EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
SERIES C PARTICIPATING PREFERRED STOCK
OF
INNODATA CORPORATION
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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Innodata Corporation, a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in its Certificate of
Incorporation, and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Board of Directors of the
Company duly approved and adopted the following resolution, which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board
of Directors by the Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorize and provide for the issue of a series of
preferred stock having a par value of $0.01 per share, which shall be designated
as Series C Participating Preferred Stock (the "Series C Preferred Stock"),
consisting of 100,000 shares having the following voting powers, preferences and
relative, participating, optional and other special rights, and qualifications,
limitations and restrictions:
1. Designation and Amount. There is hereby created a series of the Preferred
Stock of the Corporation. The shares of this series shall be designated as
"Series C Participating Preferred Stock" (the "Series C Preferred Stock").
The number of shares constituting the Series C Preferred Stock shall be One
Hundred Thousand (100,000). Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series C Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series C Preferred Stock.
2. Proportional Adjustment. In the event that the Corporation shall at any
time after the issuance of any share or shares of Series C Preferred Stock
(i) declare any dividend on Common Stock of the Corporation ("Common
Stock") payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Corporation shall
simultaneously effect a proportional adjustment to the number of
outstanding shares of Series C Preferred Stock.
3. Dividends and Distributions.
3.1. Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any other stock) ranking prior and superior to the
Series C Preferred Stock with respect to dividends, the holders of
shares of Series C Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
last day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series C
Preferred Stock, in an amount (if any) per share (rounded to the
nearest cent), equal to 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series C Preferred Stock.
3.2. The Corporation shall declare a dividend or distribution on the Series
C Preferred Stock as provided in subsection 3.1 above immediately
after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
3.3. Dividends due pursuant to subsection 3.1 shall begin to accrue on
outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series C Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue
from the date of the first issuance of any share or fraction of a
share of Series C Preferred, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Series C Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series C Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series C Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
4. Voting Rights. The holders of shares of Series C Preferred Stock shall have
the following voting rights:
4.1. Each share of Series C Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation.
4.2. Except as otherwise provided herein or by law, the holders of shares
of Series C Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
4.3. Except as required by law, the holders of Series C Preferred Stock
shall have no special voting rights and their consent shall not be
required (except to the extent that they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
5. Certain Restrictions.
5.1. The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Common Stock after the first issuance of a
share or fraction of a share of Series C Preferred Stock unless
concurrently therewith it shall declare a dividend on the Series C
Preferred Stock as required by Section 3 hereof.
5.2. Whenever quarterly dividends or other dividends or distributions
payable on the Series C Preferred Stock as provided in Section 3 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series C
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series C Preferred Stock, except dividends paid ratably
on the Series C Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series C Preferred Stock;
(iv) purchase or otherwise acquire for consideration any
shares of Series C Preferred Stock, or any shares of stock
ranking on a parity with the Series C Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
5.3. The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under subsection 5.2,
purchase or otherwise acquire such shares at such time and in such
manner.
6. Reacquired Shares. Any shares of Series C Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein and
in the Certificate of Incorporation, as then amended.
7. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Corporation, the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share
equal to 1,000 times the aggregate amount to be distributed per share to
holders of shares of Common Stock plus an amount equal to any accrued and
unpaid dividends on such shares of Series Preferred Stock.
8. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of Series C Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged.
9. No Redemption. The shares of Series C Preferred Stock shall not be
redeemable.
10. Ranking. The Series C Preferred Stock shall rank junior to all other series
of the Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise.
11. Amendment. The Certificate of Incorporation of the Corporation shall not be
further amended in any manner which would materially alter or change the
powers, preference or special rights of the Series C Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series C Preferred Stock, voting
separately as a series.
12. Fractional Shares. Series C Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series C Preferred Stock.
In Witness Whereof, the undersigned has executed this Certificate
as of December 16, 2002.
Innodata Corporation
By: Jack Abuhoff
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Title: Chief Executive Officer and President