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As filed with the Securities and Exchange Commission on August 22, 1996
Registration No. 33-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
SHIVA CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2889151
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
28 Crosby Drive
Bedford, MA 01730
(617) 270-8300
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
--------------------------
FRANK A. INGARI
President and Chief Executive Officer
Shiva Corporation
28 Crosby Drive
Bedford, MA 01730
(617) 270-8300
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
Copy to:
MARK G. BORDEN, ESQ.
Hale and Dorr
60 State Street
Boston, MA 02109
(617) 526-6000
--------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
==========================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT
SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 284,035 shares $43.625 $12,391,026.875 $4,272.77
==========================================================================================================================
<FN>
(1) The price of $43.625 per share, which is based upon prices of the Common
Stock on the Nasdaq National Market on August 16, 1996, is set forth
solely for the purpose of calculating the registration fee, in accordance
with Rule 457(c) under the Securities Act of 1933.
</TABLE>
===============================================================================
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 3
SUBJECT TO COMPLETION: DATED AUGUST 22, 1996
SHIVA CORPORATION
-----------------------
284,035 SHARES
COMMON STOCK
$.01 PAR VALUE PER SHARE
-----------------------
This Prospectus relates to the resale of 284,035 shares of Common Stock,
$.01 par value per share (the "Shares"), of Shiva Corporation (the "Company" or
"Shiva") by certain selling stockholders (the "Selling Stockholders") who
acquired the Shares in connection with the acquisition by Shiva of Spider
Systems Limited. The Shares may be sold from time to time by the Selling
Stockholders in brokers' transactions, to market makers or in block placements,
at market prices prevailing at the time of sale or at prices otherwise
negotiated. See "Selling Stockholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear certain expenses in connection with the
registration of the Shares being offered and sold by the Selling Stockholders.
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "SHVA". On August 21, 1996, the last reported sale price for the
Common Stock was $43.75.
-----------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is ____________, 1996.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information are available for inspection and copying at the
public reference facilities maintained by the Commission at 450 Fifth Street,
Room 1024, N.W., Washington, D.C. 20549, and at the following regional offices
of the Commission: Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, Room 1024, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the Company is
required to file electronic versions of these documents with the Commission
through the Commission's Electronic Data Gathering, Analysis and Retrieval
(EDGAR) system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The Common Stock of the Company is quoted on the Nasdaq National
Market. Reports and other information filed by the Company can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Stock offered hereby. This Prospectus does not contain all information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information regarding the Company and the Common Stock offered hereby, reference
is hereby made to the Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus regarding the contents
of any agreement or other document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance reference is made
to the copy of such agreement filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Registration Statement, including the exhibits and schedules thereto, may be
inspected at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from such office upon payment of the prescribed fees.
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Written requests for such copies should be
directed to Shiva Corporation, Attention: M. Elizabeth Potthoff, 28 Crosby
Drive, Bedford, Massachusetts 01730. Telephone requests may be directed to M.
Elizabeth Potthoff at (617) 270-8300.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference (File No.
0-24918):
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 30, 1996.
3. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 29, 1996.
4. The Company's Current Report on Form 8-K dated as of June 28, 1996.
5. The Company's Current Report on Form 8-K/A (Amendment No. 1 to Form
8-K dated as of June 28, 1996) dated as of July 8, 1996.
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6. The Company's Current Report on Form 8-K/A (Amendment No. 2 to Form
8-K dated as of June 28, 1996) dated as of August 13, 1996.
7. The description of the Company's Common Stock, $.01 par value per
share, contained in the Registration Statement on Form 8-A filed under
the Exchange Act and declared effective on November 17, 1994,
including any amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Shares, shall be deemed to be incorporated by reference in this
Prospectus and made a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in any Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
TRADEMARKS
SHIVA[Registered Trademark], SHIVA WITH DESIGN[Registered Trademark]
(Shiva's logo), NETMODEM/E[Registered Trademark], NETMODEM[Registered
Trademark], NETBRIDGE[Registered Trademark], NETSERIAL[Registered Trademark],
TELEBRIDGE[Registered Trademark], HUBLET[Registered Trademark],
LANROVER[Registered Trademark], SPIDER[Registered Trademark],
AIRSOFT[Registered Trademark] and ETHERGATE[Registered Trademark] are
registered trademarks of Shiva and Shiva PPP[Trademark], ShivaOS[Trademark],
Tariff Management[Trademark], isdn[Trademark], ShivaPort[Trademark],
ShivaIntegrator[Trademark], WebRover[Trademark], ShivaRemote[Trademark], Shiva
Dial-In SDK[Trademark] LanRover Access Switch[Trademark], Shiva
AccessPort[Trademark], ISSAK[Trademark], PowerBurst[Trademark],
PowerSurf[Trademark], PowerNet[Trademark] and AirAccess[Trademark] are
trademarks of Shiva. This Prospectus also includes other trade names and marks
of companies other than Shiva.
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THE COMPANY
Shiva is a leader in the design, development, manufacture and sale of
hardware and software products that enable transparent remote connectivity to
enterprise networks from any location having access to switched analog or
digital telephone service. Founded in 1985, Shiva has applied its expertise in
internetworking, personal computer ("PC") software and telephony to pioneer the
"remote node" approach to remote network access. Shiva's remote node solution
enables a remote PC to access an existing network as a fully functional network
node, thereby allowing users to access network resources from their remote PCs
as if they were directly connected to the enterprise network. Shiva servers
enable users to connect to computing resources from home, while traveling or as
part of a branch office or multi-user worksite.
The Company has three remote access product lines: (i) the LanRover,
introduced in 1992, which provides enterprise-wide remote access, (ii) the
Integrator, introduced in 1994, which provides ISDN (Integrated Services Digital
Network) LAN-to-LAN (local area network) remote access for enterprises,
workgroups and the small office, home office (SOHO) market and (iii) the
NetModem/E, introduced in 1991, which provides remote access for workgroups and
the SOHO market. These products include server hardware and software, client
software and network management software. Shiva remote access products enable
single-user dial-in to LANs over analog or digital lines, individual dial-out
from LANs to other locations and routed LAN-to-LAN dial-up connections. The
Company's remote access products support all major desktop computing platforms,
including IBM-compatible PCs, Apple Macintoshes and UNIX workstations. The
Company also has a family of communications server products, including
ShivaPort, which provides remote access for TCP/IP devices, as well as
multiprotocol terminal server functionality to connect terminals and printers to
a LAN.
Shiva has developed strategic partnerships with computer operating systems
vendors, such as Microsoft, major information systems providers, such as IBM,
Motorola and Hewlett-Packard, and a major communications equipment company,
Northern Telecom Limited. Shiva markets its products in domestic and
international markets through both direct and indirect distribution channels to
reach a wide range of customers.
On August 22, 1995, the Company acquired Spider Systems Limited
("Spider"), a leading digital internetworking company based in Edinburgh, United
Kingdom, in exchange for approximately 3,923,606 shares of Common Stock (the
"Spider Acquisition"). The acquisition of Spider provides Shiva with a range of
advanced network access products incorporating Wide Area Network (WAN)
technologies such as ISDN, X.25 and Frame Relay, as well as network consulting
services.
On June 17, 1996, the Company acquired AirSoft, Inc. ("AirSoft"), a
developer of performance enhancement software products and technologies for
remote network computing based in California, in exchange for approximately
691,587 shares of Common Stock (the "AirSoft Acquisition"). The AirSoft
acquisition enables Shiva to add AirSoft's technologies to its portfolio of
remote access solutions and to complement the market strength of Shiva PPP,
Shiva's OEM client software package that is included in both the Netscape
Navigator Personal Edition and the Microsoft Internet Explorer. Spider and
AirSoft are collectively referred to herein as the "Acquired Companies," and the
Spider Acquisition and the AirSoft Acquisition are collectively referred to as
the "Recent Acquisitions."
The Company's principal offices are located at 28 Crosby Drive, Bedford,
Massachusetts 01730, and the Company's telephone number is (617) 270-8300.
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RISK FACTORS
An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors, in addition to the other information contained in this Prospectus
and the documents incorporated by reference herein, before purchasing the
shares of Common Stock being offered hereby. This Prospectus and the documents
incorporated by reference herein contain forward-looking statements that
involve risks and uncertainties. For this purpose, any statements that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates," "plans,"
"expects" and similar expressions are intended to identify forward-looking
statements. The Company's actual results may differ materially from the results
discussed in the forward-looking statements as a result of certain factors,
including those set forth in the following risk factors and elsewhere in this
Prospectus.
UNCERTAINTIES RELATING TO THE RECENT ACQUISITIONS
RISKS ASSOCIATED WITH THE INTEGRATION OF THE ACQUIRED COMPANIES
The successful and timely integration of Shiva and the Acquired Companies
is critical to the future financial performance of the combined company. The
combination of these companies will require, among other things, continuing
integration of the companies' respective product offerings and coordination of
their sales and marketing and research and development efforts. The diversion of
the attention of management created by the integration process, and any
difficulties encountered in the transition process, could have an adverse impact
on the revenues and operating results of the combined company. In addition, the
process of combining these organizations could cause the interruption of, or a
loss of momentum in, the activities of any or all of the companies' businesses,
which could have an adverse effect on their combined operations. The difficulty
of combining the three companies may be increased by the need to integrate
personnel and the geographic distance between the three companies. Changes
brought about by the Recent Acquisitions may cause key employees to leave. There
can be no assurance that the combined company will retain the employees it wants
to retain or that the combined company will realize any of the other anticipated
benefits of the Recent Acquisitions.
RESELLERS, DISTRIBUTORS AND CUSTOMERS
There can be no assurance that resellers, distributors and present and
potential customers of Shiva will continue their recent buying patterns without
regard to the Recent Acquisitions, and any significant delay or reduction in
orders could have an adverse effect on the Company's near-term business and
results of operations.
TRANSACTION CHARGES
In connection with the Spider Acquisition, Shiva recorded charges to
operations of approximately $14.0 million in the quarter ended September 30,
1995, the quarter in which the acquisition was consummated. These charges
reflect costs associated with combining the operations of the two companies and
transaction fees and costs incident to the Spider Acquisition. There can be no
assurance that Shiva will not incur additional material charges in subsequent
quarters to reflect costs associated with the Spider Acquisition.
In connection with the AirSoft Acquisition, Shiva recorded charges to
earnings of approximately $2.0 million in the quarter ended June 29, 1996, the
quarter in which the acquisition was consummated. These charges reflect costs
associated with combining the operations of the two companies and transaction
fees and costs incident to the AirSoft Acquisition. There can be no assurance
that Shiva will not incur additional material charges in subsequent quarters to
reflect costs associated with the AirSoft Acquisition.
ADVERSE EFFECT OF POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS;
SEASONALITY OF RESULTS OF OPERATIONS
Shiva's quarterly operating results may vary significantly depending on
factors such as the timing of significant orders, the timing of new product
introductions by Shiva and its competitors and the mix of distribution channels
through which Shiva's products are sold. Spider's quarterly operating results
have historically been highly seasonal, with sales and earnings generally
stronger in the six-month period ended March 31 of each year and generally
weaker in the six-month period ended September 30 of each year. There can be no
assurance that Shiva will be able to continue its growth in revenues or sustain
its profitability on a quarterly or annual basis. Revenues can be difficult to
forecast due to the early stage of development of the remote access market and
the fact that the Company's sales cycle, from initial inquiry to trial to
multiple product purchases, varies substantially from customer to customer.
Shiva's expense levels are based, in part, on its expectations as to future
revenues. If revenue levels are below expectations, operating results may be
adversely affected. Moreover,
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Shiva's resellers typically stock significant levels of inventory, and the
Company's revenues may fluctuate based on the level of the resellers'
inventories in any particular quarter.
NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE
The market for Shiva's products is characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
Shiva's future success will depend on its ability to enhance its existing
products and to introduce new products and features to meet and adapt to
changing customer requirements and emerging technologies. The Company recently
introduced AccessSwitch, a new high-end remote access switch, and AccessPort, a
new ISDN client router, each in 1996, and any delay by the Company in completing
the development of these products, or the failure of these products to achieve
market acceptance, could have a material adverse effect on the Company's
financial condition or results of operations. In addition, there can be no
assurance that Shiva will be successful in identifying, developing,
manufacturing or marketing other new products or enhancing its existing
products. Also, there can be no assurance that services, products or
technologies developed by others will not render Shiva's products or
technologies uncompetitive or obsolete.
HIGHLY COMPETITIVE ENVIRONMENT
The market for remote access products is highly competitive. Shiva competes
with traditional vendors of modems, remote control software, terminal emulation
software and application specific remote access solutions. Shiva also competes
with suppliers of terminal servers, routers, hubs and other data communications
products, and companies offering remote access solutions based on emerging
technologies such as switched digital telephone services. In addition, Shiva
may encounter increased competition from operating system and network operating
system vendors to the extent such vendors include full remote access
capabilities in their products. The Company currently licenses a version of
its client software that can also operate with non-Shiva servers, and there can
be no assurance that the licensing of such software will not enable other
vendors to develop competitive remote access solutions. The Company may also
encounter competition from telephone service providers (such as AT&T or the
regional Bell operating companies) that may offer remote access services
through their telephone networks.
The typical method of corporate remote access using Shiva's products
involves a remote user establishing a connection directly to a remote access
server located on the corporation's network. This method of remote access could
migrate to one in which the remote user establishes a connection to a public
network, such as the Internet, to which the corporate network is also connected.
Increased competition from remote access service offerings through public
networks could have a material adverse effect on the Company's business.
The Spider Acquisition has added products to Shiva's portfolio that compete
more directly with those offered by large internetworking and communications
server companies than did Shiva's products prior to the Spider Acquisition. As a
result, the Company is in more direct competition across a broader product line
with these companies, many of whom have substantially greater resources than
Shiva.
Increased competition could result in price reductions and loss of market
share which would adversely affect Shiva's revenues and profitability. Many of
Shiva's current and potential competitors have greater financial, marketing,
technical and other resources than Shiva. There can be no assurance that Shiva
will be able to continue to compete successfully with its existing competitors
or will be able to compete successfully with new competitors.
RISKS ASSOCIATED WITH INTERNATIONAL REVENUES, REGULATORY STANDARDS AND
FOREIGN CURRENCY EXCHANGE RATE FLUCTUATIONS
The Company's international revenues accounted for approximately 39%, 47%,
52%, 55% and 57% of total revenues in the first six months of fiscal 1996 and in
fiscal 1995, 1994, 1993 and 1992, respectively. In addition to direct
international sales, Shiva also sells products to U.S. original equipment
manufacturers, such as IBM, that sell such products internationally. While many
of Shiva's current products are designed to meet the regulatory standards of
foreign markets, any inability to obtain foreign regulatory approvals with
respect to future
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products on a timely basis could have an adverse effect on operating results. In
addition, Shiva is subject to the usual risks of doing business abroad,
including fluctuations in currency exchange rates, increases in duty rates,
difficulties in obtaining export licenses, difficulties in enforcement of
intellectual property rights and political uncertainties. To the extent that the
Company makes sales denominated in currencies other than U.S. dollars, gains and
losses on the conversion of such sales to U.S. dollars may in the future
contribute to fluctuations in the Company's business and operating results. In
addition, fluctuations in exchange rates could affect demand for the Company's
products.
POTENTIAL VOLATILITY OF STOCK PRICE
The Company's shares of Common Stock have been listed on the Nasdaq
National Market since November 1994. The market price of the Common Stock has
experienced significant variations during this period, ranging from a high of
$87.25 to a low of $13.25, and there can be no assurance that the market price
of the Common Stock will not experience similar fluctuations in the future or
will not fall below such levels. The market price of the Company's Common Stock
could be subject to wide fluctuations in response to quarter-to-quarter
variations in operating results, changes in earnings estimates by analysts and
market conditions in the industry, as well as general economic conditions. In
addition, the stock market has experienced volatility that has particularly
affected the market prices for many companies' stock and that often has been
unrelated to the operating performance of such companies. These market
fluctuations may adversely affect the market price of the Company's Common
Stock.
RELIANCE ON REMOTE ACCESS MARKET; EARLY STAGE OF MARKET; CLIENT SOFTWARE
LICENSING STRATEGY
Shiva currently devotes a significant portion of its research and
development, manufacturing, marketing and sales resources to service the private
and public remote access market and expects to continue to do so. Although Shiva
believes that its concentrated focus provides it with competitive advantages in
the remote access market, this focus also may leave the Company more vulnerable
to a decline in the remote access market than companies with more diverse
product offerings. Moreover, the Company's future financial performance will
depend in large part on continued growth in the remote access market, which in
turn will depend in part on the growth in the number of organizations utilizing
remote access products and the number of applications developed for use with
those products. There can be no assurance that these markets will continue to
grow or that the Company will be able to respond effectively to the evolving
requirements of these markets. Moreover, many of the Company's customers have
not yet standardized upon any particular remote access solution, and there can
be no assurance that Shiva's products will be the standard adopted by its
customers.
The Company grants unlimited use licenses of its client software, which
operates solely with Shiva servers, as part of each sale of a remote access
server. The Company has implemented a strategy of licensing a version of its
client software that can also operate with non-Shiva servers to third-party
vendors who desire to provide remote access functionality in their own product
offerings. There can be no assurance that the Company will achieve significant
revenues from the licensing of its client software.
POTENTIAL ADVERSE IMPACT OF PRODUCT RETURNS AND PRICE REDUCTIONS
Shiva provides most of its distributors and resellers with product return
rights for stock balancing or product evaluation. Shiva also provides most of
its distributors and resellers with price protection rights. Stock balancing
rights permit distributors to return products to Shiva for credit against future
product purchases, within specified limits. Product evaluation rights permit
end-users to return products to Shiva, through the distributor or reseller from
whom such products were purchased, within 30 days of purchase if such end-user
is not fully satisfied. Price protection rights require that Shiva grant
retroactive price adjustments for inventories of Shiva products held by
distributors or resellers if Shiva lowers its prices for such products. Revenues
were reduced by provisions for product returns of $3,978,000, $7,410,000,
$7,092,000, $4,938,000 and $1,503,000 in the first six months of fiscal 1996
and in fiscal 1995, 1994, 1993 and 1992, respectively. Reserves for product
returns were $4,983,000, $4,581,000, $3,309,000, $2,054,000 and $974,000 at
June 29, 1996, December 30, 1995, December 31, 1994, January 1, 1994 and
January 2, 1993, respectively. Although Shiva believes that it has adequate
reserves to cover product returns and price reductions, there can be
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no assurance that the Company will not experience significant returns or price
protection adjustments in the future or that such reserves will be adequate to
cover such returns and price reductions.
DEPENDENCE ON SUBCONTRACTORS AND SUPPLIERS
Shiva is dependent on two subcontractors for the manufacture of significant
portions of its remote access products. If these subcontractors were to become
unable or unwilling to continue to manufacture Shiva's key products in required
volumes, the Company would have to identify and qualify acceptable additional
subcontractors. This qualification process could be lengthy and no assurances
can be given that any additional sources will become available to the Company on
a timely basis. In addition, the chipsets used in certain of Shiva's Token Ring
connectivity products and modem products are currently available only from IBM
and Rockwell, respectively. To date, Shiva has not experienced significant
delays in the receipt of key components. Certain of the components of the
Integrator product line are currently available only from Intel, Motorola and
Matra Harris. The inability to obtain sufficient key components as required, or
to develop alternative sources if and as required in the future, could result in
delays or reductions in product shipments which, in turn, could have a material
adverse effect on Shiva's results of operations.
POTENTIAL ADVERSE EFFECT OF ANY INABILITY TO MANAGE GROWTH
Shiva is currently experiencing a period of rapid growth which has placed,
and could continue to place, a significant strain on its resources. This strain
has been increased by the Recent Acquisitions. If Shiva's management is unable
to manage any future growth effectively, Shiva's results of operations could be
adversely affected.
DEPENDENCE ON HIGHLY-SKILLED PERSONNEL
Shiva believes that its future success will also depend in large part upon
its ability to attract and retain highly skilled technical, managerial and
marketing personnel including, in particular, additional management personnel in
the areas of research and development and technical support. Competition for
such personnel is intense. There can be no assurance that Shiva will be
successful in attracting and retaining the personnel it requires to continue to
grow.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
Although Shiva believes that its continued success will depend primarily on
continuing innovation, sales, marketing and technical expertise, the quality of
product support and customer relations, Shiva must also protect the proprietary
technology contained in its products. Shiva does not currently hold any patents,
relying instead on a combination of copyright, trademark, trade secret laws and
contractual provisions to establish and protect proprietary rights in its
products. There can be no assurance that the steps taken by Shiva in this regard
will be adequate to deter misappropriation or independent third-party
development of its technology. Although Shiva believes that its products and
technology do not infringe proprietary rights of others, there can be no
assurance that third parties will not assert infringement claims or that Shiva
will not be required to obtain licenses of third-party technologies.
ADVERSE EFFECT OF FLUCTUATIONS IN ECONOMIC AND MARKET CONDITIONS
The demand for Shiva's products depends in large part upon the general
demand for computer networks. General demand for computing related equipment
fluctuates from time to time based on numerous factors, including capital
spending levels and general economic conditions. The market for remote access
products is relatively new, and therefore Shiva believes that current economic
conditions have not had an adverse effect on its business. However, there can be
no assurance that future declines of computer and related equipment sales, as a
result of general economic conditions, or any other reason, would not have an
adverse effect on the Company's results of operations.
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SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial numbers of shares of the Company's Common Stock in the
public market could adversely affect the market price of the Common Stock.
POTENTIAL ADVERSE EFFECTS OF ANTI-TAKEOVER PROVISIONS; RIGHTS PLAN; POSSIBLE
ISSUANCE OF PREFERRED STOCK
The Company's Restated Articles of Organization and Restated By-laws
contain provisions that may make it more difficult for a third party to acquire,
or discourage acquisition bids for, the Company. Moreover, the Company is
subject to an anti-takeover provision of the Massachusetts General Laws which
prohibits, subject to certain exceptions, a holder of 5% or more of the
outstanding voting stock of the Company from engaging in certain activities with
the Company, including a merger, stock or asset sale. These provisions could
limit the price that certain investors might be willing to pay in the future for
shares of the Company's Common Stock. In addition, the Company has adopted a
Rights Plan pursuant to which the Company has distributed to its stockholders
rights to purchase shares of junior participating preferred stock. Upon certain
triggering events, such rights become exercisable to purchase the Company's
Common Stock at a price substantially discounted from the then applicable market
price of the Company's Common Stock. The Rights Plan could have the effect of
discouraging a merger or tender offer involving the securities of the Company
that is not approved by the Company's Board of Directors by increasing the cost
of effecting any such transaction and, accordingly, could have an adverse impact
on stockholders who might want to vote in favor of such merger or participate in
such tender offer. Also, shares of the Company's Preferred Stock may be issued
in the future without further stockholder approval and upon such terms and
conditions, and having such rights, privileges and preferences, as the Board of
Directors may determine. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of any holders of
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding voting stock of the Company. The
Company has no present plans to issue any shares of Preferred Stock, although
shares of Preferred Stock are reserved for issuance under the Rights Plan.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares of Common Stock by the Selling Stockholders.
-9-
<PAGE> 12
SELLING STOCKHOLDERS
<TABLE>
The following table provides certain information with respect to the Shares
held of record by each Selling Stockholder, certain of whom may be deemed to
have been affiliates of Spider (the "Majority Stockholders") and others (the
"Other Stockholders"). The Shares may be offered from time to time by any of the
Selling Stockholders. Because the Selling Stockholders may sell all or any part
of their Shares pursuant to this Prospectus, no estimate can be given as to the
number of Shares that will be held by each Selling Stockholder upon termination
of this offering. See "Plan of Distribution."
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
MAJORITY STOCKHOLDERS
<S> <C> <C>
Peter Howells(2) 1,992 1,992
W&J Burness Trustees Ltd. as 133,196 133,196
Trustees of the Peter Palmer
Liferent Trust(3)
Barnes Thomson Mngt Services Ltd.(4) 14,425 14,425
Andrew Broughton Davis(5) 12,915 12,915
W&J Burness (Trustees) Ltd. as 10,501 10,501
Trustees of the Nicholas Felisiak
Liferent Trust(6)
William Martin Ritchie(7) 12,915 12,915
Donald John McLeod Martin(8) 14,669 14,669
Graham Alexander Drummond 2,784 2,784
Wallace(9)
OTHER STOCKHOLDERS
CIN Investors Nominees Limited 93 93
CIN Venture Nominees Limited 12,610(10) 12,610
Robert Shaun Downey(11) 1,533 1,533
Nicholas Christopher Felisiak 2,257 2,257
Thomas Rodrick McBeath(12) 355 355
Gerald M. Meyer 470 470
NatWest Ventures Investments Ltd. 19,054(13) 19,054
Railway Pension Venture Capital Ltd. 6,351(14) 6,351
Scottish Enterprise 13,888 13,888
</TABLE>
-10-
<PAGE> 13
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Simpson Research Limited 427 427
Clare Adamson 8 8
Elizabeth Aitken 3 3
Michael Allan 127 127
Andrew Allan 15 15
Anne Ambler 292 292
Steven Anderson 15 15
Tim Anderson 5 5
Susan Anthony 69 69
Nigel Arthur 12 12
Alex Bathgate 11 11
Eric Beattie 207 207
Peter Biggs 5 5
Susan Birks 23 23
Gordon Black 15 15
Neil Black 15 15
Didier Bourgeot 326 326
Stuart Boutell 16 16
Robet Bowden 38 38
Hayley Bowman 18 18
Richard Bradley 45 45
Steve Bremner 5 5
Ian Bruce 38 38
Harry Bryson 58 58
Brendan Burke 8 8
Eric Burns 94 94
William Butt 14 14
Peter Cameron 95 95
Malcolm Campbell 14 14
</TABLE>
-11-
<PAGE> 14
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Andrew Cannon 11 11
Philip Cantore 16 16
Nigel Cartwright 5 5
HS Chahal 20 20
Nigel Chappell 1,009 1,009
Suzanne Clarke 8 8
Susan Coombs 2 2
John Cramb 3 3
Janice Cutting 9 9
Tom Daniel 47 47
Kathryn Davey 8 8
Davina Davies 7 7
Jonathon Davies 30 30
Laurence Dearling 162 162
Ian Donaldson 14 14
Roy Donaldson 14 14
Clare Edmonstone 3 3
Richard Edmonstone 25 25
Shaun Ellery 5 5
Paul Elliot 3 3
Dougal Featherstone 3 3
Laura Fergusson 8 8
Francois Ferveur 2 2
Keith Flower 94 94
Michael Fogg 8 8
David Fraser 21 21
Brian Gavin 8 8
Carol Gillespie 10 10
J Goodale 20 20
</TABLE>
-12-
<PAGE> 15
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Douglas Gordon 18 18
Neil Gordon 1 1
Paul Gowans 30 30
Linda Grant 69 69
Brian Dunlop Gray 1,214 1,214
Martin Gray 331 331
Marion Greenway 5 5
Angus Grossart 18 18
Dilys Groves 27 27
Graham Haley 16 16
Simon Hall 4 4
Lynn Hammond-Riley 704 704
Alan Harman 5 5
Tom Harris 16 16
Paul Harrison 8 8
Ian P Heavens 166 166
Steven Horle 3 3
Scott Hosking 2 2
Margaret Hume 14 14
Neil Hutton 45 45
Sharon Izon 5 5
Andrew Jamieson 2 2
Francis Kent 16 16
Chris Key 2 2
Rahail Khan 8 8
Matt Kinnear 8 8
Michael Lamont 5 5
Ian Lartey 8 8
Jean Lavin 20 20
</TABLE>
-13-
<PAGE> 16
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Brian Lesbirel 17 17
Andrew Malone 38 38
Harry Manley 36 36
Ralph Masterton 7 7
James Mathieson 34 34
Suzanne Mazeau 16 16
Gavin McCallum 15 15
Chris McEvilly 10 10
Neil McGill 8 8
Colin McGlynn 57 57
Neil McIntosh 18 18
Adrian McKie 67 67
Robert McKinlay 5 5
Lavinia McTeggart 2 2
Thomas Michel 28 28
Derek Mifsud 7 7
Colin Montgomery 85 85
Debbie Montgomery 38 38
John Morris 38 38
David Morris 3 3
Jayne Mountain 12 12
Mahmood Nasir 1,315 1,315
Clive Orchard 233 233
Colin Ormiston 58 58
David Peat 8 8
Sandrine Perino 20 20
P Perkins 714 714
David Portnell 17 17
Craig Ramage 50 50
</TABLE>
-14-
<PAGE> 17
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Bruce Ramsay 16 16
Peter Reid 534 534
Mary Reid 18 18
Helen Richards 24 24
Adalbert Riedl 68 68
Alan Robertson 38 38
Horst Rodel 1,009 1009
Steve Rose 7 7
Patrick Ruddy 8 8
Isobel Russell 8 8
Colin Saywood 24 24
Gavin Shearer 67 67
Annette Short 30 30
Kevin Smart 3 3
Ruth Smith 5 5
Ian Smith 3 3
Keith Richard Smith 9,482 9,482
David Spencer 182 182
C Stabler 633 633
David Stevenson 77 77
James W Stewart 826 826
Julia Sweatman 9 9
Rachet Tagg 1 1
Katherine Taylor 24 24
Robert Thomson 8 8
Stephen Thurlow 33 33
Colin Tinto 8 8
Martine Tomassini 12 12
June Turnbull 45 45
</TABLE>
-15-
<PAGE> 18
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Owned Common Stock Which May
Name Prior to this Offering(1) Be Sold in this Offering(1)
- ---- ---------------------- ------------------------
<S> <C> <C>
Mark Valentine 130 130
Gerry Vincett 5 5
Duncan Walker 178 178
William Walker 5 5
Beverly Walker 3 3
Elizabeth Watt 21 21
Graham Waugh 62 62
Jon Weatherall 50 50
Kate M Weatherall 97 97
Dawn Webster 10 10
Julian Welch 8 8
Clare White 28 28
Ian Whitman 15 15
George Wilkie 36 36
Rachel Willmer 58 58
Valerie June Wilson 704 704
Iam Wilson 30 30
Stuart Wilson 8 8
Steve Wines 17 17
Heather Winter 8 8
Peter Woodhouse 33 33
TOTAL 284,035 284,035
- ----------
<FN>
(1) The total shares of Common Stock listed as owned by the Selling
Stockholders does not include an aggregate of 78,476 shares held in an
escrow account to secure certain indemnification obligations of the
Spider stockholders to the Company. It is expected that these shares
(less any shares which may be distributed from the escrow acount in
satisfaction of indemnification claims) will be released from escrow
and distributed to these Selling Stockholders on the earlier of August
22, 1998 or upon the settlement of all potential claims to which the
escrow account relates. The number of shares reflected in each of
these columns does not take account of any sales of shares by the
individuals listed since the Registration Statement to which this
Prospectus relates was declared effective by the Securities and
Exchange Commission on __________, 1996.
(2) Mr. Howells serves as the Company's Vice President, Network Services
Division.
(3) The Trustees of such trust have the sole authority to hold or dispose
of, and to vote all securities held by the trust. The income of the
trust is payable to Peter Palmer and charitable beneficiaries; the
principal of such trust may be paid to Mr. Palmer and charitable
beneficiaries at the discretion of the Trustees.
(4) Barnes Thomson Management Services Limited is the general partner of
Syntech Information Technology Second Fund (the "Fund"), an investment
partnership formed under the laws of the United Kingdom, and holds
such shares for the benefit of its partners. The limited partners of
</TABLE>
-16-
<PAGE> 19
the Fund include CIN Venture Nominees Limited, Railway Pension Venture
Capital Limited and NatWest Ventures Investments Limited. David
Thomson, a director of Barnes Thomson Management Services Limited,
was a director and Chairman of Spider prior to its acquisition by the
Company.
(5) Includes 1,447 shares owned by the A.B. Davis Liferent Trust of which
Mr. Davis and Valerie June Wilson are co-trustees. The Trustees of
such trust have the sole authority to hold or dispose of, and to vote
all securities held by the trust. The income of the trust is payable
to Mr. Davis; the principal of such trust may be paid to Mr. Davis at
the discretion of the Trustees. Mr. Davis was a director of Spider
prior to its acquisition by the Company.
(6) The Trustees of such trust have the sole authority to hold or dispose
of; and to vote all securities held by the trust. The income of the
trust is payable to Nicholas C. Felisiak; the principal of such trust
may be paid to Mr. Felisiak at the discretion of the Trustees.
(7) Includes 2,895 shares owned by the Wm Ritchie Liferent Trust, 627
shares owned by the Amy Ritchie Liferent Trust and 627 shares owned by
the Kate Ritchie Liferent Trust, of each of which Mr. Ritchie and Mrs.
Marie Ritchie are co-trustees. The Trustees of such trusts have the
sole authority to hold or dispose of, and to vote all securities held
by the trusts. The income of the trusts is payable, respectively, to
Wm. Martin Ritchie and each of his children; the principal of such
trusts may be paid to such persons at the discretion of the Trustees.
Mr. Ritchie was a director of Spider prior to its acquisition by the
Company.
(8) Includes 965 shares owned by the Alice Martin Trust, 8,686 shares
owned by the DJ Martin Liferent Trust, 965 shares owned by the James
Martin Trust and 965 shares owned by the Rachel Martin Trust, of each
of which Mr. Martin and Mrs. Jean Katharine Baillie Martin are
co-trustees. The Trustees of such trusts have the sole authority to
hold or dispose of, and to vote all securities held by the trusts. The
income of the trusts is payable, respectively, to D. John M. Martin,
and each of his children; the principal of such trusts may be paid to
such persons at the discretion of the Trustees.
(9) Mr. Wallace was a director and Secretary of Spider prior to its
acquisition by the Company.
(10) Excludes shares beneficially owned by CIN Venture Nominees Limited as
a limited partner of Syntech Information Technology Second Fund. See
Note 4.
(11) Mr. Downey is the Vice President, Europe, Middle East and Africa of
the Company and was a director of Spider prior to its acquisition by
the Company.
(12) Mr. McBeath is the Vice President of Edinburgh Research & Development
of the Company.
(13) Excludes shares beneficially owned by NatWest Ventures Investments
Ltd. as a limited partner of Syntech Information Technology Second
Fund. See Note 4.
(14) Excludes shares beneficially owned by Railway Pension Venture Capital
Ltd. as a limited partner of Syntech Information Technology Second
Fund. See Note 4.
-17-
<PAGE> 20
In June 1995, the Company entered into an agreement to acquire Spider
Systems Limited ("Spider"), a leading digital internetworking company based in
Edinburgh, U.K., through the issuance of approximately 3,923,606 shares of its
common stock (the "Spider Acquisition"). The Spider Acquisition was completed on
August 22, 1995, and has been accounted for as a pooling of interests.
Approximately 235,428 of the 3,923,606 shares of Common Stock issued in the
Spider Acquisition were placed in escrow (the "Escrow Shares") to satisfy any
indemnification claims brought by Shiva based on a breach of any of the
representations and warranties relating to the business of Spider and a possible
claim against Spider by former employees of Spider relating to the purchase by
the Spider ESOP Trust of their Spider ordinary shares.
In connection with the Spider Acquisition, certain stockholders of Spider,
including the Majority Stockholders, executed a Registration Rights Agreement
(the "Registration Rights Agreement") pursuant to which they were granted
certain registration rights for the Common Stock of the Company issued pursuant
to the Spider Acquisition. The Company is fulfilling certain of its obligations
under the terms of the Registration Rights Agreement in connection with the
registration of the Shares being offered pursuant to this Prospectus.
The Spider Acquisition is more fully described in the Company's Current
Report on Form 8-K dated as of August 22, 1995.
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by the Selling Stockholders for
their own accounts. The Company will receive none of the proceeds from this
offering.
The Shares covered by this Prospectus may be sold by the Selling
Stockholders or by pledgees, donees, transferees or other successors in
interest. Such sales may be made at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices. The Shares may be sold by one or more of
the following: (a) one or more block trades in which a broker or dealer so
engaged will attempt to sell all or a portion of the Shares held by a Selling
Stockholder as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; and (c) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. The Selling Stockholders may effect such
transactions by selling shares to or through broker-dealers, and such
broker-dealers will receive compensation in negotiated amounts in the form of
discounts, concessions, commissions or fees from the Selling Stockholders and/or
the purchasers of the shares for whom such broker-dealers may act as agent or to
whom they sell as principal, or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). Such brokers or
dealers or other participating brokers or dealers and the Selling Stockholders
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, in connection with such sales, and any profits realized by the Selling
Stockholders and compensation of such brokers or dealers may be deemed to be
underwriting discounts and commissions.
Any securities covered by this Prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act of 1933, as amended, may be sold under Rule
144 rather than pursuant to this Prospectus.
The Company intends to maintain the effectiveness of this Prospectus for
approximately a 31 day period; provided, however, that if at certain times the
Company is in possession of material nonpublic information that it determines in
good faith that it is not advisable to disclose in a registration statement but
which information would otherwise be required by the Securities Act to be
disclosed in a registration statement, then Shiva may by written notice
immediately suspend the right of the Selling Stockholders to sell shares
pursuant to this registration statement.
-18-
<PAGE> 21
The Registration Rights Agreement entered into by the Company and certain
of the Selling Stockholders provides that the Company will indemnify such
Selling Stockholders for any losses incurred by them in connection with actions
arising from any untrue statement of a material fact in the Registration
Statement or any omission of a material fact required therein, unless such
statement or omission was made in reliance on written information furnished to
the Company by the Selling Stockholders. Similarly, such agreements provide that
each Selling Stockholder will indemnify the Company and its officers and
directors for any losses incurred by them in connection with any actions arising
from any untrue statement of material fact in the Registration Statement or any
omission of a material fact required therein, if such statement or omission was
made in reliance on written information furnished to the Company by such Selling
Stockholders. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
The Company will inform the Selling Stockholders that the antimanipulative
rules under the Securities and Exchange Act of 1934 (Rules 10b-5, 10b-6 and
10b-7) may apply to sales in the market and will furnish upon request the
Selling Stockholders with a copy of these Rules. The Company will also inform
the Selling Stockholders of the need for delivery of copies of this Prospectus.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Hale and Dorr, 60 State Street, Boston,
Massachusetts 02109.
EXPERTS
The financial statements and schedule incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 1995 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given the authority of said firm as
experts in auditing and accounting.
The financial statements of AirSoft, Inc. incorporated in this Prospectus
by reference to Amendment No. 2 to the Company's Current Report on Form 8-K/A
dated August 13, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm, given
upon their authority as experts in auditing and accounting.
-19-
<PAGE> 22
===============================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to sell, any securities other than the registered securities to which it
relates, or an offer to or solicitation of any person in any jurisdiction where
such an offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any time
subsequent to the date hereof.
---------------
TABLE OF CONTENTS
PAGE
----
Available Information ........................................... 2
Incorporation of Certain Information by Reference ............... 2
Trademarks ...................................................... 3
The Company ..................................................... 4
Risk Factors .................................................... 5
Use of Proceeds ................................................. 9
Selling Stockholders ............................................ 10
Plan of Distribution ............................................ 18
Legal Matters ................................................... 19
Experts ......................................................... 19
===============================================================================
284,035 shares
Shiva Corporation
Common Stock
-------------------
PROSPECTUS
--------------------
______________, 1996
===============================================================================
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
The following table sets forth the expenses in connection with the
distribution of the securities being registered. All amounts shown are
estimates except the SEC registration fee.
<S> <C>
SEC registration fee $ 4,273
Legal fees and expenses 5,000
Accounting fees and expenses 30,000
Miscellaneous 2,727
-------
Total $42,000
=======
</TABLE>
All of the above expenses will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of Chapter 156B of the Massachusetts General Laws ("Section 67")
provides that a corporation may indemnify its directors and officers to the
extent specified in or authorized by: (i) the articles of organization, (ii) a
by-law adopted by the stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of directors.
In all instances, the extent to which a corporation provides indemnification to
its directors and officers under Section 67 is optional. In its Restated
By-Laws, the Company has elected to commit to provide indemnification to its
directors and officers in specified circumstances. Generally, Article V, Section
2 of the Company's Restated By-laws indemnifies directors and officers of the
Company against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status as directors or officers or by
reason of their agreeing to serve, at the request of the Company, as a director
or officer with another organization. Under this provision, a director or
officer of the Company shall be indemnified by the Company for all costs and
expenses (including attorneys' fees), judgments, liabilities and amounts paid in
settlement of such proceedings, liabilities and amounts paid in settlement of
such proceedings, even if he is not successful on the merits, if he acted in
good faith in the reasonable belief that his action was in the best interest of
the Company. The board of directors may authorize advancing litigation expenses
to a director or officer at his request upon receipt of an undertaking by such
director or officer to repay such expenses if it is ultimately determined that
he is not entitled to indemnification for such expenses.
Article 6 of the Company's Restated Articles of Organization eliminates the
personal liability of the Company's directors to the Company or its stockholders
for monetary damages for breach of a director's fiduciary duty, except to the
extent Chapter 156B of the Massachusetts General Laws prohibits the elimination
or limitation of such liability.
The "Recommended Offers by Dundas and Wilson CS on behalf of Shiva
Corporation" dated June 16, 1995 (the "Offer Document") provides that the
Majority Stockholders (as defined therein) of Spider will indemnify the Company
and its officers and directors with respect to the statements of the business
and affairs of Spider as set forth in the Offer Document. Any indemnification
pursuant to this section shall be limited to the shares of Common Stock held in
escrow following the closing date. In addition, each Majority Stockholder,
severally and not jointly, has agreed to indemnify the Company and its officers
and directors against and has agreed to hold the Company and its officers and
directors harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any action, suit or
proceeding) ("Loss") incurred or suffered by the Company and its officers and
directors arising out of any misrepresentation or breach of a warranty made by
such Majority Stockholder pursuant to the Agreement and Undertaking dated as of
June 13, 1995, provided that (i) a Majority Stockholder shall only be liable
for any misrepresentations or breaches of warranties made by himself or itself
and
II-1
<PAGE> 24
(ii) a Majority Stockholder's maximum liability shall not extend beyond the
number of shares of the Company's Common Stock received by such Majority
Stockholder in connection with the Spider Acquisition (including shares of the
Company's Common Stock held in escrow on his or its behalf.) The Registration
Rights Agreement executed in connection with the Spider Acquisition provides
for indemnification by the Selling Stockholders of directors, officers and
controlling persons of the Company against certain liabilities, including
liabilities under the Act, under certain circumstances.
The registration rights provisions of the Agreement and Plan of Merger
dated as of June 16, 1996 between the Company, a wholly-owned subsidiary of the
Company and AirSoft (the "Merger Agreement") provides that the former
stockholders of AirSoft will indemnify the Stockholders of the Company and its
directors and officers against certain liabilities, including liabilities under
the Act, under certain circumstances. See "Plan of Distribution."
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The Company has obtained directors and officer's liability insurance for
the benefit of its directors and certain of its officers.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBITS:
--------
2.3(1) Agreement and Undertaking dated as of June 13, 1995 between the
Registrant, Spider, Certain Shareholders of Spider and the
Executive Directors of Spider.
2.4(1) Recommended Offers by Dundas & Wilson CS on behalf of Shiva
Corporation for the whole of the issued and to be issued share
capital of Spider Systems Limited.
4.1(2) Specimen certificate representing the Common Stock.
4.2(3) Rights Agreement dated as of September 29, 1995, between the
Company and American Stock Transfer & Trust Company, which
includes as Exhibit A the Form of Certificate of Vote of
Directors Establishing a Series of a Class of Stock, as Exhibit B
the Form of Rights Certificate, and as Exhibit C the Summary
Rights to Purchase Preferred Stock.
5.1 Opinion of Hale and Dorr.
23.1* Consent of Price Waterhouse LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Hale and Dorr (contained in Exhibit 5.1).
24.1 Power of Attorney (contained on page 11-4 of this Registration
Statement).
------------------
(1) Incorporated herein by reference to the Company's Registration
Statement on Form S-l (File No. 33-94134).
(2) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 30, 1995.
(3) Incorporated by reference to the Company's Registration Statement on
Form S-1 (File No. 33-97216).
* To be filed by amendment.
II-2
<PAGE> 25
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person or the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registration certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Bedford, Commonwealth of Massachusetts, on the
22nd day of August, 1996.
SHIVA CORPORATION
By: /s/ Cynthia M. Deysher
-----------------------------------------
Cynthia M. Deysher, Senior Vice President
Finance and Administration and Chief
Financial Officer
EACH PERSON WHOSE SIGNATURE appears below this Registration Statement
constitutes and appoints Frank A. Ingari, Cynthia M. Deysher and M. Elizabeth
Potthoff, and each of them, with full power to act without the other, his or her
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead in any
and all capacities (until revoked in writing) to sign all amendments (including
post-effective amendments) to this Registration Statement on Form S-3 of Shiva
Corporation, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, or any
state securities commission or other governmental entity pertaining to such
registration and sale, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he or she might or
could do in person thereby ratifying and confirming all that said
attorneys-in-tact and agents or any of them, or their or his or her substitute,
may lawfully do or cause to be done by virtue hereof.
[THIS SPACE INTENTIONALLY LEFT BLANK]
II-4
<PAGE> 27
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the date indicated:
Signatures Title(s) Date
---------- -------- ----
/s/ Frank A. Ingari President, Chief Executive Officer August 22, 1996
- -------------------------- and Chairman of the Board of
Frank A. Ingari Directors (principal executive
officer)
/s/ Cynthia M. Deysher Senior Vice President, August 22, 1996
- -------------------------- Finance and Administration and
Cynthia M. Deysher Chief Financial Officer (principal
financial and accounting officer)
/s/ David C. Cole Director August 22, 1996
- --------------------------
David C. Cole
/s/ L. John Doerr Director August 22, 1996
- --------------------------
L. John Doerr
/s/ Henry F. McCance Director August 22, 1996
- --------------------------
Henry F. McCance
/s/ Paul C. O'Brien Director August 22, 1996
- --------------------------
Paul C. O'Brien
/s/ Mitchell E. Kertzman Director August 22, 1996
- --------------------------
Mitchell E. Kertzman
II-5
<PAGE> 28
Exhibit Index
-------------
Exhibit
-------
5.1 Opinion of Hale and Dorr
23.1* Consent of Price Waterhouse LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Hale and Dorr (contained in Exhibit 5.1)
24.1 Power of Attorney (contained on page 11-4 of this
Registration Statement)
- -----------
* To be filed by amendment.
<PAGE> 1
Exhibit 5.1
-----------
HALE AND DORR
Counsellors at Law
60 State Street
Boston, Massachusetts 02109
August 22, 1996
Shiva Corporation
28 Crosby Drive
Bedford, Massachusetts 01730
Ladies and Gentlemen:
We have assisted in the preparation of a Registration Statement on Form
S-3 (the "Registration Statement") to be filed with the Securities and Exchange
Commission relating to 284,035 shares (the "Shares") of Common Stock, $.01 par
value per share, of Shiva Corporation, a Massachusetts corporation ("Shiva"),
issued to the former stockholders of Spider Systems Limited ("Spider") pursuant
to the Agreement and Undertaking dated as of June 13, 1995 between Shiva,
Spider, Certain Shareholders of Spider and the Executive Directors of Spider.
We have examined the Restated Articles of Organization of the Company, as
amended, the Restated By-laws of the Company, as amended, and originals, or
copies certified to our satisfaction, of all pertinent records of the meetings
of the directors and stockholders of the Company, the Registration Statement and
such other documents relating to the Company as we have deemed material for the
purposes of this opinion.
In examination of the foregoing documents, we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, photostatic or facsimile copies, and the authenticity of the
originals of any such documents.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized for issuance, legally issued and are fully paid
and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the Registration Statement.
Very truly yours,
/s/ Hale and Dorr
HALE AND DORR
<PAGE> 1
Exhibit 23.2
------------
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration Statement of
Shiva Corporation on Form S-3 of our report dated March 28, 1996 (June 16, 1996
as to Note 8) relating to the financial statements of AirSoft, Inc., appearing
in Amendment No. 2 to the Current Report on Form 8-K/A of Shiva Corporation
dated August 13, 1996 and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
San Jose, California
August 22, 1996
