-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B9jknuYRa9NtF26kDDo5C6LGsCeDclKQvWEICDrO7dRSGFzrj8udkec3xDpq20jG kAu/N83dcu5Ozw1a5Iwq4A== 0001012870-00-000102.txt : 20000202 0001012870-00-000102.hdr.sgml : 20000202 ACCESSION NUMBER: 0001012870-00-000102 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000228 FILED AS OF DATE: 20000112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SDL INC CENTRAL INDEX KEY: 0000934741 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770331449 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 000-25688 FILM NUMBER: 506153 BUSINESS ADDRESS: STREET 1: 80 ROSE ORCHARD WAY CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089439411 MAIL ADDRESS: STREET 1: 80 ROSE ORCHARD WAY CITY: SAN JOSE STATE: CA ZIP: 95134 DEFS14A 1 DEFINITIVE SPECIAL NOTICE AND PROXY SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 SDL, Inc. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (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: 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 Mailed to Stockholders on or about January 21, 2000 SDL, INC. 80 Rose Orchard Way San Jose, California 95134-1365 ---------------- 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 1 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 31, 1999, the Company had approximately 35.7 million shares of Common Stock outstanding and approximately 6.9 million shares reserved for future issuance under the Company's employee stock plans, of which, currently, approximately 4.1 million are covered by outstanding options and approximately 2.8 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 27.3 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. 2 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. 3 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. 4 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.
Number of Percentage Shares of Shares Beneficially Beneficially Name of Beneficial Owner Owned Owned(1) ------------------------ ------------ ------------ LeRoy C. Kopp and Kopp Investment Advisors, Inc. (2)................................................ 3,868,514 10.8% Janus Capital Corporation and Thomas H. Bailey (3).. 3,348,955 9.4% United States Trust Company of New York (4)......... 2,717,590 7.6% Donald R. Scifres (5)............................... 1,922,534 5.4% Gregory P. Dougherty (6)............................ 5,347 * David F. Welch (7).................................. 183,623 * Michael L. Foster (8)............................... 21,000 * Richard R. Craig (9)................................ 43,950 * Mark B. Myers (10).................................. 20,700 * Frederic N. Schwettmann (11)........................ 10,900 * Anthony B. Holbrook (12)............................ 19,500 * Keith B. Geeslin (13)............................... 13,922 * All executive officers and directors as a group (8 persons) (14)...................................... 2,322,526 6.5%
- -------- * 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 35,742,992 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 October 31, 1999, including 1,017,700 shares as to which Kopp Investment Advisors, Inc. has sole voting power, 700,000 shares of which Kopp Investment Advisors, Inc. has sole investment power, 298,000 shares of which LeRoy C. Kopp has sole investment power, and 2,870,514 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. 5 (5) Includes (i) 1,028,528 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) 564,608 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 5,000 options exercisable during the sixty-day period following December 31, 1999. (7) Includes 80,746 options exercisable during the sixty-day period following December 31, 1999. (8) Includes 7,500 options exercisable during the sixty-day period following December 31, 1999. (9) Includes 29,950 options exercisable during the sixty-day period following December 31, 1999. (10) Includes 20,700 options exercisable during the sixty-day period following December 31, 1999. (11) Includes 10,900 options exercisable during the sixty-day period following December 31, 1999. (12) Includes 19,500 options exercisable during the sixty-day period following December 31, 1999. (13) Includes 4,500 options exercisable during the sixty-day period following December 31, 1999. (14) Includes 713,454 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 6 - -------------------------------------------------------------------------------- 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) - -------------------------------------------------------------------------------- * FOLD AND DETACH HERE * - ------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- * FOLD AND DETACH HERE * -----END PRIVACY-ENHANCED MESSAGE-----