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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SDL, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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SDL, INC.
80 Rose Orchard Way
San Jose, California 95134-1365
Notice of Special Meeting of Stockholders
To Be Held February 28, 2000
A Special Meeting of Stockholders (the "Special Meeting") of SDL, Inc. (the
"Company"), will be held at the Company's offices at 80 Rose Orchard Way, San
Jose, California 95134, on Monday, February 28, 2000, at 9:00 a.m. Pacific
Time, to approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock. The
foregoing matter is described in more detail in the enclosed Proxy Statement,
which is attached and made a part hereof.
The Board of Directors has fixed the close of business on January 4, 2000 as
the record date for determining the stockholders entitled to notice of and to
vote at the Special Meeting and any postponement or adjournment thereof.
Whether or not you expect to attend the meeting in person, you are urged to
sign, date, and return the enclosed proxy card at your earliest convenience to
ensure the presence of a quorum at the Special Meeting. If you send in your
proxy and then decide to attend the Special Meeting to vote your shares in
person, you may still do so. Your proxy is revocable in accordance with the
procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
Michael L. Foster,
Vice President, Finance and Chief
Financial Officer and Secretary
San Jose, California
January 21, 2000
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Mailed to Stockholders on or about January 21, 2000
SDL, INC.
80 Rose Orchard Way
San Jose, California 95134-1365
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PROXY STATEMENT
General Information
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of SDL, Inc., a Delaware corporation (the "Company"), of
proxies in the accompanying form for use in voting at a Special Meeting of
Stockholders to be held on Monday, February 28, 2000, at 9:00 a.m. Pacific
Time, at the Company's offices at 80 Rose Orchard Way, San Jose, California
95134, and any adjournment or postponement thereof (the "Special Meeting"). The
shares represented by the proxies received, properly dated and executed, and
not revoked will be voted at the Special Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Special Meeting and voting in person.
Record Date, Share Ownership and Quorum
The close of business on January 4, 2000 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of
the Company entitled to notice of and to vote at the Special Meeting. As of the
close of business on the Record Date, the Company had approximately 35,743,400
shares of Common Stock outstanding and entitled to vote at the Special Meeting.
The presence at the Special Meeting of a majority, or approximately 17,871,700
of these shares of Common Stock of the Company, either in person or by proxy,
will constitute a quorum for the transaction of business at the Special
Meeting. Each outstanding share of Common Stock on the Record Date is entitled
to one vote on the matters being considered.
Except where the context otherwise requires or specific reference is
otherwise made, all references to numbers of shares in this proxy statement do
not give effect to the Company's proposed two-for-one stock split to be
effected in the form of a 100% stock dividend discussed below.
Solicitation and Voting Procedures
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Special Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Special Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation
personally, telephonically or by facsimile through its officers, directors and
regular employees, none of whom will receive additional compensation for
assisting with the solicitation. The Company will request brokers and nominees
who hold stock in their names to furnish proxy material to beneficial owners of
the shares and will reimburse such brokers and nominees for their reasonable
expenses incurred in forwarding solicitation material to such beneficial
owners.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy at the Special Meeting, and an employee of the
transfer agent will tabulate votes cast in person at the Special Meeting. Each
share of Common Stock outstanding on the record date will be entitled to one
vote on the
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matters being considered. The amendment of the Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock will
require the affirmative vote of a majority of the outstanding shares of the
Company's Common Stock. Because abstentions are treated as shares present or
represented and entitled to vote for the purposes of determining whether a
matter has been approved by the stockholders, abstentions with respect to a
matter requiring the vote of a majority of the outstanding shares of Common
Stock, such as the approval of the Amendment to the Restated Certificate of
Incorporation, have the same effect as negative votes. Broker non-votes and
shares as to which proxy authority has been withheld with respect to any matter
are not deemed to be entitled to vote for purposes of determining whether
stockholder approval of that matter has been obtained and effectively count as
votes against the proposal to amend the Company's Restated Certificate of
Incorporation.
APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
Introduction
The Company's Restated Certificate of Incorporation currently authorizes the
issuance of seventy-one million (71,000,000) shares of capital stock of which
seventy million (70,000,000) shares have been designated as Common Stock, with
a par value of $.001 per share, and one million (1,000,000) shares have been
designated Preferred Stock, with a par value of $.001 per share, of which two
hundred seventy-one thousand six hundred twenty-eight (271,628) shares have
been denominated as Series A Preferred Stock and three hundred thousand
(300,000) shares are denominated as Series B Preferred Stock. The Board of
Directors on December 15, 1999, adopted a resolution proposing that the
Restated Certificate of Incorporation be amended to increase the authorized
number of shares of capital stock to one hundred forty-one million
(141,000,000) shares of which one hundred forty million (140,000,000) shares
shall be Common Stock and one million (1,000,000) shares shall be Preferred
Stock, subject to stockholder approval of the amendment.
Proposed Stock Split. At the same time that it adopted the resolution to
increase, subject to stockholder approval, the authorized capital stock, the
Board of Directors declared a two-for-one stock split of the Company's Common
Stock which would be effected in the form of a dividend of one additional share
of Common Stock for each share of Common Stock outstanding (the "Stock Split").
Stockholders are not being asked to vote on the Stock Split, but the Stock
Split will not take place unless the authorized number of shares of capital
stock and Common Stock is increased as described in this proposal. Without this
increase in authorized shares, the Company would not have enough authorized but
unissued shares of Common Stock to double the number of its outstanding shares
in connection with the Stock Split.
Current Use of Shares. As of December , 1999, the Company had
approximately million shares of Common Stock outstanding and approximately
million shares reserved for future issuance under the Company's employee
stock plans, of which, currently, approximately million are covered by
outstanding options and approximately million are available for grant or
purchase. Based upon the foregoing number of outstanding and reserved shares of
Common Stock, the Company currently has approximately million shares
remaining available for other purposes.
Proposed Amendment to Restated Certificate of Incorporation
The Board of Directors has adopted resolutions setting forth (i) the
proposed amendment to the first paragraph of Article IV of the Company's
Restated Certificate of Incorporation (the "Amendment"); (ii) the advisability
of the Amendment; and (iii) a call for submission of the Amendment for approval
by the Company's stockholders at the Special Meeting.
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The following is the text of the first paragraph of Article IV of the
Restated Certificate of Incorporation of the Company, as proposed to be
amended:
"A. Classes of Stock. The total number of shares of all classes of stock that
the Corporation is authorized to issue is One Hundred Forty-One Million
(141,000,000) shares, consisting of One Hundred Forty Million (140,000,000)
shares of Common Stock, with a par value of $.001 per share, and One Million
(1,000,000) shares of Preferred Stock, with a par value of $.001 per share,
of which Two Hundred Seventy-One Thousand Six Hundred Twenty-Eight (271,628)
shares are denominated as Series A Preferred Stock and Three Hundred
Thousand (300,000) shares are denominated as Series B Preferred Stock."
Purpose and Effect of the Proposed Amendment
The Board of Directors believes that it is in the Company's best interest to
increase the number of shares of Common Stock that SDL is authorized to issue
in order to give the Company additional flexibility to maintain a reasonable
stock price with future stock splits and stock dividends. Although the Board of
Directors has no immediate plans, understandings, agreements or commitments to
issue any of the additional shares of Common Stock that would be authorized
upon the approval of the Amendment, other than to effect the Stock Split, the
Board of Directors may in the future give consideration to another stock
dividend or split and the Board of Directors from time to time has given and
continues to give consideration to the possible acquisition of other companies
using shares of Common Stock.
On two previous occasions since the Company's initial public offering in
1995, there have been stock dividends, functionally serving as a stock split.
The first action was a three-for-two stock split in the form of a 50% stock
dividend in June 1996. The second action was a two-for-one stock split in the
form of a 100% stock dividend in May 1999. As noted above, the Board of
Directors has approved the current Stock Split subject to the approval of the
Amendment. The Company reserves the right to seek a further increase in
authorized shares from time to time in the future as considered appropriate by
the Board of Directors.
Under the Company's Restated Certificate of Incorporation, the Company's
stockholders do not have preemptive rights with respect to Common Stock. Thus,
should the Board of Directors elect to issue additional shares of Common Stock,
existing stockholders would not have any preferential rights to purchase such
shares. If the Board of Directors elects to issue additional shares of Common
Stock, such issuance could have a dilutive effect on the earnings per share,
voting power, and shareholdings of current stockholders. In addition, if the
Board of Directors elects to issue additional shares of Common Stock, such
issuance would likely not require that current stockholders receive notice of
such issuance or require approval of current stockholders (unless, for example,
the Board of Directors elected to increase the number of shares of Common Stock
available for issuance under the Company's employee stock plans or elected to
issue more than 20% of the number of shares of Common Stock outstanding in any
one transaction).
Effect of the Stock Split
No change in total stockholders' equity will result from the Stock Split.
The aggregate amount of capital represented by the outstanding shares of Common
Stock will be increased by $.001 for each share issued to effect the Stock
Split and the Company's capital in excess of par value account will be reduced
by the same amount. After the Stock Split, purchases and sales of Common Stock
by an individual stockholder may be subject to higher brokerage charges and
applicable stock transfer taxes than on a pre-split transaction of equivalent
market value, due to the greater number of shares of Common Stock involved
after the Stock Split. In addition, the Company will incur certain expenses in
connection with the Stock Split, such as the cost of preparing and delivering
to stockholders new certificates representing additional shares.
In accordance with the terms of the Company's stock option and employee
stock purchase plans, appropriate adjustments will be made upon the
effectiveness of the Stock Split to the number of shares reserved for issuance
under such plans and the exercise prices and number of shares covered by
outstanding options.
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The Company has been advised that, based on current tax law, the Stock Split
should not result in any gain or loss for Federal income tax purpose. The tax
basis of every share held before the Stock Split will be allocated between the
two shares held as a result of the distribution, and the holding period of the
new shares will include the holding period of the shares with respect to which
they were issued. The laws of jurisdictions other than the United States may
impose income taxes on the issuance of the additional shares and stockholders
subject to such laws are urged to consult their tax advisers.
As noted above, the Stock Split is contingent on stockholder approval of the
Amendment, but stockholders are not being asked to vote on the Stock Split.
Potential Anti-Takeover Effect
The proposed Amendment could, under certain circumstances, have an anti-
takeover effect, although this is not the intent of the proposal. Other than
the shares of Common Stock issued to effect the Stock Split, the increased
number of authorized shares of Common Stock could discourage, or be used to
impede, an attempt to acquire or otherwise change control of the Company. The
private placement of shares of Common Stock into "friendly" hands, for example,
could dilute the voting strength of a party seeking control of the Company.
Furthermore, many companies have issued warrants or other rights to acquire
additional shares of Common Stock to the holders of its Common Stock to
discourage or defeat unsolicited share accumulation programs and acquisition
proposals, which programs or proposals may be viewed by the Board of Directors
as not in the best interest of the Company and its stockholders. Although the
Company has no present intent to use the additional authorized shares of Common
Stock for such purposes, if this Proposal is adopted, more capital stock of the
Company would be available for such purposes than is currently available.
Vote Necessary to Approve the Amendment
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock entitled to vote at the Special Meeting, assuming a quorum is
present, is necessary for approval of the Amendment. Therefore, abstentions and
broker non-votes (which may occur if a beneficial owner of stock where shares
are held in a brokerage or bank account fails to provide the broker or the bank
voting instructions as to such shares) effectively count as votes against the
Amendment.
Recommendation of the Board
The Board of Directors recommends a vote "FOR" the proposal to amend the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of capital stock from Seventy-One Million (71,000,000) shares
to One Hundred Forty-One Million (141,000,000) shares. Unless a contrary choice
is specified, proxies solicited by the Board of Directors will be voted FOR
approval of the Amendment.
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Security Ownership of Certain Beneficial Owners
The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock as of December
31, 1999 by (a) each stockholder known by the Company to be the beneficial
owner of more than five percent of the Company's Common Stock, (b) each
director of the Company, (c) each named executive officer (as defined in
Section 402(a)(3) of Regulation S-K) who beneficially owns shares and (d) all
executive officers and directors who beneficially own shares, as a group.
<TABLE>
<CAPTION>
Number of Percentage
Shares of Shares
Beneficially Beneficially
Name of Beneficial Owner Owned Owned(1)
------------------------ ------------ ------------
<S> <C> <C>
LeRoy C. Kopp and Kopp Investment Advisors, Inc.
(2)................................................ 4,806,398 [16.2]%
Janus Capital Corporation and Thomas H. Bailey (3).. 3,348,955 [10.7]%
United States Trust Company of New York (4)......... 2,717,590 [9.3]%
Donald R. Scifres (5)............................... [2,103,734] [7.0]%
Gregory P. Dougherty (6)............................ [19,400] *
David F. Welch (7).................................. [219,022] *
Michael L. Foster (8)............................... [ ] *
Dennis M. Samaritoni (9)............................ [ ] *
Richard R. Craig (10)............................... [116,906] *
Robert J. Lang (11)................................. [74,856] *
Mark B. Myers (12).................................. [29,400] *
Frederic N. Schwettmann (13)........................ [29,400] *
Anthony B. Holbrook (14)............................ [24,000] *
Keith B. Geeslin (15)............................... [12,422] *
All executive officers and directors as a group (8
persons) (16)...................................... [2,879,004] [9.5]%
</TABLE>
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* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of December 31,
1999 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of each
other person. Applicable percentages are based on shares outstanding
on December 31, 1999, adjusted as required by the rules. To the Company's
knowledge, except as set forth in the footnotes to this table and subject
to applicable community property laws, each person named in the table has
sole voting and investment power with respect to the shares set forth
opposite such person's name.
(2) LeRoy C. Kopp and Kopp Investment Advisors, Inc.'s address is 7701 France
Avenue South, Suite 500, Edina, Minnesota 55435. Such information is based
on a Schedule 13G filed by such stockholder with the Securities and
Exchange Commission and reflects stock held as of July 31, 1999, including
1,335,400 shares as to which Kopp Investment Advisors, Inc. has sole
voting power, 960,000 shares of which Kopp Investment Advisors, Inc. has
sole investment power, 298,000 shares of which LeRoy C. Kopp has sole
investment power, and 3,548,398 shares of which Kopp Investment Advisors,
Inc. has shared investment power.
(3) Janus Capital Corporation and Thomas H. Bailey's address is 100 Fillmore
Street, Denver, Colorado 80206. Such information is based on a Schedule
13G filed by such stockholder with the Securities and Exchange Commission
on September 10, 1999, as to all of which shares Janus Capital Corporation
has shared investment power.
(4) United States Trust Company of New York's address is 114 West 47th Street,
New York, New York 10036. Such information is based on a Schedule 13G
filed by such stockholder with the Securities and Exchange Commission and
reflects stock held as of December 31, 1998, as to all of which United
States Trust Company of New York has shared voting and investment power.
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(5) Includes (i) [1,043,828] shares held by The Donald R. and Carol D. Scifres
Revocable Living Trust and [198,900] shares held by Dr. Scifres' five
dependent children and (ii) [804,408] options exercisable during the
sixty-day period following December 31, 1999. Dr. Scifres' address is c/o
SDL, Inc., 80 Rose Orchard Way, San Jose, California 95134.
(6) Includes [19,200] options exercisable during the sixty-day period
following December 31, 1999.
(7) Includes (i) [18,000] shares held by David F. Welch and Heidi A. Welch,
Trustees F/A/O The Welch Charitable Remaining Unit Trust DTD 10/17/95 and
(ii) [79,746] options exercisable during the sixty-day period following
December 31, 1999.
(8) Includes options exercisable during the sixty-day period following
December 31, 1999.
(9) Includes options exercisable during the sixty-day period following
December 31 1999.
(10) Includes [98,970] options exercisable during the sixty-day period
following December 31, 1999.
(11) Includes [65,312] options exercisable during the sixty-day period
following December 31, 1999.
(12) Includes [29,400] options exercisable during the sixty-day period
following December 31, 1999.
(13) Includes [29,400] options exercisable during the sixty-day period
following December 31, 1999.
(14) Includes [24,000] options exercisable during the sixty-day period
following December 31, 1999.
(15) Includes [3,000] options exercisable during the sixty-day period following
December 31, 1999.
(16) Includes [1,171,336] options exercisable during the sixty-day period
following December 31, 1999.
It is important that the proxies be returned promptly and that your shares
be represented.
Stockholders are urged to fill in, sign and promptly return the accompanying
form in the enclosed envelope.
By Order of the Board of Directors
Michael L. Foster,
Vice President, Finance and Chief
Financial Officer and Secretary
January 21, 2000
San Jose, California
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SDL, INC. PROXY
80 ROSE ORCHARD WAY
SAN JOSE, CA 95134
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR A SPECIAL MEETING ON FEBRUARY 28, 2000.
Donald R. Scifres and Michael L. Foster, or any of them, each with the power
of substitution, are hereby authorized to represent and vote the shares of the
undersigned, with all the powers which the undersigned would possess if
personally present, at a Special Meeting of Stockholders of SDL, Inc. (the
"Company"), to be held on Monday, February 28, 2000, and any adjournment or
postponement thereof.
Amendment to the Company's Restated Certificate of Incorporation to increase
the number of authorized shares of Common Stock.
(Continued and to be signed on the reverse side)
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* FOLD AND DETACH HERE *
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Please mark
your vote
as indicated [x]
Shares represented by this proxy will be voted as directed by the stockholder.
If no such directions are indicated, the Proxies will have authority to vote FOR
proposal 1.
The Board of Directors recommends a vote FOR proposal 1.
1. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock.
FOR [_] AGAINST [_] ABSTAIN [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT [_]
Please sign exactly as your name appears herein. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such.
Signature___________________________________________________________
Date________________________________________________________________
Signature___________________________________________________________
Date________________________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.
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* FOLD AND DETACH HERE *
