UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
or
[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1994
For the transition period from _______ to ________
Commission file number 0-23970
NETWORK PERIPHERALS INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0216135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1371 McCarthy Boulevard
Milpitas, California 95035
(Address, including zip code, of principal executive offices)
(408) 321-7300
(Registrant's telephone number, including area code)
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
---- ----
The number of shares of the Registrant's Common Stock, $0.001 par value,
outstanding as of July 31, 1996 was 11,897,036.
This quarterly report on Form 10-Q consists of 15 pages of which this is page 1.
The Exhibit Index begins on page 15.
NETWORK PERIPHERALS INC.
INDEX TO FORM 10-Q
For the quarter ended June 30, 1996
PART I. FINANCIAL INFORMATION
Item Page
----
1. Financial Statements (unaudited):
a. Condensed Consolidated Balance Sheets -- June 30, 1996
and December 31, 1995. 3
b. Condensed Consolidated Statements of Operations -- Three
Months and Six Months Ended June 30, 1996 and 1995. 4
c. Condensed Consolidated Statements of Cash Flows -- Six
Months Ended June 30, 1996 and 1995. 5
d. Notes to Condensed Consolidated Financial Statements 6-7
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8-11
PART II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K 12-13
Signatures 14
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NETWORK PERIPHERALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS -Unaudited
(in thousands, except share and per
share data)
June 30, December 31,
1996 1995
------------------ ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 21,880 $ 27,210
Short-term investments 22,171 24,931
Accounts receivable, net of allowance for doubtful
accounts and returns of $1,007 and $738, respectively 8,451 5,364
Inventories 8,458 6,420
Deferred income taxes 2,544 2,189
Prepaid expenses and other current assets 1,943 1,557
------------------ ----------------
Total current assets 65,447 67,671
Property and equipment, net 2,734 2,280
Other assets 1,746 160
------------------ ----------------
$ 69,927 $ 70,111
================== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,380 $ 956
Accrued liabilities 8,085 3,446
------------------ ----------------
Total current liabilities 11,465 4,402
------------------ ----------------
Stockholders' equity:
Preferred Stock, $0.001 par value, 2,000,000 shares
authorized; no shares issued or outstanding - -
Common Stock, $0.001 par value, 20,000,000
shares authorized; 11,891,484 and 11,268,161,
shares issued and outstanding, respectively 12 11
Additional paid-in capital 62,409 56,579
Notes receivable from stockholders (5) (14)
Retained earnings (accumulated deficit) (3,954) 9,133
------------------ ----------------
Total stockholders' equity 58,462 65,709
------------------ ----------------
$ 69,927 $ 70,111
================== ================
<FN>
The accompanying notes are an integral part of these condensed financial statements.
</FN>
3
NETWORK PERIPHERALS INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS - Unaudited
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ------------------------------
1996 1995 1996 1995
------------- ------------- -------------- -------------
Net sales $ 12,774 $ 13,815 $ 22,902 $ 27,030
Cost of sales 6,792 7,292 12,990 14,407
------------- ------------- -------------- -------------
Gross profit 5,982 6,523 9,912 12,623
------------- ------------- -------------- -------------
Operating expenses:
Acquired research and development in
process and product integration costs - - 13,732 -
Research and development 2,340 1,374 3,952 2,739
Marketing and selling 2,687 1,543 4,732 3,100
General and administrative 951 543 1,542 1,066
------------- ------------- -------------- -------------
Total operating expenses 5,978 3,460 23,958 6,905
------------- ------------- -------------- -------------
Income (loss) from operations 4 3,063 (14,046) 5,718
Interest income, net 374 551 929 1,104
------------- ------------- -------------- -------------
Income (loss) before income taxes 378 3,614 (13,117) 6,822
Provision for income taxes 132 1,266 (30) 2,388
------------- ------------- -------------- -------------
Net income (loss) $ 246 $ 2,348 $ (13,087) $ 4,434
============= ============= ============== =============
Net income (loss) per share $ 0.02 $ 0.20 $ (1.13) $ 0.38
============= ============= ============== =============
Weighted average common and
common equivalent shares 12,333 11,750 11,617 11,757
============= ============= ============== =============
<FN>
The accompanying notes are an integral part of these condensed financial statements
</FN>
4
NETWORK PERIPHERALS INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS - Unaudited
Increase (decrease) in Cash and Cash Equivalents
(in thousands)
Six Months Ended
June 30,
-------------------------------
1996 1995
------------- -------------
Cash flows from operating activities:
Net income (loss) $ (13,087) $ 4,434
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,341 525
Research and development, in-process 13,032 -
Deferred income tax (355) -
Changes in assets and liabilities (net of effect of
NuCom acquisition)
Accounts receivable (1,937) (2,559)
Inventories (894) 1,036
Prepaid expenses and other current assets 881 147
Accounts payable 2,083 (2,824)
Accrued liabilities 631 (376)
------------- -------------
Net cash provided by operating activities 1,695 383
------------- -------------
Cash used in investing activities:
Cash paid for Acquisition, net of cash acquired (10,401) -
Holdback amount from Acquisition 1,116 -
Sale (purchase) of short-term investments 2,760 (13,727)
Purchases of property and equipment (996) (868)
------------- -------------
Net cash used in investing activities (7,521) (14,595)
------------- -------------
Cash flows from financing activities:
Proceeds from issuance of Common Stock 488 15
Repayment of stockholders' notes receivable 8 28
------------- -------------
Net cash provided by financing activities 496 43
------------- -------------
Net decrease in cash and cash equivalents (5,330) (14,169)
Cash and cash equivalents at beginning of period 27,210 21,068
------------- -------------
Cash and cash equivalents at end of period $ 21,880 $ 6,899
============= =============
Supplemental disclosure of cash flow information:
Income taxes paid $ 133 $ 2,382
============= =============
Cash paid for interest $ - $ 27
============= =============
Supplemental disclosure of noncash investing activity:
Common Stock used for acquisition of NuCom $ 5,342 $ -
============= =============
<FN>
The accompanying notes are an integral part of these condensed financial statements
</FN>
5
NETWORK PERIPHERALS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not contain all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements reflect all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation of the Company's financial condition as of June 30, 1996
and December 31, 1995, the results of its operations for the three and six month
periods ended June 30, 1996 and 1995, and its cash flows for the six month
periods ended June 30, 1996 and 1995. These financial statements should be read
in conjunction with the audited financial statements of the Company as of
December 31, 1994 and 1995 and for each of the three years in the period ended
December 31, 1995, including notes thereto, included in the Company's Annual
Report on Form 10-K (Commission File No. 0-23970).
Operating results for the three and six month periods ended June 30,
1996 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1996 or for any other future period.
2. NET INCOME PER SHARE
Net income per share is computed using the weighted average number of
common and common equivalent shares outstanding during the periods. Common
equivalent shares consist of stock options (using the treasury stock method).
Common equivalent shares from stock options are excluded from the computation if
their effect is antidilutive.
3. INVENTORIES
The components of inventory consist of the following (in thousands):
June 30, December 31,
1996 1995
------------------- --------------------
Raw material $ 4,450 $ 3,629
Work-in-process 3,080 1,894
Finished goods 928 897
------------------- --------------------
$ 8,458 $ 6,420
=================== ====================
6
NETWORK PERIPHERALS INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS--Continued
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
June 30, December 31,
1996 1995
---------------- ----------------
Computer and test equipment $ 5,100 $ 4,085
Furniture and fixtures 1,067 607
Leasehold improvements 346 346
---------------- ----------------
6,513 5,038
Less: accumulated depreciation (3,779) (2,758)
---------------- ----------------
$ 2,734 $ 2,280
================ ================
5. ACQUISITION OF NUCOM
Effective March 21, 1996 the Company completed its acquisition of NuCom
Systems, Inc. (NuCom), a Taiwan-based company, by purchasing all the outstanding
shares of NuCom in exchange for $11,158,134 in cash, and 440,748 shares of
Network Peripheral's common stock valued at $5,341,866, for an aggregate
purchase price of $17.1 million. The transaction was accounted for using the
purchase method; accordingly, the purchase price was allocated to the assets
acquired and liabilities assumed based on their estimated fair market values at
the date of acquisition. The research and development in process represents the
estimated current fair market value, using a risk-adjusted income approach, of
specifically identified technologies which had not reached technological
feasibility and had no future uses. The results of operations of NuCom will be
included with those of the Company beginning with the quarter ending June 30,
1996. The allocation of the purchase price is as follows (in thousands):
Research and development, in process $ 13,032
Other intangible assets 1,716
Current assets 4,495
Non-current assets 613
Property and equipment 479
Current liabilities Assumed (3,235)
-----------
$ 17,100
===========
The total purchase price is derived as follows:
Cash payment $ 11,158
Issuance of common stock 5,342
Other expenses 600
-----------
$ 17,100
===========
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
The forward-looking statements included in the succeeding paragraphs
are made in reliance upon the safe harbor provisions of the Private Securities
Lititgation Reform Act of 1995. The future events described in such statements
involve risks and uncertainties, including:
* the timely development and market acceptance of new products;
* the market demand by customers for the Company's existing products,
including demand by OEM customers for custom products, and the
distribution channels through which such demand is satisfied;
* competitive actions, including pricing actions and the introduction of new
competitive products, that may affect the volume of sales of the Company's
products;
* the resources expended in integrating the acquisition of NuCom and the
time required to complete that integration;
* uninterrupted supply of key components, including semiconductor devices
and other materials, some of which are sourced from a single supplier;
* the cost of materials and components;
* the ability of the Company to recruit, train and retain key personnel,
including engineers and other technical professionals;
* the development of new technologies rendering existing technologies and
products obsolete; and
* resources devoted to developing distribution channels and the success of
these efforts.
In evaluating these forward-looking statements, consideration should also be
given to the Business Risks discussed below in this interim report.
Net Sales
Net sales were $12.8 million for the three months ended June 30, 1996,
as compared to $13.8 million for the three months ended June 30, 1995, a
decrease of 8%. For the six months ended June 30, 1996 and 1995, net sales were
$22.9 million and $27.0 million, respectively, a decrease of 15%. The decreases
in the three and six month periods were primarily attributed to lower shipments
of FDDI LAN switching products, which declined 12% to $6.1 million for the
quarter and 32% to $9.8 million for the six months. The decline in shipments
reflected a significant reduction in OEM demand for FDDI switching hubs, offset
in part by shipments of new Fast Ethernet products. The Company made initial
shipments of its Fast Ethernet products in the quarter ended March 31, 1996. The
Fast Ethernet products represented $2.0 million, or 15.8% of net sales during
the most recent quarter.
Gross Profit/Margin
Gross margin was 46.8% for the three months ended June 30, 1996, as
compared to 47.2% for the three months ended June 30, 1995. The decrease was
primarily the result of the amortization of intangible assets related to the
acquisition of NuCom Systems, Inc. (the Acqusition) and changes in the product
mix. For the six months ended June 30, 1996 and 1995, gross margins were 43.3%
and 46.7%, respectively. The decrease was attributable to several nonrecurring
charges in the first quarter, including start-up costs for several of the Fast
Ethernet products and extraordinary costs to expedite production to meet
shipping requirements for certain OEM customers. Continued changes in the
product mix and the sales channel mix, variables in the development,
introduction and marketing of a new product line, fluctuations in the cost of
materials and components, as well as competitive factors, may adversely impact
the gross margin in future periods. Precluding such variables, the Company
expects the gross margin to remain relatively constant for the remainder of
1996.
Research and Development In-Process and Product Integration Costs
In the first quarter of 1996, the Company incurred one-time charges of
$13.0 million for in-process research and development costs and $700,000 for
product integration related to the Acquisition (refer to Note 5).
8
Research and Development
Research and development expense was $2.3 million, or 18.3% of net
sales, for the three months ended June 30, 1996, as compared to $1.4 million, or
9.9% of net sales, for the corresponding period in 1995. For the six months
ended June 30, 1996 and 1995, research and development expenses were $4.0
million, or 17.3% of sales, and $2.7 million, or 10.1% of sales, respectively.
The expenses in the three and six months ended June 30, 1996 are net of contract
funding of $121,000 and $271,000, respectively. No contract funding was recorded
in the corresponding periods in 1995. The increase in expenditures reflected the
addition of staff, facilities and equipment resulting from the Acquisition, as
well as costs for the development of new technologies, including ATM, and
enhancement of current technologies, including FDDI and Fast Ethernet. The
Company expects the dollar level of research and development expense to remain
relatively constant for the remainder of the 1996.
Marketing and Selling
Marketing and selling expense was $2.7 million, or 21% of net sales,
for the three months ended June 30, 1996, as compared to $1.5 million, or 11.2%
of net sales, for the corresponding period in 1995. For the six months ended
June 30, 1996 and 1995, marketing and selling expenses were $4.7 million, or
20.7% of net sales, and $3.1 million, or 11.5% of sales, respectively. The
increase in expenditures reflected the addition of staff, facilities and
equipment resulting from the Acquisition. Additionally, the Company incurred
expenses during 1996 while pursuing its marketing strategy to penetrate the
global markets, including Asia and Europe, and to establish brandname
recognition. The cost of implementing this strategy includes the addition of
sales staff and related overhead costs, and the cost of advertising and
promotional campaigns. The Company expects the dollar level of marketing and
selling expense to increase in future periods of 1996 as the Company expands its
international sales efforts.
General and administrative
General and administrative expense was $951,000, or 7.4% of net sales,
for the three months ended June 30, 1996, as compared to $543,000, or 3.9% of
net sales, for the corresponding period in 1995. For the six months ended June
30, 1996 and 1995, general and administrative expenses were $1.5 million, or
6.7% of sales, and $1.1 million, or 3.9% of sales, respectively. The increase in
expenditures reflected the addition of staff, facilities and equipment resulting
from the Acquisition and higher professional fees to support the increased
activities of the Company. The Company expects the dollar level of general and
administrative expense to remain relatively constant for the remainder of 1996.
Interest Income
Interest income was $374,000 for the three months ended June 30, 1996,
as compared to $551,000 for the corresponding period in 1995. For the six months
ended June 30, 1996 and 1995, interest income was $929,000 and $1.1 million,
respectively. The decrease was the result of reduced level of invested funds as
a result of the Acquisition.
Income Taxes
The Company's effective tax rate for the three and six months ended
June 30, 1996 was 35%, excluding the non-recurring charge of in-process research
and development, a non-deductible item for tax purposes. The rate was unchanged
from the rate applied throughout 1995 and is less than the combined federal and
state statutory rate due principally to the effects of tax exempt interest and
tax credits available to the Company.
Liquidity and Capital Resources
For the six months ended June 30, 1996, the Company recorded a loss of
$13.1 million due principally to a non-recurring charge for in-process research
and development purchased in connection with the Acquisition.
9
Cash provided by operating activities for the six months ended June 30,
1996 was $1.7 million, primarily due to a net increase in current liabilities,
offset in part by an increase in accounts receivable. The increases in current
liabilities is attributable principally to a low level of accounts payable at
the end of the prior year and the increase in account receivable is attributable
to a significant portion of shipment recorded in the last month in the quarter.
Cash used in investing activities for the six months ended June 30,
1996 was $7.5 million, of which $10.4 million, was attributed to the acquisition
of NuCom, reduced by $1.1 million retained in the transaction. The remainder of
the cash used was for the purchase of computer equipment offset by the sale of
short-term investments.
Cash provided by financing activities for the six months ended June 30,
1996 primarily resulted from the issuance of common stock under the Company's
stock option and employee stock purchase programs.
At June 30, 1996, the Company's principal sources of liquidity were its
cash, cash equivalents and short-term investments of $44.1 million. As of June
30, 1996, the Company was in the process of renegotiating its bank line of
credit and expects an agreement to be reached no later than the quarter ending
September 30, 1996. The Company believes that its existing cash balances and
funds provided by future operating activities will be sufficient to meet the
Company's capital and operating requirements for the foreseeable future.
Business Risks
In addition to the factors addressed in the preceding sections, certain
characteristics and dynamics of the Company's markets, technologies and
operations create risks to the Company's long-term success and to predictable
quarterly results. These risks will also affect the Company's ability to achieve
the results anticipated by the forward-looking statements contained in this
interim report. The Company's quarterly results have in the past varied, and are
expected in the future to vary significantly as a result of factors such as the
timing and shipment of significant orders, new product introductions or
technological advances by the Company and its competitors, market acceptance of
new or enhanced versions of the Company's products, changes in pricing policies
by the Company and its competitors, the mix of distribution channels through
which the Company's products are sold, the mix of products sold, the accuracy of
resellers' forecast of end-user demand, the ability of the Company to obtain
sufficient supplies of sole or limited source components for the Company's
products and general economic conditions. In response to competitive pressures
or new product introductions, the Company may take certain pricing or marketing
actions that could materially and adversely affect the Company's operating
results. In the event of a reduction in the prices of its products, the Company
has committed to providing retroactive price adjustments on inventories held by
its distributors, which could have the effect of reducing margins and operating
results. In addition, changes in the mix of products sold and the mix of
distribution channels through which the Company's products are sold may cause
fluctuations in the Company's gross margins. The Company's expense levels are
based, in part, on its expectations of its future revenue and, as a result, net
income would be disproportionately affected by a reduction in revenue. The
absence of significant Company experience with new products limits the Company's
ability to plan for production, market demand and sales and may adversely affect
operating results if the Company misallocates resources to a new product. Due to
the potential quarterly fluctuation in operating results, the Company believes
that quarter-to-quarter comparisons of its results of operations are not
necessarily meaningful and should not be relied upon as indicators of future
performance.
The markets for the Company's products are characterized by rapidly
changing technology, evolving industry standards, frequent new product
introductions and short product life cycles. These changes can adversely affect
the business and operating results of industry participants. The Company's
success will depend upon its ability to enhance its existing products and to
develop and introduce, on a timely and cost-effective basis, new products that
keep pace with technological developments and emerging industry standards and
address increasingly sophisticated customer
10
requirements. The inability to develop and manufacture new products in a timely
manner, the existence of reliability, quality or availability problems in the
products or their component parts, the failure to obtain reliable subcontractors
for volume production and testing of mature products, or the failure to achieve
market acceptance would have a material adverse effect on the Company's business
and operating results.
The markets in which the Company competes are also characterized by
intense competition. Several of the Company's competitors have significantly
broader product offerings and greater financial, technical, marketing and other
resources and finished installed bases than the Company. These larger
competitors may also be able to obtain higher priority for their products from
distributors and other resellers that carry products of many companies. A number
of the Company's competitors were recently acquired, which is likely to permit
these competitors to devote significantly greater resources to the development
and marketing of competitive products. These competitive pressures could
adversely affect the Company's business and operating results.
11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1(1) Amended and Restated Certificate of Incorporation.
3.2(1) By-Laws.
4.1(1) Fourth Amended and Restated Investor Rights
Agreement dated July 15, 1993.
10.1(1)* Form of Indemnity Agreement for directors and
officers.
10.2(1)* Amended and Restated 1993 Stock Option Plan and
forms of agreement thereunder.
10.3(1)* 1994 Employee Stock Purchase Plan.
10.4(1)* 1994 Outside Directors Stock Option Plan and form
of agreement thereunder.
10.6(1) Business Loan Agreement, and collateral agreements,
with Silicon Valley Bank dated August 9, 1991, as
amended May 5, 1992, April 15, 1993, February 1,
1994 and April 4, 1994 and Warrant dated August 10,
1991.
10.9(1) Facilities Lease dated August 8, 1991 with John
Arrillaga, Trustee, or his Trustee, or his
Successor Trustee UTA dated 7/20/77, as amended,
and Richard T. Peery, Trustee, or his Successor
Trustee UTA dated 7/20/77, as amended.
10.10(1)(2) Corporate Purchasing Agreement with Ungermann-Bass,
Inc. dated June 10, 1991.
10.11(1)(2) Product Development Agreement with Ungermann-Bass,
Inc. dated June 10, 1991.
10.12(1)(2) OEM Purchase Agreement with Network General
Corporation dated March 4, 1991.
10.13(1)(2) Authorized Distributor Agreement with Westcon, Inc.
dated March 4, 1993.
10.14(3) Amendment No. 1 to Facilities Lease dated June 1,
1994 with John Arrillaga, Trustee, or his Successor
Trustee UTA dated 7/20/77, as amended, and Richard
T. Peery, Trustee, or his Successor Trustee UTA
dated 7/20/77, as amended.
10.15(3) Facilities Lease dated June 1, 1994 with John
Arrillaga, Trustee, or his Successor Trustee UTA
dated 7/20/77, as amended, and Richard T. Peery,
Trustee, or his Successor Trustee UTA dated
7/20/77, as amended.
10.16(4) Salary continuation agreement dated as of March 22,
1995 with Pauline Lo Alker.
10.17(4) Salary continuation agreement dated as of March 22,
1995 with Darrell R. Scherbarth.
10.18(5) Purchase Agreement among Network Peripherals Inc.,
Network Peripherals, Ltd., NuCom Systems, Inc., and
the shareholders of NuCom, dated January 31, 1996.
10.19 Salary continuation agreement dated as of May 1996
with Truman Cole.
10.20 Salary continuation agreement dated as of May 1996
with Don Morrison.
11.1 Statement regarding computation of net income per
share.
12
(1) Incorporated by reference to the corresponding
Exhibit previously filed as an Exhibit to the
Registrant's Registration Statement on Form S-1.
(File No. 33-78350)
(2) Confidential treatment has been granted as to part
of this Exhibit.
(3) Incorporated by reference to the corresponding
Exhibit previously filed as an Exhibit to the
Registrant's Quarterly Report on Form 10-Q for the
period ended June 30, 1994 (File No. 0-23970).
(4) Incorporated by reference to the corresponding
exhibit in the Registrant Annual reports on Form
10-K for the year ended December 31, 1995 (File No.
0-23970)
(5) Incorporated by reference to the registrants report
on Form 8-K filed on March 31, 1996 (File No.
0-23970)
(b) Reports on Form 8-K
Amendment to Current Report on Form 8-K, dated March 21, 1996
(filed June 4, 1996) reported under item 2. the Company's
acquisition of NuCom Systems, Inc.
13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NETWORK PERIPHERALS INC.
Date: August 9, 1996 By: \s\ TRUMAN COLE
-------------------------------
Truman Cole
Vice President, Finance
Chief Financial Officer
(Principal Financial and Accounting
Officer)
14
INDEX TO EXHIBITS
Exhibit
Number Description of Document
- -------- -----------------------
3.1(1) Amended and Restated Certificate of Incorporation.
3.2(1) By-Laws.
4.1(1) Fourth Amended and Restated Investor Rights Agreement dated
July 15, 1993.
10.1(1)* Form of Indemnity Agreement for directors and officers.
10.2(1)* Amended and Restated 1993 Stock Option Plan and forms of
agreement thereunder.
10.3(1)* 1994 Employee Stock Purchase Plan.
10.4(1)* 1994 Outside Directors Stock Option Plan and form of agreement
thereunder.
10.6(1) Business Loan Agreement, and collateral agreements, with
Silicon Valley Bank dated August 9, 1991, as amended May 5,
1992, April 15, 1993, February 1, 1994 and April 4, 1994 and
Warrant dated August 10, 1991.
10.9(1) Facilities Lease dated August 8, 1991 with John Arrillaga,
Trustee, or his Trustee, or his Successor Trustee UTA dated
7/20/77, as amended, and Richard T. Peery, Trustee, or his
Successor Trustee UTA dated 7/20/77, as amended.
10.10(1)(2) Corporate Purchasing Agreement with Ungermann-Bass, Inc. dated
June 10, 1991.
10.11(1)(2) Product Development Agreement with Ungermann-Bass, Inc. dated
June 10, 1991.
10.12(1)(2) OEM Purchase Agreement with Network General Corporation dated
March 4, 1991.
10.13(1)(2) Authorized Distributor Agreement with Westcon, Inc. dated March
4, 1993.
10.14(3) Amendment No. 1 to Facilities Lease dated June 1, 1994 with
John Arrillaga, Trustee, or his Successor Trustee UTA dated
7/20/77, as amended, and Richard T. Peery, Trustee, or his
Successor Trustee UTA dated 7/20/77, as amended.
10.15(3) Facilities Lease dated June 1, 1994 with John Arrillaga,
Trustee, or his Successor Trustee UTA dated 7/20/77, as
amended, and Richard T. Peery, Trustee, or his Successor
Trustee UTA dated 7/20/77, as amended.
10.16(4) Salary continuation agreement dated as of March 22, 1995 with
Pauline Lo Alker.
10.17(4) Salary continuation agreement dated as of March 22, 1995 with
Darrell R. Scherbarth.
10.18(5) Purchase Agreement among Network Peripherals Inc., Network
Peripherals, Ltd., NuCom Systems, Inc., and the shareholders of
NuCom, dated January 31, 1996.
10.19 Salary continuation agreement dated as of May 1996 with Truman
Cole.
10.20 Salary continuation agreement dated as of May 1996 with Don
Morrison.
11.1 Statement regarding computation of net income per share.
27.0 Financial Data Schedule
15