Supplement, Dated January 16, 1996, to Prospectus/Joint Proxy Statement
of Caere Corporation and ViewStar Corporation, Dated December 20, 1995
NOTICE TO HOLDERS OF VIEWSTAR PREFERRED STOCK
Dissenters' Rights in Caere/ViewStar Merger
The discussion of dissenters' rights on page 46 of the Prospectus/Joint
Proxy Statement states that "holders of ViewStar Capital Stock who did not vote
in favor of the Merger may, by complying with Sections 1300 through 1312 of the
California Law, be entitled to dissenters' rights as described therein." A
similar statement appears on page 9 of the proxy statement. It is also stated
(on page 46) that the discussion on pages 46-47 "is not a complete statement of
the California Law relating to dissenters' rights, and is qualified in its
entirety by reference to Sections 1300 through 1312 of the California Law
attached to this Prospectus/Joint Proxy Statement as Appendix C."
Section 1311 of the California Law, printed on page 5 of Appendix C,
provides that the right to receive cash for dissenting shares "does not apply to
classes of shares whose terms and provisions specifically set forth the amount
to be paid in respect to such shares in the event of a reorganization or
merger."
ViewStar's Articles of Incorporation provide that, in the event of any
merger of the corporation with another corporation, the holders of each series
of Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of any assets or funds of the corporation to the holders of
ViewStar Common Stock, an amount per share of Preferred Stock equal to the
original issue price of such share of Preferred Stock plus (i) an amount equal
to 1% of such original issue price multiplied by the number of full months for
which such share has been outstanding, plus (ii) any declared but unpaid
dividends on such share. ViewStar has never declared any dividends on any of its
shares.
ViewStar believes that all series of ViewStar Preferred Stock fall
within the description in Section 1311 of the California Law and that therefore
the holders of ViewStar Preferred Stock are not entitled to dissenters' rights
to receive cash for their Preferred shares.
Holders of ViewStar Preferred Stock should also understand that they
will not be entitled to dissenters' rights to receive cash for shares of
ViewStar Common Stock to be issued upon conversion of ViewStar Preferred Stock
after the Record Date. This is because, as stated on page 46 of the
Prospectus/Joint Proxy Statement, Dissenting Shares must have been outstanding
on the Record Date. Shares of ViewStar Common Stock issued after the Record
Date, whether pursuant to conversions of ViewStar Preferred Stock or otherwise,
will not satisfy this statutory requirement for Dissenting Shares.
