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Filed by Spyglass, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Exchange Act of 1934
Subject Company: Spyglass, Inc.
Commission File No. 000-26074
THE FOLLOWING IS THE SCRIPT FOR A PORTION OF THE CONFERENCE CALL HELD ON APRIL
19, 2000 IN CONNECTION WITH THE RELEASE OF SPYGLASS' SECOND QUARTER 2000
EARNINGS.
Douglas P. Colbeth, Chairman and CEO of Spyglass:
I would like to take this opportunity to discuss the merits of the pending
strategic Merger Agreement between Spyglass and OpenTV. This is a very
compelling transaction that will combine Spyglass with the world's leading
software company in the interactive television market. OPTV already has 6.1
million subscribers deployed using the OpenTV Platform. Combining Spyglass with
OpenTV will extend the OpenTV Interactive software platform, and greatly enhance
professional services offerings to network operators, device manufacturers, and
content providers.
Spyglass and OpenTV share a common vision that Interactive Television is all
about enhancing the viewer experience through a number of interactive features
and applications, some of which are based on Internet protocols and may require
broadband access. However, Satellite and Terrestrial based operators must also
be able to offer compelling narrow-band interactive services. OPTV is already a
market leader in this segment of the market. We believe that approaching the
market with a proven software platform provides a defensible business model with
the opportunity to secure new customers for OpenTV's software platform.
A significant opportunity exists when you integrate Spyglass' Device Mosaic
with OpenTV's interactive software platform. This extends OPTV's software
platform to better meet the needs of broadband network operators who want to
offer Internet based content, applications, and services. This carries two major
near term benefits: Upgrade opportunities to existing OPTV subscribers, and a
greatly improved offering to help capture additional broadband network
operators.
In addition, there is a definite ability to leverage Spyglass' content
transformation product (Prism) into OpenTV's Interactive Television platform.
This will enable us to extend the OpenTV software platform to serve new types of
devices - most notably next generation Media Phones.
When third generation wireless networks are rolled out throughout the world,
OpenTV and Spyglass believe there will be a convergence of broadband and
wireless content. Content providers and Network Operators do no want to
re-author
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content for various devices. Spyglass' current products and services can
significantly enhance OPTV's offerings in a converging world.
OpenTV will be able to capitalize on the rapid growth of the wireless data
market by utilizing Spyglass' software and services to enable OpenTV's media
partners to extend their offerings beyond the television - by creating
complementary content and applications for subscribers with wireless devices.
Many of OpenTV's existing Interactive TV network operators are also Wireless
operators in need of comprehensive, multi-device solutions. Specifically, OPTV's
Content Partners like News Corp., AOL, and Time Warner want to be able to
leverage a subset of their Interactive TV content to wireless devices. Spyglass
Prism is a great technology to help make that happen without having to re-author
content.
Another major benefit of our merger is from a geographical standpoint. The
combined entities will have a truly international presence and customer base.
Over 80% of OpenTV's revenues come from Europe, Asia, and Australia - whereas
over 80% of Spyglass' revenues come from the U.S. market.
The combined entity will soon be able to offer a deeper and broader set of
products to a larger market. As a result of the merger, OpenTV will gain several
significant customer relationships domestically, as well as broadening their
services organization. Spyglass products and services will have access to
OpenTV's overseas customer base.
There is also a nice match in terms of our Customer Base. OpenTV customers
includes a very impressive list of cable, satellite, and terrestrial television
network operators including B-Sky-B, TPS, France Telecom cable, News Corporation
and Echostar, among others. Currently, more than 25 operators in 20 countries
have deployed OpenTV software. This accounts for over 6.1 million deployments.
Spyglass in turn has worked with several of the world's most prominent device
manufacturers, including; Sony, NEC, Philips, Motorola, and LG Electronics.
Last but certainly not least - Spyglass' Professional Services Organization
provides a strong resource base to support the continued rollout of OpenTV's
software platform. This presents an opportunity to grow services revenue focused
on the successful deployments of OPTV's platform and applications.
OpenTV has currently been providing integration services to its customers on a
limited basis. As they gain traction in the U.S., the integration and
development requirements from their customers will increase dramatically,
especially with broadband implementations. There will be significant
opportunities to support the OpenTV software platform and applications - with
the goal of enhancing OpenTV's overall revenue growth.
Spyglass' services organization will add the capacity for OPTV to deliver
comprehensive services including: strategic consulting, product design, custom
application development, porting, integration, quality assurance testing and
third party project management capabilities. This organization will also
continue to support customers of Spyglass' products.
I would now like to address the handful of inquiries that we have received
related to the significant correction in the NASDAQ stock market, and an even
more
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dramatic decline in the information appliance sector stocks. I also want to be
clear on how that will impact our pending merger with OpenTV.
The answer is - there has been no change to the strategic value of the merger
with OpenTV.
Spyglass management and Board of Directors have always based our strategic
decisions on the fundamental long-term value for our shareholders. Case in point
was our decision in late 1996 to shift the Company's strategy to develop
solutions for information appliances, at a time when few other companies (or
investors) even considered Interactive Television or Wireless Data a viable
market opportunity.
Our strategic decisions are based on our long-range vision - not the short term
and often-irrational volatility of stock markets. We do not believe the recent
dynamics of a volatile stock market should drive our long-term strategic
decisions. The Directors and Management of both Spyglass and OpenTV are
completely committed to executing this merger transaction.
In summary, we believe the merger of Spyglass and OpenTV creates the worldwide
leading supplier of Interactive Software, Applications, and Services for Network
Operators, Device Manufacturers, and Content Providers.
***
Spyglass and the Spyglass logo are trademarks or registered trademarks of
Spyglass, Inc., in the United States and other countries. Mosaic is a trademark
of the University of Illinois. (Other technologies and brand names are
trademarks or registered trademarks of their respective companies.) This
conference call script contains information about management's future
expectations, plans and prospects that constitute forward-looking statements for
purposes of the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those indicated by
these forward-looking statements as a result of various important factors
including failure of the merger transaction with OpenTV to close due to the
failure to obtain regulatory, shareholder or other approvals, the risk that
OpenTV and Spyglass (the "Combined Company") businesses will not be integrated
successfully and unanticipated costs of such integration, failure of the
Combined Company to retain and hire key executives, technical personnel and
other employees, failure of the Combined Company to manage its growth, failure
of the Combined Company to successfully manage its changing relationship with
customers, suppliers and strategic solution center customers, consummation of
binding agreements with prospective business partners, competition, development
of the marketplace, the timing of the execution and recognition of revenues
under new agreements, the ability to close and execute large multi-year
contracts, product development, technological change and other factors.
For a detailed discussion of these and other cautionary statements, please refer
to the proxy statement/prospectus to be filed by Spyglass, Inc. and OpenTV Corp.
as described below, as well as the companies' filings with the Securities and
Exchange Commission, especially in Spyglass' annual report on Form 10-K for the
year ended September 30, 1999 filed December 22, 1999 and in OpenTV's Form F-1
Registration Statement filed on November 19, 1999, as amended, and other
documents periodically filed with the Securities and Exchange Commission.
Spyglass undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
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Spyglass, Inc. its officers and directors may be deemed to be participants in
the solicitation of proxies from Spyglass shareholders with respect to the
transactions contemplated by the merger agreement referenced in the foregoing
information. Information regarding such officers and directors is included in
Spyglass' annual report on Form 10-K for the year ended September 30, 1999 filed
with the SEC on December 22, 1999. This document is available free of charge at
the SEC website at www.sec.gov and from Spyglass by contacting Bruce Beerbower
at (603) 245-6656 or [email protected].
THIS CONFERENCE CALL SCRIPT IS BEING FILED PURSUANT TO RULE 425 UNDER THE
SECURITIES ACT OF 1933 AND DEEMED FILED PURSUANT TO RULE14A-12 UNDER THE
EXCHANGE ACT OF 1934. THIS CONFERENCE CALL SCRIPT DOES NOT CONSTITUTE AN OFFER
OF SALE OF SECURITIES. SHAREHOLDERS OF SPYGLASS, INC. AND OTHER INVESTORS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHICH WILL BE INCLUDED IN THE
REGISTRATION STATEMENT ON FORM F-4 TO BE FILED BY OPENTV CORP. IN CONNECTION
WITH THE MERGER BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. AFTER SUCH
DOCUMENT IS FILED, IT WILL BE AVAILABLE FREE OF CHARGE ON THE SEC WEBSITE AT
WWW.SEC.GOV AND FROM SPYGLASS, INC. BY CONTACTING BRUCE BEERBOWER AT (630)
245-6656 OR [email protected].
