UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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ANNUAL
REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
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For the
fiscal year ended December 31, 2007
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or
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o
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TRANSITION
REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
transition period from to
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Commission
file number 0-23282
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A.
Full title of the plan and the address of the plan, if different from that of
the issuer named below:
NMS Communications Corporation 401(k) Plan
B.
Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
NMS
Communications Corporation
100 Crossing Boulevard
Framingham, Massachusetts 01702
NMS Communications Corporation 401(k) Plan
Index of Financial Statements and Supplemental Schedule
Note:
Supplemental schedules required by the
Employee Retirement Income Security Act of 1974 that have not been included
herein are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Participants and
Administrator of
NMS Communications Corporation 401(k) Plan
We have audited the
accompanying statements of net assets available for benefits of NMS
Communications Corporation 401(k) Plan (the Plan) as of December 31,
2007 and 2006, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2007. These financial statements
are the responsibility of the Plans 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 NMS Communications
Corporation 401(k) Plan as of December 31, 2007 and 2006, and the
changes in net assets available for benefits for the year ended December 31,
2007, in conformity with accounting principles generally accepted in the United
States of America.
Our audits were performed
for the purpose of forming an opinion on the financial statements taken as a
whole. The supplemental schedule of
assets (held at end of year) as of December 31, 2007 is presented for
purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of Labors
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plans management. The supplemental schedule has been
subjected to the auditing procedures applied in our 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/: UHY LLP
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Boston, Massachusetts
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June 27, 2008
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3
NMS Communications Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
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December 31,
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2007
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2006
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Assets
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Investments, at fair value (Note 3)
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$
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27,909,532
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$
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26,889,898
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Receivables:
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Participant contributions
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119,148
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78,097
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Employer contributions
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55,757
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19,738
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Total receivables
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174,905
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97,835
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Liabilities
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Excess participant contributions
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21,686
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Total liabilities
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21,686
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Net assets available for benefits at fair
value
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28,084,437
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26,966,047
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Adjustment from fair value to contract
value for fully benefit-responsive investment contracts
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(33,517
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)
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1,720
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Net assets available for benefits
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$
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28,050,920
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$
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26,967,767
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The
accompanying notes are an integral part of these financial statements.
4
NMS Communications Corporation 401(k) Plan
Statement of Changes in Net Assets Available for
Benefits
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Year Ended
December 31, 2007
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Additions:
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Additions to net assets attributed to:
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Investment income:
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Net appreciation in fair value of
investments
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$
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1,769,636
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Interest income
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28,843
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Total investment income
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1,798,479
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Contributions:
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Participant contributions
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2,022,105
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Employer contributions
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521,854
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Total contributions
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2,543,959
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Total additions
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4,342,438
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Deductions:
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Deductions from net assets attributed to:
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Benefits paid to participants
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3,258,735
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Other
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550
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Total deductions
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3,259,285
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Net increase
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1,083,153
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Net assets available for benefits:
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Beginning of year
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26,967,767
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End of year
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$
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28,050,920
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The
accompanying notes are an integral part of these financial statements.
5
NMS Communications Corporation 401(k) Plan
Notes to Financial Statements
1. Description of Plan
The following description of
the NMS Communications Corporation 401(k) Plan (the Plan) provides only
general information. Participants should refer to the Plan Agreement for a
more complete description of the Plans provisions.
General
The Plan is a defined contribution
plan covering all full-time and part-time employees of NMS Communications
Corporation (the Company). Regular full-time employees and regular part-time
employees regularly scheduled to work 20 or more hours per week are eligible on
their hire date. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Effective
January 2, 2006, the Plan terminated its relationship with MassMutual Life
Insurance Company and Investors Bank & Trust and transferred its assets to
Putnam Investments (Putnam) and appointed Mercer Trust Company (MTC) as the
Plans trustee. MTC is a wholly-owned subsidiary of Mercer, Inc. (Mercer).
Mercer and Putnam are both wholly-owned subsidiaries of Marsh McLennan
Companies, Inc.
Contributions
Each year, participants in
the Plan may contribute up to 50 percent of pretax annual compensation
including cash bonuses, subject to certain limitations. The Company will match
50 percent of the participants contribution up to six percent of the
participants compensation. Company matching contributions are accrued and paid
on a bi-weekly basis. The Company may also elect to make additional
discretionary contributions; however, it did not do so during the years ended December 31,
2007 or 2006. Contributions are subject to certain limitations.
Participant Accounts
Each participants account
is credited with the participants contribution and allocations of (a) the
Companys contribution and (b) Plan earnings, and charged with an
allocation of administrative expenses. Allocations are based on salary deferral
elections, or account balances, as defined. The benefit to which a participant
is entitled is the benefit that can be provided from the participants vested
account.
Vesting
Participants are immediately
vested in their contributions plus actual earnings thereon. Vesting in the
Companys matching contribution and discretionary contribution is based on
years of continuous service. A participant is 100 percent vested after
three years of continuous service. A participant automatically becomes fully
vested upon attainment of normal retirement age, upon disability or death, or
upon termination of the Plan.
Investment Options
Upon enrollment in the Plan,
a participant may direct employee contributions, in increments of one percent,
among the investment options made available under the Plan. Employer matching
contributions are allocated according to these same employee contribution
selections.
Participant Loans
Participant loans are
permitted under the Plan. A participant may apply for a loan of up to 50% of
his or her vested account balance. The minimum loan amount is $1,000 and the
maximum is $50,000. New loan interest rates are set at the current prime rate
plus one percent. Interest rates on outstanding loans ranged from 5.0% to
9.5% at December 31, 2007 and December 31, 2006. The loans are
secured by the balances in the participants accounts.
6
Payment of Benefits
Upon termination of service
due to death, disability, retirement, separation from service or proven
hardship, a participant may elect to receive the value of the vested interest
in his or her account in the form of an installment or a lump-sum distribution.
Forfeitures
The Company will use all
forfeited amounts to reduce future employer contributions. At December 31,
2007 and 2006, forfeited non-vested accounts totaled $7,418 and $64,996,
respectively. Also in the year ended December 31, 2007, employer
contributions were reduced by $71,792 from forfeited non-vested accounts. There
were no such reductions to employer contributions in the year ended December 31,
2006.
2.
Summary of Significant Accounting Policies
Basis of
Accounting
The financial statements are
presented on the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America (GAAP).
Investment
Valuation and Income Recognition
Except as described below,
investments in common stock, common-collective trusts and mutual funds are
valued at their fair value and net asset value, respectively, which represents
the value at which units/shares may be purchased or redeemed. Loans to
participants are valued at cost plus accrued interest, which approximates fair
value.
Purchases and sales of
securities are recorded on a trade-date basis. Interest and dividend income is
recorded as earned, on the accrual basis.
As described in Financial
Accounting Standards Board (FASB) Staff Position, FSP AAG INV-1 and SOP
94-4-1,
Reporting of Fully
Benefit-Responsive Investment
Contracts
Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution
Health and Welfare and
Pension
Plans
(the FSP), investment contracts held by a
defined-contribution plan are required to be reported at fair value. However,
contract value is the relevant measurement attribute for that portion of the
net assets available for benefits of a defined-contribution plan attributable
to fully benefit-responsive investment contracts because contract value is the
amount participants would receive if they were to initiate permitted
transactions under the terms of a plan. As required by the FSP, the statement
of net assets available for benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive investment
contracts from fair value to contract value. The statement of changes in net assets
available for benefits is prepared on a contract value basis.
Payment of
Benefits
Benefits
and withdrawals are recorded when paid.
Expenses
The
Company pays certain administrative expenses on behalf of the Plan.
Use of
Estimates
The preparation of financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosures of contingent assets and liabilities. Actual
results could differ from those estimates.
7
New
Accounting Pronouncements
In September 2006, the
FASB issued Statement of Financial Accounting Standards No. 157,
Fair Value Measurements
(the Standard).
The Standard defines fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements.
The Standard applies to fair value measurements already required or permitted
by existing standards. The Standard is effective for financial statements
issued for fiscal years beginning after November 15, 2007.
Management is currently evaluating what impact the adoption of the Standard
will have on the Plans financial statements.
8
3.
Investments
The following tables present
the fair value of the Plans investments:
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December 31,
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Description
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2007
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Harbor
Capital International Fund
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$
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3,897,289
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*
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American
Funds Growth Fund of America
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2,855,360
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*
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Putnam
S&P 500 Index Fund
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2,355,577
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*
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Putnam
Retirement Ready 2020 Fund
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2,114,339
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*
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Van Kampen
Growth and Income Fund
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2,055,165
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*
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Western
Asset Core Bond Portfolio
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2,045,797
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*
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Oppenheimer
International Small Company
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1,889,078
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*
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Putnam
Stable Value Fund
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1,651,119
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*
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Putnam
Retirement Ready 2035 Fund
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1,512,863
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*
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Putnam Small
Cap Growth Fund
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1,401,613
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*
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NMS
Communications Corporation Common Stock
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351,837
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Participant
Loans
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324,999
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Other mutual
funds
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5,454,496
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Total
investments at fair value
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$
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27,909,532
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December 31,
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Description
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2006
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Harbor
Capital International Fund
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$
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3,371,538
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*
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American
Funds Growth Fund of America
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2,845,196
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*
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Putnam
S&P 500 Index Fund
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|
2,464,802
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*
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Putnam
Retirement Ready 2020 Fund
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|
2,313,994
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*
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Western
Asset Core Bond Portfolio
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|
2,149,321
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*
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Van Kampen
Growth and Income Fund
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|
2,074,236
|
*
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Putnam Small
Cap Growth Fund
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|
1,717,347
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*
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Putnam
Retirement Ready 2035 Fund
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|
1,426,602
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*
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Putnam
Stable Value Fund
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|
1,352,237
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*
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NMS
Communications Corporation Common Stock
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505,817
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Participant
Loans
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287,076
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Other mutual
funds
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6,381,732
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Total
investments at fair value
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$
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26,889,898
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*
Investments that represent 5% or more of the
Plans assets at the end of the year.
During
2007, the Plans investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated in value by $1,769,636 as
follows:
Mutual funds
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$
|
1,798,924
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|
Common
collective trusts
|
|
121,595
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Brokerage
securities
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|
(13,872
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)
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NMS
Communications Corporation Common Stock
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(101,774
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)
|
Adjustment from
fair value to contract value for fully benefit-responsive investment
contracts
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(35,237
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)
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$
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1,769,636
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|
9
In
2006, the Plan entered into the Putnam Stable Value Fund, a benefit-responsive
investment contract. Putnam maintains the contributions in a general account.
The account is credited with earnings on the underlying investments and charged
for participant withdrawals and administrative expenses. The guaranteed
investment contract issuer is contractually obligated to repay the principal
and a specified interest rate that is guaranteed to the Plan.
As
discussed in Note 2, because the guaranteed investment contract is fully
benefit-responsive, contract value is the relevant measurement attribute for
that portion of the net assets available for benefits attributable to the
guaranteed investment contract. Contract value, as reported to the Plan by
Putnam, 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. The contract value of the Plans investment in
the Putnam Stable Value Fund was $1,617,602 and $1,353,957 at December 31,
2007 and 2006, respectively.
There
are no reserves against contract value for credit risk of the contract issuer
or otherwise. During the year ended December 31, 2007, the average yield
and crediting interest rates were 3.44 percent and 5.31 percent, respectively.
The crediting interest rate is based on a formula agreed upon with the issuer,
but may not be less than 0%. Such interest rates are reviewed on a quarterly
basis for resetting.
Certain
events limit the ability of the Plan to transact at contract value with the
issuer. Such events include the following: (1) amendments to the Plan
documents (including complete or partial plan termination or merger with
another plan), (2) changes to the Plans prohibition on competing
investment options or deletion of equity wash provisions, (3) bankruptcy
of the Plan sponsor or other plan sponsor events (for example, divestitures or
spin-offs of a subsidiary) that cause a significant withdrawal from the Plan,
or (4) the failure of the trust to qualify for exemption from federal
income taxes or any required prohibited transaction exemption under ERISA. The
Plan administrator does not believe that the occurrence of any such value
event, which would limit the Plans ability to transact at contract value with
participants, is probable.
4.
Tax Status
The Company adopted a
Non-Standardized Prototype Plan, (the Prototype Plan) that received a
favorable opinion letter from the Internal Revenue Service dated August 9,
2002, which letter stated that the Prototype Plan is designed in accordance
with applicable sections of the Internal Revenue Code of 1986, as amended (the Code)
as of that date. Since then, the Plan has been amended. The Plan administrator
believes that the Plan is currently being operated in compliance with the
applicable requirements of the Code and therefore, the related trust is exempt
from taxation.
5.
Plan Termination
Although it has not
expressed any intent to do so, the Company may terminate the Plan at any time.
In the event of a termination of the Plan all amounts credited to a participants
account will be fully vested and would be paid out to the participant as
directed by the Company.
6.
Related Party Transactions
The Plan invests in the
common stock of the Company (the Common Stock) and transactions in the Common
Stock are party-in-interest transactions. During the year ended December 31,
2007, the Plan purchased no shares of the Common Stock and sold shares of the
Common Stock having an aggregate value of $52,206. There were no dividends
received from the Common Stock during the years ended December 31, 2007
and 2006. Effective June 1, 2005, the Plan no longer offered the choice to
Plan participants to contribute to the NMS Communications Stock Fund.
The Plan invests in the mutual
funds of Putnam, the Plan custodian, and transactions in these investments are
party-in interest transactions.
Loans to participants
qualify as party-in-interest transactions.
10
7.
Risks and Uncertainties
The Plan invests in various
investment securities. Investment securities 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 value 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.
8.
Reconciliation of Financial Statements to Form 5500
The following is a
reconciliation of net assets available for benefits per the financial
statements to the Form 5500:
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December 31,
2007
|
|
December 31,
2006
|
|
Net assets available for benefits per the
financial statements
|
|
$
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28,050,920
|
|
$
|
26,967,767
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Add:
|
|
|
|
|
|
Excess participant contributions
|
|
|
|
21,686
|
|
Less:
|
|
|
|
|
|
Participant contribution receivable
|
|
(119,148
|
)
|
(78,097
|
)
|
Employer contribution receivable
|
|
(55,757
|
)
|
(19,738
|
)
|
Adjustment from fair value to contract
value for fully benefit-responsive investment contracts
|
|
33,517
|
|
(1,720
|
)
|
Net assets available for benefits per
Form 5500
|
|
$
|
27,909,532
|
|
$
|
26,889,898
|
|
The
following is a reconciliation of the Plans net increase in net assets
available for benefits per the financial statements to the Form 5500:
|
|
December 31,
2007
|
|
Net increase in net assets available for
benefits per financial statements
|
|
$
|
1,083,153
|
|
Add:
|
|
|
|
Prior year participant contributions
receivable
|
|
78,097
|
|
Prior year employer contributions
receivable
|
|
19,738
|
|
Less:
|
|
|
|
Current year participant contributions
receivable
|
|
(119,148
|
)
|
Current year employer contributions
receivable
|
|
(55,757
|
)
|
Prior year excess participant contributions
|
|
(21,686
|
)
|
Adjustment from fair value to contract
value for fully benefit-responsive investment contracts
|
|
35,237
|
|
Net income per Form 5500
|
|
$
|
1,019,634
|
|
11
NMS Communications Corporation 401(k) Plan
Schedule of Assets (Held at End of Year)
Schedule H, Part IV, Line
4iForm 5500
December 31, 2007
(a)
Parties-in-
interest to
the Plan
|
|
(b)
Identity of Issue
Borrower, Lessor,
or Similar Party
|
|
(c)
Description of Investment
Including Maturity Date,
Rate of Interest, Collateral
Par, or Maturity Value
|
|
(d)
Cost
|
|
(e)
Current
Value
|
|
|
|
Mutual
Funds
|
|
|
|
|
|
|
|
*
|
|
Putnam
|
|
CRM Mid Cap
Value Fund
|
|
**
|
|
$
|
955,971
|
|
*
|
|
Putnam
|
|
Putnam Small
Cap Growth Fund
|
|
**
|
|
1,401,613
|
|
*
|
|
Putnam
|
|
Putnam Money
Market Fund-SDB
|
|
**
|
|
8,424
|
|
|
|
Harbor
Capital
|
|
Harbor
Capital International Fund
|
|
**
|
|
3,897,289
|
|
|
|
MSIF
|
|
MSIF Trust
Mid Cap Growth Fund
|
|
**
|
|
926,462
|
|
|
|
Oppenheimer
|
|
Oppenheimer
International Small Company Fund
|
|
**
|
|
1,889,078
|
|
|
|
Western
Asset
|
|
Western
Asset Core Bond Portfolio Fund
|
|
**
|
|
2,045,797
|
|
|
|
American
Funds
|
|
American Funds
Growth Fund of America
|
|
**
|
|
2,855,360
|
|
|
|
Columbia
|
|
Columbia
Acorn USA Fund
|
|
**
|
|
578,980
|
|
|
|
Columbia
|
|
Columbia
Small Cap Value II
|
|
**
|
|
424,197
|
|
|
|
Van Kampen
|
|
Van Kampen
Growth and Income Fund
|
|
**
|
|
2,055,165
|
|
|
|
Oakmark
|
|
Oakmark
Equity & Income
|
|
**
|
|
99,848
|
|
|
|
Neuberger
|
|
Neuberger &
Berman Socially Responsive
|
|
**
|
|
94,015
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2010 Fund
|
|
**
|
|
306,109
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2015 Fund
|
|
**
|
|
178,879
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2020 Fund
|
|
**
|
|
2,114,339
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2025 Fund
|
|
**
|
|
387,109
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2030 Fund
|
|
**
|
|
416,111
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2035 Fund
|
|
**
|
|
1,512,863
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2040 Fund
|
|
**
|
|
128,216
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2045 Fund
|
|
**
|
|
878,727
|
|
*
|
|
Putnam
|
|
Putnam
Retirement Ready 2050 Fund
|
|
**
|
|
4,096
|
|
|
|
Common
Collective Trusts
|
|
|
|
|
|
|
|
*
|
|
Putnam
|
|
S&P 500
Index Fund
|
|
**
|
|
2,355,577
|
|
*
|
|
Putnam
|
|
Stable Value
Fund
|
|
**
|
|
1,651,119
|
|
|
|
Brokerage
Securities
|
|
Self-directed
Brokerage Account
|
|
**
|
|
67,352
|
|
*
|
|
Common
Stock
|
|
NMS
Communications Corporation
|
|
**
|
|
351,837
|
|
*
|
|
Participant
loans
|
|
Interest
rates ranging from 5.00%-9.50%
|
|
**
|
|
324,999
|
|
|
|
|
|
|
|
|
|
$
|
27,909,532
|
|
*
Parties-in-interest to the Plan
**
Cost omitted for participant-directed
investments
12
SIGNATURE
Pursuant to the requirements
of the Securities and Exchange Act of 1934, the Plan administrator has caused
this annual report on form 11-K to be signed on its behalf by the undersigned
hereunto duly authorized.
|
NMS Communications Corporation 401(k) Plan
|
|
|
|
By
|
/s/: José Freitas
|
|
|
José Freitas, NMS Communications Corporation
|
|
|
401(k) Plan Administrator
|
June 27, 2008
13
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