<PAGE>
As filed with the Securities and Exchange Commission on July 30, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
OPEN MARKET, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 04-3214536
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
245 FIRST STREET
CAMBRIDGE, MASSACHUSETTS 02142
(617) 949-7000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
GARY B. EICHHORN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OPEN MARKET, INC.
245 FIRST STREET
CAMBRIDGE, MASSACHUSETTS 02142
(617) 949-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
___________________________________________________________
COPY TO:
JOHN H. CHORY, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
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 dividend or interest reinvestment plans, please check the following box: [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: []
<TABLE>
<CAPTION>
==============================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount
Title of Each Class of to be Offering Price Aggregate of Registration
Securities to be Registered Registered Per Share (1) Offering Price (1) Fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 448,933 $10.9375 $4,910,204.69 $1,488
==============================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon prices on the Nasdaq
National Market on July 24, 1997.
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
Subject to completion; Dated July 30, 1997
OPEN MARKET, INC.
448,933 SHARES
COMMON STOCK
___________
This Prospectus relates to the registration of 448,933 shares (the
"Shares") of Common Stock, par value $.001 per share (the "Common Stock"), of
Open Market, Inc. ("Open Market" or the "Company"). The Shares may be offered
and sold from time to time for the account of Reed Elsevier Inc., a stockholder
of the Company (the "Selling Stockholder"). See "The Selling Stockholder." The
shares of Common Stock covered by this Prospectus were issued to the Selling
Stockholder in a private placement made in connection with the acquisition by
the Company of Folio Corporation ("Folio") pursuant to the terms of a Stock
Purchase Agreement, dated as of February 20, 1997, among the Company, Folio and
the Selling Stockholder. The Shares may be offered and sold in transactions
quoted on the Nasdaq National Market (the "NNM"), in negotiated transactions, at
fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices or at negotiated prices. See
"Plan of Distribution." The Selling Stockholder and any agents or broker-dealers
that participate with the Selling Stockholder in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions received by the
Selling Stockholder and any profit on the resale of the Shares may be deemed to
be underwriting commissions or discounts under the Securities Act. See "The
Selling Stockholder" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares but will bear all expenses incurred in effecting the registration of the
Shares, including all registration and filing fees, printing expenses, and the
legal fees of counsel to the Company. The Selling Stockholder will bear all
brokerage or underwriting expenses or commissions, if any, applicable to the
Shares.
The Common Stock is traded on the NNM under the symbol "OMKT." On July 28,
1997, the last reported sale price of the Common Stock on the NNM was $11.75 per
share.
SEE "RISK FACTORS" ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
_______________
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 July __, 1997
<PAGE>
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 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, Suite 1300, New York, New York
10048 and at Citicorp 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. In addition, materials filed by the Company can be
inspected at the offices of The Nasdaq Stock Market, Reports Section, 1735 K
Street, N.W., Washington, D.C. 20006. In addition, the Company is required to
file electronic versions of these documents with the Commission through the
Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
The Commission maintains a World Wide Web site at http:/ /www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act, with respect to the Shares to be offered
and sold by means of this Prospectus. This Prospectus omits certain of the
information contained in the Registration Statement and the exhibits and
schedules thereto in accordance with the rules and regulations of the
Commission. For further information regarding the Company and the Shares
offered hereby, reference is made to the Registration Statement and the exhibits
and schedules filed therewith, which may be inspected without charge at the
office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and
copies of which may be obtained from the Commission at prescribed rates.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
There is incorporated herein by reference and made a part hereof, each of
which is on file with the Commission, (i) the Current Report on Form 8-K of the
Company dated February 27, 1997, (ii) the Current Report on Form 8-K of the
Company dated March 24, 1997, as amended on May 23, 1997, (iii) the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 1996,
(iv) the proxy statement for the Company's Annual Meeting of Stockholders held
on May 21, 1997, (v) the Quarterly Report on Form 10-Q of the Company for the
quarter ended March 31, 1997 and (vi) the description of the Common Stock
contained in the Company's registration statement filed pursuant to Section
12(g) of the Exchange Act, including any amendments or reports filed for the
purpose of updating such description filed by the Company.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Shares registered hereby shall be deemed to be incorporated herein by
reference and shall be a part hereof from the date of the 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
such 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, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of the documents incorporated by reference
herein, other than exhibits to such documents not specifically incorporated by
reference. Such requests should be directed to Open Market, Inc., 245 First
Street, Cambridge, Massachusetts 02142, Attention: Investor Relations
(telephone: (617) 949-7000).
-2-
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
-3-
<PAGE>
THE COMPANY
General. The Company develops, markets, licenses and supports high
performance software products that allow its customers to engage in business-to-
consumer and business-to-business Internet commerce and to deploy Internet-based
business applications within an enterprise ("Intranet"). Open Market's
innovative technology enables the separation of the management of business
transactions from the management of content, thereby allowing companies to
securely and centrally manage business transactions using content located on
multiple distributed Web servers. The Company's products permit functions such
as order taking, authorization, payment processing, security and customer
service to be performed centrally by a "back office" transaction management
system, allowing businesses to focus on management of the "front office" content
at their distributed Web sites.
The Company's objective is to be a leading supplier of comprehensive,
integrated, high performance software products to enable businesses to manage
Internet business transactions and Intranet applications. To achieve this
objective, the Company is pursuing the following strategies:
* Focus on providing Internet software for business
* Promote the Company's product "SecureLink" as an industry standard
* Support open systems
* Provide enhanced security
* Continue to develop technology and marketing relationships
* Implement comprehensive distribution strategy
* Identify market opportunities and provide complete solutions for these
markets
During 1996, the Company saw strong demand for Internet commerce solutions
across a variety of markets, including: retail, financial services, software
distribution, entertainment, media, government and others. In particular, the
Company has seen early opportunities in the following growing markets: commerce
service providers, business-to-business catalogs and information commerce.
In 1996, a number of major financial institutions, telecommunications
companies and information service providers began using Open Market's software
to build Internet commerce infrastructure - one that enables them to offer
commerce services to their business customers.
To enhance Open Market's lead in the key business-to-business catalog
market, in February 1997, Open Market acquired Waypoint Software Corporation
("Waypoint") which specializes in the business-to-business industrial catalog
segment of the Internet. Waypoint's software enables rapid development of
business-to-business catalogs for the Internet and quick retrieval of complex
product information for product specifiers in the manufacturing industry.
Waypoint brings to Open Market cutting-edge technology and expertise which Open
Market believes will benefit companies in the computer, Internet, mechanical,
and instrumentation fields by providing the user with the power to retrieve
manufacturers' product information from online catalogs.
In March 1997, Open Market acquired Folio, a leading supplier of software
for managing business-critical information. This acquisition will result in an
Internet-based solution for companies engaged in the $16 billion "Information
Commerce" market. The potential benefits of this acquisition extend throughout
Open Market's existing customer base. Commerce service providers who are using
Open Market software to deliver Internet commerce transaction services can add
new value to merchants selling information-based products. For business-to-
business industrial catalogers, the Open Market/Folio combination will provide a
fast route to digital transactions.
The Company is incorporated in Delaware. Its principal executive offices
are located at 245 First Street, Cambridge, Massachusetts 02142, and its
telephone number is (617) 949-7000.
-4-
<PAGE>
RISK FACTORS
Prospective purchasers of the Shares offered hereby should carefully
consider the following risk factors, in addition to other information contained
or incorporated by reference in this Prospectus.
RAPID TECHNOLOGICAL CHANGE
The computer software industry is characterized by rapid technological
change. As a result, there is uncertainty about the widespread acceptance of
new products which can cause significant delays in the sales cycle. The Company
must continue to upgrade its own technologies and commercialize products and
services incorporating such technologies, which may also lengthen the sales
cycle.
DEVELOPING INTERNET MARKET
The market for the Company's Internet products and services has only
recently begun to develop and is rapidly evolving. If the market fails to
develop or develops more slowly than expected, the Company's operating results
could be materially adversely affected.
RECENT ACQUISITIONS
In February 1997 and March 1997, the Company completed the acquisitions of
Waypoint and Folio, respectively. There can be no assurance that these
businesses or their products will be successful, that the Company will
successfully integrate these businesses into the Company, or that the Company
will achieve the desired synergies from the transactions.
PRODUCT RELEASE SCHEDULES
Delays in the planned release of the Company's new products or upgrades of
existing products may adversely affect forecasted revenues, and create
operational inefficiencies resulting from staffing levels designed to support
the forecasted revenues.
COMPETITION
The Internet is characterized by an increasing number of market entrants
that have introduced or developed products and services for commerce and
information management on the Internet. The Company's operating results will be
affected by the number of competitors and their pricing strategies and market
acceptance of their products.
DEPENDENCE ON PERSONNEL
The Company's future success depends in significant part upon the continued
service of its key technical and senior management personnel, and its continuing
ability to attract and retain highly qualified technical and managerial
personnel.
PRICING
Future prices that the Company is able to charge for its products may
decline from historical levels due to competitive reasons and other factors.
LIMITED OPERATING HISTORY
The Company has a limited operating history. The Company's ability to
successfully market its existing products and to develop and market new products
must be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets.
-5-
<PAGE>
QUARTERLY OPERATING RESULTS
The Company's expense levels are fixed in advance and based in part on its
expectations as to future revenues. Quarterly sales and operating results will
generally depend on the volume and timing of and ability to fulfill orders
received within the quarter.
FOREIGN EXCHANGE
To the extent that foreign currency exchange rates fluctuate in the future,
the Company may be exposed to continued financial risk. Although the Company
attempts to limit this risk by denominating most sales in the United States
dollars and limiting the amount of assets in its foreign operations, there can
be no assurance that the Company will be successful in limiting its exposure.
ACCOUNTING STANDARDS
Accounting standards, including those promulgated by the American Institute
of Certified Public Accountants ("AICPA") and the Financial Accounting Standards
Boards ("FASB"), change frequently. The AICPA has proposed changes in software
revenue recognition, which the Company does not believe will impact its
operating results. The recently adopted FASB pronouncement on employee stock
option plans also has not had a material effect on the Company's results of
operations. There can be no assurance that these or future pronouncements will
not impact the Company's future operating results.
LITIGATION
Litigation regarding intellectual property rights, copyrights and patents
is increasingly common in the software industry. In addition, the Company faces
litigation risks with respect to other general corporate matters that may arise
in connection with its normal operations.
INFLATION
To date, inflation has not had a significant impact on the Company's
operations. While management expects this trend to continue in the short-term,
the long-term outlook is uncertain.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholder.
THE ACQUISITION
Pursuant to a Stock Purchase Agreement, dated as of February 20, 1997 (the
"Stock Purchase Agreement"), by and among Open Market, Folio and the Selling
Stockholder, Open Market acquired all of the outstanding shares of capital stock
of Folio for an aggregate purchase price of $45,000,000 (subject to adjustment).
As payment of the purchase price, Open Market (i) issued 897,866 shares of
Common Stock of the Company, (ii) made a cash payment of $10,000,000, (iii)
agreed to issue 897,866 shares of Common Stock of the Company in January 1998
and (iv) issued a promissory note of the Company in the original principal
amount of $10,000,000 payable in either cash or a combination of cash and Common
Stock of the Company as provided in the Stock Purchase Agreement.
THE SELLING STOCKHOLDER
The Selling Stockholder is the former stockholder of Folio. The shares of
Common Stock covered by this Prospectus were issued to the Selling Stockholder
in connection with the acquisition of Folio by Open Market. See "The
Acquisition."
At July 25, 1997, there were 30,752,539 shares of Common Stock of the
Company issued and outstanding.
-6-
<PAGE>
The table below sets forth certain information with respect to the Selling
Stockholder. The Selling Stockholder has had no material relationship with the
Company or any of its affiliates within the past three years.
<TABLE>
<CAPTION>
Percentage
of Common
Stock of
Number of the Company
Shares of Number of owned by the
Common Stock Shares of Selling Stockholder
beneficially owned by the Common Stock ---------------------
Selling Stockholder Offered Before the After the
Name as of July 28, 1997 Hereby(1) Offering Offering
- ------------------------ ------------------------- ------------- ---------- ---------
<S> <C> <C> <C> <C>
Reed Elsevier Inc. 897,866 448,933 2.92% 1.46%
</TABLE>
- -------------
(1) Pursuant to the terms of the Stock Purchase Agreement, the Selling
Stockholder has the right to request that the Company register on Form S-3
or another appropriate registration statement up to 50% of its shares of
Common Stock of the Company on or after June 30, 1997 and up to 50% of its
shares of Common Stock of the Company on or after January 5, 1998.
Information concerning the Selling Stockholder may change from time to
time and any such changed information will be set forth on supplements to this
Prospectus if and when necessary.
-7-
<PAGE>
PLAN OF DISTRIBUTION
GENERAL
The Company has been advised by the Selling Stockholder that, as of the
date hereof, it has not made any binding arrangement with any broker for the
offering or sale of the Shares. Brokers, dealers or agents may participate in
such transactions as agents and may, in such capacity, receive brokerage
commissions from the Selling Stockholder or from purchasers of such securities.
Such brokers, dealers or agents may also purchase and resell shares of Common
Stock of the Company for their own account. The Selling Stockholder and such
brokers, dealers or agents may be considered "underwriters" as that term is
defined by the Securities Act, although the Selling Stockholder disclaims such
status. Any commissions, discounts or profits received by such brokers, dealers
or agents in connection with the foregoing transactions may be deemed to be
underwriting discounts and commissions under the Securities Act. Any broker or
dealer may act as a broker or dealer on behalf of the Selling Stockholder in
connection with the offering of certain of the Shares by Selling Stockholder.
To comply with the securities laws of certain jurisdictions, if applicable,
the Shares will be offered or sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain jurisdictions, the
Shares may not be offered or sold unless they have been registered or qualified
for sale in such jurisdictions or unless an exemption from such registration or
qualification is available and is complied with.
Pursuant to applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Shares may be limited in its ability to
engage in market activities with respect to such Shares. In addition and
without limiting the foregoing, the Selling Stockholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder which may limit the timing of purchases and sales of such Shares.
All of the foregoing may affect the marketability of such Shares.
The Company has agreed to pay substantially all of the expenses incident to
the registration, offering and sale of the Shares to the public other than
commissions and discounts of agents or dealers. Such expenses (excluding such
commissions and discounts) are estimated to be approximately $16,000.
The Shares offered hereby may be offered and sold by the Selling
Stockholder from time to time in transactions on the Nasdaq National Market, in
negotiated transactions, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices or at negotiated prices. Such sales may be made pursuant to an
underwritten offering or pursuant to one or more of the following methods (among
others): (a) purchases by a broker-dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (b) ordinary
brokerage transactions and transactions in which a broker solicits purchasers;
and (c) block trades in which a broker-dealer so engaged will attempt to sell
the Shares as agent but may take a position and resell a portion of the block as
principal to facilitate the transaction.
The Selling Stockholder will act independently of the Company in making
decisions with respect to the timing, manner and size of each sale. Sales of
the Shares are, in general, expected to be made at the market price prevailing
at the time of each such sale; however, prices in negotiated transactions may
differ considerably.
LEGAL MATTERS
The validity of the Shares will be passed upon for the Company by Hale and
Dorr LLP, 60 State Street, Boston, MA 02109.
EXPERTS
The consolidated financial statements of Open Market, Inc. and the
financial statements of Folio Corporation incorporated by reference in this
Prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, are included herein in reliance upon the authority
of said firm as experts giving said reports.
-8-
<PAGE>
================================================================================
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or any Selling Stockholder. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby to any person to whom it is unlawful
to make such offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of the
Company since such date.
_______________
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Available Information........................................... 2
Documents Incorporated by Reference............................. 2
The Company..................................................... 4
Risk Factors.................................................... 5
Use of Proceeds................................................. 6
The Acquisition................................................. 6
The Selling Stockholder......................................... 6
Plan of Distribution............................................ 8
Legal Matters................................................... 8
Experts......................................................... 8
</TABLE>
================================================================================
================================================================================
448,933 SHARES
OPEN MARKET, INC.
COMMON STOCK
----------
PROSPECTUS
----------
July __, 1997
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the offering (all of which, other than
selling commissions or discounts, will be borne by the Company and not the
Selling Stockholder) are estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee $ 1,488
Legal Fees and Expenses.............................. 8,000
Accounting Fees and Expenses......................... 4,000
Miscellaneous........................................ 2,512
-------
Total.............................................. $16,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article EIGHTH of the Company's Amended and Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation") provides that no
director of the Company shall be personally liable for any monetary damages for
any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
Article NINTH of the Company's Restated Certificate of Incorporation
provides that a director or officer of the Company (a) shall be indemnified by
the Company against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement incurred in connection with any litigation or
other legal proceeding (other than an action by or in the right of the Company)
brought against him by virtue of his position as a director or officer of the
Company 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 Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful and (b) shall be indemnified by the Company against all
expenses (including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Company brought against him
by virtue of his position as a director or officer of the Company 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 Company, except that no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged to
be liable to the Company, unless a court determines that, despite such
adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Company against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced
to a director or officer at his request, provided that he undertakes to repay
the amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
Indemnification is required to be made unless the Company determines that
the applicable standard of conduct required for indemnification has not been
met. In the event of a determination by the Company that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Company fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Company
notice of the action for which indemnity is sought and the Company has the right
to participate in such action or assume the defense thereof.
Article NINTH of the Company's Restated Certificate of Incorporation
further provides that the indemnification provided therein is not exclusive, and
provides that in the event that the Delaware General Corporation Law is amended
to expand the indemnification permitted to directors or officers the Company
must indemnify those persons to the fullest extent by such law as to so amended.
II-1
<PAGE>
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have 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, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2 Stock Purchase Agreement, dated as of February 20, 1997, among Folio
Corporation, Reed Elsevier Inc., the sole stockholder of Folio
Corporation and the Company /1/
5 Opinion of Hale and Dorr LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Hale and Dorr LLP (included in Exhibit 5)
24 Power of Attorney (contained on signature pages hereto)
- -------------
/1/ Incorporated by reference from the Company's Current Report on Form 8-K
dated March 24, 1997.
II-2
<PAGE>
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 prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any derivation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (l)(i) and (l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
the "Exchange Act"), that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(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 Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described in Item 15 above, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, the Commonwealth of Massachusetts on July
29, 1997.
OPEN MARKET, INC.
By: /s/ Regina O. Sommer
---------------------------------------
Regina O. Sommer
Senior Vice President and Chief
Financial Officer
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gary B.
Eichhorn, Shikhar Ghosh and Paul P. Brountas, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution in each of them, for him and in his name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3 of Open Market, Inc. and
to file the same, with all exhibits thereto, and other 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 or necessary to be done in
and about the premises, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/Gary B. Eichhorn President, Chief Executive July 29, 1997
- ------------------- Officer and Director
Gary B. Eichhorn (principal executive officer)
/s/Regina O. Sommer Senior Vice President and July 29, 1997
- ------------------- Chief Financial Officer
Regina O. Sommer (principal financial and
accounting officer)
/s/ Gulrez Arshad Director July 29, 1997
- -----------------
Gulrez Arshad
II-4
<PAGE>
/s/Shikhar Ghosh Director July 29, 1997
- ----------------
Shikhar Ghosh
/s/David K. Gifford Director July 29, 1997
- -------------------
David K. Gifford
/s/Bruce Judson Director July 29, 1997
- ---------------
Bruce Judson
/s/ William S. Kaiser Director July 29, 1997
- ---------------------
William S. Kaiser
/s/Brian J. Knez Director July 29, 1997
- -----------------
Brian J. Knez
/s/Ray Stata Director July 29, 1997
- ------------
Ray Stata
/s/Eugene F. Quinn Director July 29, 1997
- ------------------
Eugene F. Quinn
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2 Stock Purchase Agreement, dated as of February 20, 1997, among
Folio Corporation, Reed Elsevier Inc., the sole stockholder of
Folio Corporation, and the Company /1/
5 Opinion of Hale and Dorr LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Hale and Dorr LLP (included in Exhibit 5)
24 Power of Attorney (contained on signature pages hereto)
</TABLE>
- -----------------------
/1/ Incorporated by reference from the Company's Current Report on Form 8-K
dated March 24, 1997.
<PAGE>
EXHIBIT 5
HALE AND DORR LLP
60 State Street
Boston, Massachusetts 02109
July 30, 1997
Open Market, Inc.
245 First Street
Cambridge, Massachusetts 02142
Ladies and Gentlemen:
We have assisted in the preparation of the Registration Statement on Form
S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the
registration for resale of 448,933 shares of Common Stock, $0.001 par value per
share (the "Shares"), of Open Market, Inc., a Delaware corporation (the
"Company").
We have examined the Certificate of Incorporation and By-laws of the
Company and all amendments thereto and have examined and relied on the originals
or copies certified to our satisfaction of such records of meetings, written
actions in lieu of meetings or resolutions adopted at meetings of the directors
of the Company and such other documents and instruments as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
In our examination of the foregoing documents, we have assumed (i) the
genuineness of all signatures and authenticity of all documents submitted to us
as originals, (ii) the conformity to the originals of all documents submitted to
us as certified or photostatic copies and (iii) the authenticity of the
originals of the latter documents.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly and validly authorized and issued and are fully paid and
non-assessable.
We hereby consent to the use of our name in the Registration Statement and
in the related Prospectus under the caption "Legal Matters" and to the filing of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Hale and Dorr LLP
Hale and Dorr LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report for Open Market, Inc.
dated February 4, 1997 (except with respect to the matters discussed on Note 13,
as to which the date is March 7, 1997) included in Open Market Inc.'s Form 10-K
for the year ended December 31, 1996 and our report for Folio Corporation dated
May 15, 1997, included in Open Market, Inc.'s Form 8-K dated May 23, 1997 and to
all references to our firm included in this Registration Statement.
Arthur Andersen LLP
Boston, Massachusetts
July 25, 1997
