1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1997
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CAERE CORPORATION
(Exact name of Registrant as specified in its charter)

DELAWARE ____ 94-2250509
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification
Number)
100 COOPER COURT
LOS GATOS, CALIFORNIA 95030
(408) 395-7000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

---------------

ROBERT G. TERESI
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
100 COOPER COURT
LOS GATOS, CALIFORNIA 95030
(408) 395-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

---------------

COPIES TO:

LEE F. BENTON, ESQ.
JULIE M. ROBINSON, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306-2155
(415) 843-5000

---------------

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, 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 filed in 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 of the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

---------------

CALCULATION OF REGISTRATION FEE

===============================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------

Common Stock, $0.001 par value 300,000 $7.1875 $2,156,250 $653.41
===============================================================================================================================

(1) Estimated in accordance with Rule 457(c) solely for the purpose of computing
the amount of the registration fee based on the average of the high and low
prices of the Company's Common Stock as reported on the Nasdaq National
Market System on May 16, 1997.

---------------

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 THAT 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.

================================================================================

PROSPECTUS
300,000 SHARES

CAERE CORPORATION

-------------------
COMMON STOCK
-------------------

This Prospectus relates to a total of 300,000 shares of Common Stock (the
"Shares"), with a par value of $0.001 (the "Common Stock") of Caere Corporation
(the "Company" or "Caere") which are being offered and sold by certain
stockholders of the Company (the "Selling Securityholders"). The Shares were
issued by the Company in an acquisition pursuant to an Agreement and Plan of
Merger and Reorganization by and among: Caere Corporation; ViewStar Acquisition
Corp.; Formonix, Inc.; and Mr. Lynn J. Formanek and Mr. David L. Formanek, dated
as of March 31, 1997 (the "Merger Agreement").

The Shares may be offered by the Selling Securityholders from time to time
in transactions on the Nasdaq National Market System, in privately negotiated
transactions or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). See "Selling
Securityholders" and "Plan of Distribution."

The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Securityholders hereof. See "Plan of Distribution."

The Selling Securityholders, directly or through agents, dealers or
underwriters, may sell the Shares offered hereby
from time to time on terms to be determined at the time of sale. The Company's
Common Stock is traded on the Nasdaq National Market System under the symbol
CAER.

--------------------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 5.
---------------------

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.

No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $16,904. The aggregate proceeds to the
Selling Securityholders from the sale of the Shares will be the purchase price
of the Shares sold less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. See "Plan of Distribution."

The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Act"), and any commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Act. The Company has agreed to
indemnify the Selling Securityholders and certain other persons against certain
liabilities, including liabilities under the Act.

The date of this Prospectus is May __, 1997.

No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained or incorporated
by reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, by any person in any jurisdiction in which
it is unlawful for such person to make such offer or solicitation. Neither the
delivery of this Prospectus at any time nor any sale made hereunder shall, under
any circumstances, imply that the information herein is correct as of any date
subsequent to the date hereof.

AVAILABLE INFORMATION

The Company is subject to the informational reporting 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 can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
following Regional Offices: Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of such
Web site is http://www.sec.gov. The Company's Common Stock is quoted on the
Nasdaq National Market System, and such reports, proxy statements and other
information can also be inspected at the offices of The Nasdaq Operations, 1735
K Street, N.W., Washington, D.C. 20006.

Additional information regarding the Company and the Shares offered hereby
is contained in the Registration Statement on Form S-3 and the exhibits thereto
filed with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information
contained in such Registration Statement and the exhibits thereto. Statements
contained in this Prospectus regarding the contents of any document or contract
may be incomplete and, in each instance, reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement. For
further information pertaining to the Company and the Shares, reference is made
to the Registration Statement and the exhibits thereto, which may be inspected
without charge at, and copies thereof may be obtained at prescribed rates from,
the office of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act are by this reference incorporated in and made a part of
this Prospectus:

(1) The Annual Report on Form 10-K for the fiscal year ended December 31,
1996, filed on March 31, 1997, including all matters incorporated by
reference therein;

(2) The Proxy Statement for the Company's 1997 Annual Meeting of Stockholders,
as amended, filed on April 9, 1997, including all matters incorporated by
reference therein;

(3) The Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1997, filed on May 12, 1997, including all matters incorporated by
reference therein; and

(4) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A effective November 10, 1989 and the
description of the Company's Preferred Share Purchase Rights set forth in
the Company's Registration Statement on Form 8-A effective April 22, 1991.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part of this Prospectus from the date of filing of 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 such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner to whom
this Prospectus is delivered, upon a written or oral request to Caere
Corporation, Attention: Investor Relations, 100 Cooper Court, Los Gatos,
California, 95030, telephone number (408) 395-7000.

The discussions in this Prospectus and the documents incorporated by
reference herein contain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein and in such incorporated documents. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
under the heading "Risk Factors" herein, as well as those discussed in the
documents incorporated herein by reference.

--------------------

3.
5

THE COMPANY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE HEREIN OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS.

Caere designs, develops, manufactures, and markets optical character
recognition ("OCR") software and hardware for converting scanned and faxed
images into computer usable text, as well as desktop forms and information
management products.

Caere Corporation was originally incorporated in California in September
1973 and reincorporated in Delaware in August 1989. The Company's executive
offices are located at 100 Cooper Court, Los Gatos, California 95030, and its
telephone number is (408) 395-7000.

THE OFFERING

Shares offered .............. Up to 300,000 Shares, all of which are being
offered by the Selling Securityholders.(1)

Use of Proceeds.............. The Company will not receive any of the proceeds
from the sale of the Shares by the Selling
Securityholders.

Nasdaq Symbol................ CAER.

(1) The 300,000 shares of Common Stock were issued by the Company pursuant to
the Merger Agreement.

USE OF PROCEEDS

The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Securityholders.

DIVIDEND POLICY

The Company has never paid cash dividends. The Company's Board of
Directors currently intends to retain any earnings for use in the Company's
business and does not anticipate paying any cash dividends in the foreseeable
future.

This Prospectus includes trademarks and trade names of the Company and certain
other companies.

RISK FACTORS

The following factors should be considered carefully with the information
provided elsewhere in this Prospectus in evaluating an investment in the Shares
offered hereby.

This Prospectus contains forward-looking statements which involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth in the following Risk Factors and elsewhere
in this Prospectus.

RISK OF TRANSITION OF CAERE BUSINESS MODEL

Caere continues to transition its business model due to the changing
dynamics of the marketplace. In the fourth quarter of 1994, Caere began to
"bundle" limited functionality versions of its OmniPage software recognition
products with scanner products from various manufacturers. The Company's
objective in bundling its software products with scanners was to expand the
overall market for OCR software by providing a larger number of scanner
purchasers with experience in the advantages of optical character recognition
and then upgrade these users to fully-featured products. "Light" versions, with
limited capabilities, are now bundled with most scanners being sold. The success
of this business model, compared to Caere's former model of selling its software
primarily at higher prices with lower unit volumes, will depend upon a decision
by a significant proportion of customers who first receive OCR software in a
bundled form to upgrade to a newer or more fully featured version of the
Company's software. Such an upgrade is typically sold at a substantially lower
price than the price of a fully featured non-upgrade product. The Company
believes that bundles and upgrades will become a larger portion of its total
revenues and unit sales in the future.

There can be no assurance that Caere's continued transition to the "bundle
and upgrade" business model will be successful and provide sufficient increases
in unit volume in the future to offset reduced per-unit revenue and gross
margin. In addition, customers using the bundled products may defer or forego
the purchase of Caere's more fully featured versions of OmniPage and WordScan
products if they find that the bundled products satisfy their recognition needs.

LACK OF PRODUCT REVENUE DIVERSIFICATION

Caere derived approximately 72% of sales in 1996 and 69% of sales in 1995
from the OmniPage line of products. Caere expects that this software product
will continue to account for a majority of the Company's sales in the future. A
decline in demand for the product as a result of competition, technological
change or other factors would have a material adverse effect on the Company's
results of operations.

MATURE MARKETS FOR CERTAIN OCR PRODUCTS

For fiscal years ended December 31, 1996, 1995, and 1994, Caere derived
approximately 14%, 23% and 15%, respectively, of its net revenues from sales of
its transaction processing OCR and bar code hardware products. The market for
both of these sets of products is relatively mature and may not be subject to
growth or expansion by the Company in the future. There can be no assurance that
Caere's hardware-based transaction processing products will continue to be a
significant source of net revenues for the Company.

FLUCTUATING REVENUES AND OPERATING RESULTS

Caere's revenues and operating results have fluctuated in the past and the
Company's future revenues and operating results are likely to do so in the
future, particularly on a quarterly basis. Caere's experience has been that a
disproportionately large percentage of shipments has occurred in the third month
of each fiscal quarter and

that shipments tend to be concentrated in the latter half of that month. Because
backlog early in a quarter is not generally large enough to assure that Caere
will meet its revenue target for any particular quarter, quarterly results are
difficult to predict until the end of the quarter. A shortfall in shipments at
the end of any particular quarter may cause the results for that quarter to fall
significantly short of anticipated levels.

The Company's quarterly operating results may continue to fluctuate due to
numerous other factors. Some of these factors include the demand for the
Company's products, seasonality, customer order deferrals in anticipation of new
versions of the Company's products, the introduction of new products and product
enhancements by the Company or its competitors, including the effects of filling
the distribution channels following such introductions and of potential delays
in availability of announced or anticipated products, price changes by the
Company or its competitors, product sales mix, timing of acquisitions and
associated costs, and timing of significant marketing and sales promotions.

COMPETITION AND PRICE EROSION

The information management market is highly competitive and subject to
rapid change along with constant pressure to reduce prices. Caere's competition
within the microcomputer software industry ranges from large corporations to
small independent software vendors. Caere also expects to encounter continued
competition both from established companies and from new companies that are now
developing, or may develop, competing products. Competition in the software
products market can be grouped into the following categories:

Page recognition products contend with competition in two markets. First,
several companies offer packaged OCR application programs through the retail
distribution channel. These include Xerox Imaging Systems and several small
independent software vendors. The Company faces significant price erosion and
competition in the retail channel.

The second competitive market for page recognition products is the
original equipment manufacturer ("OEM") and reseller market in which companies
license the Company's OCR technology to incorporate into different application
software products or "bundle" the technology with related hardware products such
as scanners or fax modems. Competitors include Xerox Imaging Systems and several
small independent software vendors. The Company experiences significant price
competition in the OEM market and expects this to continue. In addition, the
Company's "bundled" OCR products themselves present competition to the Company's
fully featured shrinkwrap product. Caere is also subject to the risk that
significant portions of the functionality provided by its OCR products could be
incorporated into computer operating systems such as those developed and
marketed by Microsoft Corporation and International Business Machines, Inc.

PageKeeper has several direct competitors offering competing products in
the growing desktop document management market. These competing products
include, but are not limited to, PaperPort Deluxe by Visoneer, Paper Master by
Documagix, and Pagis by Xerox Imaging Systems. With decreasing scanner prices
driving affordable scanning solutions into the mainstream, Caere expects to face
increasing competition in this product category from a variety of software
developers in the future.

OmniForm competes against various products in the electronic forms market.
In the forms creation segment, where OmniForm's technology takes an existing
paper form and converts it into an electronic version, OmniForm has little
competition. In the forms design and print segment of the electronic forms
market, OmniForm competes with products such as Form Tool Gold and Form Tool 97
by IMSI. In the form filling and submit segment of the electronic forms market,
OmniForm competes with products including JetForm and FormFlow by JetForm. In
the Internet/intranet publish and submit segment of the electronic forms market,
OmniForm competes with JetForm by JetForm; however, as the market for these
products continues to develop, Caere expects to face increasing competition in
this product category from a variety of software developers in the future.

The major competition in the OCR segment of the Company's hardware
business is Siemens CGK. In the bar code segment of the hardware business there
are numerous competitors, including Symbol Technologies.

Many of the Company's competitors have substantially greater financial,
marketing, recruiting and training resources than the Company. Accordingly, the
Company's success will depend in part upon its ability to develop product
enhancements and new products that keep pace with continuing changes in
technology and customer preferences while remaining price competitive. There can
be no assurance that the Company will be able to successfully develop product
enhancements or new products to keep abreast of changing technologies, that it
will be able to introduce such products on a timely basis or that any such
products or enhancements will be successful in the marketplace. The Company's
failure to develop product enhancements or to adapt its products to
technological change on a timely basis would have a material adverse effect on
the Company's business and results of operations.

DEPENDENCE ON DISTRIBUTION AND SUPPORT

Domestically, the Company markets its software products through
distributors, including Ingram Micro, Merisel, Tech Data, computer superstores
such as Best Buy, CompUSA, Computer City, and Egghead, mail order houses
including PC Connection, MicroWarehouse, and Computer Discount Warehouse, and
office superstores such as OfficeMax and Office Depot. Caere also markets its
software products directly to end user customers by outsourcing telemarketing
and order fulfillment services to Softbank Services Group. High-speed and
integrator products are primarily sold through Law Cypress Distributing Company,
which works with the Company to serve value-added resellers and systems
integrators of imaging products. The Company markets its transaction processing
OCR and bar code products primarily through independent distributors,
value-added resellers ("VARs"), and hardware OEMs. The Company's agreements with
OEMs typically grant an OEM the right to distribute the Company's products with
the OEMs' microcomputers and other data collection equipment. VARs purchase the
Company's products and incorporate them into systems integrated with the
products of other manufacturers.

Sales of software products to Ingram Micro represented approximately 28%,
22%, and 23% of the Company's net revenues during 1996, 1995, and 1994,
respectively. Sales of software products through Softbank Services Group
represented approximately 15%, 9%, and 2% of the Company's net revenues during
1996, 1995, and 1994, respectively. Should either of these customers have a
significant change in its quarterly buying pattern or its financial condition,
the Company could experience a material adverse impact on its business and
financial results. In addition, there are increasing numbers of companies
competing for access to distribution channels, and distributors and retailers
often carry competing products. Retailers of Caere's products typically have a
limited amount of shelf space and promotional resources for which there is
intense competition. There can be no assurance that distributors and retailers
will continue to provide the Company's products with adequate levels of shelf
space and promotional support. Failure to do so would have a material adverse
effect on the Company's results of operations. Also, due in part to the
historical volatility of the personal computer industry, certain of Caere's VARs
and OEMs have from time to time experienced declining profit margins, cash flow
shortages and other financial difficulties. If the Company's resellers were to
experience financial difficulties, the Company's results of operations could be
adversely affected.

DEPENDENCE ON PROPRIETARY RIGHTS

The Company relies upon a combination of proprietary technology, trade
secrets, know-how, continuing technological innovations and licensing
opportunities to maintain its competitive position. The Company attempts to
protect its technology and trade secrets with patents, copyrights, trade secret
laws, technical measures and non-disclosure agreements. The Company's policy is
to file patent and copyright applications to protect technology, inventions and
improvements that are important to the development of its business. The Company
has been issued a series of patents which directly relate to its products.
Assurance cannot be given, however, that any patents issued

to the Company will not be challenged, invalidated or circumvented or that the
rights granted by the patents or copyrights will provide competitive advantages
to the Company.

In order to protect its ownership rights in its software products, the
Company licenses such products to OEMs and resellers on a non-exclusive basis
with contractual restrictions on reproduction, distribution and transferability.
In addition, the Company generally licenses its software in object code form
only. The Company licenses its software products to end users by use of a
"shrink-wrap" customer license that restricts the end user to personal use of
the product. Despite these contractual restrictions, it may be possible for
competitors or users to illegally copy the software or obtain information which
the Company regards as proprietary.

The Company also relies on trade secrets and proprietary know-how. The
Company has been, and will continue to be, required to disclose its trade
secrets and proprietary know-how to employees and consultants. Although the
Company seeks to protect its trade secrets and proprietary know how by entering
into confidentiality agreements with such persons, there can be no assurance
that these agreements will not be breached, that the Company would have an
adequate remedy for any breach, or that the Company's trade secrets will not
otherwise become known or be independently discovered by competitors.

Because of technological developments in the industry in which the Company
markets its products, it is possible that certain of the Company's products may
infringe third party proprietary rights. From time to time the Company has
received, and in the future may receive, notices of claims of infringement. In
response to these claims, the Company may have to obtain licenses for an
allegedly infringing product or stop selling such product and be liable for
damages. There can be no assurance that any required licenses or rights could be
obtained on commercially reasonable terms.

In addition, Caere has developed products in the past that incorporate
technology based on licenses received from third parties. The Company's ability
to continue to develop and commercialize its products will be affected by its
ability to renew existing technology licenses and to obtain technology licenses
from third parties in the future. There can be no assurance that the Company
will be able to renew its current licenses or obtain any necessary licenses in
the future. The failure to renew existing licenses or to obtain any licenses
that may be required in the future on commercially reasonable terms could have a
material adverse effect on the Company's business and results of operations.

Policing unauthorized use of technology is difficult, especially in the
software industry. Software piracy can be expected to remain a persistent
problem for the software industry for the foreseeable future. Such piracy can be
particularly egregious in international markets in which the Company distributes
its products. The failure to prevent piracy of the Company's products could have
a material adverse effect on the Company's business and results of operations.

PRODUCT DEVELOPMENT RISKS

The development and enhancement of the Company's OCR and desktop document
management products have historically absorbed and are expected to continue to
consume the greatest part of the Company's development effort. The Company
believes that it must continue to upgrade and enhance its existing products to
ensure that its products remain competitive.

During 1996, 1995, and 1994, research and product development expenses
were approximately $7,069,000, $7,915,000, and $9,072,000, respectively. In
addition to internal product development, the Company incorporates software
produced by other companies into its products. All such incorporation or use is
pursuant to licensing agreements. There can be no assurance that the research
and development expenses incurred will not exceed development budgets or that
new products will achieve market acceptance and generate sales sufficient to
offset

development costs. There also can be no assurance that license agreements for
incorporated third party software will continue to be available to the Company
on acceptable terms.

From time to time, the Company has experienced delays in product
development and "debugging" efforts, and could experience such delays in the
future. Significant delays in developing, completing, or shipping new or
enhanced products could materially adversely affect the Company's financial
results. Furthermore, as the Company's products become more complex, development
cycles become longer and more expensive. There can be no assurance that the
Company will be able to respond effectively to technological changes or new
product announcements by others, or that the Company's product development
efforts will be successful.

DEPENDENCE ON SOLE SOURCE SUPPLIER

Most of the components used in the manufacture of the Company's products
are available from multiple sources of supply. Certain components used in the
manufacture of the Company's OCR products are currently available only from a
single source. Although the Company generally maintains a several-month
inventory level of these components, failure of a single-source supplier to
deliver required quantities of such materials could materially and adversely
affect the Company's operating results. The Company believes that, if necessary,
it could develop alternative sources of supply for these components and parts,
or re-engineer the products. However, any delays in developing such alternative
sources of supply or in the re-engineering of the products could have a material
adverse effect on the Company's business and results of operations.

DEPENDENCE ON INTERNATIONAL SALES

Internationally, the Company's products are sold through distributors. At
December 31, 1996, the Company had distributors servicing Western and Eastern
Europe, Canada, Australia, New Zealand, South Korea, Mexico, and Japan. The
Company's international revenues are subject to certain risks, such as export
controls, import restrictions, and other governmental regulations. Caere's
international revenues in 1996, 1995, and 1994 were approximately $16,391,000,
$15,154,000, and $18,125,000, respectively, representing approximately 30.1%,
29.2% and 30.7% of Caere's net revenues, respectively. The Company expects that
international revenues will continue to represent a significant percentage of
the Company's net revenues. In most cases, the Company bills its international
customers in United States dollars; therefore, such revenues are not subject to
foreign currency fluctuations. However, fluctuations in exchange rates could
affect demand for the Company's products by causing their prices to be out of
line with products priced in the local currency. The Company's international
revenues are subject to certain risks, such as export controls, import
restrictions, longer payment cycles, greater difficulties in accounts receivable
collections, and the requirement of complying with a wide variety of foreign
laws. Although Caere has not previously experienced any difficulties under
foreign law in exporting its products to other countries, there can be no
assurance that the Company will not experience such difficulties in foreign
countries in the future. Any such difficulties would have a material adverse
effect on the Company's international sales and results of operations.

RISK OF PRODUCT RETURNS

The Company's agreements with its distributors generally provide for a
limited right of return, with the distributor receiving full credit for the
product's purchase price, less any discounts, against a purchase order of equal
or greater value. The Company monitors its returns and records provisions for
estimated returns as shipments are made. During 1996, 1995, and 1994, returns
represented 3.2%, 3.7%, and 4.3% of revenues, respectively. Although Caere
believes that it provides adequate allowances for returns, there can be no
assurance that actual returns will not exceed the Company's allowances. Any
product returns in excess of recorded allowances could result in a material
adverse effect on operating results of the Company.

POSSIBLE VOLATILITY OF CAERE STOCK PRICE

The market prices for Caere's Common Stock have fluctuated widely in the
past. The management of Caere believes that such fluctuations may have been
caused by announcements of new products, quarterly fluctuations in the results
of operations and other factors including, but not limited to, changes in
conditions of the personal computer industry in general. Stock markets have
experienced extreme price volatility in recent years. This volatility has had a
substantial effect on the market prices of securities issued by Caere and other
high technology companies, often for reasons unrelated to the operating
performance of the specific companies. Caere anticipates that the market price
for its Common Stock may continue to be volatile. Such future stock price
volatility for Caere Common Stock may provoke the initiation of securities
litigation, which may divert substantial management resources and have an
adverse effect on Caere and its results of operations.

DEPENDENCE ON KEY PERSONNEL

Caere's success depends to a significant degree upon the continued
contributions of the Company's key management, marketing, product development
and operational personnel. The success of the Company will depend to a large
extent upon its ability to retain and continue to attract highly skilled
personnel. Competition for employees in the computer industry is intense, and
there can be no assurance that the Company will be able to attract and retain
enough qualified employees. If the business of the Company grows, it may become
increasingly difficult for it to hire, train and assimilate the new employees
needed. The Company's inability to retain and attract key employees could have a
material adverse effect on the Company's product development and results of
operations. Caere does not carry any key person life insurance with respect to
any of its personnel.

EFFECT OF ANTITAKEOVER PROVISIONS OF DELAWARE LAW AND CAERE'S CHARTER DOCUMENTS

Caere is a corporation organized under the laws of the state of Delaware.
Certain provisions of the Delaware Law and the charter documents of Caere may
have the effect of delaying, deferring or preventing changes in control or
management of Caere. Caere is subject to the provisions of Section 203 of the
Delaware Law, which has the effect of restricting changes in control of a
company. Caere's Board of Directors is divided into three separate classes.
Additionally, Caere's Board has the authority to issue up to 2,000,000 shares of
Preferred Stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of such shares without any further vote or action by
its stockholders. Caere also has a Preferred Share Purchase Rights Plan. The
antitakeover protections of Delaware Law, the Caere charter documents, and the
Preferred Share Purchase Rights Plan could make it more difficult for a third
party to acquire, or could discourage a third party from acquiring, a majority
of the outstanding stock of the Company.

10.

SELLING SECURITYHOLDERS

The following table sets forth the names of the Selling Securityholders,
the number of shares of Common Stock owned by each Selling Securityholder prior
to this offering, the number of shares of Common Stock being offered for the
account of each Selling Securityholder and the number of shares of Common Stock
to be owned by each Selling Securityholder after completion of this offering.
This information is based upon information provided by the Selling
Securityholders. Because the Selling Securityholders may offer all, some or none
of their Common Stock being offered, no definitive estimate as to the number of
Shares thereof that will be held by the Selling Securityholders after such
offering can be provided.

SHARES BENEFICIALLY
SHARES BENEFICIALLY SHARES BEING OWNED AFTER
SELLING SECURITYHOLDER OWNED PRIOR TO OFFERING(1) OFFERED OFFERING(1)(2)
- ---------------------- -------------------------- ------- ------------------
NUMBER Percent NUMBER PERCENT
------ ------- ------ -------

Lynn J. Formanek 343,750 2.6% 187,500 156,250 1.2%
David L. Formanek 206,250 1.6% 112,500 93,750 *

- ---------------

* Less than 1%

(1) Based on 13,246,757 shares outstanding as of April 15, 1997. The persons
named in the table have sole voting and investment power with respect to
all shares beneficially owned by them, subject to community property laws
where applicable.

(2) Assumes the sale of all Shares offered hereby. See "Plan of
Distribution."

11.

PLAN OF DISTRIBUTION

The Shares may be offered by the Selling Securityholders from time to
time in transactions on the Nasdaq National Market System, in privately
negotiated transactions or a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Securityholders may effect such transactions by selling the Shares
directly or by or through agents or broker-dealers who may receive compensation
in the form of discounts, concessions or commissions from the Selling
Securityholders or the purchasers of the Shares for whom such broker-dealers may
act as agent or to whom they sell as principal or both (which compensation to a
particular broker-dealer might be in excess of customary commissions).

The Selling Securityholders and any underwriters, dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by them and any provided pursuant to the sale of the Shares
by them might be deemed to be underwriting discounts and commissions under the
Securities Act. In order to comply with the securities laws of certain states,
if applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless the Shares have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.

The Company is registering the Shares offered by the Selling
Securityholders hereunder pursuant to contractual registration rights contained
in the Merger Agreement. The Company will pay substantially all of the expenses
incident to the offering and sale of the Shares to the public, other than
commissions, concessions and discounts of underwriters, dealers or agents. Such
expenses (excluding such commissions and discounts) are estimated to be
$16,904. The Merger Agreement provides for cross-indemnification of the
Selling Securityholders and the Company to the extent permitted by law, for
losses, claims, damages, liabilities and expenses arising, under certain
circumstances, out of any registration of the Shares.

12.

LEGAL MATTERS

The validity of the securities offered hereby will be passed upon for the
Company by Cooley Godward LLP, Palo Alto, California.

EXPERTS

The consolidated financial statements and schedule of Caere Corporation
as of December 31, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996, have been incorporated by reference herein and
in the registration statement in reliance upon the report of KPMG Peat Marwick
LLP, independent auditors, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.

13.

15
================================================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

--------------------

TABLE OF CONTENTS

Page
----

Available Information..........................................2
Incorporation of Certain Documents by Reference................2
The Company....................................................4
The Offering...................................................4
Use of Proceeds................................................4
Dividend Policy................................................4
Risk Factors...................................................5
Selling Securityholders.......................................11
Plan of Distribution..........................................12
Legal Matters.................................................13
Experts.......................................................13

300,000 SHARES

CAERE CORPORATION

COMMON STOCK

------------
PROSPECTUS
------------

MAY __, 1997

================================================================================

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses payable by the Company in
connection with the sale, issuance and distribution of the securities being
registered, other than underwriting discounts and commissions. All amounts are
estimates except the SEC registration fee. None of these expenses will be paid
by the Selling Securityholders.

SEC Registration Fee............... $ 654
Printing and Engraving Expenses.... 1,000
Legal Fees and Expenses............ 10,000
Accounting Fees and Expenses....... 5,000
Blue Sky Fees and Expenses ........ 250
-------
Total.............................. $16,904
-------

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Section 145 of the Delaware General Corporation Law, Caere has broad
powers to indemnify its directors and officers against liabilities they may
incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). Caere's Bylaws provide that the Company
will indemnify its directors and executive officers and may indemnify other
officers to the fullest extent permitted by law. Under Caere's Bylaws,
indemnified parties are entitled to indemnification for negligence, gross
negligence and otherwise to the fullest extent permitted by law. The Bylaws also
require Caere to advance litigation expenses incurred by its directors and
executive officers in case of stockholder derivative actions or other actions,
upon receipt of an undertaking by the indemnified party to repay such advances
if it is ultimately determined that the indemnified party is not entitled to
indemnification.

In addition, Caere's Certificate of Incorporation provides that, pursuant
to Delaware law, its directors shall not be liable for monetary damages for
breach of the directors' fiduciary duty of care to Caere and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the duty
of care, and in appropriate circumstances equitable remedies such as injunctive
or other forms of non-monetary relief will remain available under Delaware law.
In addition, each director will continue to be subject to liability for breach
of the director's duty of loyalty to the Company for acts or omissions not in
good faith or involving intentional misconduct or a knowing violation of law,
for any transaction from which the director derived an improper personal benefit
or for any willful or negligent payment of unlawful dividends or any unlawful
stock repurchases or redemptions. The provision also does not affect a
director's responsibilities under any other law, such as the federal securities
laws or state or federal environmental laws.

The Company has entered into indemnity agreements with each of its
directors and executive officers. Such indemnity agreements contain provisions
that are in some respects broader than the specific indemnification provisions
contained in Delaware law.

Caere maintains a policy providing directors' and officers' liability
insurance, which insures directors and officers of Caere in certain
circumstances, with a liability limit of $7,000,000 per claim and in the
aggregate. This coverage is on a claims made basis.

II-1

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

2.2 Agreement and Plan of Merger and Reorganization by and among: Caere
Corporation; ViewStar Acquisition Corp.; Formonix, Inc.; and Mr.
Lynn J. Formanek and Mr. David L. Formanek, dated as of March 31,
1997.

4.1 Form of Specimen Certificate for Company's Common Stock.(1)

5.1 Opinion of Cooley Godward LLP.

23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors.

23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.

24.1 Power of Attorney. Reference is made to page II-3.

- --------------------
(1) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-30842), as amended, and incorporated herein by reference.

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 to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;

(2) That, for purposes 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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the 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
registrant pursuant to provisions described in Item 15, or otherwise, the
registrant 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
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant 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 Registrant 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-2

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Los Gatos, State of California, on May 22, 1997.

CAERE CORPORATION

By /s/ BLANCHE M. SUTTER
---------------------------------------------------
Blanche M. Sutter
Executive Vice President, Chief Financial Officer
and Secretary

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert G. Teresi and Blanche M. Sutter,
and each or any one of them, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
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 and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her substitutes
or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capabilities and
on the date indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ ROBERT G. TERESI Chairman of the Board, President and May 22, 1997
- ------------------------------------ Chief Executive Officer
Robert G. Teresi (Principal Executive Officer)

/s/ BLANCHE M. SUTTER Executive Vice President, Chief May 22, 1997
- ------------------------------------ Financial Officer and Secretary
Blanche M. Sutter (Principal Financial and Accounting
Officer)

Director May __, 1997
- ------------------------------------
James K. Dutton

/s/ ROBERT J. FRANKENBERG Director May 22, 1997
- ------------------------------------
Robert J. Frankenberg

/s/ FREDERICK W. ZUCKERMAN Director May 22, 1997
- ------------------------------------
Frederick W. Zuckerman

II-3

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

4.1 Form of Specimen Certificate for Company's Common Stock.(1)

5.1 Opinion of Cooley Godward LLP.

23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors.

23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.

24.1 Power of Attorney. Reference is made to page II-3.

- ------------
(1) Filed as an exhibit to the Registration Statement on Form S-1 (No.
33-30842), as amended, and incorporated herein by reference.

II-4