<PAGE>
As filed with the Securities and Exchange Commission on February 10, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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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.)
One Wayside Road
Burlington, Massachusetts 01803
(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.
One Wayside Road
Burlington, Massachusetts 01803
(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:
As soon as practicable 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>
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Proposed
Maximum Proposed
Offering Maximum Amount
Amount Price Aggregate of
Title of Each Class of to be Per Share Offering Registration
Securities to be Registered Registered (1) Price (1) Fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 538,342(2) $9.8125 $5,282,481 $1,559
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices on the Nasdaq National Market on February 4, 1998.
(2) Includes the registration of the Preferred Stock Purchase Rights to be
attached to such Common Stock on February 12, 1998.
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>
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.
SUBJECT TO COMPLETION; DATED FEBRUARY 10, 1998
Prospectus
OPEN MARKET, INC.
538,342 Shares of Common Stock
-----------
This Prospectus relates to the registration of 538,342 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 February
6, 1998, the last reported sale price of the Common Stock on the NNM was
$12.5625 per share.
See "Risk Factors" on page 6 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 __________, 1998
<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 (vi) the Quarterly Report on Form 10-Q of the
Company for the quarter ended June 30, 1997, (vii) the Quarterly Report on Form
10-Q of the Company for the quarter ended September 30, 1997, (viii) the Current
Report on Form 8-K of the Company dated January 26, 1998 and (ix) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on May 3, 1996 and
the description of the Company's Series A Junior Participating Preferred Stock
contained in the Company's Registration Statement on Form 8-A filed with the
Commission on January 30, 1998.
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
-2-
<PAGE>
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., One Wayside
Road, Burlington, Massachusetts 01803, Attention: Investor Relations (telephone:
(617) 949-7000).
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 2B of the Exchange Act. For this purpose, any
statements contained herein or incorporated herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes," "plans," "expects" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the results of the Company to
differ materially from those indicated by such forward-looking statements. These
factors include those set forth in "Risk Factors" herein.
-3-
<PAGE>
THE COMPANY
General. Open Market develops, markets, licenses and supports high
performance application software products that provide solutions for the
burgeoning Internet commerce market. These products fall into two categories:
(i) products which allow the Company's customers to engage in business-to-
consumer and business-to-business Internet Commerce and (ii) applications for
the Information Commerce/Knowledge Management Industry. The core products for
the Internet Commerce market are Transact and LiveCommerce, while the core
products in Information Commerce/Knowledge Management are a suite of search and
retrieval products sold under the "Folio" brand.
Internet Commerce Products.
Transact. Transact performs the tasks required in order for the Web site
--------
of a business to have the capacity to perform comprehensive order management for
Internet Commerce. Transact 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 product's order management functions
consist of order taking, authorization, payment processing, security and
customer service to be performed centrally by a "back office" transaction
management system, allowing business to focus on management of the "front
office" content at their distributed Web sites. Specifically, the order taking
functions include capturing orders (item, price, tax, shipping costs, etc.),
processing orders (authenticating buyers, determining form of payment,
processing payment, addressing fulfillment, etc.) and servicing orders online
(order and shipment status, transaction statements, returns etc.).
Transact is sold to two types of customers: (i) corporate customers which
use the product for their own Web-based business activities (i.e., selling
directly to their customers, either consumers or other businesses) and (ii)
commerce service providers ("CSPs") which use the product to provide Internet
commerce transaction services to their business customers ("merchants"), in
order for the merchants to, in turn, sell directly to their customers.
LiveCommerce. LiveCommerce became commercially available in October, 1997
------------
after development was completed by the Company following acquisition of the
product in the alpha phase of development from Waypoint Software Corporation in
February, 1997. LiveCommerce enables the rapid development and management of
large catalogs on the Web. The Company is targeting companies in the retail
office supply, scientific equipment, electronics, computer, mechanical and
instrumentation fields.
LiveCommerce, when combined with Transact, represents a complete Internet
commerce solution for both large retailers and industrial manufacturers.
Information Commerce/Knowledge Management Products. Folio 4.1, the most
recent release of the Folio suite of products, allows organizations to make
business-critical information available electronically on either CD-ROM or, with
the Company's SiteDirector product, the Internet. The Folio suite of products
was developed by ten-year-old Folio Corporation, which the Company acquired in
March, 1997. The Folio products are widely used primarily in two industries:
(i) by commercial publishers selling business-critical content to industries
such as tax, legal, accounting, banking and insurance and (ii) companies
distributing to their employees and other constituencies enterprise-critical
information.
Together, Folio and Transact provide a complete solution for Information
Commerce -- the already large and rapidly expanding business of selling high-
value information electronically.
-4-
<PAGE>
Distribution. Open Market's software is primarily sold via a direct,
consultative sales channel. The Company has offices throughout the United States
as well as in Canada, the United Kingdom, France, Germany, Holland, Italy, Japan
and Australia. In addition, Open Market has distribution partners in several
countries, including Germany, Singapore, Malaysia, Korea, India, Brazil, South
Africa and Israel. Augmenting the Company's direct sales force are over 200
business partners selling solutions based on Folio products. Additionally, over
1,000 companies have signed up for the Company's developer program.
Consulting Services. Although the Company's products function as complete
solutions, the Company also performs consulting services in order to supplement
or enhance the functionality of its products in order to meet customer
specifications.
Maintenance and Support. As a full service provider, the Company sells
maintenance and support services to all eligible customers electing to purchase
such services.
The Company is incorporated in Delaware. Its principal executive offices
are located at One Wayside Road, Burlington, Massachusetts 01803, and its
telephone number is (617) 949-7000.
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<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,
-6-
<PAGE>
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving
markets.
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 recently adopted Statement of
Position 97-2 entitled Software Revenue Recognition. The Company does not
believe this pronouncement 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.
Year 2000 Compliance
The Company recognizes that it must ensure that its products and operations
will not be adversely impacted by Year 2000 software failures which can arise in
time-sensitive software applications which utilize a field of two digits to
define the applicable year. In such applications, a date using "00" as the year
may be recognized as the year 1900 rather than the year 2000. The Company is in
the process of identifying anticipated costs, problems and uncertainties
associated with resolving Year 2000 issues. Although management does not expect
Year 2000 issues to have a material impact on its business or future results of
operations, there can be no assurance that there will not be interruptions of
operations, other limitations of system or product functionality or that the
Company will not incur significant costs to avoid such interruptions or
limitations.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholder.
-7-
<PAGE>
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)
issued 897,866 shares of Common Stock of the Company on January 5, 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 February 6, 1998, there were 31,894,958 shares of Common Stock of
the Company issued and outstanding.
The table below sets forth certain information with respect to the Selling
Stockholder. To the Company's knowledge, the Selling Stockholder has had no
material relationship with the Company or any of its affiliates within the past
three years.
<TABLE>
<CAPTION>
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Percentage
Number of Shares Number of of
of Common Stock Shares of Shares of
beneficially owned Common Stock Common Stock
by the Selling Number of Shares Beneficially Beneficially
Stockholder of Common Stock Owned After Owned After
Name Prior to Offering Offered Hereby(1) Offering Offering
- ---- ----------------- ----------------- -------- --------
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<S> <C> <C> <C> <C>
Reed Elsevier Inc. 1,076,683 538,342 538,341 1.69%
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</TABLE>
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(1) On August 13, 1997, the Company registered 448,933 shares of Common Stock
of the Company held by the Selling Stockholder.
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.
-8-
<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 the 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 $15,000.
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.
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<PAGE>
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, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
-10-
<PAGE>
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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 OF CONTENTS
Page
----
Available Information........................................................ 2
Documents Incorporated by Reference.......................................... 2
The Company.................................................................. 4
Risk Factors................................................................. 6
Use of Proceeds.............................................................. 7
The Acquisition.............................................................. 8
The Selling Stockholder...................................................... 8
Plan of Distribution......................................................... 9
Legal Matters............................................................... 10
Experts..................................................................... 10
538,342 Shares
Open Market, Inc.
Common Stock
----------
PROSPECTUS
----------
______________, 1998
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<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:
Securities and Exchange Commission Registration Fee.................. $ 1,559
Legal Fees and Expenses.............................................. 7,000
Accounting Fees and Expenses......................................... 4,000
Miscellaneous........................................................ 2,441
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Total.............................................................. $15,000
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
II-1
<PAGE>
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.
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/
4 Rights Agreement, dated as of January 26, 1998, between the Company
and BankBoston N.A., which includes as Exhibit A Terms of the Series
A Junior Participating Preferred Stock, as Exhibit B the Form of
Rights Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Stock/2/
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.
/2/ Incorporated by reference from the Company's Registration Statement on Form
8-A dated January 26, 1998 (File No. 0-28439).
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 with or furnished to the
Commission by the Company pursuant to Section 13 or 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
II-3
<PAGE>
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-4
<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 town of Burlington, the Commonwealth of Massachusetts on
February 9, 1998.
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 February 9, 1998
- ---------------------- Officer and Director
Gary B. Eichhorn (principal executive officer)
/s/ Regina O. Sommer Senior Vice President and February 9, 1998
- ---------------------- Chief Financial Officer
Regina O. Sommer (principal financial and
accounting officer)
II-5
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Gulrez Arshad Director February 9, 1998
- ----------------------
Gulrez Arshad
/s/ Thomas H. Bruggere Director February 9, 1998
- ----------------------
Thomas H. Bruggere
/s/ Shikhar Ghosh Director February 9, 1998
- ----------------------
Shikhar Ghosh
Director
- ---------------------- ___________, 1998
David K. Gifford
Director
- ---------------------- ___________, 1998
Bruce Judson
/s/ William S. Kaiser Director February 9, 1998
- ----------------------
William S. Kaiser
/s/ Brian J. Knez Director February 9, 1998
- ----------------------
Brian J. Knez
Director ___________, 1998
- ----------------------
Ray Stata
Director
- ---------------------- ___________, 1998
Eugene F. Quinn
II-6
<PAGE>
EXHIBIT INDEX
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/
4 Rights Agreement, dated as of January 26, 1998, between the Company
and BankBoston N.A., which includes as Exhibit A Terms of the Series
A Junior Participating Preferred Stock, as Exhibit B the Form of
Rights Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Stock/2/
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.
/2/ Incorporated by reference from the Company's Registration Statement on
Form 8-A dated January 26, 1998 (File No. 0-28439).
<PAGE>
[LETTERHEAD OF HALE AND DORR LLP APPEARS HERE]
Exhibit 5
February 9, 1998
Open Market, Inc.
One Wayside Road
Burlington
Massachusetts 01803
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 538,342 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 or made a part of this Registration
Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
February 10, 1998
