<PAGE> 1
As filed with the Securities and Exchange
Commission on October 23, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
______________________
SPYGLASS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 37-1258139
(State or other (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
1240 EAST DIEHL ROAD, NAPERVILLE, ILLINOIS 60563 (708) 505-1010
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
______________________
PATRICK J. RONDEAU, ESQ.
HALE AND DORR, 60 STATE STREET, BOSTON, MASSACHUSETTS 02109 (617) 526-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
______________________
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 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.
/ /
<PAGE> 2
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 this prospectus is expected to be made pursuant to Rule 434,
please check the following box.
/ /
<PAGE> 3
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================
| | | Proposed | Proposed | |
| | | Maximum | Maximum | Amount |
| | Amount | Offering | Aggregate | of Regis-|
| Title of Each Class | to be | Price Per | Offering | tration |
| of Securities to be Registered |Registered| Share(1) | Price(1) | Fee |
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
|Common Stock, $.01 par value.......... | 117,613 | $ 17.75 | $2,087,630.75 | $633.00 |
| | shares | | | |
=============================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and based upon prices on the Nasdaq National Market on
October 21, 1996.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
<PAGE> 4
SUBJECT TO COMPLETION
OCTOBER 23, 1996
PROSPECTUS
117,613 Shares
SPYGLASS, INC.
Common Stock
______________________
This Prospectus covers the resale of 117,613 shares of Common Stock of
Spyglass, Inc. ("Spyglass" or the "Company") by certain stockholders of the
Company (the "Selling Stockholders"). See "Selling Stockholders." The shares
of Common Stock covered by this Prospectus were issued to the Selling
Stockholders in connection with the Company's acquisition of SurfWatch Software,
Inc. in a transaction completed on April 24, 1996. The Company will not receive
any of the proceeds from the sale of these shares by the Selling Stockholders.
The Selling Stockholders may from time to time sell the shares covered
by this Prospectus on the Nasdaq National Market in ordinary brokerage
transactions, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution."
The Common Stock is quoted on the Nasdaq National Market under the symbol
SPYG.
SEE "RISK FACTORS" BEGINNING ON PAGE 5
FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK.
______________________
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 October __, 1996
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 that 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.
<PAGE> 5
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 documents can 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
following regional offices: Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
copies of such material may be obtained from the Commission's public reference
section at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Commission maintains a site on the World-Wide Web ("WWW") that contains
reports, proxy and information statements regarding the Company. The
Commission's WWW site is (http://www.sec.gov). The Common Stock is traded on the
Nasdaq National Market. Reports and other information concerning the Company
may be inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and its Common Stock, reference is hereby made to such Registration
Statement, exhibits and schedules. Statements contained in this Prospectus as
to the contents of any contract or any other document are not necessarily
complete, and in each instance reference is hereby made to the copy of such
contract or document (if any) filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Registration Statement and the exhibits and schedules thereto may be examined
without charge at the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof may
be obtained from the Commission upon payment of prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, as amended by an Annual Report on Form 10-K/A filed with the
Commission on May 17, 1996;
(2) the Company's Current Report on Form 8-K dated February 2, 1996, as
amended by a Current Report on Form 8-K/A filed with the Commission on April 17,
1996;
(3) the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995, as amended by a Quarterly Report on Form 10-Q/A filed with
the Commission on May 17, 1996;
(4) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
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<PAGE> 6
(5) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996; and
(6) the Company's Registration Statement on Form 8-A dated May 11, 1995
registering the Common Stock under Section 12(g) of the Exchange Act.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to October 23,
1996 and prior to the termination of the offering of the Common Stock registered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to the Treasurer of the Company, 1240 East Diehl Road, Naperville,
Illinois 60563; telephone (708) 505-1010.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
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<PAGE> 7
The Company
Spyglass, Inc. ("Spyglass" or the "Company") develops, markets and
distributes embeddable World-Wide Web ("WWW") technologies to software
developers, on-line service providers and communications device developers.
These technologies enable organizations to offer products and services for
electronic publishing, commerce and collaboration on the Internet. The
Company's two principal products are the Client Software Development Kit
("CSDK") and the Server Software Development Kit ("SSDK"). These kits break out
individual pieces of World-Wide Web functionality into technology components
that are used in combination to build new Web-based applications, or
individually to add specific Web capabilities to existing products and services.
The CSDK divides the functionality of the conventional WWW browser into
individual software components. Customer companies use these components to build
customized standalone browsers, or to embed specific browser functionality--such
as the ability to retrieve and display hypertext markup language (HTML)
documents--into existing applications (e.g., a computer-aided design program),
or devices, (e.g., a personal digital assistant). The CSDK technology is based
in part on NCSA Mosaic, which is owned by the University of Illinois and is
licensed to the Company, along with the Mosaic name and spinning globe logo, on
an exclusive basis (with certain limited exceptions). The SSDK splits WWW
server functionality into software components that can be used to build a fully
functioning World-Wide Web server to manage and control access to information
stored at individual WWW databases or sites. The SSDK components can be
embedded into hardware devices such as a network router, or integrated in
existing applications such as databases.
Through the acquisitions of Stonehand Inc., SurfWatch Software, Inc. and
OS Technologies Corporation in 1996, Spyglass has added display, editing,
filtering and conferencing components that further enhance the value of its WWW
technology kits to companies wishing to enhance their products and services with
Web functionality. The Company intends to build upon the user popularity of its
CSDK and SSDK technology by developing or acquiring additional client and server
technologies that can be used by a variety of computer software developers, on-
line service providers, communications device developers, commercial
organizations and computer users to more effectively publish and access
information and conduct commerce on the Internet.
The Company was organized as an Illinois corporation in February 1990 and
reincorporated in Delaware in May 1995. The Company's principal office is
located at Naperville Corporate Center, 1240 East Diehl Road, Naperville,
Illinois 60563 and its telephone number is (708) 505-1010. The Spyglass WWW
address is http://www.spyglass.com. As used in this prospectus, the term
"Company" refers to Spyglass, Inc. (including its predecessor Illinois
corporation) and its wholly owned subsidiaries, unless the context otherwise
requires.
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<PAGE> 8
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully by potential investors in evaluating an
investment in the Common Stock offered hereby.
Variability of Quarterly Operating Results. The Company's quarterly
operating results have varied and may continue to vary significantly depending
on factors such as the timing of significant license agreements, the terms of
the Company's licensing arrangements with its customers and the timing of new
product introductions and upgrades by the Company and its competitors. The
Company typically structures its license agreements with customers to require
commitments for a significant minimum number of licenses, and license revenues
are recognized as the committed licenses are purchased. The license commitments
typically provide for these purchases to be made over several quarters. The
Company typically experiences the greatest proportion of net revenue in the
first quarter of a license arrangement. The Company's net revenue from a
license arrangement often declines after the first quarter of the arrangement as
the number of copies purchased by the customer declines. Additional revenues
from a customer will not be earned unless and until the initial committed levels
are exceeded. The Company's revenues in any quarter will therefore depend in
significant part on its ability to sell licenses to new customers in that
quarter. The Company's expense levels are based in part on expectations of
future revenue levels and any shortfall in expected revenue could therefore
result in a disproportionate decrease in the Company's net income.
New and Uncertain Market. The commercial market for Internet services
and products has only recently begun to develop, and the Company's future
success will depend in large part on increased commercial use of the Internet.
Although there has been a significant increase in the use and popularity of the
Internet over the past year, commercial use continues to be constrained by the
need for reliable processes such as security measures for electronic commerce as
well as the need for readily available customer support and a supporting
infrastructure providing widespread Internet accessibility and high-speed
communications capabilities. There can be no assurance that widespread
commercial use of the Internet will develop. Also, while the Company believes,
based upon its contacts with customers and potential customers, that vendors of
products offered to computer users will increasingly seek to include WWW
software component technology in their product offerings to ensure that users
can effectively access information published by such vendors on the Internet,
there can be no assurance that vendors will seek to incorporate browsers in
their products or that customers will accept multiple browsers on their
computers.
Dependence on OEMs, VARs and Distributors. The Company licenses the
CSDK and the SSDK to OEMs, VARs and distributors that include the CSDK and the
SSDK in their products and services. The success of the Company is therefore
dependent in large part upon the performance of its customers, which is outside
the Company's control. The Company's relationships with most of its customers
have been established within the last two years, and the Company is unable to
predict with accuracy the extent to which its customers will be successful in
marketing and selling products incorporating the CSDK and the SSDK. The loss of
any of the Company's current customers, either to competitive products offered
by other companies or to products developed internally by the customers, could
have a material adverse effect on the Company. Moreover, the Company's future
success will depend in part on its ability to attract new customers, including
customers in additional industry segments.
-5-
<PAGE> 9
Competition. The market for software products used in connection with the
Internet is extremely competitive. Moreover, because the Internet is an open
system designed to be freely available to computer users worldwide, and because
of the increasing popularity of the Internet, the Company expects that it will
encounter increased competition in the future. The Company currently faces
competition from a wide variety of sources, including other Internet technology
vendors (such as Netscape Communications Corporation), on-line service companies
and Internet access companies that offer WWW access through their own browsers
(such as Prodigy and NETCOM On-line Communication Services), networking software
companies that have developed their own WWW technologies (such as Netmanage and
Frontier Technology) and vendors of operating systems that incorporate WWW
technologies. In licensing its Internet software component technologies to
software companies, the Company considers its prime competition to be the
prospect company's internal software development resources. Additional
competition for the Company's products may come from Microsoft Corporation, to
which the Company granted a multi-year, multi-platform, worldwide license to
distribute client technology for a combination of per copy and fixed license
fees, and browser and server software available over the Internet that may be
downloaded and used without charge.
Dependence on the CSDK and the SSDK. The Company currently derives
substantially all of its revenues from licenses of the CSDK and the SSDK. As a
result, any factors adversely affecting the sales of these products, such as
increased price competition or the introduction of technologically superior
products, could have a material adverse effect on the Company. A number of
companies market Internet browsers and servers and the Company expects that
additional competitive products will be introduced in the future. The Company's
future financial performance will depend in significant part on its ability to
develop and introduce new products and its ability to increase the performance,
functionality and flexibility of the CSDK and the SSDK. There can be no
assurance that any such new products or product improvements will be
successfully developed or achieve market acceptance.
Technological Change and New Products. The market for Internet software
products is characterized by rapidly changing technology, evolving industry
standards and customer demands, and frequent new product introductions and
enhancements. These market characteristics are exacerbated by the emerging
nature of this market and the fact that many companies have only recently
introduced products, and many more companies are expecting to introduce their
first Internet products in the near future. The Company's future success will
depend in significant part on its ability to continually improve the
performance, features and reliability of the CSDK and the SSDK in response to
both competitive product offerings and evolving demands of the marketplace, and
there can be no assurance that the Company will be successful in doing so. In
addition, a key element of the Company's business strategy is the development
and introduction of new products that capitalize on the increasing use of the
Internet for publishing, collaboration and commercial transactions. There can
be no assurance that the Company will be successful in developing such products
or that such products will meet with market acceptance. In addition, new
product releases by the Company, whether improved versions of the CSDK and the
SSDK or introductions of new products, may contain undetected errors that
require significant design modifications, resulting in a loss of customer
confidence and adversely affecting sales.
Management of Growth; Integration of Acquisitions. The Company's business
has grown significantly over the past several years as a result of both internal
growth and acquisitions of products and businesses. The Company has consummated
three acquisitions since January 1996, and the Company may make additional
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<PAGE> 10
acquisitions in the future. Managing this growth, and integrating acquired
products and businesses, requires a significant amount of management time and
skill. There can be no assurance that the Company will be effective in managing
its future growth or in assimilating acquisitions or that any failure to manage
growth or assimilate an acquisition will not have a material adverse effect on
the Company's business, operating results or financial condition. Furthermore,
there can be no assurance that any past or future acquisitions will produce the
results anticipated by the Company.
Limited Proprietary Rights. One of the Company's principal products, the
CSDK, is based in part on NCSA Mosaic. NCSA Mosaic was developed in 1993 by the
National Center for Supercomputing Applications at the University of Illinois at
Urbana-Champaign and is available on a free-with-copyright basis from the
University to anyone using the Internet. As part of the agreement between the
Company and the University of Illinois, the University has certain rights to
incorporate features of the CSDK (limited to certain releases) into NCSA Mosaic.
Although the University is not permitted to make NCSA Mosaic available for
distribution by resellers, the free availability of NCSA Mosaic may adversely
affect sales of licenses for the CSDK.
The NCSA Mosaic technology underlying the CSDK, as well as the Mosaic
name, is owned by the University of Illinois and is licensed to the Company
pursuant to an exclusive (subject to previously granted licenses described
below), royalty-bearing license agreement. Although this license agreement is
terminable by the University only in the event of a material breach by the
Company of its obligations thereunder, the termination of this license would
have a material adverse effect on the Company. The University of Illinois has
informed the Company that, prior to granting exclusive rights to the Company,
the University granted certain rights with respect to NCSA Mosaic to
approximately 10 organizations, some of which have developed and market WWW
browsers based on NCSA Mosaic.
The Company does not have any patents on its own technology, and relies
upon copyright law, trade secret protection and confidentiality and/or license
agreements with its employees, customers and others to protect its proprietary
technology. Effective copyright and trade secret protection may not be
available in every foreign country in which the Company's products are
distributed. The University of Illinois has no patent protection for NCSA
Mosaic. There can be no assurance that the steps taken by the Company (or the
University of Illinois) to protect their proprietary technology will be adequate
to prevent misappropriation of its technology by third parties, or that third
parties will not be able to develop similar technology independently. In
addition, there can be no assurance that other parties will not assert
technology infringement claims against the Company.
Dependence on Key Personnel. The Company's success will depend in large
part upon the services of a number of key employees, including Douglas P.
Colbeth, its President and Chief Executive Officer and Tim Krauskopf, its co-
founder and Vice President of Research & Development. The loss of the services
of one or more of these key employees could have a material adverse effect on
the Company. The Company's success will also depend in significant part upon
its ability to attract and retain highly-skilled management, technical and
marketing personnel. Competition for such personnel in the software industry
is intense, and there can be no assurance that the Company will be successful
in attracting and retaining such personnel.
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<PAGE> 11
Government Regulation and Legal Uncertainties. The Internet is just
emerging as a commercial market, and as a result there are few laws or
regulations directly applicable to access to or commerce on the Internet.
However, as the use of the Internet increases, it is possible that a number of
laws and regulations may be adopted covering issues such as user privacy,
pricing, and characteristics and quality of products and services. Moreover,
because the Internet has only recently come into widespread use, it is not yet
clear how existing laws governing issues such as property ownership, libel and
personal privacy apply to transactions on the Internet. The legal framework
that ultimately develops with respect to the Internet may restrict on some ways
the Company's business or otherwise adversely affect its operating results.
Volatility of Stock Price. There has been significant volatility in the
market price of securities of technology-based companies, particularly Internet-
related companies and companies similar in size to the Company. Factors such as
announcements of technological developments or new products by the Company or
its competitors, variations in the Company's quarterly operating results,
general economic or stock market conditions unrelated to the Company's operating
performance, and the investing public's perception of the commercial
opportunities offered by the Internet may have a significant impact on the
market price of the Common Stock.
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<PAGE> 12
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each Selling Stockholder
as of October 22, 1996. The Selling Stockholders are employees or former
employees of SurfWatch Software, Inc., now a wholly-owned subsidiary of the
Company. No Selling Stockholder has been an officer of, or had any other
material relationship with, the Company since June 1, 1993.
<TABLE>
<CAPTION>
Number of Number of
Name of Shares of Shares of
Selling Common Stock Common Stock
Stockholder(1) Beneficially Owned(2) Offered Hereby(2)
- -------------- --------------------- -----------------
<S> <C> <C>
Ann W. Duvall and
William Duvall(3) 274,198 69,125
The Jay Friedland
Charitable Remainder
Trust II(4) 46,083 46,083
Helen R.S. MacKenzie 4,608 1,152
Matthew Kendall 4,608 1,152
Anup Murarka 230 58
Randy Carr 173 43
-------- --------
TOTALS 329,900 117,613
______________________________________________________________________
</TABLE>
(1) Sales of the shares of Common Stock offered hereby may also be
made by permitted persons or entities to whom such shares are
gifted, transferred or pledged by the Selling Stockholders
listed herein.
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<PAGE> 13
(2) Of the total shares of Common Stock listed as beneficially
owned by the Selling Stockholders, a total of 47,045 shares
are held in an escrow account to secure indemnification
obligations to the Company of the Selling Stockholders. It is
expected that these shares (less any shares which may be
distributed from the escrow account to the Company in
satisfaction of indemnification claims) will be released from
escrow and distributed to the Selling Stockholders on April
24, 1997. The number of shares indicated as beneficially
owned by the Selling Stockholders includes those shares
(representing 10% of the number of shares listed as
beneficially owned by each Selling Stockholder) which such
Selling Stockholder is entitled to receive upon distribution
of these shares from the escrow account. The total number of
shares listed as beneficially owned by the Selling
Stockholders also includes 3,238 shares which each of Ann
Duvall, William Duvall and Jay Friedland have pledged to the
Company in support of loans from the Company.
(3) Of the total number of shares listed as beneficially owned by Ann W.
Duvall and William Duvall, 26,740 shares are held in Ann W. Duvall's name,
7,386 shares are held in William Duvall's name and the remaining 240,072
shares are held jointly. All of the 240,072 shares held jointly by Ann
W. Duvall and William Duvall have been reregistered in the street name of
Goldman, Sachs & Co. Of these 240,072 shares, 170,947 are currently
pledged in support of loans made to the Duvalls. The 69,125 shares being
registered are held by the Duvalls jointly and are not currently pledged
in support of loans.
(4) Jay Friedland is trustee of The Jay Friedland Charitable
Remainder Trust II and has sole voting and investment control
over the shares held by the trust. Mr. Friedland also holds 90,299
shares of the Company's Common Stock in his own name.
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<PAGE> 14
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Prospectus may be
offered and sold from time to time by the Selling Stockholders. The
Selling Stockholders will act independently of the Company in making
decisions with respect to the timing, manner and size of each sale.
Such sales may be made on the Nasdaq National Market or otherwise,
at prices related to the then-current market price or in negotiated
transactions, including pursuant to one or more of the following
methods: (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 the broker solicits purchasers; and (c) block trades in which
the broker-dealer so engaged will attempt to sell the shares as
agent but may position and resell a portion of the block as
principal to facilitate the transaction. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for
other broker-dealers to participate. Broker-dealers will
receive commissions or discounts from the Selling Stockholders in
amounts to be negotiated immediately prior to the sale.
The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including certain liabilities under the
Securities Act. Additionally, the Company will pay the expenses
incurred by it in connection with this offering, other than
discounts, commissions, fees or expenses of underwriters, selling
brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Stock, or legal
expenses of any person other than the Company.
In offering the shares of Common Stock covered hereby, the
Selling Stockholders and any broker-dealers and any other
participating broker-dealers who execute sales for the Selling
Stockholders may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits
realized by the Selling Stockholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and
commissions.
The Company has advised the Selling Stockholders that during
such time as they may be engaged in a distribution of Common Stock
covered hereby they are required to comply with Rules 10b-6 and 10b-
7 under the Exchange Act, as those Rules are described in more
detail below, and, in connection therewith, that they may not engage
in any stabilization activity in connection with the Company's
securities, are required to furnish to each broker-dealer through
which Common Stock covered hereby may be offered copies of this
Prospectus, and may not bid for or purchase any of the Company's
securities except as permitted under the Exchange Act. Rule 10b-6
under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for
an account in which the participant has a beneficial interest, any
of the securities that are the subject of the distribution. Rule
10b-7 governs bids and purchases made in order to stabilize the
price of a security in connection with a distribution of the
security.
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<PAGE> 15
In connection with distributions of the Common Stock or
otherwise, the Selling Stockholders may enter into hedging
transactions with broker-dealers or other financial institutions.
In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of Common Stock in
the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders may also sell Common Stock
short and redeliver the shares to close out such short positions.
The Selling Stockholders may also enter into options or other
transactions with broker-dealers or other financial institutions
which require the delivery to such broker-dealer or financial
institution of the Common Stock offered hereby, which Common Stock
such broker-dealer or other financial institution may, subject to
the applicable stockholder's agreement, resell pursuant to this
Prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders may also pledge the shares registered
hereunder to a broker-dealer or other financial institution and,
upon a default, such broker-dealer or financial institution may,
subject to the applicable stockholder's agreement, effect sales of
the pledged Common Stock pursuant to this Prospectus. In addition,
any Common Stock covered by this Prospectus that qualifies for sale
pursuant to Rule 144 may be sold under Rule 144 under the Securities
Act rather than pursuant to this Prospectus.
-12-
<PAGE> 16
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will
be passed upon for the Company by Hale and Dorr, Boston,
Massachusetts.
EXPERTS
The consolidated financial statements of Spyglass, Inc. for
each of the three years in the period ended September 30, 1995
incorporated by reference from the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1995, have been
audited by Price Waterhouse LLP, independent public accountants, as
set forth in their reports incorporated by reference herein. Such
financial statements referred to above are incorporated herein by
reference in reliance upon the authority of said firm as an expert
in giving such reports.
-13-
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
Item Amount
<S> <C>
SEC Registration Fee..................................... $ 633
Accounting Fees and Expenses............................. 5,000*
Legal Fees and Expenses.................................. 5,000*
Miscellaneous............................................ 4,367*
---------
Total.................................................... $ 15,000*
=========
</TABLE>
*Estimated
ITEM 15 INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware 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.
Article NINTH of the Registrant's Certificate of Incorporation provides
that a director or officer of the Registrant (a) shall be indemnified by the
Registrant against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement reasonably incurred in connection with any
litigation or other legal proceeding (other than an action by or in the right of
the Registrant) brought against him by virtue of his position as a director or
officer of the Registrant 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
Registrant, 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 Registrant against expenses (including attorneys' fees) and
amounts paid in settlement reasonably incurred in connection with any action by
or in the right of the Registrant by virtue of his position as a director or
officer of the Registrant 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
Registrant, except that no indemnification shall be made with respect to any
such matter as to which such director or officer shall have been adjudged to be
liable to the Registrant, unless and only to the extent that a court determines
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper. Notwithstanding the foregoing, to the
extent that a director or officer has been successful, on the merits or
otherwise, he shall be indemnified against all expenses (including attorneys'
fees) reasonably incurred by him in connection therewith. Expenses incurred in
defending a civil
II-1
<PAGE> 18
or criminal action, suit or proceeding shall be advanced by the Registrant to a
director or officer, at his request, upon receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
is not entitled to indemnification.
Indemnification is required to be made unless the Registrant determines
(in the manner provided in the Certificate of Incorporation) that the applicable
standard of conduct required for indemnification has not been met. In the event
of a determination by the Registrant that the director or officer did not meet
the applicable standard of conduct required for indemnification, or if the
Registrant fails to make an indemnification payment within 60 days after such
payment is claimed by such person, such person is permitted to petition a 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 Registrant notice of the action for which
indemnity is sought and the Registrant has the right to participate in such
action or assume the defense thereof.
Article NINTH of the Registrant's 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 Registrant
must indemnify those persons to the fullest extent permitted by such law as so
amended.
The Company has purchased a general liability insurance policy which
covers certain liabilities of directors and officers of the Company arising out
of claims based on acts or omissions in their capacity as directors or officers.
Article EIGHTH of the Registrant's Certificate of Incorporation provides
that, except to the extent that the General Corporation Law of Delaware
prohibits the elimination or limitation of liability of directors for breaches
of fiduciary duty, no director of the Registrant shall be personally liable to
the Registrant or its stockholders for monetary damages for any breach of
fiduciary duty as a director.
II-2
<PAGE> 19
ITEM 16. EXHIBITS
Exhibit Description of Exhibit
4.1* -- Amended and Restated Certificate of Incorporation of the Company,
as amended
4.2** -- By-laws of the Company
4.3** -- Specimen Certificate for shares of common stock of the Company
5.1 -- Opinion of Hale and Dorr
23.1 -- Consent of Price Waterhouse LLP
23.2 -- Consent of Hale and Dorr (included in Exhibit 5.1)
24.1 -- Power of Attorney (appears on page II-5)
___________________
* Incorporated by reference from the Company's Registration Statement on
Form S-8 (File No. 333-04357).
** Incorporated by reference from the Company's Registration Statement on
Form S-1 (File No. 33-92174).
ITEM 17. UNDERTAKINGS
The Company 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;
(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 (1)(i) and (1)(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 purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE> 20
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 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 the 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
Corporation pursuant to the indemnification provisions described herein, 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-4
<PAGE> 21
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Naperville and State of Illinois on the 23rd day
of October, 1996.
SPYGLASS, INC.
By: /s/ Douglas P. Colbeth
------------------------
Douglas P. Colbeth
President and
Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Douglas P. Colbeth, Gary Vilchick and Patrick J. Rondeau, Esq. 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 Spyglass, 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.
II-5
<PAGE> 22
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated below on the 23rd day of October, 1996.
Signature Title
--------- -----
/s/ Douglas P. Colbeth
------------------------------- President, Chief Executive Officer
Douglas P. Colbeth and Director
(Principal executive officer)
/s/ Gary Vilchick
------------------------------- Chief Financial Officer
Gary Vilchick (Principal financial officer)
/s/ Thomas S. Lewicki
------------------------------- Treasurer and Controller
Thomas S. Lewicki (Principal accounting officer)
/s/ Tim Krauskopf
------------------------------- Director
Tim Krauskopf
/s/ William S. Kaiser
------------------------------- Director
William S. Kaiser
/s/ Ray Rothrock
------------------------------- Director
Ray Rothrock
/s/ Steven R. Vana-Paxhia
------------------------------- Director
Steven R. Vana-Paxhia
II-6
<PAGE> 23
EXHIBIT INDEX
Exhibit Description of Exhibit
- ------- --------------------------
4.1* -- Amended and Restated Certificate of Incorporation of the Company,
as amended
4.2** -- By-laws of the Company
4.3** -- Specimen Certificate for shares of common stock of the Company
5.1 -- Opinion of Hale and Dorr
23.1 -- Consent of Price Waterhouse LLP
23.2 -- Consent of Hale and Dorr (included in Exhibit 5.1)
24.1 -- Power of Attorney (appears on page II-5)
___________________
* Incorporated by reference from the Company's Registration Statement on
Form S-8 (File No. 333-04357).
** Incorporated by reference from the Company's Registration Statement on
Form S-1 (File No. 33-92174).
II-7
<PAGE> 1
EXHIBIT 5.1
HALE AND DORR
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000.FAX 617-526-5000
October 23, 1996
Spyglass, Inc.
Naperville Corporate Center
1240 East Diehl Road
Naperville, IL 60563
Dear Sirs:
We have assisted in the preparation and filing with the
Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (the "Registration Statement"),
relating to the sale of up to 117,613 shares of Common Stock, $.01
par value per share (the "Shares"), of Spyglass, Inc., a Delaware
corporation (the "Company"), held by certain stockholders of the
Company.
We have examined the Amended and Restated Certificate of
Incorporation, as amended, and By-laws of the Company, and all
amendments thereto, and have examined and relied upon the
originals, or copies certified to our satisfaction, of such
records of meetings of directors and stockholders of the Company,
documents and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinions expressed
below.
We assume that appropriate action will be taken, prior to the
offer and sale of the Shares, to register and qualify the Shares
for sale under all applicable state securities or "blue sky" laws.
In our examination of the foregoing documents, we have
assumed the genuineness of all signatures and the authenticity of
all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies, and
the authenticity of the originals of such latter documents.
We express no opinion as to the laws of any State or
jurisdiction other than the laws of the Commonwealth of
Massachusetts, the General Corporation Law Statute of the State of
Delaware and the Federal law of the United States of America.
<PAGE> 2
Based upon and subject to the foregoing, we are of the
opinion that the Shares have been duly authorized for issuance and
are legally issued, fully paid and non-assessable.
We hereby consent to the use of our name in the Registration
Statement and under the caption "Legal Matters" in the related
Prospectus and consent to the filing of this opinion as an Exhibit
to the Registration Statement.
This opinion is based upon currently existing statutes,
rules, regulations, and judicial decisions, and we disclaim any
obligation to advise you of any change in any of these sources of
law or subsequent legal or factual developments which might affect
any matters or opinions set forth herein.
Please note that we are opining only as to matters expressly
set forth herein, and no opinion should be inferred as to any
other matters.
Very truly yours,
/s/ Hale and Dorr
HALE AND DORR
- 2 -
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form
S-3 of our report dated October 25, 1995 except as to Note 1, which
is as of November 28, 1995, which appears on page 17 of the 1995
Annual Report of Spyglass, Inc., which is incorporated by
reference in Spyglass, Inc.'s Annual Report on Form 10-K for the
year ended September 30, 1995. We also consent to the
incorporation by reference of our report on the Financial
Statement Schedules, which appears in Spyglass, Inc.'s Annual
Report on Form 10-K. We also consent to the references to us
under the headings "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Chicago, Illinois
October 21, 1996
