Innodata Corporation
Three University Plaza
Hackensack, NJ 07601
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 27, 2001
To the Stockholders of Innodata Corporation:
The Special Meeting of Stockholders of Innodata Corporation (the "Company")
will be held at Three University Plaza, Hackensack, NJ 07601, 5th Floor, at
11:00 A.M. on Tuesday, February 27, 2001, for the following purposes:
(1) To authorize and approve an amendment to the Company's Certificate of
Incorporation to increase authorized Common Stock to 75 million shares
of $.01 par value common stock; and
(2) To consider and transact such other business as may properly come before
the meeting or any adjournments thereof.
A Proxy Statement and form of Proxy are enclosed herewith. Only holders of
record of Common Stock of the Company at the close of business on January 12,
2001 will be entitled to notice of and to vote at the Special Meeting and any
adjournments thereof. A complete list of the stockholders entitled to vote will
be available for inspection by any stockholder during the meeting; in addition,
the list will be open for examination by any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting at the office of the Secretary of the Company,
located at 95 Rockwell Place, Brooklyn, New York 11217.
By Order of the Board of Directors,
Martin Kaye
Secretary
Hackensack, New Jersey
January 29, 2001
All stockholders are cordially invited to attend the Meeting. If you do
not expect to be present, please sign and date the enclosed form of Proxy and
return it promptly using the enclosed envelope. No postage is required if
mailed in the United States. Any person giving a Proxy has the power to revoke
it at any time prior to its exercise and if present at the Meeting may withdraw
it and vote in person. Attendance at the Meeting is limited to stockholders,
their proxies and invited guests of the Company.
INNODATA CORPORATION
Three University Plaza
Hackensack, NJ 07601
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Innodata Corporation (the "Company") of proxies in the
form enclosed. Such Proxies will be voted at the Special Meeting of
Stockholders of the Company to be held at Three University Plaza, Hackensack, NJ
07601, 5th Floor, at 11:00 A.M. on Tuesday, February 27, 2001 (the "Meeting")
and at any adjournments thereof for the purposes set forth in the accompanying
Notice of Special Meeting of Stockholders.
This Proxy Statement and accompanying Proxy are being mailed on or about
January 29, 2001 to all stockholders of record on January 12, 2001 (the "Record
Date").
Any stockholder giving a Proxy has the power to revoke the same at any time
before it is voted. The cost of soliciting Proxies will be borne by the
Company. The Company has no contract or arrangement with any party in
connection with the solicitation of proxies. Following the mailing of the Proxy
materials, solicitation of Proxies may be made by officers and employees of the
Company by mail, telephone, telegram or personal interview. Properly executed
Proxies will be voted in accordance with instructions given by stockholders at
the places provided for such purpose in the accompanying Proxy. Unless contrary
instructions are given by stockholders, it is intended to vote the shares
represented by such Proxies for the approval of an amendment to the Company's
Certificate of Incorporation to increase authorized Common Stock to 75 million
shares of $.01 par value common stock. The current members of the Board of
Directors presently hold voting authority for Common Stock representing an
aggregate of 2,402,601 votes, or approximately 23% of the total number of votes
eligible to be cast at the Special Meeting. The members of the Board of
Directors have indicated their intention to vote affirmatively on the proposal.
VOTING SECURITIES
Stockholders of record as of the close of business on the Record Date will
be entitled to notice of, and to vote at, the Meeting or any adjournments
thereof. On the Record Date there were 10,495,669 outstanding shares of common
stock, par value $.01 per share (the "Common Stock"). Each holder of Common
Stock is entitled to one vote for each share held by such holder. The presence,
in person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum at the Meeting. Proxies
submitted which contain abstentions or broker non-votes will be deemed present
at the Meeting in determining the presence of a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 30, 2000 information
regarding the beneficial ownership of the Company's Common Stock based upon the
most recent information available to the Company for (i) each person known by
the Company to own beneficially more than five (5%) percent of the Company's
outstanding Common Stock, (ii) each of the Company's officers and directors, and
(iii) all officers and directors of the Company as a group. Unless otherwise
indicated, each stockholder's address is c/o Company, 3 University Plaza,
Hackensack, NJ 07601.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Shares Owned Beneficially (1)
Amount and Nature
Name and Address of of Beneficial
Beneficial Owner Ownership Percent of Class
Track Data Corporation (2) 1,160,486 11.1%
Barry Hertz (3) 1,396,484 13.1%
Todd Solomon (4) 1,488,078 13.7%
Jack Abuhoff (5) 761,322 6.8%
Martin Kaye (6) 255,498 2.4%
Stephen Agress (7) 168,520 1.6%
Jurgen Tanpho (8) 83,670 *
Jan Palmen (8) 18,000 *
Klaas Brouwer (9) 34,520 *
Abraham Biderman 0 *
Dr. E. Bruce Fredrikson (10)
Syracuse University
School of Management
Syracuse, NY 13244 79,494 *
Dr. Charles F. Goldfarb 400 *
All Officers and Directors
as a Group (11 persons)
(3)(4)(5)(6)(7)(8)(9)(10) 4,285,986 34.8%
<FN>
______________________________
* Less than 1%.
1. Except as noted otherwise, all shares are owned beneficially and of record.
Includes shares pursuant to options presently exercisable or which are exercisable
within 60 days. Based on 10,455,842 shares outstanding, after giving effect to a two
for one stock split paid on December 1, 2000.
2. Consists of 1,160,486 shares owned by Track Data Corporation ("TDC"), which is
controlled by Mr. Hertz.
3. Includes 1,160,486 shares owned by TDC, which is controlled by Mr. Hertz,
8,400 shares held in a pension plan for the benefit of Mr. Hertz and currently
exercisable options to purchase 206,898 shares of Common Stock.
4. Includes currently exercisable options to purchase 435,996 shares of Common
Stock.
5. Includes currently exercisable options to purchase 703,824 shares of Common
Stock.
6. Includes currently exercisable options to purchase 235,500 shares of Common
Stock.
7. Includes currently exercisable options to purchase 66,000 shares of Common
Stock. Also includes exercisable options to purchase 11,500 shares of Common Stock
by his wife. Mr. Agress disclaims beneficial ownership in shares attributable to his
wife.
8. Consists of shares issuable upon exercise of currently exercisable options
granted under the Company's Stock Option Plans.
9. Includes currently exercisable options to purchase 24,000 shares of Common
Stock.
10. Includes currently exercisable options to purchase 71,496 shares of Common
Stock.
</TABLE>
PROPOSAL CONCERNING INCREASE IN NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has adopted a proposal declaring advisable an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock of the Company to 75,000,000 shares of
Common Stock, with a par value of $.01 per share (the "Proposed Stock
Amendment"). The form of the Proposed Stock Amendment is attached hereto as
Exhibit A.
At January 12, 2001, the authorized Common Stock of the Company consisted
of 20,000,000 shares of Common Stock, par value $.01 per share. As of January
12, 2001, 10,495,669 shares of Common Stock were outstanding. In addition, as of
January 12, 2001 an aggregate of 5,015,034 shares of Common Stock were reserved
for issuance upon: (i) exercise of options granted or which may be granted under
the Company's Stock Option Plans (3,955,452 shares); and (ii) exercise of
various other outstanding warrants and options (1,059,582 shares). The Board of
Directors proposed to increase the number of its authorized shares of Common
Stock in order to be able to have adequate Common Stock available to meet its
current obligations to issue Common Stock and in order to utilize equity
issuances in future financings and acquisitions and for stock dividends or
splits.
If the Proposed Stock Amendment is adopted by the Company's stockholders,
the additional shares of Common Stock would be issuable at any time and from
time to time, by action of the Board of Directors without further authorization
from the Company's stockholders, except as otherwise required by applicable law
or rules and regulations to which the Company may be subject, to such persons
and for such consideration (but not less than the par value thereof) as the
Board of Directors determines. Holders of Common Stock of the Company have no
preemptive rights to acquire or subscribe to any of the additional shares of
Common Stock.
Issuance of additional Common Stock, directly or upon exercise of warrants
or options, would have a dilutive effect on the voting power of the outstanding
Common Stock of the Company. Depending upon the number of shares of the
Company's Common Stock issued and the amount of any additional consideration to
be paid upon the conversion of any shares of Preferred Stock, if and when
issued, into shares of Common Stock (if the Board of Directors affords
conversion privileges for Preferred Stock) and the relationship thereof to the
book value of the Common Stock, it is possible that issuance of any of the
Common Stock, either directly or upon conversion of any Preferred Stock, could
have a dilutive effect on stockholders' equity in the Company.
Considerations
If the Proposed Stock Amendment is not approved, the Company will have a
limited number of authorized shares of Common Stock available for future use by
the Company. The Company's management believes that the authorization of the
additional shares of Common Stock are in the best interests of the Company and
its stockholders so that sufficient shares will be readily available for use, if
feasible, in acquisitions, in raising additional capital and for grants as
incentives to employees, officers, directors and consultants of the Company, as
well as for stock dividends or splits.
From time to time the Company may consider acquisitions or other
transactions which may require the issuance of shares of Common Stock. The
Company's management believes that the increase in the number of authorized
shares of Common Stock is in the best interests of the Company and its
stockholders since additional shares of Common Stock will be available for use,
if feasible, in acquisitions and in raising additional capital and will provide
the Company with the flexibility of having a broader choice in the type and
number of equity securities available to it for the above and other corporate
purposes. The Company does not currently have any commitments to any material
acquisitions or other transactions which would require the issuance of the
shares of its Common Stock.
Due to the Board of Directors' discretion in connection with the issuance
of additional shares of Common Stock and in connection with the issuance and the
relative rights and preferences of the Preferred Stock, such as its ability to
cause the Common Stock or Preferred Stock to be issued in a private placement or
to determine the convertibility of the Preferred Stock, it may, under certain
circumstances, possess timing and other advantages in responding to a tender
offer or other attempt to gain control of the Company, which may make such
attempts more difficult and less attractive. For example, issuance of additional
shares would increase the number of shares outstanding and could necessitate the
acquisition of a greater number of shares by a person making a tender offer and
could make such acquisition more difficult since the recipient of such
additional shares may favor the incumbent management. Moreover, these
advantages, including the right to grant voting powers to the holders of the
Preferred Stock, gives the Board of Directors the ability to provide any such
holders with a veto power over actions proposed to be taken by the holders of
the Company's Common Stock. This could have the effect of insulating existing
management from removal even if it is in the best interest of the common
stockholders. Management of the Company is not aware of any existing or
threatened efforts to obtain control of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL
OF THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at the Special
Meeting, assuming a quorum is present, is required to approve the amendment to
the Company's Certificate of Incorporation. Abstentions will not be counted as
affirmative votes. The current members of the Board of Directors presently hold
voting authority for Common Stock representing an aggregate of approximately
2,402,601 votes, or approximately 23% of the total number of votes eligible to
be cast at the Special Meeting. The members of the Board of Directors have
indicated their intention to vote affirmatively on the proposal.
EXPENSE OF SOLICITATION
The cost of soliciting proxies, which also includes the preparation,
printing and mailing of the Proxy Statement, will be borne by the Company.
Solicitation will be made by the Company primarily through the mail, but regular
employees of the Company may solicit proxies personally, by telephone or
telegram. The Company will request brokers and nominees to obtain voting
instructions of beneficial owners of the stock registered in their names and
will reimburse them for any expenses incurred in connection therewith.
PROPOSALS OF STOCKHOLDERS
Stockholders of the Company who intend to present a proposal for action at
the next Annual Meeting of Stockholders of the Company must notify the Company's
management of such intention by notice in writing received at the Company's
principal executive offices on or before August 15, 2001 in order for such
proposal to be included in the Company's Proxy Statement and form of proxy
relating to such Meeting. Stockholders who wish to present a proposal for
action at the next Annual Meeting are advised to contact the Company as soon as
possible in order to permit the inclusion of any proposal in the Company's proxy
statement.
OTHER MATTERS
The Company knows of no items of business that are expected to be presented
for consideration at the Annual Meeting which are not enumerated herein.
However, if other matters properly come before the Meeting, it is intended that
the person named in the accompanying Proxy will vote thereon in accordance with
his best judgement.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN
THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE
THE EXPENSE OF FURTHER MAILINGS.
Hackensack, New Jersey By Order of the Board of Directors
January 29, 2001
Martin Kaye, Secretary
Exhibit A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INNODATA CORPORATION
Innodata Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of Directors of Innodata
Corporation, the following resolution amending the Certificate of Incorporation
of said corporation, has been adopted by the written consent of stockholders of
said corporation holding a majority of the outstanding stock entitled to vote
thereon. The resolution setting forth the amendment is as follows:
RESOLVED, that Paragraph 4(a) of the Certificate of Incorporation shall be
amended to read in its entirety as follows:
"(a) The total number of shares of stock which the Corporation shall have the
authority to issue is 75,000,000 shares of Common Stock, and 4,998,000 shares of
Preferred Stock, 1,000 shares of Series A Preferred Stock and 1,000 shares of
Series B Preferred Stock, all par value $.01 per share."
SECOND: That these resolutions have been adopted by written consents of
stockholders holding a majority of the outstanding stock entitled to vote
thereon in accordance with Sections 216 and 228 of the General Corporation
Law of the State of Delaware.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said Innodata Corporation has caused this certificate to be
signed by its Vice President, and its Assistant Secretary, this ______ day of
February, 2001.
Innodata Corporation
<TABLE>
<CAPTION>
<S> <C>
By: Attest:
Martin Kaye, Laurel Louison,
Vice President Assistant Secretary
</TABLE>
