##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 10-K/A
  (Amendment
    No. 1)
     (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM     TO     .   COMMISSION
    FILE NUMBER:
    0000-24647
      TERAYON COMMUNICATION SYSTEMS,
    INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other
    Jurisdiction of
    Incorporation or Organization)

77-0328533(IRS Employer
    Identification No.)   2450
    WALSH AVENUE
    SANTA CLARA, CALIFORNIA 95051(408) 235-5500 (Address,
    Including Zip Code, and Telephone Number,
    Including Area Code, of the Registrants Principal
    Executive Offices)
      SECURITIES
    REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
  Title of Each Class:

Name of Each Exchange on Which Registered:None

None   SECURITIES
    REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
    COMMON STOCK, par value $0.001 per share (Title
    of Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o þ o
  Rule 12b-2).  Yes o þ




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##### 



INDEX
    TERAYON COMMUNICATION SYSTEMS, INC.
  PageNo.PART IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


3Item 11.


Executive
    Compensation


7Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


18Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


20Item 14.


Principal
    Accountant Fees and Services


21PART IVItem 15.


Exhibits, Financial
    Statement Schedules


22Signatures


23EXHIBIT 31.1EXHIBIT 31.2   2




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EXPLANATORY
    NOTE
  Form 10-K Form 10-K Form 10-K. Form 10-K/A Form 10-K
  PART III Item 10.  Directors,
    Executive Officers and Corporate Governance.



Certain information regarding the Companys directors and
    executive officers as of April 1, 2007, is set forth below. Name

Age

PositionJerry D. Chase


47


Chief Executive Officer and
    DirectorMark A. Richman


47


Chief Financial Officer and Senior
    Vice President,
    Finance and AdministrationMatthew J. Aden


51


Senior Vice President, Global
    Sales and Customer
    SupportZaki Rakib


48


Chairman of the Board and DirectorMatthew Miller(2)


59


DirectorShlomo Rakib


50


DirectorLewis Solomon(1)(2)(3)


73


DirectorHoward W. Speaks, Jr.(1)(2)


59


DirectorDavid Woodrow(1)(3)


61


Director     (1)
    
    Member of Audit Committee(2)
    
    Member of Compensation Committee(3)
    
    Member of Nominating and Governance Committee  Jerry D. Chase
  Mark A. Richman
 3




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Matthew J. Aden
  Dr. Zaki Rakib
  Dr. Matthew Miller
  Shlomo Rakib
  Lewis Solomon
 4




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Howard W. Speaks, Jr.
  David Woodrow
  Board
    Committees
  Audit
    Committee
  Form 10-K
     5




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##### Table of Contents



Audit
    Committee Financial Expert
    Compensation
    Committee
        Nominating
    and Governance Committee
        Legal
    Committee
    Section 16(a)
    Beneficial Ownership Reporting Compliance
     6




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##### Table of Contents



Code of
    Ethics
    Item 11.
    Executive
    Compensation.  Compensation
    Discussion and Analysis
  Compensation
    Philosophy and Objectives
      
    attracting and retaining individuals of superior ability and
    managerial talent;
    motivating the achievement of key strategic and financial
    performance measures on an annual basis by linking incentive
    award opportunities to the achievement of performance goals in
    these areas; and
    ensuring that compensation for our NEOs is appropriately aligned
    with our corporate strategies, business objectives and the
    long-term interests of our stockholders.     7




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##### Table of Contents



Determination
    of Compensation; Compensation Benchmarking and Peer
    Group
          
    Carrier Access Corporation
    Harmonic Inc.
    Network Equipment Technologies, Inc.
    Harris Stratex Networks, Inc.
    Zhone Technologies, Inc.
    Chyron Corporation 8




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##### Table of Contents




    Concurrent Computer Corporation
    Frequency Electronics, Inc.
    Interphase Corporation
    Occam Networks
    Scopus Video Networks Ltd.
    Video Display Corporation    Principal
    Elements of Compensation
  Base Salary:
  Annual Incentive Compensation:
   9




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year-to-date year-to-date year-to-date
  Long-Term Equity Incentive Compensation:
      Change
    of Control and Severance Arrangements
   10




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Other
    Elements of Compensation
    Summary
    Compensation Table
  Form 10-K/A.
  Non-EquityOption

Incentive Plan

All OtherSalary

Awards

Compensation

Compensation

TotalName and Principal Position

Year

($)

($)(1)

($)

($)(2)

($)Jerry D. Chase


2006



400,000



217,751







450



618,201Chief Executive OfficerMark A. Richman


2006



300,000



167,223







450



467,673Chief Financial Officer and
    Senior Vice President,
    Finance and AdministrationMatthew J. Aden


2006



325,000



152,894



351,463
(3)


690



830,047Senior Vice President, Global
    Sales and Customer Support     (1)
    
    The amount reflected in this column represents the compensation
    expense recognized for financial statement purposes for the
    fiscal year ended December 31, 2006 associated with stock
    options granted in years prior to 2006, measured in accordance
    with SFAS 123(R), but excluding any estimate of future
    forfeitures 11




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##### Table of Contents



and reflecting the effect of any actual forfeitures. These
    compensation costs reflect options granted prior to the fiscal
    year ended December 31, 2006. The assumptions used to
    calculate the value of options are set forth under Note 9,
    Stockholders Equity, of the Notes to the
    Consolidated Financial Statements included in our Annual Report
    on
    Form 10-K
    for the fiscal year ended December 31, 2006, filed with the
    Commission on April 2, 2007.(2)
    
    Represents life insurance premiums paid by us for the benefit of
    the NEO.(3)
    
    Represents earned commissions under the 2006 Executive Sales
    Commission Plan earned in 2006, a portion of which may be paid
    in 2007. Please see Compensation Discussion and
    Analysis above for additional information regarding this
    plan.  Grants of
    Plan-Based Awards in 2006
    Estimated Payout Under Non-EquityIncentive Plan AwardsThreshold

Target

MaximumName

($)

($)

($)Jerry D. Chase






300,000



300,000Mark A. Richman






225,000



225,000Matthew J. Aden






325,000



   Outstanding
    Equity Awards at Fiscal Year-End
    Option AwardsNumber of


Number ofSecurities Underlying


Securities Underlying


OptionOption

Unexercised Options


Unexercised Options


Exercise


OptionGrant

(#)


(#)


Price


ExpirationName

Date

Exercisable


Unexercisable


($)


DateJerry D. Chase

9/8/2004


450,000



350,000
(1)

$
1.67


9/7/2014Mark A. Richman

11/30/2004


260,416



239,584
(2)

$
1.99


11/29/2014Matthew J. Aden

8/1/2005


177,083



322,917
(3)

$
3.17


7/31/2011     (1)
    
    16,667 shares (or 1/48th of the shares subject to the
    options) will vest on the 8th day of each month through
    September 8, 2008.(2)
    
    10,417 shares (or 1/48th of the shares subject to the
    option) will vest on the 30th day of each month through
    November 30, 2008.(3)
    
    10,417 shares (or 1/48th of the shares subject to the
    option) will vest on the 1st day of each month through
    August 1, 2009.  Option
    Exercises and Stock Vested
   12




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Director
    Compensation
      
    a monthly retainer of $2,000;
    a per meeting attendance fee of $1,000 for each Board of
    Directors or committee meeting attended; and
    for the chairs of the committees of the Board of Directors, an
    additional $500 for each committee meeting attended.      
    a quarterly retainer for services as a member of the Board of
    Directors of $6,000;
    a quarterly retainer for services as the chair of the Audit
    Committee of $2,500;
    a quarterly retainer for services as the chairs of the
    Compensation Committee and Legal Committee of $2,000;
    a quarterly retainer for services as the chairs of the
    Nominating and Governance Committee and the Strategic Committee
    of $1,250;
    a quarterly retainer for services as members of the Audit
    Committee, Compensation Committee and Legal Committee of $1,250;
    a per meeting attendance fee of $1,000 for each Board of
    Directors or committee meeting attended; and
    for the chairs of the committees of the Board of Directors, an
    additional $500 for each committee meeting attended.  13




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##### Table of Contents



Fees Earned or

Option

All OtherPaid in Cash

Awards

Compensation

TotalName

($)(1)

($)(4)

($)

($)Alek Krstajic(2)


17,000



15,679
(5)






32,679Matthew Miller


58,500



29,886
(6)






88,386Shlomo Rakib


50,500











50,500Zaki Rakib


63,500











63,500Mark Slaven(3)


59,500



50,659
(7)






110,159Lewis Solomon


87,000



31,174
(8)


6,487
(11)


124,661Howard W. Speaks, Jr.


83,000



53,250
(9)






136,250David Woodrow


93,500



33,822
(10)






127,322     (1)
    
    Includes the following cash amounts that were paid in lieu of
    stock options, for services performed in 2006, as described
    immediately prior to the table above: Matthew Miller 
    $12,500; Shlomo Rakib  $12,500; Zaki
    Rakib  $12,500; Lewis Solomon  $17,500;
    Howard W. Speaks, Jr.  $20,000; and David
    Woodrow  $20,000.(2)
    
    Alek Krstajic resigned from our Board of Directors effective
    June 19, 2006.(3)
    
    Mark Slaven resigned from our Board of Directors effective
    August 2, 2006.(4)
    
    The amount reflected in this column represents the compensation
    expense recognized for financial statement purposes for the
    fiscal year ended December 31, 2006 associated with stock
    options granted in years prior to 2006, measured in accordance
    with SFAS 123(R), but excluding any estimate of future
    forfeitures and reflecting the effect of any actual forfeitures.
    These compensation costs reflect options granted prior to the
    fiscal year ended December 31, 2006. The assumptions used
    to calculate the value of options are set forth under
    Note 9, Stockholders Equity, of the Notes
    to the Consolidated Financial Statements included in our Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2006, filed with the
    Commission on April 2, 2007. No stock options were granted
    to our outside directors during the fiscal year ended
    December 31, 2006.(5)
    
    At December 31, 2006, Alek Krstajic held options to
    purchase 261,829 shares of our common stock.(6)
    
    At December 31, 2006, Matthew Miller held options to
    purchase 70,417 shares of our common stock.(7)
    
    At December 31, 2006, Mark Slaven held options to purchase
    81,108 shares of our common stock.(8)
    
    At December 31, 2006, Lewis Solomon held options to
    purchase 304,000 shares of our common stock.(9)
    
    At December 31, 2006, Howard W. Speaks, Jr. held options to
    purchase 80,583 shares of our common stock.(10)
    
    At December 31, 2006, David Woodrow held options to
    purchase 140,527 shares of our common stock.(11)
    
    This amount reflects the payment by us of the costs and fees
    associated with the attendance by Mr. Solomon of
    conferences and seminars, and expenses related to periodicals
    subscribed to by Mr. Solomon.  Employment,
    Severance and Change of Control Arrangements With Named
    Executive Officers
  Jerry
    D. Chase and Mark A. Richman
   14




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
    lump sum cash payment equal to 12 months of the
    executives base salary;
    a lump sum cash payment equal to the greater of (1) the
    executives annual performance bonus for the most recent
    completed calendar year or (2) the executives target
    performance bonus in effect for the year of the
    termination; and
    payment for the cost of COBRA continuation premiums for the
    medical, dental and vision care benefits for the executive
    officer and his dependents for a period of up to 12 months.    
    a lump sum cash payment equal to, in the case of Mr. Chase,
    2.5 times, and in the case or Mr. Richman, 2 times, the sum
    of (1) the executive officers base salary and
    (2) an amount that is equal to the greater of (a) the
    executives annual performance bonus for the most recent
    completed calendar year or (b) the executives target
    performance bonus in effect for the year of the termination;
    payment for the cost of COBRA continuation premiums for the
    medical, dental and vision care benefits for the executive
    officer and his dependents for a period of up to 30 months
    in the case of Mr. Chase, and 24 months in the case of
    Mr. Richman; and
    full vesting of all of the executive officers unvested
    stock options.  gross-up gross-up
    Form 8-K
  Matthew
    J. Aden
   15




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
    a lump sum cash payment equal to 12 months of his base
    salary and
    payment for the cost of COBRA continuation premiums for the
    medical, dental and vision care benefits for Mr. Aden and
    his dependents for a period of up to 12 months.    
    a lump sum cash payment equal to 2 times his base salary;
    a lump sum cash payment equal to 2 times the greater of
    (1) Mr. Adens sales commission payments for the
    most recent completed calendar year or
    (2) Mr. Adens target sales commission payment in
    effect for the year of the termination;
    payment for the cost of COBRA continuation premiums for the
    medical, dental and vision care benefits for Mr. Aden and
    his dependents for a period of up to 24 months; and
    full vesting of all of his unvested stock options.    Form 8-K
  Severance
    Payments and Benefits Upon Involuntary Termination
    Cash


Cash


COBRASeverance 


Severance 


ContinuationBase Salary


Bonus


Coverage


TotalName

($)


($)


($)(1)


($)Jerry D. Chase


400,000



300,000



16,780



716,780Mark A. Richman


300,000



225,000



16,636



541,636Matthew J. Aden


325,000







17,688



342,688  16




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(1)
    
    Represents the current premiums for the NEOs medical,
    dental and vision insurance, multiplied by the maximum number of
    months of COBRA continuation coverage to which the NEO is
    entitled.  Severance
    Payments and Benefits Upon Involuntary Termination Following
    Change in Control
    Cash


Cash


Unexercisable


COBRASeverance


Severance


Options that


Continuation


Excise TaxBase Salary


Bonus


Vest


Coverage


Gross Up


TotalName

($)


($)


($)(1)


($)(2)


($)(3)


($)Jerry D. Chase


1,000,000



750,000



99,000



41,950



151,968



2,042,918Mark A. Richman


600,000



450,000



2,188



33,272







1,085,460Matthew J. Aden


650,000



702,926







35,375







1,388,301     (1)
    
    This value is based on the difference, if any, between the
    option exercise price and $2.00, which was the closing price of
    our common stock on March 13, 2007, the assumed date of
    termination.(2)
    
    Represents the current premiums for the NEOs medical,
    dental and vision insurance, multiplied by the maximum number of
    months of COBRA continuation coverage to which the NEO is
    entitled.(3)
    
    This value is an estimate calculated by outside consultants and
    represents a gross up for the portion of the excise tax in
    excess of $200,000.  Compensation
    Committee Interlocks and Insider Participation
    Compensation
    Committee Report
  The material in this report is not soliciting
    material, is not deemed filed with the
    Securities and Exchange Commission, and is not to be
    incorporated by reference into any filing of the Company under
    the Securities Act of 1933, as amended, or Exchange Act, whether
    made before or after the date hereof and irrespective of any
    general incorporation language contained in such.
  Regulation S-K, Form 10-K/A
      Form 10-K/A
   17




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Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Beneficial OwnershipNumber of


PercentageBeneficial Owner

Shares


OwnershipKern Capital Management, LLC(1)


11,538,200



14.9
%114 West 47th Street,
    Suite 1926New York, New York 10036Zaki Rakib(2)


4,302,040



5.5
%Shlomo Rakib(3)


4,302,040



5.5
%Jerry D. Chase(4)


550,000



*Lewis Solomon(5)


356,803



*Mark A. Richman(6)


312,500



*Matthew J. Aden(7)


229,166



*David M. Woodrow(8)


132,747



*Howard W. Speaks, Jr.(9)


76,579



*Matthew Miller(10)


65,041



*All executive officers and
    directors as a group (9 persons)(11)


10,326,916



13.3
%     (1)
    
    Kern Capital Management, LLC filed an amendment to
    Schedule 13G, dated as of February 14, 2007, with the
    Commission. Kern Capital Management, LLC reported beneficial
    ownership of 11,538,200 shares.(2)
    
    Shares beneficially owned by Dr. Zaki Rakib include
    240,000 shares of common stock held by the Shlomo Rakib
    Childrens Trust of which Dr. and Mrs. Rakib are
    trustees, and 1,300,000 shares of common stock underlying
    stock options, which are exercisable within 60 days of
    April 13, 2007. Dr. Rakib disclaims beneficial
    ownership of these shares held by the Zaki Rakib Childrens
    Trust and stock and stock options held by Dr. Rakibs
    family members, totaling 4,302,040 shares.(3)
    
    Shares beneficially owned by Shlomo Rakib include
    240,000 shares of common stock held by the Zaki Rakib
    Childrens Trust of which Mr. And Mrs. Rakib are
    trustees, and 1,300,000 shares of common stock underlying
    stock options which are exercisable within 60 days of
    April 13, 2007. Mr. Rakib disclaims 18




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beneficial ownership of these shares held by the Shlomo Rakib
    Childrens Trust and stock and stock options held by
    Mr. Rakibs family members, totaling
    4,302,040 shares.(4)
    
    Shares beneficially owned include 550,000 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(5)
    
    Shares beneficially owned include 296,803 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007, as well as
    60,000 shares of common stock.(6)
    
    Shares beneficially owned include 312,500 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(7)
    
    Shares beneficially owned include 229,166 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(8)
    
    Shares beneficially owned include 132,747 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(9)
    
    Shares beneficially owned include 76,579 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(10)
    
    Shares beneficially owned include 65,041 shares of common
    stock underlying stock options that are exercisable within
    60 days of April 13, 2007.(11)
    
    Shares beneficially owned by the Companys current
    directors and executive officers as a group include
    4,262,836 shares of common stock underlying stock options
    that are exercisable within 60 days of April 13, 2007.  Equity
    Compensation Plan Information
    Common StockAvailable forCommon Stock



Future Issuanceto be Issued

Weighted Average

Under EquityUpon Exercise of

Exercise Price of

Compensation PlansOutstanding Options

Outstanding Options

(Excluding Securitiesand Rights

and Rights

Reflected in Column(a))Plan Category

(a)

(b)

(c)Equity compensation plans approved
    by Terayon stockholders(1)


9,664,399


$
4.25



7,529,114Equity compensation plans not
    approved by Terayon stockholders(2)


2,505,310


$
6.82



1,719,164Total


12,169,709


$
4.78



9,248,278     (1)
    
    Includes options to purchase common stock outstanding under the
    Terayon Communication Systems, Inc. 1995 Stock Option Plan, as
    amended (1995 Plan), the Terayon Communication Systems, Inc.
    1997 Equity Incentive Plan, as amended (1997 Plan), and the
    Terayon Communication Systems, Inc. 1998 Non-Employee Directors
    Stock Option Plan, as amended (1998 Plan). Does not include
    600,371 shares of our common stock that were available for
    issuance under the Terayon Communication Systems, Inc. 1998
    Employee Stock Purchase Plan, as amended, which was also
    approved by our stockholders, including the Terayon
    Communication Systems, Inc. 1998 Employee Stock Purchase Plan
    Offering for Foreign Employees. The 1997 Plan was amended on
    June 13, 2000 to, among other things, provide for an
    increase in the number of shares of our common stock on each
    January 1 beginning January 1, 2001 through January 1,
    2007, by the lesser of 5% of our common stock outstanding on
    such January 1 or 3,000,000 shares. In May 2003, the 1997
    Plan was amended to reduce the number of authorized shares in
    the 1997 Plan by 6,237,826 shares. In May 2005, the 1997
    Plan was amended to reduce the number of authorized shares in 19




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##### Table of Contents



the 1997 Plan by 4,000,000 shares. The 1997 Plan expired on
    March 25, 2007, and no shares are available for grant under
    this plan.(2)
    
    Includes options to purchase common stock outstanding under the
    Terayon Communication Systems, Inc. 1999 Non-Officer Equity
    Incentive Plan, as amended (1999 Plan), Mainsail Equity
    Incentive Plan (Mainsail Plan), TrueChat Equity Incentive Plan
    (TrueChat Plan), and options issued outside of any equity
    incentive plan. The Mainsail Plan and the TrueChat Plan were
    terminated by the Board of Directors on March 7, 2007. The
    1999 Plan provides for nonqualified stock options to be issued
    to non-officer employees and consultants of the Company. Prices
    for nonqualified stock options may not be less than 85% of the
    fair market value of the common stock at the date of the grant.
    Options generally vest and become exercisable over a period not
    to exceed five years from the date of grant. Unexercised options
    expire ten years after date of grant. The 1999 Plan also
    provides for the sale of restricted shares of common stock to
    employees, directors and consultants, and the Company has
    provided such awards in prior years and may provide such awards
    in the future.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.      Procedures
    for Approval of Related Person Transactions
    Director
    Independence
   20




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##### Table of Contents



Item 14.
    Principal
    Account Fees and Services.    2005


2006Audit Fees(1)

$
637


$
4,037Audit-Related Fees(2)






Tax Fees(3)






All Other Fees






     (1)
    
    Audit fees consist of fees for professional services rendered
    for the audit of the Companys consolidated annual
    financial statements and review of the interim consolidated
    financial statements included in quarterly reports and services
    that are normally provided in connection with statutory and
    regulatory filings or engagements. In 2005 and 2006, audit fees
    include fees for professional services rendered for the audits
    of (i) managements assessment of the effectiveness of
    internal control over financial reporting and (ii) the
    effectiveness of internal control over financial reporting.(2)
    
    Audit-related fees consist of fees billed for professional
    services that are reasonably related to the performance of the
    audit or review of the Companys consolidated financial
    statements but are not reported under Audit Fees.
    Such fees include, among other things, employee benefit plan
    audits and certain consultations concerning financial accounting
    and reporting standards.(3)
    
    Tax fees consist of fees for professional services rendered for
    assistance with federal, state and international tax compliance.      de
    minimus
  Audit
    Committee Pre-Approval Policies
   21




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##### Table of Contents



non-audit non-audit
  Item 15.
    Exhibits,
    Financial Statement Schedules.  Form 10-K/A.
 22




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##### Table of Contents



SIGNATURES  th
    Jerry
    D. Chase
   Chief Executive Officer
    Signature

Title

Date/s/  Jerry
    D. ChaseJerry
    D. Chase

Chief Executive Officer and
    Director

April 30, 2007/s/  Mark
    A. RichmanMark
    A. Richman

Chief Financial Officer (Principal
    Financial Officer, Principal Accounting Officer)

April 30, 2007/s/  Zaki
    RakibDr.
    Zaki Rakib

Chairman of the Board of Directors

April 30, 2007/s/  Shlomo
    RakibShlomo
    Rakib

Director

April 30, 2007/s/  Lewis
    SolomonLewis
    Solomon

Director

April 30, 2007/s/  David
    WoodrowDavid
    Woodrow

Director

April 30, 2007/s/  Dr.
    Matthew
    MillerDr.
    Matthew Miller

Director

April 30, 2007/s/  Howard
    W. SpeaksHoward
    W. Speaks, Jr.

Director

April 30, 2007  23




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##### Table of Contents



Exhibit
    Index
 ExhibitNumber

Exhibit Description3
.1

Amended and Restated Certificate
    of Incorporation of Terayon Communication Systems, Inc.(11)3
.2

Bylaws of Terayon Communication
    Systems, Inc.(11)3
.3

Certificate of Amendment to
    Amended and Restated Certificate of Incorporation of Terayon
    Communication Systems, Inc.(11)3
.4

Certificate of Designation of
    Series A Junior Participating Preferred Stock.(4)4
.1

Specimen Common Stock
    Certificate.(2)4
.2

Amended and Restated Information
    and Registration Rights Agreement, dated April 6, 1998.(1)4
.3

Form of Security for Terayon
    Communication Systems, Inc.s 5% Convertible
    Subordinated Notes due August 1, 2007.(3)4
.4

Registration Rights Agreement,
    dated July 26, 2000, among Terayon Communication Systems,
    Inc. and Deutsche Bank Securities, Inc. and Lehman Brothers,
    Inc.(3)4
.5

Indenture, dated July 26,
    2000, between Terayon Communication Systems, Inc. and State
    Street Bank and Trust Company of California, N.A.(3)4
.6

Rights Agreement, dated
    February 6, 2001, between Terayon Communication Systems,
    Inc. and Fleet National Bank.(4)4
.7

Rights Agreement Amendment, dated
    April 21, 2007 between Terayon Communication Systems, Inc.
    and Computershare Trust Company, N.A. (as successor in
    interest to Fleet National Bank).(19)10
.1

Form of Indemnification Agreement
    between Terayon Communication Systems, Inc. and each of its
    directors and officers.(15)10
.2*

1995 Stock Option Plan, as
    amended.(1)10
.3*

1997 Equity Incentive Plan, as
    amended.(6)10
.4*

1998 Employee Stock Purchase Plan,
    as amended.(9)10
.5*

1998 Non-Employee Directors
    Stock Option Plan, as amended.(9)10
.6*

1998 Employee Stock Purchase Plan
    Offering for Foreign Employees.(5)10
.7*

1999 Non-Officer Equity Incentive
    Plan, as amended.(10)10
.8

Data Over Cable Service Interface
    Specifications License Agreement, dated December 21, 2001,
    between Terayon Communication Systems, Inc. and Cable Television
    Laboratories, Inc.(6)10
.9

Amendment to DOCSIS IPR Agreement
    to cover DOCSIS 2.0, dated December 21, 2002, between
    Terayon Communication Systems, Inc. and Cable Television
    Laboratories, Inc.(6)10
.10

Lease Agreement, dated
    September 18, 1996, between Sobrato Interests III and
    VeriFone.(7)10
.11

Triple Net Sublease, dated
    April 1, 2002, by and between Terayon Communication
    Systems, Inc. and Hewlett-Packard Company.(7)10
.12

Aircraft Lease Agreement, dated
    February 8, 2002, between Terayon Communication Systems,
    Inc. and General Electric Capital Corporation.(8)10
.13

First Amendment to Aircraft Lease
    Agreement and Security Deposit Pledge Agreement, dated
    December 31, 2003, between Terayon Communication Systems,
    Inc. and General Electric Capital Corporation.(13)10
.14

Notification Letter of Intent to
    Terminate or Sublease the Aircraft Lease Agreement, dated
    March 12, 2004.(13)10
.15*

Employment Agreement, dated
    July 22, 2005, between Terayon Communication Systems, Inc.
    and Jerry Chase.(16)10
.16

Proprietary Information and
    Inventions Agreement, dated July 22, 2004, between Terayon
    Communication Systems, Inc. and Jerry Chase.(12)10
.17

Aircraft Sublease Agreement, dated
    August 24, 2004, between Terayon Communication Systems,
    Inc. and United Furniture Equipment Rental, Inc.(12)10
.18*

Employment Agreement, dated
    July 22, 2005, between Terayon Communication Systems, Inc.
    and Mark Richman.(16)10
.19

Proprietary Information and
    Inventions Agreement, dated November 10, 2004, between
    Terayon Communication Systems, Inc. and Mark Richman.(15)10
.20*

Form of Option Agreement for the
    Terayon Communication Systems, Inc. 1997 Equity Incentive
    Plan.(14)10
.21*

Form of Option Agreement for the
    Terayon Communication Systems, Inc. 1998 Non-Employee Directors
    Stock Option Plan.(15)




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.22

Lease, dated August 9, 2006
    between Sobrato Development Companies #871 and Terayon
    Communication Systems, Inc.(17)10
.23

Triple Net
    Sub-Sublease
    Agreement, effective as of August 9, 2006, as amended,
    between Terayon Communication Systems, Inc. and Citrix Systems,
    Inc.(17)10
.24*

Employment Agreement, dated
    July 27, 2005, between Terayon Communication Systems, Inc.
    and Matthew Aden. (16)10
.25

Proprietary Information and
    Inventions Agreement, dated July 27, 2005, between Terayon
    Communication Systems, Inc. and Matthew J. Aden.(16)10
.26*

Amendment No. 1 to the
    Terayon Communication Systems, Inc. 1997 Equity Incentive
    Plan.(17)10
.27*

Non-Employee Director Equity
    Compensation Policy.(17)10
.28*

Non-Employee Director Equity
    Compensation Policy Nonstatutory Stock Option Agreement.(17)10
.29*

2006 Executive Sales Commission
    Plan.(17)10
.30*

2006 Section 16 Executive
    Officer Bonus Plan.(17)10
.31

Termination Agreement, effective
    as of March 22, 2007, between Terayon Communications
    Systems, Inc. and General Electric Capital Corporation.(18)10
.32

Agreement and Plan of Merger,
    dated as of April 21, 2007 among Terayon Communication
    Systems, Inc., Motorola, Inc., and Motorola GTG Subsidiary VI
    Corp.(19)14
.1

Code of Business Conduct.(17)21
.1

List of Subsidiaries.(18)24
.1

Power of Attorney (see signatures
    of this
    Form 10-K/A).31
.1

Certification of the Chief
    Executive Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of the Chief
    Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of the Chief
    Executive Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.(18)32
.2

Certification of the Chief
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.(18)99
.1

Audit Committee Charter of Terayon
    Communication Systems, Inc.(17)99
.2

Compensation Committee Charter of
    Terayon Communication Systems, Inc.(17)99
.3

Nominating and Governance
    Committee Charter of Terayon Communication Systems, Inc. (17)     (1)
    
    Incorporated by reference to exhibits to our Registration
    Statement on
    Form S-1
    filed on June 16, 1998 (File
    No. 333-56911).(2)
    
    Incorporated by reference to exhibits to our Registration
    Statement on
    Form S-1/A
    filed on July 31, 1998 (File
    No. 333-56911).(3)
    
    Incorporated by reference to our Registration Statement on
    Form S-3
    filed on October 24, 2000 (File
    No. 333-48536).(4)
    
    Incorporated by reference to our Report on
    Form 8-K
    filed on February 9, 2001.(5)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on April 2, 2001.(6)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on April 1, 2002.(7)
    
    Incorporated by reference to our Report on
    Form 10-Q
    filed on May 15, 2002.(8)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on March 27, 2003.(9)
    
    Incorporated by reference to our Report on Registration
    Statement on
    Form S-8
    filed on August 30, 2002.(10)
    
    Incorporated by reference to our Report on
    Form 10-Q
    filed on August 14, 2003.(11)
    
    Incorporated by reference to our Report on
    Form 8-K
    filed on November 21, 2003.(12)
    
    Incorporated by reference to our Report on
    Form 10-Q
    filed on November 9, 2004.(13)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on March 15, 2004.(14)
    
    Incorporated by reference to our Report on
    Form 8-K
    filed on September 14, 2004.(15)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on March 15, 2005.(16)
    
    Incorporated by reference to our Report on
    Form 10-Q
    filed on August 9, 2005.




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##### Table of Contents



(17)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on December 29, 2006.(18)
    
    Incorporated by reference to our Report on
    Form 10-K
    filed on April 2, 2007.(19)
    
    Incorporated by reference to our Report on
    Form 8-K
    filed on April 23, 2007.*
    
    Management contract or compensatory plan or arrangement required
    to be filed as an exhibit pursuant to Item 15(b) of Form
    10-K.