As filed with the Securities and Exchange Commission on August __, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
NATURAL MICROSYSTEMS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-2814586
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
8 Erie Drive
Natick, Massachusetts 01760-1339
(508) 650-1300
(Address and Telephone Number of Registrant's Principal Executive Offices)
Robert P. Schechter
President and Chief Executive Officer
Natural MicroSystems Corporation
8 Erie Drive
Natick, Massachusetts 01760-1339
(508) 650-1300
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Richard N. Hoehn, Esq.
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to a dividend or interest reinvestment plan, 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. [ ]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to a
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. [ ]
If any class of securities is to be concurrently registered on this
Form pursuant to Section 12(b) of the Securities Exchange Act of 1934 pursuant
to General Instruction V, please check the following box. [ ]
C A L C U L A T I O N O F R E G I S T R A T I O N F E E
Proposed Proposed
Maximum Maximum
Title of each Offering Aggregate Amount of
Class of Securities Amount to be Price Offering Registration
To be Registered Registered (1) Per Share (2) Price (2) Fee
- ------------------- -------------- ------------- --------- ------------
Common Stock, 22,801
$.01 par value shares $39.00 $889,239 $306.64
(1) Plus such additional number of shares as may be required in the event
of a stock dividend, split-up of shares, recapitalization or other
similar change in the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee,
in accordance with Rule 457 under the Securities Act, on the basis of
the average of the high and low sale prices of the Common Stock on
August 23, 1996 as reported on the Nasdaq National Market.
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 this Registration
Statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, September __, 1996
22,801 SHARES
Natural MicroSystems Corporation
COMMON STOCK
The Prospectus relates to the resale of up to 22,801 shares (the
"Shares") of Common Stock, $.01 par value per share, of Natural MicroSystems
Corporation (the "Company") held by certain stockholders of the Company (the
"Selling Stockholders").
_________________________
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. FOR A
DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH
THE PURCHASE OF THESE SECURITIES, SEE "RISK FACTORS" BEGINNING ON PAGE 5.
_________________________
The Selling Stockholders and their agents, donees, distributees,
pledgees and other successors in interest may offer and sell the Shares from
time to time in one or more transactions on The Nasdaq Stock Market, or
otherwise, at market prices then prevailing or in negotiated transactions.
The Shares may also be sold pursuant to option, hedging or other transactions
with broker-dealers. The Shares may also be offered in one or more
underwritten offerings. The underwriters in an underwritten offering, if any,
and the terms and conditions of any such offering will be described in
a supplement to this Prospectus. See "Selling Stockholders" and "Plan of
Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. See "Use of Proceeds".
The Common Stock of the Company is traded on the National Market of The
Nasdaq Stock Market (the "Nasdaq National Market") under the symbol "NMSS".
On September ___, 1996, the last reported sale price of Common Stock on the
Nasdaq National Market was $______ per share.
_________________________
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 September __, 1996.
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 filed by the Company with the
Commission pursuant to the informational requirements of the Exchange Act may
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048, and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials also may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Common Stock of the Company is traded on the Nasdaq National
Market. Reports, proxy statements and other information concerning the
Company also may be inspected at the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 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 of the information set forth in the Registration Statement and the
exhibits and schedules filed therewith. For further information with respect
to the Company and the Common Stock offered hereby, reference is hereby made
to such Registration Statement and to the exhibits and schedules filed
therewith. Statements contained in this Prospectus regarding the contents of
any agreement or other document are not necessarily complete, and in each
instance reference is made to the copy of such agreement or document 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 without charge at the
principal office of the Commission, 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 0-14805) are incorporated herein by reference: (1) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995; (2) the
Company's interim reports on Form 10-Q for the fiscal quarters ended March 31,
1996 and June 30, 1996; (3) the Company's current report on Form 8-K filed
with the Commission on June 28, 1966, as amended by Form 8-K/A filed by the
Company with the Commission on August 12, 1996; and (4) the description of the
Company's Common Stock incorporated by reference in the Company's registration
statement on Form 8-A (SEC File No. 0-23282) filed with the Commission on
January 25, 1994 from the registration statement on Form S-1 (SEC File No.
33-72596) filed with the Commission on December 6, 1993.
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In addition, all documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date hereof and prior to the termination of the offering of the Common
Stock registered hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statements contained in a document incorporated or deemed to
be incorporated by reference herein 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 modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this Prospectus
is delivered, upon a written request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such copies
should be directed to the Chief Financial Officer of the Company, 8 Erie
Drive, Natick, Massachusetts 01760-1339, Telephone: (508) 650-1300.
THE COMPANY
The Company designs, manufactures and markets integrated hardware and
software products which enable its customers to develop and implement computer
telephony applications and telecommunications systems based on open,
standards-based, client-server architectures. The principal functions
provided by the Company's products include connection to and monitoring of
public switched telephone networks (PSTN), call switching, call control,
recognition and generation of TouchTone signals, digital recording and
playback of transmissions, and integration of mixed media resources
(facsimile, speech recognition and text-to-speech) and computer-based
information. The Company's products are used in applications and systems in
areas such as voice messaging, automated attendant, interactive voice response
(IVR), specialized switching, call centers and computer telephony integration,
call and data recording, voice-facsimile, wireless infrastructure, and data
integration on local- and wide-area networks (LANs and WANs). Among examples
of these applications are telephone banking, medical alert and prescription
services, transaction card authorization, telemarketing, school bulletin
boards, cellular and other wireless switching services, security monitoring,
and automated operator services.
The Company believes it has been and continues to be a technology leader
in computer telephony. It pioneered the use of digital signal processing
chips (DSPs) for PC-based computer telephony applications in the early 1980s.
In 1993, based on its long experience in using DSPs in combination with its
own proprietary algorithms, the Company introduced the Alliance Generation
(AG) product line, which the Company believes is the most powerful,
fully-featured, PC-based enabling technology currently available. The AG
product line is fully compatible with Multi-Vendor Integration Protocol
(MVIP), a widely-adopted standard for interoperability and switching among
computer telephony resources, which was introduced by the Company in 1990
with the support of other industry participants. The Company's Telephony
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Services Architecture (TSA) provides a framework in which cost-effective
computer telephony and telecommunications products can form the basis for
high value applications and systems. TSA is designed to be open,
standards-based, layered, operating system-independent, modular and
scaleable. The Company's strategy is to expand its business by concentrating
its product development and marketing efforts in market segments worldwide
which are characterized by high value applications and systems. The Company
offers a broad range of enabling technology products for both the traditional
computer telephony markets and the emerging markets in wireless
infrastructure, data communications and mixed media. Rather than attempting
to develop all such enabling technologies with its own resources, the Company
designs its products based on interoperability with standards and, in
addition, enters into development, supply and licensing arrangements with
companies which have developed complementary technologies. In November 1995,
the Company substantially increased its international presence through its
acquisition of VOX S.A. (VOX), one of two significant European-based
suppliers of computer telephony enabling technology products. In June 1996,
the Company acquired Tek-Nique, Inc. and PSR Systems, Inc., affiliated
Illinois corporations (together "TEKnique") which develop and distribute
integrated hardware and software products for the Intelligent Network (IN) and
data communications markets.
The Company pursues a leveraged distribution model whereby its customers
- -- original equipment manufacturers (OEMs), value added resellers (VARs),
systems integrators, telephony service providers, and international
distributors -- incorporate the Company's enabling technology into the
products and services they deliver to end-users. Representative customers of
the Company, and the types of applications and systems they develop and
implement using the Company's enabling technology products, include: Alcatel
Business Systems, Centigram Communications Corporation and Wildfire
Communications, Inc. (voice messaging); Edify Corporation (IVR); Aspect
Telecommunications Corporation (call centers); France Telecom (enhanced
network services); Allen Telecom Group, Inc. and BellSouth Wireless, Inc.
(wireless infrastructure); Magnasync Corporation (specialized switching);
Kreutler GbmH (call and data recording); Netcentric Corporation (LAN/WAN data
integration); and Cap Sesa Telecom and Nippon Telephone & Telegraph
International (systems integrators/distributors). The Company's products have
been incorporated into more than 425 products sold by more than 280 customers.
The Company's principal executive offices are located at 8 Erie Drive,
Natick, Massachusetts 01760-1339, and its telephone number is (508) 650-1300.
The Company was incorporated in Delaware in 1983.
________________________
AG, Alliance Generation , NaturalAccess, Open Telecommunications,
Telephony Services Architecture and TSA are trademarks, and Natural
MicroSystems, VOX and TEKnique are trade names, of the Company used in this
Prospectus. Multi-Vendor Integration Protocol and MVIP are trademarks of GO-
MVIP, Inc. This Prospectus also includes references to trademarks and trade
names of companies other than the Company.
4
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating an investment
in the Common Stock offered by this Prospectus. In particular, potential
investors are advised that statements contained herein or incorporated by
reference into this Prospectus expressing the beliefs and expectations of
management regarding the Company's future results or performance are forward
looking statements based on current expectations that involve a number of
risks and uncertainties. The following factors describe certain market risks
associated with an investment in the Common Stock and various of the risks
and uncertainties which could cause actual results to differ materially from
management expectations.
Variations in Operating Results. The Company's results of operations
have varied from quarter to quarter and, in recent quarters, approximately
half of the revenues have been received in the final month. These variations
result from a number of factors, including timing of customer orders,
adjustments of delivery schedules to accommodate customer or regulatory
requirements, availability of components from suppliers, timing and level of
international sales, mix of products sold, and timing and level of
expenditures for sales, marketing and new product development. The Company
has historically operated with little backlog and substantially all of its
revenues in each quarter have resulted from orders received in that quarter.
If short-term demand for the Company's products declines, or if the Company is
unable to secure adequate materials from its suppliers, the Company's results
of operations for that quarter would be adversely affected. No assurance can
be given that these quarterly variations will not occur in the future and,
accordingly, the results of any one quarter may not be indicative of the
operating results for future quarters.
Competition. The market for products of the type supplied by the
Company is highly competitive. The Company has numerous competitors whose
products compete with one or more of the Company's products. The products of
one competitor, Dialogic Corporation, which is significantly larger than the
Company and has significantly greater resources available to it, compete
directly against the Company's full range of products. As the Company enters
new markets, it expects to encounter competition from additional competitors,
some of whom may have greater resources than the Company. In addition,
certain large applications and systems developers use their own proprietary
computer telephony enabling components as an alternative to purchasing
commercially available products such as those sold by the Company.
Market Acceptance of Products; Technological Changes. The market for
the Company's products is characterized by rapidly changing technology,
evolving industry standards and frequent new product introductions. The
Company's near term success and future growth is substantially dependent upon
continuing market acceptance of its products. The Company's future success
will in large part depend on its continued ability to enhance its existing
products and to develop new products to meet changing customer requirements
and emerging industry standards. There can be no assurance that the Company
will successfully develop new products and enhancements, including its
NaturalAccess software line, on a timely basis or that such products and
enhancements will achieve market acceptance. Any delay in the development of
5
these products and enhancements or their failure to achieve market acceptance
would adversely affect the Company's business. In addition, there can be no
assurance that products or technologies developed by others will not render
the Company's products or technologies noncompetitive or obsolete. One
computer telephony industry standard which has emerged over the last several
years is Multi-Vendor Integration Protocol (MVIP), an architecture for
interoperability and switching, of which the Company was the primary
developer. Although a substantial number of products are based on MVIP, a
competing architecture for interoperability, Dialogic Corporation's Signal
Computing System Architecture (SCSA), has been introduced and others may
emerge. There can be no assurance that SCSA or another architecture will not
supersede MVIP, which could adversely affect the Company's business.
Integration of VOX and TEKnique Operations. The successful integration
of the operations of VOX, which was acquired in November 1995, and of
TEKnique, which was acquired in June 1966, with those of the Company will
require, among other things, the coordination of the product offerings of the
Company with those of VOX and TEKnique, and related sales, marketing,
development and administrative activities. There can be no assurance that the
Company will not encounter unexpected difficulties in such integrations or
that the expected benefits will be realized. Any unexpected delays or costs
incurred in such integrations could have a material adverse effect upon the
Company.
Limited Protection of Proprietary Technology. The Company's success is
dependent upon proprietary technology. The Company currently has no patents
and protects its technology primarily through copyrights and trade secrets.
There can be no assurance that the steps taken by the Company to protect its
proprietary rights will be adequate to prevent the misappropriation of its
technology or the independent development by others of similar technology.
Although the Company believes that its products and technology do not infringe
on any existing proprietary rights of others, there can be no assurance that
third parties will not assert infringement claims. If infringement is
alleged, there can be no assurance that the Company would prevail or that any
necessary licenses would be available on acceptable terms, if at all. In any
event, patent and other intellectual property litigation can be extremely
protracted and expensive.
Dependence on Market Success of Third Parties; Significant Customer.
The Company's customers are primarily original equipment manufacturers (OEMs),
value added resellers (VARs), systems integrators, telephony service
providers, and international distributors. The Company's revenues are
dependent upon the ability of its customers to develop and sell computer
telephony applications and systems to end-users. Factors affecting the
ability of the Company's customers to develop and sell their products include
competition, regulatory restrictions, patent and other intellectual property
issues, and overall economic conditions. One of the Company's customers
accounted for 13.1%, 13.3% and 11.9% of the Company's revenues in 1993, 1994
and 1995, respectively. There can be no assurance that this customer will
continue to purchase similar volumes of the Company's products.
6
Dependence on Outside Suppliers and Contract Assembly Manufacturers.
The Company relies on various suppliers of components for its products. Many
of these components are standard and generally available from multiple
sources. However, certain custom integrated circuits and other devices which
are components of one or more of the Company's products are acquired by the
Company from single source suppliers. Although the Company believes it could
develop other sources for each of these custom devices, the process could take
several months, and the inability or refusal of any such source to continue to
supply devices could have a material adverse effect on the Company pending the
development of an alternative source. The Company also currently relies on a
single contract manufacturer to assemble printed circuit boards for each of
its North American and European operations. Although a number of such
contract manufacturers exist, the interruption or termination of the Company's
current manufacturing relationships could have a short-term adverse effect on
the Company's business.
Risks Associated with International Operations. The Company's sales to
customers outside North America accounted for 43.2% of the Company's revenues
in 1995. In addition, the Company believes that a material portion of its
domestic sales ultimately result in the use of the Company's products outside
North America. Accordingly, a significant portion of the Company's revenues
are subject to the risks associated with international sales. Subsequent to
the Company's acquisition of VOX in November 1995, the Company has had
significant assets denominated in French currency and has denominated a
significant portion of its sales in foreign currencies. Further, customers
generally evaluate the purchase of products of the Company based on the
purchase price expressed in the customer's currency. Therefore, changes in
foreign currency exchange rates may adversely affect the sale of the Company's
products. The Company does not currently engage in currency hedging
transactions to offset the risks associated with variations in currency
exchange rates. In addition, international markets have different regulatory
environments than those of the United States, and the Company is required to
obtain approval for its products prior to their use in other countries. There
can be no assurance that changes will not occur in such regulations or that,
if such changes occur, the Company will be able to continue to sell its
products into the affected markets. In addition, the Company's international
business may be adversely affected by risks such as political instability,
trade and tariff regulations, difficulty in obtaining export licenses,
difficulties or delays in collecting accounts receivable, and difficulties in
staffing and managing international operations.
Possible Volatility of Stock Price. Factors such as announcements of
technological innovations or new products by the Company, its competitors and
other third parties, as well as quarterly variations in the Company's results
of operations and market conditions in the industry, may cause the market
price of the Common Stock to fluctuate significantly. In addition, the stock
market in general has recently experienced extreme price and volume
fluctuations, which have particularly affected the market prices of many high
technology companies and which have often been unrelated to the operating
performance of such companies. These broad market fluctuations may adversely
affect the market price of the Common Stock.
7
Dependence on Key Personnel. The Company is highly dependent on certain
key executive officers and technical employees, the loss of any of whom could
have an adverse impact on the future operations of the Company. In addition,
the Company may need to hire additional skilled personnel to support the
continued growth of its business and the market for skilled personnel,
especially those with the technical abilities required by the Company, is
currently very competitive. There can be no assurance that the Company will
be able to retain its existing personnel or attract additional qualified
employees.
Certain Charter Provisions with Anti-Takeover and Other Effects. The
Company's Board of Directors has the power to issue shares of Common Stock and
Preferred Stock which, if issued, could dilute and adversely affect various
rights of the holders of Common Stock and, in addition, could be used to
discourage an unsolicited attempt to acquire control of the Company. The
Company's Certificate of Incorporation also provides for a classified board of
directors and contains other provisions which may also discourage an
unsolicited takeover attempt. These provisions could limit the price that
investors might be willing to pay in the future for shares of Common Stock and
could make it more difficult for stockholders of the Company to effect certain
corporate actions.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
8
SELLING STOCKHOLDERS
Set forth below, with respect to each Selling Stockholder, is the number
of shares of Common Stock beneficially owned as of August 22, 1996, the number
of Shares offered pursuant to this Prospectus and the number of shares to be
owned after completion of the offering (assuming the sale of all the Shares
offered hereunder).
Number of
Shares to be Number of Shares
Total Number of Offered or to be Owned After
Name Shares Owned Sold (1) the Offering (1)
---- --------------- ------------ -----------------
Herbert L. Pavey . . . . 18,678 9,339 9,339
Julius M. Rothschild . . 18,678 9,339 9,339
John C. Alexander . . . 2,281 2,281 0
Adam J. Machalek . . . . 365 365 0
Jeffrey M. DeMent . . . 365 365 0
Joseph A. Lee . . . . . 290 290 0
Jeffrey M. Putnam . . . 290 290 0
Jeffrey T. Rego . . . . 290 290 0
Stephen F. Witt . . . . . 124 124 0
Tedd R. Pierce . . . . . 41 41 0
Celeste M. Baril . . . . 25 25 0
Michael A. Firman . . . 25 25 0
Mark D. Davis . . . . . . 18 18 0
Mary V. Hubner . . . . . 9 9 0
(1) Such Shares were issued by the Company to such Selling
Stockholders in exchange for their shares of the common stock of
Tek-Nique, Inc., an Illinois corporation ("Tek-Nique"), on June 14, 1996
in connection with the merger of a wholly-owned subsidiary of the Company
with and into Tek-Nique. Tek-Nique and PSR Systems, Inc., which are
each currently wholly-owned subsidiaries of the Company and which
operate a single business known as TEKnique, were, prior to their
acquisition by the Company, under common ownership by the Selling
Stockholders, each of whom continues to be employed by TEKnique.
PLAN OF DISTRIBUTION
The Selling Stockholders and their agents, donees, distributees,
pledgees and other successors in interest may, from time to time, offer for
sale and sell or distribute the Shares to be offered by them hereby (a) in
transactions executed on the Nasdaq National Market, or any securities
exchange on which the shares may be traded, through registered broker-dealers
(who may act as principals, pledgees or agents) pursuant to unsolicited orders
or offers to buy, (b) in negotiated transactions, or (c) through other means.
The Shares may be sold from time to time in one or more transactions at market
prices prevailing at the time of sale or a fixed offering price, which may be
changed, or at varying prices determined at the time of sale or at negotiated
9
prices. Such prices will be determined by the Selling Stockholders or by
agreement between the Selling Stockholders and their underwriters, dealers,
brokers or agents. The Shares may also be offered in one or more underwritten
offerings. The underwriters in an underwritten offering, if any, and the
terms and conditions of any such offering will be described in a supplement to
this Prospectus.
In connection with distribution of the Shares, the Selling Stockholders
may enter into hedging or other option transactions with broker-dealers in
connection with which, among other things, such broker-dealers may engage in
short sales of the Shares pursuant to this Prospectus in the course of hedging
the positions they may assume with one or more of the Selling Stockholders.
The Selling Stockholders may also sell Shares short pursuant to this
Prospectus and deliver the Shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which may result in the delivery of Shares to such broker-
dealers who may sell such Shares pursuant to this Prospectus. The Selling
Stockholders may also pledge the Shares to a broker-dealer and upon default
the broker-dealer may effect the sales of the pledged Shares pursuant to this
Prospectus.
The distribution of the Shares by the Selling Stockholders is not
subject to any underwriting agreement. Any underwriters, dealers, brokers or
agents participating in the distribution of the Shares may receive
compensation in the form of underwriting discounts, concessions, commissions
or fees from the Selling Stockholders and/or purchasers of Shares, for whom
they may act. Such discounts, concessions, commissions or fees will not
exceed those customary for the type of transactions involved. In addition,
the Selling Stockholders and any such underwriters, dealers, brokers or agents
that participate in the distribution of Shares may be deemed to be
underwriters under the Securities Act, and any profits on the sale of Shares
by them and any discounts, commissions or concessions received by any of such
persons may be deemed to be underwriting discounts and commissions under the
Securities Act. Those who act as underwriter, broker, dealer or agent in
connection with the sale of the Shares will be selected by the Selling
Stockholders and may have other business relationships with the Company and
its subsidiaries or affiliates in the ordinary course of business. Alex.
Brown & Sons Incorporated, which acts as a market maker with respect to the
Common Stock, has agreed to act as a principal in purchasing some or all of
the Shares from the Selling Stockholders and may thereafter resell such Shares
from time to time in or through one or more transactions or distributions on
the Nasdaq National Market, through other registered brokers or dealers
pursuant to unsolicited orders or offers to buy, in independent negotiated
transactions, or otherwise.
The aggregate proceeds to the Selling Stockholders from the sale of the
Shares offered by the Selling Stockholders hereby will be the purchase price
of such Shares less any broker s commissions.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdiction only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration of qualification
requirement is available and is complied with.
10
The Selling Stockholders and any broker-dealer, agent or underwriter
that participates with the Selling Stockholders in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act, in which event any commissions received by such broker-dealers, agents or
underwriters and any profit on the resale of the Shares purchased by them may
be deemed to be underwriting commissions or discounts under the Securities
Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares offered hereby may not
simultaneously engage in market making activities with respect to the Shares
for a period of two business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Rules
10b-2, 10b-5, 10b-6 and 10b-7, which provisions may limit the timing of sales
of the Shares by the Selling Stockholders.
There is no assurance that the Selling Stockholders will sell any or all
of the Shares described herein and may transfer, devise or gift such
securities by other means not described herein. The Company is permitted to
suspend the use of this Prospectus in connection with sales of the Shares by
holders during certain periods of time under certain circumstances relating to
pending corporate developments and public filings with the Commission and
similar events. Expenses of preparing and filing the registration statement
and any and all amendments thereto will be borne by the Company.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby is being passed upon for
the Company by Choate, Hall & Stewart (a partnership including professional
corporations), Boston, Massachusetts. Richard N. Hoehn, a partner of Choate,
Hall & Stewart, is the Secretary of the Company.
11
No dealer, salesman 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 any of the
Underwriters. This Prospectus does
not constitute an offer of any
securities other than those to which
it relates or an offer to sell, or a
solicitation of an offer to buy, to
any person in any jurisdiction where
such an offer or solicitation would
be unlawful. Neither the delivery
of this Prospectus nor any sale
hereunder shall, under any
circumstances, create any
implication that the information
contained herein is correct as of
any time subsequent to the date
hereof.
22,801 Shares
NATURAL
MICROSYSTEMS
CORPORATION
Common Stock
PROSPECTUS
September ___, 1996
TABLE OF CONTENTS
Page
Available Information . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . 2
The Company . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . 8
Selling Stockholders . . . . . . 9
Plan of Distribution . . . . . . 9
Interests of Named Experts
and Counsel . . . . . . . . . . 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by the
registrant in connection with the distribution of the securities being
registered hereunder. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . $ 306.64
Legal Fees and Expenses . . . . . . . . . . . . $5,000.00
Accountants' Fees and Expenses . . . . . . . . $1,000.00
---------
Total . . . . . . . . . . . . . . . . . . $6,306.64
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation may indemnify a director, officer, employee or
agent against expenses (including attorneys' fees), judgments, fines and for
amounts paid in settlement in respect of or in successful defense of any
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article Tenth of the Company's Fourth Restated Certificate of
Incorporation provides that no director of the Company shall be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Tenth further provides that a director's personal liability shall be
eliminated or limited in the future to the fullest extent permitted from time
to time by the Delaware General Corporation Law.
Article Eleventh of the Company's Fourth Restated Certificate of
Incorporation provides that the Company shall, to the fullest extent permitted
from time to time under the Delaware General Corporation Law, indemnify each
of its directors and officers against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement in respect of any
action, suit or proceeding in which such director or officer may be involved
or with which he may be threatened, while in office or thereafter, by reason
II-1
of his or her actions or omissions in connection with services to the Company,
such indemnification to include prompt payment of expenses in advance of the
final disposition of any such action, suit or proceeding.
Item 16. Exhibits
*2.1 Articles Fourth, Seventh, Twelfth and Thirteenth of the
Registrant's Fourth Restated Certificate of Incorporation.
*3.1 Articles II, III, IV, V, VII, VIII, XII and XXV of the
Registrant's By-Laws.
4.1 Investment and Registration Rights Agreement dated as of June 14,
1996.
5.1 Opinion of Choate, Hall & Stewart as to validity of shares being
registered and Consent.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Choate, Hall & Stewart (included in Exhibit 5.1).
25.1 Power of Attorney (part of Signature Page).
_________________________
* Filed as an exhibit to the registrant's Registration Statement on Form S-1
(No. 33-27596)
Item 17. Undertakings
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 material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
II-2
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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
Insofar as indemnification of liabilities arising under the Securities
Act of 1933 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 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 any of 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 Act and will be governed by the final adjudication
of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a 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 Natick, The Commonwealth of Massachusetts on August
23, 1996.
Natural MicroSystems Corporation
(Issuer and Employer)
By: /s/ Robert P. Schechter
Robert P. Schechter, President
and Chief Executive Officer
II-4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Robert P. Schechter, John F. Kennedy
and Richard N. Hoehn, jointly and severally, his true and lawful attorneys-
in-fact and agents with full powers of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, 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 to be in and
about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on the dates indicated by the
following persons in the capacities indicated.
Name Capacity Date
/s/ Robert P. Schechter President, Chief Executive 8/23/96
Robert P. Schechter Officer and Director
(Principal Executive Officer)
/s/ John F. Kennedy Chief Financial Officer 8/23/96
John F. Kennedy (Principal Financial Officer)
/s/ David C. Flynn Controller 8/23/96
David C. Flynn (Principal Accounting Officer)
/s/ Charles T. Foskett Director 8/23/96
Charles T. Foskett
/s/ David F. Millet Director 8/19/96
David F. Millet
/s/ Ronald W. White Director 8/23/96
Ronald W. White
/s/ C. William McDaniel Director 8/23/96
C. William McDaniel
II-5
Exhibit 4.1
INVESTMENT AND REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of June 14, 1996, by and among
Natural MicroSystems Corporation, a Delaware corporation ("NMS"),
Tek-Nique, Inc., an Illinois corporation ("TEKnique") and the
individuals signatory hereto (the "TEKnique Stockholders"), who
collectively own all of the outstanding shares of capital stock
of TEKnique.
WHEREAS, pursuant to a Merger Agreement and Plan of
Reorganization by and among NMS, TEKnique and the TEKnique
Stockholders dated as of this date (the "Merger Agreement";
capitalized terms used herein without definition shall have the
meanings given them in the Merger Agreement"), NMS will acquire
all of the outstanding capital stock of TEKnique through a merger
of a subsidiary of NMS with and into TEKnique; and
WHEREAS, the Merger Agreement provides that NMS will issue
shares of its common stock to the TEKnique Stockholders in
consideration for NMS' acquisition of the stock of TEKnique; and
WHEREAS, it is a condition to the closing under the Merger
Agreement that NMS, TEKnique and the TEKnique Stockholders enter
into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have
the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering
the Securities Act.
(b) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
(c) "Holder" shall mean any holder of Restricted
Securities.
(d) The terms "register," "registered" and "registration"
all refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act
("registration statement"), and the declaration or ordering of
the effectiveness of such registration statement.
(e) "Restricted Securities" shall mean the NMS Shares
issued to the TEKnique Stockholders pursuant to the Merger
Agreement (including if any, the Contingent Shares) and any other
NMS Shares issued in respect of such shares upon subdivisions,
combinations, stock dividends, reclassifications,
recapitalizations or similar events, or any other shares of
capital stock issued in exchange for or in replacement of the NMS
Shares in a merger or otherwise.
(f) "Registrable Securities" shall have the meaning set
forth in the preface of Section 3 below.
(g) "Registration Expenses" shall mean all expenses
incurred by NMS in complying with its obligations under Sections
3 and 4 of this Agreement, including, without limitation, all
federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for NMS,
blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration.
(g) "Securities Act" shall mean the Securities Act of 1933,
as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall
be in effect at the time.
(h) "Selling Expenses" shall mean all selling commissions
and fees and disbursements of counsel for the Holders applicable
to the sale of Restricted Securities pursuant to this Agreement.
2. Restrictions on Transferability; Investment Representations.
2.1 Restrictions. The Restricted Securities shall not be
sold, assigned, transferred or pledged except upon the conditions
specified in this Section 2, which conditions are intended to
ensure compliance with the provisions of the Securities Act.
Each Holder will cause any proposed purchaser, assignee,
transferee, or pledgee of the Restricted Securities held by the
Holder to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Section 2.
2.2 Restrictive Legend. TEKnique and each of the TEKnique
Stockholders understand and acknowledge that the Restricted
Securities have not been registered under the Securities Act, or
under any applicable blue sky or state securities law, on the
grounds that the offering and sale of the Restricted Securities
pursuant to the Merger Agreement are exempt from registration
pursuant to Section 4(2) of the Securities Act and are exempt
from qualification pursuant to exemptions available under state
securities laws, and that NMS's reliance upon such exemptions is
predicated in part upon the representations of TEKnique and each
TEKnique Stockholder set forth in this Agreement. TEKnique and
each TEKnique Stockholder acknowledge and understand that the
DS1:268694 -- 2 --
Restricted Securities acquired by TEKnique and each TEKnique
Stockholder must be held indefinitely unless such Restricted
Securities are subsequently registered under the Securities Act
and applicable blue sky and state securities laws or unless an
exemption from such registration is available. Each certificate
representing the Restricted Securities (unless otherwise
permitted by the provisions of Section 2.3 below) shall be
stamped or otherwise imprinted with a legend in the following
form (in addition to any legend required under applicable state
securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
NMS RECEIVES AT ITS REQUEST AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENTS COVERING
THE ACQUISITION OF THESE SHARES AND RESTRICTING THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE
BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY
OF NMS AT THE PRINCIPAL EXECUTIVE OFFICES OF NMS.
NMS shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Restricted Securities
in order to implement the restrictions on transfer established in
this Section 2.
2.3 Notice of Proposed Transfers. Prior to any proposed
sale, assignment, transfer or pledge of any Restricted
Securities, unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the
Holder thereof shall give written notice to NMS of such Holder's
intention to effect such transfer, sale, assignment or pledge.
Each such notice shall describe the manner and circumstances of
the proposed transfer, sale, assignment or pledge in sufficient
detail, and, if requested by NMS, shall be accompanied, at such
Holder's expense, by either (i) a written opinion of legal
counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to NMS, addressed to NMS, to the effect
that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act, or (ii) a
"no action" letter from the Commission to the effect that the
transfer of such securities without registration will not result
in a recommendation by the staff of the Commission that action be
taken with respect thereto, whereupon the Holder of such
Restricted Securities shall transfer such Restricted Securities
in accordance with the notice delivered by the Holder to NMS. No
such notice or opinion of counsel shall be required in connection
with any distribution of the Restricted Securities by TEKnique to
the TEKnique Stockholders. NMS will not require an opinion of
DS1:268694 -- 3 --
counsel for transactions made in reliance on Rule 144 under the
Securities Act except in unusual circumstances, the existence of
which shall be determined in good faith by the Board of Directors
of NMS. Each certificate evidencing the Restricted Securities
transferred as provided above shall bear, except if such transfer
is made pursuant to an effective registration statement under the
Securities Act or Rule 144, the appropriate restrictive legend
set forth in Section 2.2 above, except that such certificate
shall not bear such restrictive legend if in the opinion of
counsel for such Holder and NMS such legend is not required in
order to establish compliance with any provision of the
Securities Act.
2.4 Investment Representations. TEKnique and each TEKnique
Stockholder respectively represent and warrant to NMS that it or
such stockholder is or will be acquiring the Restricted
Securities for its or such stockholder's own account for
investment purposes only and not with a view to distribution
(other than a distribution by TEKnique to the TEKnique
Stockholders). Each TEKnique Stockholder also respectively
represents and warrants that such stockholder (a) has such
knowledge and experience in financial and business matters,
either alone or with advisors, that such stockholder is capable
of evaluating the merits and risks of acquiring the Restricted
Securities; (b) has the ability to bear the economic risks of
ownership of the Restricted Securities; (c) has been furnished
copies of the following: (i) NMS's annual report to stockholders
for 1995, (ii) NMS's definitive proxy statement filed with the
Commission in connection with its 1996 annual meeting of
stockholders, (iii) NMS's annual report on Form 10-K for 1995 and
its quarterly report on Form 10-Q for the quarter ended March 31,
1996, each as filed with the Commission, (iv) any other reports
or documents filed by NMS with the Commission since such annual
report on Form 10-K, and (v) a brief description of the
Restricted Securities and any material changes in NMS's affairs
that are not disclosed in the documents furnished; and (d) has
had the opportunity to ask questions and receive answers
concerning NMS, the Merger Agreement and the transaction
contemplated thereby, the Restricted Securities and to obtain any
additional information which NMS possesses or can acquire without
unreasonable effort or expense that is necessary to verify the
accuracy of the other information furnished.
3. Registration and Sale. Not later than 90 days following the
date hereof, NMS shall prepare and file with the Commission a
registration statement on Form S-3 covering the sale by the
Holders of the Restricted Securities (but excluding fifty percent
of the shares issued to each of the Major Stockholders at the
Closing) issued to the Holders (the "Registrable Securities");
provided, however that if NMS shall furnish to the Holders a
certificate signed by the President of NMS stating that in the
good faith judgment of the Board of Directors it would be
DS1:268694 -- 4 --
seriously detrimental to NMS or its stockholders for a
registration statement to be filed in the near future, then NMS's
obligation to file such registration statement shall be deferred
for a period not to exceed 90 days from the date such certificate
is furnished to the Holders.
(a) Obligations of NMS. In connection with such
registration statement, NMS will:
(i) use its best efforts to cause such registration
statement to become effective as soon as is practicable and
to remain effective until all Registrable Securities have
been sold, but in no event shall NMS be obligated to use its
best efforts to cause such registration statement to remain
effective as to any Registrable Securities beyond the second
anniversary (or the first anniversary if Rule 144 is amended
to permit sales of restricted stock thereunder after one
year) of the date of the issuance thereof;
(ii) furnish to the Holders such reasonable number of
copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as
they may reasonably request in order to facilitate the
public offering of such securities;
(iii) prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all
Registrable Securities;
(iv) use its best efforts to register and qualify the
Registrable Securities covered by such registration
statement under such other securities or blue sky laws of
such jurisdictions as shall be reasonably requested by the
Holders, provided that NMS shall not be required in
connection therewith or as a condition thereto to file a
general consent to service of process in any such states or
jurisdictions; and
(v) keep each Holder advised in writing as to the
status of such registration statement and related blue sky
law qualifications.
(b) Obligations of the Holders. In connection with such
registration statement, each Holder will:
(i) furnish to NMS such information regarding such
Holder, the Restricted Securities and any other NMS Shares
beneficially held by him or her, and the distribution
proposed by such Holder as NMS may reasonably request in
DS1:268694 -- 5 --
writing and as shall be required in connection with any
registration, qualification or compliance referred to in
this Agreement; and
(ii) if, after a registration statement becomes
effective, NMS advises the holders of Registrable Securities
that NMS considers it appropriate for the registration
statement to be amended, the Holders of such shares shall
suspend any further sales of their Registrable Securities
until NMS advises them that the registration statement has
been amended.
(c) Expenses. All Registration Expenses incurred in
connection with the registration pursuant to this Agreement shall
be borne by NMS. All Selling Expenses shall be borne by the
respective Holder selling the Registrable Securities.
4. Reports Under Exchange Act.
With a view to making available to the Holders the benefits
of Rule 144 under the Securities Act and any other rule or
regulation of the Commission that may at any time permit a Holder
to sell Restricted Securities to the public without registration
or pursuant to a registration on Form S-3, if applicable, NMS
agrees, so long as any Restricted Securities shall be held by any
Holders, to use its best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports
and other documents required of NMS under the Securities Act and
the Exchange Act;
(c) list all Restricted Securities on such securities
exchanges as the Common Stock of NMS is listed; and
(d) furnish to any Holder, so long as such Holder owns any
Restricted Securities, forthwith upon written request (i) a
written statement by NMS that it has complied with the reporting
requirements set forth in subparagraph (c)(1) of Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold pursuant to a
registration statement on Form S-3, (ii) a copy of the most
recent annual or quarterly report of NMS and such other reports
and documents filed by NMS with the Commission, and (iii) such
other information (but not any opinion of counsel) as may be
reasonably requested by any Holder seeking to avail himself or
herself of any rule or regulation of the Commission which permits
the selling of any Restricted Securities without registration or
pursuant to Form S-3. NMS hereby represents and warrants that as
DS1:268694 -- 6 --
of the date hereof it qualifies as a registrant whose securities
may be resold pursuant to a registration statement on Form S-3.
5. Indemnification.
5.1 NMS Indemnification of Holders. NMS will indemnify
each Holder, each of such Holder's officers and directors and
partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to
which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of
Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on
any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus,
offering circular or other document, or any amendment or
supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, or any
violation by NMS of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to NMS in
connection with any such registration, qualification or
compliance, and NMS will reimburse each such Holder, each of its
officers and directors, and each person controlling such Holder,
each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, provided that
NMS will not be liable in any such case to the extent that any
such claim, loss, damage,, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity
with written information furnished to NMS by an instrument duly
executed by such Holder, controlling person or underwriter, as
the case may be, and stated to be specifically for use therein.
5.2 Holders' Indemnification of NMS. Each Holder will
indemnify NMS, each of its directors and officers, each
underwriter, if any, of NMS's securities covered by such a
registration statement, each person who controls NMS or such
underwriter within the meaning of Section 15 of the Securities
Act, and each other such Holder, each of its officers and
directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such
DS1:268694 -- 7 --
registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse
NMS, such Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in
conformity with written information furnished to NMS by an
instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the
liability of each Holder under this subsection (b) shall be
limited in an amount equal to the public offering price of the
shares sold by such Holder, provided, however, subject to such
limitation on the amount of money damages, the provisions of this
sentence shall not limit or restrict any other right or action of
NMS against the Holders arising out of any such untrue statement
or omission contained in any registration statement, prospectus,
offering circular or other documents in reliance upon and in
conformity with written information furnished to NMS by such
Holder in the manner described hereinabove.
5.3 Procedures. Each party entitled to indemnification
under this Section 5 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 5 unless the failure to give
such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the
Indemnifying Party shall not assume the defense for matters as to
which there is a conflict of interest or separate and different
defenses. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to
such claim or litigation. No Indemnifying Party shall be liable
DS1:268694 -- 8 --
for indemnification hereunder with respect to any settlement or
consent to judgment, in connection with any claim or litigation
to which these indemnification provisions apply, that has been
entered into without the prior consent of the Indemnifying Party
(which consent will not be unreasonably withheld).
5.4 Legal Expenses. In the event of any indemnification
hereunder, the Indemnifying Party shall pay the reasonable fees
and expenses of counsel for the Indemnified Party or Parties in
connection with the claim or litigation to which such
indemnification applies.
6. Transfer of Registration Rights.
The rights of a Holder under this Agreement may be assigned
to a transferee or assignee acceptable to NMS, which acceptance
shall not be unreasonably withheld, in connection with any
transfer or assignment of Registrable Securities by a Holder
provided that: (i) such transfer may otherwise be effected in
accordance with applicable securities laws, and (ii) such
assignee or transferee acquires at least 20% of the transferring
Holder's Registrable Securities; provided, however, that NMS must
be given written notice prior to the time of said transfer,
stating the name and address of said transferee or assignee and
identifying the securities with respect to which such
registration rights are being assigned.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of
Massachusetts applicable to contracts entered into and wholly to
be performed within The Commonwealth of Massachusetts.
7.2 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
7.3 Headings. The headings of the Sections of this
Agreement are for convenience and shall not by themselves
determine the interpretation of this Agreement.
7.4 Notices. Any notice required or permitted hereunder
shall be given in writing and shall be conclusively deemed effec-
tively given upon personal delivery, or three days after deposit
in the United States mail, by registered or certified mail (or by
airmail, if notice shall be sent outside the United States),
postage prepaid, addressed (a) if to NMS, at its principal
executive office, attention: President, and (b) if to a Holder at
such address as shall be the address of record of the Holder on
DS1:268694 -- 9 --
the registry of NMS, or at such other address as any Holder may
designate in accordance with the terms hereof.
7.5 Amendment of Agreement. This Agreement may be amended
only by a written instrument signed by NMS and by persons holding
at least a majority of the Restricted Securities.
DS1:268694 -- 10 --
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
STOCKHOLDERS: NATURAL MICROSYSTEMS
CORPORATION
* By: /s/ John F. Kennedy
_________________________ Its: Chief Financial Officer
John Alexander
*
_________________________
Celeste Baril
TEK-NIQUE, INC.
*
_________________________
Mark Davis By: Herbert Pavey
Its: Vice President
*
_______________________
Jeff Dement
*By: Tek-Nique, Inc.
* Attorney-in-Fact Under Power
_________________________ of Attorney granted June 14, 1996
Michael Firman
By: /s/ Herbert Pavey
* Its: Vice President
_________________________
Mary Hubner
*
_________________________
Joe Lee
*
_________________________
Adam Machalek
/s/ Herbert Pavey
*
_________________________
Tedd Pierce
*
_________________________
Jeff Putnam
*
_________________________
Jeff Rego
DS1:268694 -- 11 --
/s/ Julius Rothschild
*
________________________
Steve Witt
-- 12 --
Exhibit 5.1
CHOATE, HALL & STEWART
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02109-2891
TELEPHONE (617)248-5000
FACSIMILE (617) 248-4000
TELEX 49615860
August 29, 1996
Natural MicroSystems Corporation
8 Erie Drive
Natick, Massachusetts 01760-1339
Gentlemen:
This opinion is delivered to you in connection with the registration
statement on Form S-3 (the "Registration Statement") to be filed on or about
August 29, 1996 by Natural MicroSystems Corporation (the "Company") under the
Securities Act of 1933, as amended, for registration under said Act of 22,801
shares of common stock, $.01 par value (the "Common Stock"), of the Company.
We are familiar with the Company's Certificate of Incorporation, as
amended, its By-Laws, as amended, and the records of its corporate
proceedings. We have also examined such other documents, records and
certificates and made such further investigation as we have deemed necessary
for the purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock to be sold by the Selling Stockholders pursuant to the
Registration Statement have been legally issued, fully paid and nonassessable.
We understand that this opinion is to be used in connection with the
Registration Statement and consent to the filing of this opinion as an exhibit
to the Registration Statement. We further consent to the reference to this
firm in the section entitled "Interests of Named Experts and Counsel" in the
Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
Exhibit 23.1
AUDITOR'S CONSENT
The Board of Directors
Natural MicroSystems Corporation
We consent to incorporation by reference in this registration statement on
Form S-3 of Natural MicroSystems Corporation of our report dated January 22,
1996, relating to the consolidated balance sheets of Natural MicroSystems
Corporation as of December 31, 1995 and 1994 and the related consolidated
statements of operations, stockholders' equity, and cash flow for each of the
years in the three-year period ended December 31, 1995, and all related
schedules, which report appears in the December 31, 1995 annual report on Form
10-K of Natural MicroSystems Corporation.
KPMG PEAT MARWICK LLP
Boston, MA
August 26, 1996
