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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1 to Form 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended June 29, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from _____ to _____
Commission File Number 0-24918
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SHIVA CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2889151
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
28 Crosby Drive, Bedford, MA 01730
(Address of principal executive offices, including Zip Code)
(617) 270-8300
(Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
The number of shares outstanding of the registrant's Common Stock as of June 29,
1996 was 28,493,368.
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EXPLANATORY NOTE
This Form 10-Q/A of Shiva Corporation is filed solely to amend the Exhibit
Index included herein.
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Item 6. Exhibits and Reports on Form 8-K
<TABLE>
(a) Exhibits
<CAPTION>
Exhibit No. Description of Exhibit
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<S> <C>
10.1(1) Lease by and between Walford Company, Landlord, and
Shiva Corporation, Tenant dated May 24, 1996.
10.2+ Amendment #2 dated June 27, 1996 to the License and
Development Agreement between Shiva Corporation and
Microsoft Corporation dated March 4, 1994.
10.3+(1) First Amendment dated June 28, 1996 to the
Development and License Agreement effective as of
December 30, 1994 between Shiva Corporation and
Hewlett-Packard Company.
10.4+ Letter Agreement dated March 15, 1996 between Shiva
Corporation and Northern Telecom Limited to amend the
Shiva/Nortel Contract dated May 15, 1995.
10.5+(1) First Amendment dated May 16, 1996 to the
Shiva/Nortel Contract dated May 15, 1995.
11.0(1) Statement of Computation of Earnings per share
included herein on page 14.
27.0(1) Financial Data Schedule.
<FN>
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+ Confidential treatment requested.
(1) Previously filed.
</TABLE>
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(b) Reports on Form 8-K: The Company filed a Current Report on Form 8-K
dated June 27, 1996, as amended by Amendment No. 1 on Form 8-K/A dated July 9,
1996 and Amendment No. 2 on Form 8-K/A dated August 13, 1996. The Current
Report, as amended, announced the completion of the Company's acquisition of
AirSoft, Inc. ("AirSoft"), a Delaware Corporation, in exchange for approximately
691,587 shares of the Company's Common Stock. Amendment No. 2 to the Current
Report contained the following financial statements pursuant to Item 7 of Form
8-K for AirSoft: Balance Sheets as of December 31, 1995, December 31, 1994 and
March 31, 1996; Statements of Operations for the years ended December 31, 1995,
1994 and 1993 and the three months ended March 31, 1996 (unaudited) and March
31, 1995 (unaudited); Statements of Stockholders' Equity for the years ended
December 31, 1995, 1994 and 1993; and Statements of Cash Flows for the years
ended December 31, 1993, 1994 and 1993 and the three months ended March 31, 1996
(unaudited) and March 31, 1995 (unaudited). Amendment No. 2 to the Current
Report also contained the following pro forma combined financial statements:
Unaudited Pro Forma Combined Balance Sheet at March 30, 1996 and Unaudited Pro
Forma Combined Statement of Operations for the years ended December 30, 1995,
December 31, 1994 and January 1, 1994 and the three months ended March 30, 1996
and April 1, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SHIVA CORPORATION
Date: February 13, 1997 by: /S/ Cynthia M. Deysher
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Cynthia M. Deysher
Senior Vice President Finance and
Administration and Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
The following exhibits are filed herewith.
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
10.1(1) Lease by and between Walford Company, Landlord, and
Shiva Corporation, Tenant dated May 24, 1996.
10.2+ Amendment #2 dated June 27, 1996 to the License and
Development Agreement between Shiva Corporation and
Microsoft Corporation dated March 4, 1994.
10.3+(1) First Amendment dated June 28, 1996 to the
Development and License Agreement effective as of
December 30, 1994 between Shiva Corporation and
Hewlett-Packard Company.
10.4+ Letter Agreement dated March 15, 1996 between Shiva
Corporation and Northern Telecom Limited to amend the
Shiva/Nortel Contract dated May 15, 1995.
10.5+(1) First Amendment dated May 16, 1996 to the
Shiva/Nortel Contract dated May 15, 1995.
11.0(1) Statement of Computation of Earnings per share
included herein on page 14.
27.0(1) Financial Data Schedule.
<FN>
- --------------------
+ Confidential treatment requested.
(1) Previously filed.
</TABLE>
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.2
Amendment No. 2 to the
License and Development Agreement Between
SHIVA CORPORATION and MICROSOFT CORPORATION
This Amendment No. 2 is made and entered into by and between MICROSOFT
CORPORATION ("MS") and SHIVA CORPORATION ("COMPANY") this 27th day of June, 1996
Recitals
The parties have entered into that certain License and Development Agreement
dated March 4, 1994 and Amendment dated June 30, 1995 (collectively the
Agreement); and
The parties hereby agree to amend the Agreement as follows:
Amendment
1. Capitalized terms shall have the same meaning as set forth in the
Agreement, except as otherwise provided.
2. Section 3 is modified as follows:
(a) the delivery date for the ********************* is extended from
October 1, 1995 to April 1, 1996;
(b) a new delivery date is added: ********************************** due
July 1, 1996.
3. Section 5 is deleted in its entirety and replaced with the following:
"5. Effective April 1, 1996, COMPANY shall provide MS support for the *****
*************** of the Licensed Software under the terms described in
Exhibit F. COMPANY shall provide corrections to and other support for the
**************** of the Licensed Software to MS *********************
***************************************************************."
4. The attached Exhibit F is added to the Agreement and is incorporated herein
by reference.
5. This Amendment shall amend, modify and supersede to the extent of any
inconsistencies, the provisions of the Agreement. Except as expressly
amended by this Amendment, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date set forth above. All signed copies of this
Amendment to the Agreement shall be deemed originals. This Amendment does
not constitute an offer by MS. This Amendment shall be effective upon
execution on behalf of COMPANY and MS by their duly authorized
representative.
MICROSOFT CORPORATION SHIVA CORPORATION
By: /s/ Brian Valentine By: /s/ Cynthia M. Deysher
------------------------------------- ----------------------------
Name (Print): Brian Valentine Name (Print): Cynthia M. Deysher
Title: General Mgr., Exchange Prod. Unit Title: Sr. Vice President
Date: 7/11/96 Date: 6/27/96
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EXHIBIT F
SUPPORT
Definitions
"Version" shall mean a binary version of the Licensed Software designated by a
numeric identification of the form "N.M" where "N" designates the Version
identification.
"Revision" shall mean a release of the binary version of the Licensed Software
incorporating corrections and minor enhancements. A Revision is designated by a
numeric identification of the form "N.M" where "M" designates the Revision
identification.
"Documentation" shall mean any printed manuals, on-line help, and release notes
provided with the Licensed Software, as more particularly described in Exhibit
B.
All other terms shall be interpreted in accordance with the definitions as set
forth in the Agreement.
SUPPORT OBLIGATIONS OF MS
MS shall review all reported problems in MS's Other Products(s) to determine
whether the reported problem is attributable to the Licensed Software or the
Other Product(s). If MS determines that a problem exists in the Licensed
Software (i.e. that the Licensed Software does not perform in accordance with
the Documentation for the Licensed Software), MS shall use all reasonable
efforts to resolve the problem themselves. If MS is unable to resolve the
problem then MS may submit the problem to COMPANY for resolution.
If MS submits a problem to COMPANY for resolution, MS shall do so by submitting
to COMPANY: (i) if possible, a sample program separate from MS's Other Product,
which, when executed in conjunction with the Licensed Software, clearly
illustrates the problem with such Licensed Software, and (ii) a detailed
description of the problem. MS and COMPANY shall prioritize any such problem
submitted to COMPANY for resolution in accordance with the hierarchy described
below. MS shall supply any additional information reasonably requested by
COMPANY and MS shall make its support personnel available to assist in the
problem identification and resolution.
Any Problem submitted to COMPANY for resolution must be referred to COMPANY's
online support group by MS's Primary Support Liaison. Similarly, COMPANY's
response to a problem submitted by MS will be conveyed only by COMPANY's on-line
support group to MS's Primary Support Liaison. However, in the event that MS's
Primary Support Liaison is unavailable, MS's Alternate Support Liaison may
substitute in place of MS's Primary Support Liaison. The Support Liaison shall
be the persons identified below. A Support Liaison may be changed upon
reasonable notice to COMPANY.
BOTH THE MS'S PRIMARY AND SECONDARY SUPPORT LIAISONS MUST ATTEND THE TRAINING
DESCRIBED ABOVE. Unless both COMPANY and MS agree otherwise.
MS's Primary Support
Liaison l: Glenn Meacham Liaison 2: Shannon McMorris
(206) 704-5766 (214) 756-7000
MS's Alternate Support Liaison: Sid Siddiqui
(206) 704-5386
PROBLEM HIERARCHY
The following hierarchy SHALL BE USED IN CLASSIFYING PROBLEMS:
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
PROBLEM
LEVEL DESCRIPTION OF PROBLEM
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CRITICAL End-user is unable to use or install the product, resulting in
critical impact on operations. For example: Data is corrupted;
no obvious work around; requires program or design changes;
causes a system failure; corrupts operating system or hardware.
SERIOUS End-user is able to use the product but is severely restricted.
For example: Causes program failure; work around is awkward or
inefficient; misleading output. System crashes may also be
classified as serious if caused by an unusual or unlikely set of
commands.
MEDIUM End-user can use the product with limitations that are not
critical to overall operations. For example: The work around is
acceptable and does not seriously impact operations; prevents a
user from using preferable procedure; confusing interface;
externals not affected. Low End-user can circumvent the problem
and use the product with only slight inconvenience. For
example: The work around becomes the permanent solution;
correct use is obvious.
SUPPORT OBLIGATIONS OF COMPANY
Support for MS's technical and customer service support personnel:
MS will provide the first line of technical support to its customers for both
the Licensed Software and Other Products(s). COMPANY will provide MS with direct
technical telephone support. The fee for the first 12 months is ********** for
Maintenance and Support with subsequent renewal terms at a rate of ******* per
year. This support includes:
- - Guaranteed call back within *******
- - Toll free 800[pound sign]
- - Available 9am to 8pm access (EST), Monday - Friday, COMPANY Holidays excluded
- - MS can designate up to 2 primary contacts and an alternate
- - MS can submit less critical incidents via E-mail or Fax
- [email protected] (Must be accompanied by Contract Number)
- Fax - 617-270-8337
- Guaranteed one business day response
- - ** Support Incidents annually
- - COMPANY will provide a fax number to MS for support purposes
COMPANY's support obligations hereunder shall be limited to responding to a
problem in the Licensed Software as follows:
CRITICAL PROBLEM: COMPANY shall use reasonable efforts to acknowledge (i.e.
calling MS back to scope and define the problem and make a first attempt at
problem resolution) within **************** and provide a response (i.e.
making further attempts to resolve the problem; this may include exchange of
code and documentation of trouble shooting work completed) within *************
and a full solution within ************** days of receiving problem referral
from MS. If a solution cannot reasonably be provided within *************** of
receiving problem referral, COMPANY shall develop and present a plan to MS to
provide a solution as soon as reasonably practicable.
SERIOUS PROBLEM: COMPANY shall use reasonable efforts to acknowledge within ***
*********** and provide a response within **************** and a full solution
within **************** of receiving problem referral from MS. If a solution
cannot reasonably be provided within ********** of receiving problem referral,
COMPANY shall develop and present a plan to MS to provide a solution as soon as
reasonably practicable.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
MEDIUM OR LOW PROBLEM: COMPANY shall *********************************** either
as a correction or in a subsequent Revision of the Licensed Software. After the
expiration of this Agreement, subsequent Revisions will be provided to MS in
order for MS to support its customers as long as a support agreement is in place
between MS and COMPANY.
ESCALATION CHANNEL
In the event the above guidelines are not met or are at risk of not being met,
the support issue will be escalated as follows:
- - Technical Support Manager Michael Knox (617) 270-8449
- - V.P. Customer Service Rich Lanchantin (617) 270-8868
In addition, when the assigned Microsoft Support representative or Microsoft
Management are concerned about the progress being made on a particular support
issue, the above escalation channel should be used.
Incident Reporting
A summary report of activity will be provided to Microsoft's Support
Representative on a Quarterly basis. The format will consist of the following
information:
- - Case Number
- COMPANY's internal tracking number. Provided to Microsoft for each
incident opened with COMPANY Technical Support
- - Open Date
- Original Date the incident was opened in COMPANY Technical Support
- - Severity
- Severity Level of Incident
- - Status
- Current status. Research, Followup, Engineering
- - Brief Description
- - Complete Date
- Date Case was closed.
- - Solution Description
- Details of steps used to solve problem.
COMPANY shall have **********************************************************
*************************************************************************
**************************************************************************
***********************************************************************.
COMPANY shall have ************************************************************
******************************************************************************
***************************************************************************
*******.
COMPANY shall provide support for the Licensed Software until five (5) years
after the termination of the Agreement.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTED SUCH OMISSIONS.
EXHIBIT 10.4
3/15/96
Dear Mickey:
We have prepared this agreement to permit Shiva and Nortel to amend the
Shiva/Nortel Agreement, effective May 15, 1995 as follows:
Non-refundability of prior development expenses
<TABLE>
Nortel agrees to amend Section 13.5 of the original agreement which permitted
Nortel to terminate the agreement and compel Shiva to repay all product
development fees ***** in the event of Shiva's inability to deliver an FCS
version of Release 1 on or before March 31, 1996. Nortel and Shiva agree to
the following schedule as a substitute for the original repayment language.
<CAPTION>
Amount Event/Deliverable Status of amount paid
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<S> <C> <C>
***** Signature of both parties on this letter ********** upon occurrence of event
agreement
***** Shiva's delivery of ******************** ********** upon supply of deliverable,
**************************************** provided that such delivery occurs no later than
********************** *****
***** Shiva's delivery of ******************** ********** upon supply of deliverable,
**************************************** provided that such delivery occurs no later than
********************** *****
***** Shiva's interim delivery of ************* ********** upon Nortel's acceptance of
**************************************** delivery, currently planned for *****
***** Shiva's delivery of ************* ********** upon Nortel's acceptance of
delivery, currently planned for *****
***** Shiva's delivery of************* ********** upon Nortel's acceptance of
delivery, currently planned for *****
</TABLE>
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTED SUCH OMISSIONS.
Volume Commitment and Termination Clause:
-----------------------------------------
Both Shiva and Nortel agree to cancel **********.
If this letter agreement is consistent with your understanding of the
changes that we have agreed to, please have the appropriate Nortel
signatory execute one copy of the amending letter and return to my
attention. You can retain an original with my signature for your
files. If changes need to be made, please phone or email me.
Very truly yours,
/s/ Ed Gregory
Agreed to for Nortel by:
Signature /s/ Micky Tsui Date 3/19/96
Print Name Micky Tsui
