FILED PURSUANT TO RULE 424(b)(3) REGISTRATION STATEMENT NO. 333-41133 PROSPECTUS SUPPLEMENT NO. 3 (TO PROSPECTUS DATED DECEMBER 4, 1997) 1,864,000 SHARES INTERLEAF, INC. COMMON STOCK This prospectus supplement supplements information contained in Interleaf's prospectus dated December 4, 1997, as supplemented on August 3, 1998 and November 23, 1998, relating to shares of common stock which are issuable upon conversion of the Series 6% Convertible Preferred Stock, $.01 par value per share by the selling shareholders listed on page 7 of the prospectus. This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with the prospectus, including any amendments or supplements thereto. On April 15, 1999, Interleaf entered into an agreement with SIL Nominees, Ltd., the one remaining selling shareholder which did not previously convert its shares of 6% Convertible Preferred Stock, pursuant to which SIL Nominees, Ltd. agreed to convert all of its shares of 6% Convertible Preferred Stock into 507,334 shares of Interleaf common stock. The shares of common stock received by SIL Nominees, Ltd. upon conversion will be sold pursuant to this prospectus. The following table supplements the information set forth in the prospectus under the caption "Selling Shareholders" with respect to SIL Nominees, Ltd. and the number of shares beneficially owned by SIL Nominees, Ltd. that may be offered pursuant to the prospectus: NUMBER OF SHARES OF COMMON STOCK NUMBER OF SHARES OF NUMBER OF SHARES OF COMMON NAME OF SELLING SHAREHOLDER BENEFICIALLY OWNED AS OF COMMON STOCK BEING STOCK OWNED AFTER THE APRIL 13, 1999 OFFERED OFFERING - ---------------------------- ------------------------ ------------------- --------------------------- SIL Nominees, Ltd. 577,334 507,334 70,000 The number of shares stated in this prospectus supplement has been adjusted to account for the one-for-three reverse stock split which occurred on December 31, 1998. THIS DATE OF THIS PROSPECTUS SUPPLEMENT IS APRIL 15, 1999.