEY: 0000790705 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 952746131 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15135 FILM NUMBER: 96596438 BUSINESS ADDRESS: STREET 1: 26580 W AGOURA RD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8188805656 MAIL ADDRESS: STREET 1: 26580 W AGOURA RD CITY: CALABASAS STATE: CA ZIP: 91302 10-K/A 1 FORM 10-K/A NO. 1 1 ______________________________________________________________________________ FORM 10-K/A NO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _________________ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 0-15135 TEKELEC (Exact name of registrant as specified in its charter) CALIFORNIA 95-2746131 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 26580 WEST AGOURA ROAD, CALABASAS, CALIFORNIA 91302 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 880-5656 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, WITHOUT PAR VALUE (Title of class) 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the last reported sale price of the Common Stock on March 1, 1996 as reported on the Nasdaq National Market, was approximately $92,500,000. The number of shares outstanding of the registrant's Common Stock on March 1, 1996 was 11,655,189. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement to be delivered to shareholders in connection with their Annual Meeting of Shareholders to be held on May 10, 1996 are incorporated by reference into Part III of this Annual Report. 2 EXPLANATORY NOTE This Form 10-K/A No. 1 is being filed solely: (i) to amend Item 14 to include a footnote to Exhibit 10.19 indicating that confidential treatment has been requested with respect to portions of the Exhibit, and that such confidential portions have been deleted and filed with the Commission pursuant to Rule 24b-2 promulgated under the Securities Act of 1934 and (ii) to include an amended Exhibit 10.19 which, in response to the Commission's comments regarding the Registrant's request for confidential treatment of such Exhibit, includes certain portions of such Exhibit which were omitted in the original filing of the Form 10-K. -2- 3 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this Report: CONSOLIDATED FINANCIAL STATEMENTS PAGE . Report of Independent Accountants F-1 . Consolidated Statements of Operations for each of the three years in the period ended December 31, 1995 F-2 . Consolidated Balance Sheets as of December 31, 1995 and 1994 F-3 . Consolidated Statements of Cash Flow for each of the three years in the period ended December 31, 1995 F-4 . Consolidated Statements of Shareholders' Equity for each of the three years in the period ended December 31, 1995 F-5 . Notes to Consolidated Financial Statements F-6 PAGE CONSOLIDATED FINANCIAL STATEMENT SCHEDULE . Schedule II Valuation and Qualifying Accounts and Reserves for each of the three years in the period ended December 31, 1995 S-1 Schedules which are not listed above have been omitted because they are not applicable or the information required to be set forth therein is included in the consolidated financial statements or notes thereto. LIST OF EXHIBITS 3.1 Amended and Restated Articles of Incorporation(1) 3.2 Bylaws, as amended(2) 10.1 Amended and Restated 1984 Stock Option Plan, including forms of stock option agreements(3)(4) 10.2 Employee Stock Purchase Plan and form of subscription agreement(5), as amended January 29, 1988(6), January 28, 1989(7), March 15, 1991(8), May 15, 1992(9), December 8, 1992(9), March 24, 1993(9) and October 29, 1994(4)(10) -3- 4 10.3 Amended and Restated Non-Employee Director Equity Incentive Plan, including forms of stock award certificate and nonstatutory stock option agreements(4)(11) 10.4 1994 Stock Option Plan, including forms of stock option agreements(11), as amended February 4, 1995(12) and March 3, 1995 (4)(12) 10.5 Retirement Pension Rules of Tekelec Ltd.(1)(4) 10.6 Form of Indemnification Agreement between the Registrant and all directors of the Registrant(4)(13) 10.7 Lease dated as of February 8, 1988 between the Registrant and State Street Bank and Trust Company of California, N.A., not individually, but solely as an Ancillary Trustee for State Street Bank and Trust Company, a Massachusetts banking corporation, not individually, but solely as Trustee for the AT&T Master Pension Trust, covering the Company's principal facilities in Calabasas, California(14) 10.8 Form of International Distributor Agreement(15) and Schedule of Distributors 10.9 Loan and Security Agreement dated September 14, 1993 between the Registrant and CoastFed Business Credit Corporation(16), as amended by Amendment to Loan Documents dated May 18, 1994(17) 10.10 Accounts Collateral Security Agreement dated September 14, 1993 between the Registrant and CoastFed Business Credit Corporation(16) 10.11 Equipment Collateral Security Agreement dated May 18, 1994 between the Registrant and CoastFed Business Credit Corporation(17) 10.12 Officer Severance Plan, including form of Employment Separation Agreement(4)(18) 10.13 Consulting Agreement dated as of January 20, 1994 between the Registrant and Howard Oringer, including warrant and confidentiality agreement(4)(18) 10.14 Warrant issued to Robert V. Adams on January 16, 1992, as amended by Amendment No. 1 dated July 24, 1993(4)(18) 10.15 Warrant issued to Howard Oringer on January 16, 1992, as amended by Amendment No. 1 dated July 24, 1993(4)(18) 10.16 Warrant issued to Philip Black on April 16, 1994(4)(10) *10.17 Distributorship Agreement dated September 16, 1994 between the Registrant and AT&T Corp.(19) 10.18 Memo of Understanding dated October 27, 1994 between the Registrant and Stratus Computer, Inc.(1) *10.19 Compensation agreement dated November 22, 1995 between the Registrant and Allan Toomer(4) -4- 5 11.1 Statement of Computation of Earnings Per Share 21.1 Subsidiaries of the Registrant(1) 23.1 Consent of Coopers & Lybrand L.L.P. 27.1 Financial Data Schedule ----------------- * Confidential treatment has been requested or granted with respect to portions of this exhibit, and such confidential portions have been deleted and filed with the Commission pursuant to Rule 24b-2 promulgated under the Securities Act of 1934. (1) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1994. (2) Incorporated by reference to Amendment No. 2 to the Registrant's Registration Statement on Form S-3 (Registration No. 33-58551) filed with the Commission on May 18, 1995. (3) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-48079) filed with the Commission on May 22, 1992. (4) Constitutes a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report. (5) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-16094) filed with the Commission on December 9, 1986. (6) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-22370) filed with the Commission on June 8, 1988. (7) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-30475) filed with the Commission on August 11, 1989. (8) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-40612) filed with the Commission on May 16, 1991. (9) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-63102) filed with the Commission on May 24, 1993. (10) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-87558) filed with the Commission on December 19, 1994. (11) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-82124) filed with the Commission on July 28, 1994. (12) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-60611) filed with the Commission on June 27, 1995. -5- 6 (13) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1987. (14) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended June 30, 1988. (15) Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No. 33-4123) filed with the Commission on March 19, 1986. (16) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended September 30, 1993. (17) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended June 30, 1994. (18) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1993. (19) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended September 30, 1994. (B) REPORTS ON FORM 8-K No reports on Form 8-K were filed or required to be filed by the Registrant during the quarter ended December 31, 1995. (C) EXHIBITS See the list of Exhibits under Item 14(a)3 of this Annual Report on Form 10-K. (D) FINANCIAL STATEMENT SCHEDULES See the Schedule under Item 14(a)2 of this Annual Report on Form 10-K. -6- 7 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to the Registrant's Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calabasas, California. TEKELEC By: PHILIP J. ALFORD ------------------------- Philip J. Alford, Chief Executive Officer Dated: July 18, 1996 -7- 8 INDEX TO EXHIBITS
Exhibit No. Exhibit - ----------- ------- 10.19 Compensation Agreement dated November 22, 1995 between the Registrant and Allan Toomer*
______________________ * Confidential material has been omitted from this Exhibit pursuant to Rule 24b-2 and filed separately with the Securities and Exchange Commission. EX-10.19 2 EXHIBIT 10.19/COMPENSATION AGREEMENT 1 EXHIBIT 10.19 November 22, 1995 Mr. Allan Toomer Senior Vice President & General Manager Tekelec Network Switching Division 3000 Aerial Parkway Suite #120 Morrisville, NC 27560 Dear Allan, I am very pleased to offer the following compensation program to you as Senior Vice President and General Manager of Tekelec's Network Switching Division ("NSD"). This package, once accepted by you, will supersede and replace any executory portions of that agreed to in my letter to you dated September 5, 1994 (see attached). I am proposing a longer term commitment through 1997 from both you and Tekelec to supersede the previous arrangement. I believe this is beneficial to both of us because of the potential the EAGLE business offers and the contribution you can continue to make to its success. 1. Your base salary will be $203,000 per annum payable $7,807.69 bi-weekly effective October 1, 1995. It will be reevaluated annually each year thereafter based on my recommendations to the Compensation Committee of the Board and subject to final Board approval. 2. The terms of your bonus plan for 1995 will be as follows: (a) Up to * of your annual salary based on achievement of 105% of NSD's business plan revenues for 1995 (see attached) and operating income of * or (b) Up to * of your annual salary based on achievement of 110% of NSD's business plan revenues for 1995 and operating income of *. Under these criteria, the aggregate amount of your bonus for 1995 will be determined as follows: o one third of the bonus will be based on achievement of the revenue objective o one third of the bonus will be based on achievement of both the revenue and operating income objectives ________________ * Confidential material has been omitted pursuant to Rule 24b-2 and filed separately with the Securities and Exchange Commission. 2 Mr. Allan Toomer Page 2 o one third of the bonus will be based on achievement of both the revenue objectives and management objectives set forth in your 1994 review and based on my recommendation to the Board. The bonus plan for each year thereafter will be based on the Tekelec Corporate Executive bonus program recommended annually by me and approved by the Board of Directors. 3. The terms of the Early Retirement Bonus Plan outlined in the letter of September 5, 1994, will be amended as follows and will be in lieu of the benefits you are eligible to receive under the Officer Severance Plan. If you elect on or after 1/1/97 and prior to 4/1/97 to retire, or if your employment with Tekelec terminates prior to 4/1/97 as a result of your death or long-term disability, then you receive the following: A bonus payment equal to 130% of the sum of your then current salary plus the highest annual bonus paid to you by Tekelec in the three calendar years prior to your retirement date. At a minimum this will amount to $300,000. In addition, if your employment with Tekelec terminates prior to 4/1/97 as a result of your death or long-term disability, then all stock options granted to you prior to 9/30/95 under Tekelec's 1984 and 1994 Stock Option Plan which remain unvested at the date of such termination would immediately vest. 4. The vesting of the unvested portion of all stock options granted to you prior to September 30, 1995 under Tekelec's 1984 and 1994 Stock Option Plan will accelerate on a "first-in-first-out basis" and become exercisable as follows: December 31, 1995 26,000 March 31, 1996 23,000 June 30, 1996 20,000 September 30, 1996 17,000 December 31, 1996 10,000 ------ 96,000
5. Provided a successor as General Manager of NSD has been identified and approved by the Board of Directors and upon the effective date of your full-time retirement, then Tekelec will enter into a consulting agreement with you for 6 months for up to 20 hours per week at a rate of $2,500 per week. You will still be eligible for all other Tekelec benefits for which you qualify during this period. This consulting agreement may be extended by mutual agreement. 3 Mr. Allan Toomer Page 3 6. I will recommend that the Compensation Committee of the Board of Directors grant to you additional Stock Options with an aggregate exercise cost of $300,000, based on 100% of the closing price at November 22, 1995 of Tekelec Common Stock with vesting in 7 quarterly installments to commence 12/31/95 and ending 6/30/97. You will also be eligible for further grants of Stock Options based on my recommendation and subject to the discretion of the Compensation Committee of the Board. There can be no assurance, however, that such recommendations will be made or approved for you. 7. In the event of termination of your employment prior to January 1, 1997, you would still be eligible to receive your severance benefits in accordance with the terms of the Officer Severance Plan. In addition, if you are entitled to receive severance benefits under the Officers Severance Plan, all options granted to you prior to September 30, 1995 which remain unvested at the date of termination would immediately vest. Over the next two years there are some significant and exciting goals outlined below that I believe we have agreed you would like to achieve for Tekelec with NSD and Eagle. Obviously, in a rapidly changing environment new business opportunities will evolve that could change these goals and we will keep this under review. * o Continue to develop the NSD management team encompassing all major functions of sales, engineering, marketing and customer service. * o Continue to develop the EAGLE product line and business to at least $* in revenues and operating income of at least *% in 1997. * Although this agreement is subject to Board approval, I do not envision that it will not be approved. _____________ * Confidential material has been omitted pursuant to Rule 24b-2 and filed separately with the Securities and Exchange Commission. 4 Mr. Allan Toomer Page 4 Allan, I believe that this compensation program meets both our objectives. I am looking forward to continuing the working relationship we have developed and to the opportunity to build on the success you have achieved for EAGLE and Tekelec. * I look forward to receiving your agreement to the foregoing. Sincerely, /s/ Philip J. Alford - -------------------- Philip J. Alford President & CEO Agreed and accepted: Agreed and accepted effective /s/ Allan Toomer as of November 22, 1995 - --------------------- ----------------------- Allan Toomer cc: Compensation Committee Ronald W. Buckly, Coudert Brothers ______________ * Confidential material has been omitted pursuant to Rule 24b-2 and filed separately with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----