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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 1999
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Open Market, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-28436 04-3214536
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(Commission File Number) (IRS Employer Identification No.)
One Wayside Road, Burlington, Massachusetts 01803
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(Address of principal executive offices) (Zip Code)
(781) 359-3000
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(Registrant's Telephone Number, including Area Code)
Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 15, 1999 (the "Effective Time"), pursuant to an Agreement and
Plan of Merger, dated as of July 14, 1999 (the "Merger Agreement"), by and among
Open Market, Inc. a Delaware corporation ("Open Market"), OM/SA Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Open Market
(the "Transitory Subsidiary"), and FutureTense, Inc., a Delaware corporation
("FutureTense"), Open Market acquired FutureTense by means of a statutory merger
of the Transitory Subsidiary with and into FutureTense (the "Merger"), with
FutureTense being the surviving corporation. As a result of the Merger,
FutureTense became a wholly owned subsidiary of Open Market. The Transitory
Subsidiary was formed solely for the purpose of effecting the Merger.
In the Merger, Open Market issued an aggregate of 7,346,210 shares of Open
Market common stock, $.001 par value per share (the "Open Market Common Stock"),
to the former FutureTense stockholders. Pursuant to the Merger Agreement, each
outstanding share of FutureTense common stock, $.0002 par value per share (the
"FutureTense Common Stock"), was converted into the right to receive .384322377
shares of Open Market Common Stock (the "Common Conversion Ratio"). The Common
Conversion Ratio was calculated by dividing: (a) the difference between (1) the
sum of $125,000,000 and $1,272,338, the aggregate amount receivable by
FutureTense upon the exercise of outstanding options ("Options") to purchase
shares of FutureTense Common Stock as determined immediately prior to the
Effective Time and (2) $1,676,821, the Deductible Obligations (as defined in the
Merger Agreement); by (b) $14.7064; and then dividing the quotient by the sum of
(x) the number of shares of FutureTense Common Stock issued and outstanding, (y)
the number of shares of FutureTense capital stock issuable upon exercise of
outstanding Options and warrants whether vested or unvested, and (z) the number
of shares of FutureTense Common Stock issuable upon conversion of the
FutureTense preferred stock, all of which were determined immediately prior to
the Effective Time. In addition, Open Market assumed each unexpired and
unexercised Option, whether vested or unvested, and all warrants to purchase
FutureTense Common Stock and converted them pursuant to the conversion ratio
into options or warrants to purchase Open Market Common Stock.
Based upon the capitalization of Open Market as of the Effective Time, the
7,346,210 shares of Open Market Common Stock issued to the holders of
FutureTense Common Stock represent approximately 20% of the outstanding shares
of Open Market Common Stock as of the Effective Time.
Open Market, Jarrett Collins, as representative of the FutureTense
stockholders, and State Street Bank and Trust Company, as Escrow Agent, have
entered into an Escrow Agreement providing that 10% of the Open Market Common
Stock received by the FutureTense stockholders will be held in escrow for the
purpose of securing the
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indemnification obligations of the FutureTense stockholders pursuant to the
Merger Agreement.
The issuance of shares of Open Market Common Stock in connection with the
Merger was approved by the Board of Directors and the stockholders of Open
Market, and the Merger Agreement and the Merger were approved by the Board of
Directors and the stockholders of FutureTense and the Board of Directors of Open
Market. The terms of the Merger Agreement, including the amount of
consideration paid by Open Market, were determined pursuant to arms' length
negotiations. Prior to the closing of this transaction, there was no material
relationship between Open Market and FutureTense.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement which is included as Exhibit 2.1 to this Current Report on Form
8-K and incorporated herein by reference from the Open Market Registration
Statement on Form S-4 (File No. 333-84801).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
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The financial statements of FutureTense contained on pages F-1 through F-18
of Open Market's Registration Statement on Form S-4 (File No. 333-84801) are
hereby incorporated by reference and are included as Exhibit 99.2 pursuant to
Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended.
(b) Pro Forma Financial Information.
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The pro forma financial information contained on pages 68 through 75 of
Open Market's Registration Statement on Form S-4 (File No. 333-84801) are hereby
incorporated by reference and are included as Exhibit 99.3 pursuant to Rule 12b-
23(a) of the Securities and Exchange Act of 1934, as amended.
(c) Exhibits
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See Exhibit Index attached hereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: November 1, 1999 OPEN MARKET, INC.
By: /s/ Betty J. Savage
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Betty J. Savage
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated July 14, 1999, by and
among the Registrant, OM/SA Acquisition Corporation and
FutureTense, Inc. (Incorporated by reference from Exhibit
2.1 of the Registrant's Registration Statement on Form S-4
(File No. 333-84801)).
2.2 Certificate of Merger, merging OM/SA Acquisition Corporation
with and into FutureTense, Inc., as filed with the Secretary
of State of the State of Delaware on October 15, 1999.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
99.1 Press Release issued October 18, 1999.
99.2 Financial Statements of FutureTense, Inc. (Incorporated by
reference from pages F-1 to F-18 of the Registrant's
Registration Statement on Form S-4 (File No. 333-84801)).
99.3 Unaudited Pro Forma Condensed Combined Financial Statements
of the Registrant and FutureTense, Inc. (Incorporated by
reference from pages 68 through 75 of the Registrant's
Registration Statement on Form S-4 (File No. 333-84801)).
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EXHIBIT 2.2
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CERTIFICATE OF MERGER
OF
OM/SA ACQUISITION CORPORATION
(a Delaware corporation)
INTO
FUTURETENSE, INC.
(a Delaware corporation)
FutureTense, Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware ("FutureTense"), does
hereby certify:
FIRST: That the name and state of incorporation of each of the constituent
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corporations of the merger is as follows:
Name State of Incorporation
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OM/SA Acquisition Corporation Delaware
FutureTense, Inc. Delaware
SECOND: That an Agreement and Plan of Merger between the parties to the
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merger has been approved, adopted, certified, executed and acknowledged by each
of the constituent corporations in accordance with the requirements of
Subsection (c) of Section 251 of the General Corporation Law of the State of
Delaware (the "Delaware Law").
THIRD: That the name of the surviving corporation of the merger (the
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"Surviving Corporation") is FutureTense, Inc.
FOURTH: That this Certificate of Merger shall be effective upon the filing
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of this Certificate of Merger with the Secretary of State of the State of
Delaware (the "Effective Time").
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FIFTH: That the Certificate of Incorporation of FutureTense, which will
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survive the merger, shall be the Certificate of Incorporation of the surviving
corporation. The By-laws of the Surviving Corporation from and after the
Effective Time shall be the By-laws of OM/SA Acquisition Corporation, except
that the name of the corporation set forth in the By-laws shall be changed to
the name of the Surviving Corporation, continuing until thereafter amended in
accordance with their terms and the Certificate of Incorporation of the
Surviving Corporation and as provided by the Delaware Law. The officers and
directors of the Surviving Corporation shall be the officers and directors of
OM/SA Acquisition Corporation immediately prior to the Effective Time.
SIXTH: That the executed Agreement and Plan of Merger is on file at the
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principal place of business of the surviving corporation. The address of said
principal place of business is 43 Nagog Park, Acton, Massachusetts 01720.
SEVENTH: That a copy of the Agreement and Plan of Merger will be furnished
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by the surviving corporation upon request and without cost to any stockholder of
any constituent corporation.
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IN WITNESS WHEREOF, FutureTense, Inc. has caused this Certificate of Merger
to be executed by its President and attested by its Secretary this 15th day of
October, 1999.
FutureTense, Inc.
(a Delaware corporation)
By: /s/ Ronald J. Matros
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Ronald J. Matros
President and
Chief Executive Officer
ATTEST:
/s/ B.C. Krishna
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B.C. Krishna
Secretary
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Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K of our report dated February 2, 1999 included in Open
Market, Inc.'s Form 10-K/A for the year ended December 31, 1998. It should be
noted that we have not audited any financial statements of Open Market, Inc.
subsequent to December 31, 1998 or performed any audit procedures subsequent to
the date of our report.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 1, 1999
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Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Current Report on
Form 8-K of Open Market, Inc. ("Open Market") of our report dated March 10, 1999
relating to the financial statements of FutureTense, Inc., which appear in the
registration statement (No. 333-84801 as filed on August 6, 1999 and amended on
September 2, 1999 and September 7, 1999) on Form S-4 as filed by Open Market.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 1, 1999
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Exhibit 99.1
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Open Market and FutureTense Finalize Merger
First to Offer Open, Integrated Set of E-business Applications for Managing
Online Content, Commerce and Customer Relationships
BURLINGTON, Mass., Oct. 18/PR Newswire/ - Open Market (NASDAQ: OMKT-news) the
market share leader in Internet commerce software, today announced the
completion of its merger with FutureTense, Inc., a privately held leader in
Internet content management and delivery software. Open Market will now be the
first company to offer enterprises worldwide an integrated set of e-business
applications for managing online content, commerce and customer relationships
based on an open application server architecture. With Open Market's e-business
applications, enterprises can develop dynamic Web sites that increase revenue
and deliver online customers a rich, personalized experience.
"Starting today, there's a new category of Internet software: the e-business
application set," said Gary Eichhorn, CEO of Open Market. "Companies need
complete e-business solutions and they don't have the time and money to waste
either building the solutions themselves, or integrating packages from multiple
vendors. Only a set of open, integrated e-business applications that manage
content, commerce and customer relationships can offer the kind of speed, power,
and flexibility customers need to keep their Web sites running as fast as their
business."
Under the terms of the agreement, Open Market is issuing 7,346,210 shares of its
common stock to the holders of outstanding FutureTense stock. In addition, Open
Market is assuming employee options and warrant to acquire FutureTense stock
that will convert into options to acquire 1,124,628 shares of Open Market common
stock. A substantial portion of these options are exercisable immediately upon
the closing of the transaction. As of the close of trading Friday, the common
stock issued by Open Market had an aggregate market value of approximately
$96,419,006 and Open Market issued options to acquire Open Market stock valued
at $14,760,743. The company intends to account for this transaction as a
pooling of interests.
Open Market + FutureTense = Open, Complete and Integrated Set of E-business
Applications for Users Worldwide
Open Market's set of e-business applications offers robust, proven applications
for both commerce and content management, with customer relationship management
functionality. As the first company to offer a complete set of integrated e-
business applications, the Open Market-FutureTense combination is already
providing organizations with a fast way to obtain a comprehensive, reliable and
integrated e-business solution. It alleviates the time and cost for enterprises
to integrate proprietary technology from multiple vendors or adjust their own
systems. In addition, Open Market's e-business applications ease deployment and
reduce ongoing support so companies can quickly create and maintain their
businesses online with dynamic Web sites that offer a rich, personalized, and
seamless buying experience for their online customers.
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Unlike proprietary competitive offerings, the Open Market e-business
applications set is based on the open Netscape Application Server and
distributed commerce architecture. This allows for a highly scalable system that
can easily accommodate increased traffic or changes in online business
requirements. With an application-server-neutral approach, Open Market's e-
business applications are flexible and extensible, lowering the total cost of
ownership and deployment for customers over competing systems.
"To truly utilize the Web for managing all customer interaction, companies need
business model flexibility that provides scalability, reliability, and high
availability," said B.C. Krishna, Open Market's chief technology officer. "Our
open and distributed architecture provides all of the above and allows customers
to easily add several Web presences with different business models without re-
creating the system as they would with proprietary offerings. For IT
departments, that flexibility and adaptability is a key 'buy button' for
eBusiness."
Product Roadmap
Open Market's set of e-business applications, available now, is comprised of the
company's Transact commerce application and FutureTense's IPS content management
and delivery application. The open and flexible architecture on which both
products are based enable easy integration and fast deployment today. Further
development efforts will provide tighter integration and enhanced marketing and
personalization functionality across both commerce and content applications.
Transact and IPS will continue to evolve and be enhanced as standalone
applications. Both products will continue to support other industry commerce and
content offerings. Open Market's other products, ShopSite and LiveCommerce, will
continue to exist as standalone products, with key catalog features being added
over time as enhancements or modules to the IPS application.
For global enterprise customers and international organizations, the merger
brings the content and commerce management capabilities of FutureTense IPS to a
worldwide audience through Open Market's distribution channels in Europe and
Asia Pacific.
About FutureTense
FutureTense, Inc., headquartered in Acton, Mass., is a leading developer of
technology solutions that enable organizations to manage and deliver high-
impact, interactive Web sites that support their e-business objectives. The
FutureTense Internet Publishing System (IPS) is a robust technology platform
that streamlines the development, production, delivery and maintenance of large,
dynamic Web sites through the integration of content acquisition and management,
personalization, workflow, design, and content delivery. Among the many
companies currently using FutureTense's powerful content management and delivery
system are Chase Manhattan Bank, The New York Times, Newsweek, and The
Washington Post. FutureTense has won prestigious industry awards including being
named to Upside Magazine's Hot 100 Companies for 1999, and Red Herring
Magazine's Herring 100 - Top Private Companies in 1999 "Reader's Choice Award."
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About Open Market
Founded in 1994, Open Market, Inc. (NASDAQ: OMKT-news) is the market-share
leader in Internet commerce software with more than 25,000 merchant licenses
sold worldwide. Open Market's high-performance application software products and
professional services allow its customers to engage in business-to-consumer and
business-to-business Internet commerce, information commerce, and commercial
publishing. Among Open Market's distinguished roster of global customers are
many of the most popular domains on the Web, including Lycos.com, AOL.com, and
the Wall Street Journal Interactive Edition; major industrials such as Acer,
Ingram Micro, Milacron, and Siemens; and 10 of the world's top 13 national
telephone companies. The company, headquartered in Burlington, Massachusetts,
has a presence in 30 countries. Open Market's international head office is in
the UK with additional offices in Australia, Canada, France, Germany, Italy,
Japan and The Netherlands. Open Market can be reached by calling 1-888-OPEN-MKT
(toll-free) or 1-781-359-3000 in the U.S. or +44 (0)1753 838 000 in the UK or by
visiting http://www.openmarket.com.
This news release contains forward-looking statements that involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are the company's limited operating history, the company's ability to
integrate FutureTense in its operations, delays in product development,
development of the Internet market, changes in product pricing policies,
competitive pressures, and the risk factors detailed from time to time in the
company's periodic reports and registration statements filed with the Securities
and Exchange Commission.
Open Market, Transact, LiveCommerce, and ShopSite are trademarks or registered
trademarks of Open Market, Inc. in the United States and other countries. IPS is
a trademark of FutureTense, Inc. All other names are used for identification
purposes only and may be trademarks of their respective owners.
