As filed with the Securities and Exchange Commission on May 4, 1999.
Registration No. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SYKES ENTERPRISES, INCORPORATED
(Exact name of registrant as specified in its charter)
Florida 56-1383460
(State of Incorporation) (I.R.S. Employer Identification No.)
100 North Tampa Street, Suite 2700
Tampa, Florida 33602, Telephone (813) 274-1000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------------
Scott J. Bendert
Senior Vice President - Finance, Treasurer, and Chief Financial Officer
Sykes Enterprises, Incorporated
100 North Tampa Street, Suite 2700, Tampa, Florida 33602, (813) 274-1000
(Name, address, including zip code, and
telephone number, of agent for service)
-------------------------
With a copy to:
Martin A. Traber, Esq.
Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
(813) 274-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [__]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [__]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [__]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [__]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Shares Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
to be registered Registered Price Per Share(1) Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 983,332 $22.15625 $21,786,950 $6,056.78
</TABLE>
(1) Calculated pursuant to Rule 457(c). The proposed maximum offering price per
share and the proposed maximum aggregate offering price are based on $22.15625,
the average of the high and low sale prices on May 3, 1999, of the Common Stock
as reported on the Nasdaq National Market.
<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
PROSPECTUS
983,332 Shares
SYKES ENTERPRISES, INCORPORATED
Common Stock
-----------------------
The selling shareholders identified in this prospectus are offering
983,332 shares. Sykes will not receive any of the proceeds of the sale of shares
by the selling shareholders.
-----------------------
Sykes' common stock is traded on the Nasdaq National Market under the
Symbol "SYKE." On May 3, 1999, the last reported sale price for the common stock
on the Nasdaq National Market was $21.75 per share.
-----------------------
Investing in the common stock involves risks.
See "Risk Factors" beginning on page 3.
-----------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
-----------------------
Prospectus dated ____________, 1999
<PAGE>
SYKES
We are a global leader in providing vertically integrated
technology-based solutions through an integrated strategy combining our
information technology ("IT") services with an emerging global e-commerce
platform. We continue to leverage our position as a leading provider of
information technology services by assisting our clients in capitalizing on the
growth of e-commerce over the Internet. Our e-commerce service platform enables
us to comprehensively continue to expand by serving as a single-source provider
of Internet-based technology solutions throughout the life cycle of a customer's
e-commerce needs. Through our 29 IT call centers and other offices and
e-commerce distribution centers located in the United States, Canada, Europe,
Africa, and The Philippines, we provide services to leading computer hardware
and software companies by providing technical support to end users of their
products and to major companies by providing corporate help desk and additional
business services. Through SHPS, Incorporated, a wholly-owned subsidiary, we
also provide on-line clinical managed care services, medical protocol products,
and employee benefit administration and support services. The integration of our
existing technology services with our emerging global e-commerce platform
enables our customers to take full advantage of increasing customer loyalty,
business expansion and effectiveness, all while lowering their total costs.
Sykes' customers include Adobe Systems, Apple Computer, Compaq, Compuserve,
Gateway, Hewlett Packard, IBM, Intel, Microsoft, and Motorola.
We have built 11 of our 14 domestic IT call centers. Each of these IT
call centers, and an additional IT call center currently under construction, is
a stand-alone facility modeled after the same prototype, which enables us to
construct new IT call centers rapidly and cost effectively. Our strategy of
locating domestic IT call centers in smaller communities, typically near a
college or university, has enabled us to benefit from a relatively lower cost
structure and a technically proficient, stable work force.
SHPS, a wholly-owned subsidiary of Sykes, is a single-source provider
of care management services and employee benefits administration services
through technology solutions and call center-based operations. SHPS' customers
include large corporations, healthcare providers, payors, and insurance
companies. SHPS' care management services are designed to enhance the quality of
an individual's overall healthcare by carefully evaluating clinically-based
solutions to help patients, physicians, and healthcare providers and payors
select appropriate and efficient medical treatment while providing the
opportunity to reduce overall medical expenditures. SHPS' employee benefits
administration services enable customers to outsource the administration of
their employee benefit programs.
We believe that our ability to work in partnership with our customers
during the life cycle of their information technology products gives us a
competitive advantage to become a preferred provider of outsourced IT services
to our customers. These life-cycle services, integrated with our e-commerce
service platform, include software design, integration, and implementation,
technical documentation, electronic and physical product distribution, foreign
language translation, end-user technical product support, and our comprehensive
suite of e-commerce services.
We believe that outsourcing by information technology companies and
companies with information technology needs will continue to grow as businesses
focus on their core competencies rather than nonrevenue producing activities.
Additionally, rapid technological changes, significant growth in conducting
business over the Internet, continual capital requirements for state-of-the-art
technology, and the need to integrate and update complex information technology
systems spanning multiple generations of hardware and software components make
it increasingly difficult for businesses to maintain cost-effective, quality
information technology services in-house. Our strategy includes the following
key elements:
* Continue the significant growth of our support service revenues
through additional IT call centers on a global basis;
* Rapidly expand our e-commerce service platform revenues by serving
as a single-source provider of solutions throughout the life cycle
of a customer's e-commerce needs;
* Market our array of services to existing customers to position
Sykes as a preferred vendor;
* Establish a competitive advantage through our sophisticated
technological capabilities; and
* Further penetration into vertically integrated markets; and
* Expand our global presence through strategic alliances and
selective acquisitions.
We were founded in 1977 in North Carolina and moved our headquarters to
Florida in 1993. In March 1996, we changed our state of incorporation from North
Carolina to Florida. Our headquarters are located at 100 North Tampa Street,
Suite 3900, Tampa, Florida 33602, and our phone number is (813) 274-1000.
<PAGE>
RISK FACTORS
An investment in the common stock involves certain risks. Before
investing in the shares, you should carefully consider the risks described below
and the other information included in or incorporated by reference into this
prospectus. The risks and uncertainties described below are not the only ones
facing Sykes. Additional risks and uncertainties not currently known to us or
that we currently do not believe are material also may affect us. If any of
these risks actually occur, our business, financial condition, and results of
operation could be harmed. This could cause the trading price of our common
stock to decline, and you may lose part or all of your investment.
This prospectus and documents incorporated by reference into this
prospectus contain forward-looking statements that involve risks and
uncertainties. The words "intend," "anticipate," "believe," "seeks," "estimate,"
"plan," and "expect" and similar expressions identify these forward-looking
statements. These forward-looking statements are not guaranties of future
performance and are subject to a number of risks and uncertainties, including
those discussed below and elsewhere in this prospectus and the documents
incorporated by reference into this prospectus. Our actual results could differ
materially from those forward-looking statements.
Potential Difficulties in Integrating Recent Acquisitions and Identifying,
Consummating and Integrating Future Acquisitions
Sykes has completed nine acquisitions since January 1, 1997, with three
acquisitions completed during 1998. In addition, a key element of Sykes'
strategy it to expand its customer base through strategic alliances and
selective acquisitions. To date, Sykes has not experienced significant
unforeseen difficulties in integrating any of these acquisitions. Nevertheless,
each of these acquisitions has resulted in a diversion of management's attention
to the integration of the acquired business. There can be no assurance that
Sykes will be able to successfully integrate the operations and management of
recent acquisitions and future acquisitions.
Acquisitions involve significant risks that could have a material
adverse effect on Sykes. These risks generally apply to any company that
recently has completed acquisitions and include the following:
* the diversion of management's attention to the integration of the
businesses to be acquired;
* the risk that the acquired businesses will fail to maintain the
quality of services that Sykes has historically provided;
* the need to implement financial and other systems and add manage-
ment resources;
* the risk that key employees of the acquired business will leave
after the acquisition;
* potential liabilities of the acquired business;
* unforeseen difficulties in the acquired operations;
* adverse short-term effects on Sykes' operating results;
* lack of success in assimilating or integrating the operations of
acquired businesses with those of Sykes;
* the dilutive effect of the issuance of additional equity
securities;
* the incurrence of additional debt; and
* the amortization of goodwill and other intangible assets involved
in any acquisitions that are accounted for using the purchase
method of accounting.
Sykes future growth may depend to some extent on its ability to
successfully complete strategic acquisitions to expand or complement its
existing operations. Therefore, Sykes intends to continue to pursue
acquisitions. Sykes may not be able to identify, consummate, or successfully
integrate future acquisitions.
Thus, Sykes might not be able to successfully implement its acquisition
strategy. Furthermore, there can be no assurance acquired entities will achieve
levels of revenue and profitability or otherwise perform as expected, or be
consummated on acceptable terms to enhance shareholder value. Sykes continues to
monitor acquisition opportunities.
Growth Places Significant Demand on Sykes' Management and Other Resources
Sykes has rapidly expanded its operations since it began providing
information technology support services through its IT call centers in 1994 and
anticipates continued growth to be driven by industry trends toward outsourcing
of such services. There can not be any assurance that Sykes will be able to
effectively manage its expanding operations or maintain its profitability. This
growth has placed, and is expected to continue to place, significant demands on
Sykes' management, information and processing systems, and internal controls.
These resources could be further strained from the opening of new IT call
centers and the necessity to successfully attract and retain qualified
management personnel to manage the growth and operations of Sykes' business to
meet such demands. Sykes intends to continue to hire new employees and develop
further its financial and managerial controls and reporting systems and
procedures to accommodate any future growth. Failure to expand any of the areas
mentioned in an efficient manner could have a material adverse effect on Sykes'
business, financial condition, and results of operation.
Rapid Technological Change
The market for information technology services is characterized by
rapid technological advances, frequent new product introductions and
enhancements, and changes in customer requirements. Sykes' future success will
depend in large part on its ability to service new products, platforms, and
rapidly changing technology. These factors will require Sykes to provide
adequately trained personnel to address the increasingly sophisticated, complex
and evolving needs of its customers. In addition, Sykes ability to capitalize on
its acquisitions will depend on its ability to continually enhance software and
services and adapt such software to new hardware and operating system
requirements. Any failure by Sykes to anticipate or respond rapidly to
technological advances, new products and enhancements, or changes in customer
requirements could have a material adverse effect on Sykes' business, financial
condition and results of operations.
Dependence on Key Customers
Sykes derives a substantial portion of its revenues from a few clients.
Sykes' largest ten customers accounted for approximately 42%, 40%, and 41% of
its consolidated revenue for the years ended December 31, 1996, 1997, and 1998,
respectively. Revenue from a single customer comprised 12% and 10% of Sykes'
consolidated revenues for the years ended December 31, 1996 and 1997,
respectively. No single customer accounted for 10% of revenues for the year
ended December 31, 1998. Sykes' loss of, or the failure to retain a significant
amount of business with, any of its key customers could have a material adverse
effect on Sykes' business, financial condition and results of operations.
Generally, Sykes' contracts with its customers are cancelable by the customer at
any time or on short-term notice, and customers may unilaterally reduce their
use of Sykes' services under such contracts without penalty. Thus, Sykes'
contracts with its customers do not ensure that Sykes will generate a minimum
level of revenues.
Inability to Attract and Retain Experienced Personnel May Adversely Impact
Sykes' Business
Sykes' business is labor intensive and places significant importance on
its ability to recruit, train, and retain qualified technical and professional
personnel. Sykes generally experiences high turnover of its personnel and is
continuously required to recruit and train replacement personnel as a result of
a changing and expanding work force. Additionally, demand for qualified
professionals conversant with certain technologies is intense and may outstrip
supply as new and additional skills are required to keep pace with evolving
computer technology. Sykes' ability to locate and train employees is critical to
Sykes' ability to achieve its growth objective. Sykes' inability to attract and
retain qualified personnel or an increase in wages or other costs of attracting,
training, or retaining qualified personnel could have a material adverse effect
on Sykes' business, financial condition and results of operations.
Reliance on Technology and Computer Systems
Sykes has invested significantly in sophisticated and specialized
telecommunications and computer technology and has focused on the application of
this technology to meet its clients' needs. Sykes anticipates that it will be
necessary to continue to invest in and develop new and enhanced technology on a
timely basis to maintain its competitiveness. Significant capital expenditures
may be required to keep Sykes' technology up-to-date. There can be no assurance
that any of Sykes' information systems will be adequate to meet its future needs
or that Sykes will be able to incorporate new technology to enhance and develop
its existing services. Moreover, investments in technology, including future
investments in upgrades and enhancements to software, may not necessarily
maintain Sykes' competitiveness. Sykes' future success will also depend in part
on its ability to anticipate and develop information technology solutions which
keep pace with evolving industry standards and changing client demands.
Year 2000 Risks
Date sensitive computer applications that currently record years in
two-digit, rather than four-digit, format may be unable to properly categorize
and process dates occurring after December 31, 1999. This is known as the "Year
2000 Problem." To the extent Sykes' software applications contain source codes
that are unable to appropriately interpret the calendar year 2000, some level of
modification or even possibly replacement of such applications may be necessary.
Sykes has made a preliminary determination that it should not incur significant
costs to make its software programs and operating systems Year 2000 compliant.
If Year 2000 related failures were to occur in Sykes' computer and operating
systems, however, Sykes could incur significant, unanticipated liabilities and
expenses.
Sykes has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues. In the event any third parties cannot timely provide
the Company with contents, products, services or systems that are Year 2000
compliant, Sykes' services could be materially adversely affected.
Although Sykes expects its systems to be Year 2000 compliant on or
before December 31, 1999, it cannot predict the outcome or the success of its
efforts to become Year 2000 compliant, or that third party systems are or will
be Year 2000 compliant, or that the costs required to address the Year 2000
problem, or that the impact of a failure to achieve substantial Year 2000
compliance, will not have a material adverse effect on the Company's business,
financial condition or results of operations.
Dependence on Trend Toward Outsourcing
Sykes' business and growth depend in large part on the industry trend
toward outsourcing information technology services. Outsourcing means that a
company contract with a third-party, such as Sykes, to provide support services
rather than perform such services in house. There can be no assurance that this
trend will continue, as organizations may elect to perform such services
themselves. A significant change in this trend could have a material adverse
effect on Sykes' business, financial condition and results of operations.
Additionally, there can be no assurance that Sykes' cross-selling efforts will
cause its customers to purchase additional services from Sykes or adopt a
single-source outsourcing approach.
Risk of Emergency Interruption of IT Call Center Operations
Sykes' operations are dependent upon its ability to protect its IT call
centers and its information databases against damages that may be caused by fire
and other disasters, power failure, telecommunications failures, unauthorized
intrusion, computer viruses and other emergencies. The temporary or permanent
loss of such systems could have a material adverse effect on Sykes' business,
financial condition, and results of operations.
Sykes has taken precautions to protect itself and its customers from
events that could interrupt delivery of its services. These precautions include
off-site storage of backup data, fire protection and physical security systems,
rerouting of telephone calls to one or more of its other IT call centers in the
event of an emergency, backup power generators and a disaster recovery plan.
Sykes also maintains business interruption insurance in amounts it considers
adequate. Notwithstanding such precautions, there can be no assurance that a
fire, natural disaster, human error, equipment malfunction or inadequacy, or
other event would not result in a prolonged interruption in Sykes' ability to
provide support services to its customers. Such an event could have a material
adverse effect on Sykes' business, financial condition and results of
operations.
Risks Associated with International Operations and Expansion
At December 31, 1998, Sykes' international operations were conducted
from twelve IT call centers located in Sweden, The Netherlands, France, Germany,
South Africa, Scotland, Ireland, and The Philippines. Revenues from foreign
operations for the years ended December 31, 1996, 1997, and 1998, were 38.4%,
36.3% and 35.1% of consolidated revenues, respectively. Sykes intends to
continue its international expansion. International operations are subject to
certain risks common to international activities, such as changes in foreign
governmental regulations, tariffs and taxes, import/export license requirements,
the imposition of trade barriers, difficulties in staffing and managing foreign
operations, political uncertainties, longer payment cycles, foreign exchange
restrictions that could limit the repatriation of earnings, possible greater
difficulties in accounts receivable collection, potentially adverse tax
consequences, and economic instability.
Sykes conducts business in various foreign currencies and is therefore
subject to the transaction exposures that arise from foreign exchange rate
movements between the dates that foreign currency transactions are committed and
the date that they are consummated. Sykes is also subject to certain exposures
arising from the translation and consolidation of the financial results of its
foreign subsidiaries. Sykes has from time to time taken limited actions to
attempt to mitigate Sykes' foreign transaction exposure. However, there can be
no assurance that actions taken to manage such exposure will be successful or
that future changes in currency exchange rates will not have a material impact
on Sykes' future operating results. Sykes does not hedge either its translation
risk or its economic risk.
There can be no assurance that one or more of such factors or other
factors relating to international operations will not have a material adverse
effect on Sykes' business, results of operations or financial condition.
Existence of Substantial Competition
The markets for Sykes' services are highly competitive, subject to
rapid change, and highly fragmented. While many companies provide information
technology services, Sykes believes no one company is dominant. There are
numerous and varied providers of such services, including firms specializing in
call center operations, temporary staffing and personnel placement companies,
general management consulting firms, divisions of large hardware and software
companies and niche providers of information technology services, many of whom
compete in only certain markets. Sykes' competitors include many companies who
may possess substantially greater resources, greater name recognition and a more
established customer base than it does. In addition to Sykes' competitors, the
services offered by Sykes are often provided by in-house personnel. Increased
competition, the failure of Sykes to compete successfully, pricing pressures,
loss of market share and loss of clients could have a material adverse effect on
Sykes' business, financial condition, and results of operation.
Many of Sykes' large customers purchase information technology services
primarily from a limited number of preferred vendors. Sykes has experienced and
continues to anticipate significant pricing pressure from these customers in
order to remain a preferred vendor. These companies also require vendors to be
able to provide services in multiple locations. Although Sykes believes it can
effectively meet its customers' demands, there can be no assurance that it will
be able to compete effectively with other information technology services
companies. Sykes believes that the most significant competitive factors in the
sale of its services include quality, reliability of services, flexibility in
tailoring services to client needs, experience, reputation, comprehensive
services, integrated services and price.
Dependence on Senior Management
The success of Sykes is largely dependent upon the efforts, direction
and guidance of its senior management. Sykes' continued growth and success also
depend in part on its ability to attract and retain skilled employees and
managers and on the ability of its executive officers and key employees to
manage its operations successfully. Sykes has entered into employment and
non-competition agreements with its executive officers. The loss of any of
Sykes' senior management or key personnel, and, in particular, John H. Sykes,
Chairman of the Board and Chief Executive Officer, or its inability to attract,
retain or replace key management personnel in the future, could have a material
adverse effect on Sykes' business, financial condition and results of
operations.
Control by Principal Shareholder and Anti-Takeover Considerations
As of the date of this Prospectus, John H. Sykes, Sykes' Chairman of
the Board and Chief Executive Officer, beneficially owned approximately 43.6% of
Sykes' outstanding common stock. As a result, Mr. Sykes will be able to elect
the Company's directors and determine the outcome of other matters requiring
shareholder approval.
Sykes' Board of Directors is divided into three classes serving
staggered three-year terms. The staggered Board of Directors and the
anti-takeover effects of certain provisions contained in the Florida Business
Corporation Act and in Sykes' Articles of Incorporation and Bylaws, including
the ability of the Board of Directors of Sykes to issue shares of preferred
stock and to fix the rights and preferences of those shares without shareholder
approval, may have the effect of delaying, deferring or preventing an
unsolicited change in the control of Sykes. This may adversely affect the market
price of Sykes common stock or the ability of shareholders to participate in a
transaction in which they might otherwise receive a premium for their shares.
Volatility of Stock Price May Result in Loss of Investment
Sykes common stock has experienced significant volatility since Sykes'
initial public offering in April 1996. Sykes believes that market prices of
information technology stocks in general have experienced volatility, which
could affect the market price of Sykes' common stock regardless of Sykes'
financial results or performance. Sykes further believes that various factors
such as general economic conditions, changes or volatility in the financial
markets, changing market conditions in the information technology industry, and
quarterly or annual variations in Sykes' financial results, could cause the
market price of the common stock to fluctuate substantially in the future.
Future Payment of Dividends Is Highly Unlikely
Sykes has never declared or paid any cash dividends on its common
stock. Sykes currently anticipates that all of its earnings will be retained for
development and expansion of its business and does not anticipate paying any
cash dividends in the foreseeable future. Any payments of future dividends and
the amounts thereof will be dependent upon Sykes' earnings, financial
requirements and other factors deemed relevant by the Board of Directors.
Risks Associated with SHPS' Care Management Services and Employee
Benefits Services
SHPS, a wholly-owned subsidiary of Sykes, is a provider of care
management services and products and employee benefits administration and
support services. In addition to the risks described above, SHPS is subject to
the following specific risks:
Potential Risks of Care Management Contracts
Some SHPS' care management contracts contain "shared risk" provisions
under which SHPS may be required to bear a portion of any loss in connection
with such provisions. To the extent healthcare participants covered by such
contracts require more frequent or extensive care than anticipated, SHPS would
incur unexpected costs not offset by additional revenue, which would reduce
operating margins. In the worst case, the revenue derived from such contracts
may be insufficient to cover the cost of the services provided. Any such
reduction or elimination of earnings could have a material adverse effect on
SHPS' business, financial condition and results of operations.
Potential Legal Liability for Care Management
Participants in the healthcare industry have become subject to an
increasing number of lawsuits alleging malpractice, product liability, bad
faith, ERISA liability and other legal theories, including negligence in
credentialing and utilization management, many of which involve large claims and
significant legal costs. SHPS, through its utilization review services, makes
recommendations concerning the appropriateness of providers' proposed medical
treatment of patients and, as a result, it could be subject to liability arising
from any adverse medical consequences. SHPS does not grant or deny claims for
payment of benefits, and SHPS does not believe that it engages in the practice
of medicine or the delivery of medical services. There can be no assurance,
however, that SHPS will not be subject to claims or litigation related to
granting or denying claims for payment of benefits or allegations that SHPS
engages in the practice of medicine or the delivery of medical services. When a
patient requires guidance in retaining physician services in their area, SHPS
assists them in identifying appropriate providers. To the extent that those
providers are deemed to be agents of SHPS, SHPS could be subject to liability
regarding adverse medical consequences or inappropriate provider selection.
Additionally, due to the nature of its business, SHPS could become involved in
litigation regarding the information provided telephonically by its clinical
service staff, particularly in light of the emerging laws relating to
telemedicine, which is the practice of performing medical diagnoses and
treatment via telecommunications devices. See "-- Risks Relating to
Telemedicine."
Additionally, to the extent that SHPS' clinical service staff could be
deemed a provider of medical or clinical services, SHPS could be subject to
claims of licensure violations, which could result in fines, suspension or loss
of the right to do business in a particular state. In Arizona, the state court
of appeals held that the state board of medicine, as the entity with authority
to regulate the practice of medicine in Arizona, had jurisdiction to investigate
complaints against a physician arising from his decisions authorizing or denying
pre-certification of medical procedures as a medical director of a health plan.
As a result of its investigation, the Arizona state board of medicine issued a
"letter of concern." Unlike the physician in the Arizona case, the physicians
and nurses employed by SHPS do not make final decisions regarding the
authorization or denial of medical treatment. However, to the extent that their
duties could be viewed as comparable, the physicians and nurses employed by SHPS
could be deemed to be engaged in the corporate practice of medicine and subject
to discipline by the state boards of medicine and nursing through which they are
licensed, which could result in substantial penalties to SHPS, including
administrative penalties such as fines, reprimands, criminal penalties, or an
order to cease doing business, any of which could have a material adverse effect
on SHPS.
SHPS also could incur liability as a fiduciary in respect of certain of
the disability management services it provides. To reduce its exposure, SHPS
maintains general liability insurance coverage up to $2.0 million in the
aggregate, product liability insurance coverage up to $1.0 million in the
aggregate, umbrella liability insurance coverage up to $10.0 million in the
aggregate, primary occurrence errors and omissions insurance coverage up to $5.0
million in the aggregate and excess occurrence errors and omissions insurance
coverage up to $5.0 million in the aggregate. There can be no assurance,
however, that such insurance will be sufficient or available at a reasonable
cost to protect SHPS from liability. To the extent that such insurance is
insufficient or unavailable to cover the costs associated with these potential
liabilities, SHPS' business or results of operations could be materially
adversely affected.
Potential Legal Liability as a Benefits Administrator
As an administrator of benefits, SHPS provides services to employers
that are subject to the requirements of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), which may prevent the imposition of liability
in state law claims such as malpractice or bad faith. The possibility exists
that SHPS could be subject to state law claims for services provided to plans
not covered by ERISA and liability for these claims could be substantial.
Additionally, there can be no assurance that ERISA will not be further eroded by
legal precedent or amended to modify or repeal the current limitations on
liability.
As a provider of COBRA compliance and administration services, SHPS is
subject to excise taxes for noncompliance with certain provisions of COBRA.
Under current federal laws, the maximum amount of such taxes that may be imposed
on SHPS in any year for unintentional violations of COBRA is $2.0 million. In
addition to the excise tax liability that may be imposed on SHPS, substantial
excise taxes may be imposed on SHPS' customers under COBRA. Under many of SHPS'
service agreements, SHPS assumes financial responsibility for the payment of
such taxes or penalties assessed against a customer arising out of SHPS' failure
to comply with COBRA, unless such taxes or penalties are attributable to the
customer's failure to comply with the terms of its agreement with SHPS. In
addition to liability for excise taxes for noncompliance with COBRA, SHPS
accepts financial responsibility for certain civil and other liabilities
incurred by its customers that are attributable to SHPS' failure to fulfill its
obligations to its customers under its agreements. These liabilities could, in
certain cases, be substantial. There can be no assurance that SHPS will not
incur material liability for noncompliance with COBRA or for its failure to
comply with its agreement with any customer in the future. Although SHPS
maintains errors and omissions insurance coverage and such other coverages as
SHPS believes are reasonable, the imposition of such liability on SHPS in excess
of any available insurance coverage, or its insurer's interpretation that such
liability is not covered under SHPS' insurance policy, could have a material
adverse effect on SHPS.
Governmental Regulation
The healthcare and employee benefit industries are subject to extensive
and evolving regulation, both at the federal and state levels. The benefit plans
administered by SHPS and its Care Management programs are subject to a variety
of laws and regulations, including ERISA, COBRA, the Health Insurance
Portability and Accountability Act of 1996 ("HIPAA"), federal and state
confidentiality laws, Medicare as secondary payor laws and regulations,
telemedicine laws, the Public Health Service Act, a number of state third party
administrative laws, and state laws involving the provision of healthcare
services. These laws and regulations are administered by numerous agencies,
including the Department of Labor, the Department of Commerce, the Department of
Health and Human Services, the Internal Revenue Service (the "IRS") and state
insurance and health regulation departments.
Where a patient requires a second opinion, one of SHPS' physician
medical directors provides the patient with the names of physicians in the
patient's area. The patient selects a physician and SHPS makes an appointment
for the patient with the physician, and this physician evaluates the
appropriateness of the care being recommended by the patient's attending
physician. In doing so, the physician may order designated healthcare services
which in turn must be a covered service approved by SHPS for payment. Whether
such services are covered benefits is determined by the terms of the customer's
benefit plan, not by SHPS. SHPS reviews the terms of its customers' benefit
plans, each of which includes a process to determine which healthcare services
are covered. If the ordered designated healthcare services are covered under the
Medicare or Medicaid programs, the provision of the list of names of physicians
or the making of a patient appointment by the medical director could be deemed a
referral subject to the prohibitions against referrals to entities performing
designated healthcare services in which the referring physician has a financial
interest as defined in the Stark I and Stark II statutes, resulting in fines or
criminal penalties, which could have a material adverse effect on SHPS.
SHPS' customers, and not SHPS, generally pay the physicians who perform
the second opinion and related services, including designated healthcare
services. SHPS does not believe that under these circumstances it has a
financial relationship in any entity that provides designated healthcare
services which are reimbursed under the Medicare or Medicaid programs.
Therefore, SHPS does not believe that the Stark II statute impacts referrals
made by SHPS' medical directors in these instances.
Occasionally, SHPS may advance payments to physicians, laboratories and
x-ray facilities, which may include payment for designated healthcare services,
on behalf of SHPS' customers. SHPS' customers reimburse SHPS in total for these
advances. These advances may constitute a financial interest as that term is
defined in Stark I and in the proposed regulations to the Stark II laws.
However, SHPS believes that the advance payments to physicians do not violate
the Stark I and Stark II prohibition against referrals, as the advance payments
meet the proposed exception for physician services under the proposed Stark II
regulations. SHPS also believes that these payments, which are authorized by
SHPS' medical director, to laboratories and x-ray facilities do not violate
Stark I and the Stark II proposed regulations as these advance payments meet the
proposed exception for payments by physicians for items and services under the
proposed Stark II regulations. However, there are, to date, no final regulations
promulgated under the Stark II statute. To the extent that these actions by the
medical directors could later be found to be subject to and in violation of the
Stark II statute, the medical directors and SHPS could be subject to fines or
criminal penalties, which could have a material adverse effect on SHPS.
Many of these statutes and regulations impact the development of
healthcare information services and interstate transmission of medical
information and services. Some of the statutes and regulations governing the
provision of healthcare services as well as laws relating to telemedicine and
corporate practice of medicine doctrines could be construed by regulatory
authorities to apply to certain of SHPS' activities. See "-- Risks Relating to
Laws Governing Corporate Practice of Medicine." To the extent these statutes and
regulations could be deemed applicable to SHPS, SHPS and its employees could be
required to obtain additional licenses or registrations or to modify or curtail
SHPS' activities, or SHPS could be subject to revocation or suspension of
existing licenses or registrations or civil or criminal penalties or fines,
currently as high as $10,000, any of which could have a material adverse effect
on SHPS.
Currently, 34 states require licensure or registration of entities
deemed to be private utilization review agents. Frequently, these states exempt
entities providing services to ERISA plans. SHPS' current clients for these
services are primarily but not exclusively ERISA plans. To the extent that SHPS
provides services only to ERISA plans in any given state, SHPS may be exempt
from these licensure requirements. Although SHPS has voluntarily achieved
licensure in the states in which SHPS has determined licensure is required,
penalties for failure to achieve licensure in additional states could result in
the loss of SHPS' licenses or substantial penalties to SHPS, which could have a
material adverse effect on SHPS.
Risks Relating to Laws Governing Corporate Practice of Medicine
The laws of certain states in which SHPS operates or may operate in the
future do not permit business corporations to practice medicine or exercise
control over physicians who practice medicine. Currently, Arkansas, California,
Illinois, Iowa, Kansas, Louisiana, Massachusetts, Michigan, New Mexico, Texas,
Virginia, Washington and West Virginia have some form of prohibition against the
corporate practice of medicine. Although SHPS does not believe that the services
it provides constitute the corporate practice of medicine, a finding that SHPS
is engaged in the corporate practice of medicine in any of the foregoing states
could result in loss of licensing, the need to develop relationships with
physicians licensed in the states having corporate practice of medicine
statutes, and civil and criminal fines, which currently range as high as
$10,000, any of which could require SHPS to modify its techniques of doing
business, withdraw from certain states or otherwise curtail its activities, and
could have a material adverse effect on SHPS.
Risks Relating to Telemedicine
Telemedicine is the practice of performing medial diagnosis and
treatment via telecommunications devices. These technologies range from
providing clinical advice over the telephone, the transmission of high
resolution images (e.g., x-rays, sonograms) and the remote performance of
clinical evaluations using interactive teleconferencing. As advanced
telecommunications technology has become more widely available, the legal issues
associated with telemedicine have become the subject of new legislation. In the
past three years, legislation has been introduced to amend licensure laws
related to the out of state practice of medicine and consultation. To date, 23
states have introduced or passed bills related to telemedicine, primarily
regarding the licensure of out-of-state physicians and the coverage of
telemedicine procedures by third party payor plans. Those states are Alabama,
Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Maryland,
Mississippi, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North
Dakota, Ohio, Oregon, Rhode Island, Utah, Virginia, Washington and West
Virginia.
Although SHPS does not believe that these laws currently impact SHPS'
operations because it does not believe it engages in medical diagnosis or
treatment via telecommunication devices, to the extent SHPS' services could be
deemed to be telemedicine, SHPS could be subject to liability for licensure
violations, violations of third party payor requirements or violations of the
laws relating to the confidentiality of patient medical records, any of which
could have a material adverse effect on SHPS.
Possible Adverse Effect of National and State Healthcare Reform Proposals
The extent and type of government support for and oversight of the
delivery of healthcare services, as well as the extent and type of health
insurance benefits that employers are required to provide employees, have been
the subject of close scrutiny and debate in recent years, both at the national
and state levels, resulting in such legislation as HIPAA. Additional changes in
the government programs and regulations, including requirements governing the
manner by which services are delivered, and the premiums for services, the
reimbursement of fees, benefits packages, parity for particular health
conditions, access to particular types of healthcare providers, or the
development of a modified healthcare purchasing system could have a material
adverse effect on SHPS.
Reliance on Information Processing Systems and Proprietary Technology
SHPS' business is dependent on its ability to store, retrieve, process
and manage significant databases, and to periodically expand and upgrade its
information processing capabilities. To facilitate the planned expansion of
SHPS' existing services to accommodate its customers' needs and future
regulatory requirements, SHPS intends to develop additional proprietary
applications software and databases and to use commercially available database
management software and computer hardware that are not currently being used by
SHPS. Currently, the information processing systems and services of SHSB are
provided to SHPS by The Prudential Insurance Company of America ("Prudential")
pursuant to a transitional systems support services agreement. Pursuant to this
agreement, Prudential is to provide such services through March 31, 1999. SHPS
is currently in the process of migrating its information systems from the
mainframe platform provided under this agreement to a proprietary, client server
platform.
SHPS currently estimates that the cost to migrate from a mainframe
platform to a client server platform and to make its computer systems Year 2000
compliant will be approximately $5.5 million. However, any additional costs
incurred in connection with such migration, delay in such migration or in
becoming Year 2000 compliant, or the failure of the new systems to adequately
support SHPS' operations, could materially adversely affect SHPS' business and
financial results. In addition, there can be no assurance that SHPS will be able
to incorporate new technology to enhance and develop its existing services.
SHPS' computer equipment and software systems are maintained at SHPS'
Arizona, Kentucky, Massachusetts, Nevada and Ohio locations. Interruption or
loss of SHPS' information processing capabilities through loss of stored data,
breakdown or malfunction of computer equipment and software systems,
telecommunications failure or damage to SHPS' systems or the Arizona, Kentucky,
Massachusetts, Nevada or Ohio locations caused by fire, hurricane, tornado,
flood, lightning, electrical power outage or other disruption could have a
material adverse effect on SHPS.
SHPS' business is dependent on its continued use of proprietary
software, databases and processing techniques. SHPS attempts to protect its
trade secrets and other proprietary information through agreements with
customers, employees and consultants. There can be no assurance that these
precautions will be adequate to deter misappropriation of SHPS' proprietary
software and healthcare information processing techniques.
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares.
SELLING SHAREHOLDERS
On December 29, 1998, Sykes issued 1,474,998 shares of common stock to
the holders of all of the outstanding stock of Oracle Service networks
Corporation ("Oracle") of London, Ontario, Canada. Oracle provides call center
operations, including customer support and service applications, primarily to
the financial services, telecommunications, and automotive industries, as well
as care management services to the healthcare insurance industry. In connection
with the business combination between Oracle and Sykes pursuant to a Combination
Agreement dated December 9, 1998, the former shareholders of Oracle received
1,474,998 exchangeable shares of Oracle, which are exchangeable for 1,474,998
shares of common stock of Sykes (the "Exchangeable Shares"). Before any sale of
shares by this prospectus, the former shareholders of Oracle will exchange
exchangeable shares into the shares of common stock that will be sold pursuant
to this prospectus. Under the terms of the Registration Rights Agreement dated
December 29, 1998 entered into in connection with the business combination
between Oracle and Sykes, Sykes agreed to file a registration statement under
the Securities Act of 1933 to register the sale of up to two-thirds of the
shares of common stock issuable to the former Oracle shareholders, and to keep
such registration statement effective until December 29, 1999, or, if earlier,
until all of the shares covered by this prospectus have been sold. Accordingly,
983,332 shares of common stock covered by this prospectus are being offered for
sale by the former Oracle shareholders.
The following table sets forth certain information concerning the
selling shareholders:
<TABLE>
<CAPTION>
Maximum
Shares Beneficially Number of Shares Beneficially
Owned Prior Shares Being Owned After
to the Offering Offered the Offering(1)
------------------------------ ------------ ----------------------------
Number Percent Number Percent
---------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Slemko Investment Corporation(1)........... 513,302 * 342,201 171,101 *
Stilco Investments Limited................. 474,804 * 316,536 158,268 *
Hambro Insurance Services Group PLC........ 486,892 * 324,595 324,595 *
---------------
Total Shares Offered..... 983,332
===============
</TABLE>
- ------------------
*Less than 1.0%
(1) The selling shareholders may sell from time to time all or a portion of
the shares being offered. The amounts shown assume the sale of all the
shares being offered by each selling shareholder.
(2) Gerald Slemko, the sole shareholder of Slemko Investment Corporation,
served as the Chief Executive Officer of Oracle Service Networks
Corporation before its acquisition by Sykes and since.
PLAN OF DISTRIBUTION
The shares offered by this prospectus may be sold from time to time by
the selling shareholders until December 29, 1999. Such sales may be made in the
over-the-counter market, on the NASDAQ National Market or one or more exchanges,
or otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions, or to one or more
underwriters for resale to the public. The shares sold may be sold in one or
more of the following ways:
* a block trade in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
* purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
* an exchange distribution in accordance with the rules of such
exchange;
* ordinary brokerage transactions and transactions in which the
broker solicits purchasers; or
* an underwritten public offering.
In effecting sales, brokers or dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from the selling shareholders in
amounts to be negotiated immediately prior to the sale. Such broker or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with such sales. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this prospectus.
Brokers or dealers may be entitled to indemnification by Sykes and the
selling shareholders against certain liabilities, including liabilities under
the Securities Act of 1933.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for Sykes by Foley & Lardner, Tampa, Florida. Martin A. Traber, a
partner of Foley & Lardner, owns 2,250 shares of Sykes common stock.
EXPERTS
The consolidated financial statements of Sykes Enterprises,
Incorporated (Sykes) at December 31, 1998, and for the year then ended,
incorporated by reference in the Sykes Annual Report (Form 10-K) for the year
ended December 31, 1998, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference therein
and incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Sykes Enterprises,
Incorporated at December 31, 1996 and 1997, and for each of the two years in the
period ended December 31, 1997, incorporated by reference in Sykes Form 10-K for
the year ended December 31, 1998, in this registration statement, have been
audited by PricewaterhouseCoopers LLP, independent auditors, as set forth in
their report thereon incorporated by reference therein. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement we filed with the
SEC relating to the shares of common stock offered by this prospectus. This
prospectus does not contain all of the information described in the registration
statement. For further information, you should refer to the registration
statement.
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room. Our SEC filings are also available to
the public from the SEC's Website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC automatically will update and supercede this information. We
incorporate by reference the documents listed below that we have filed with the
SEC and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus and before the termination of the offering of the common stock:
1. Annual Report on Form 10-K for the year ended December 31, 1998;
2. Current Report on Form 8-K filed January 12, 1999;
3. Current Report on Form 8-K filed January 21, 1999;
4. Current Report on Form 8-K filed February 3, 1999;
5. Current Report on Form 8-K/A filed March 12, 1999;
6. Proxy Statement dated April 1, 1999, for the 1999 Annual Meeting
of Shareholders; and
7. The description of the common stock set forth in the Registration
Statement of Form 8-A dated April 19, 1996.
We will provide any of these filings to each person, including any
beneficial owner, to whom a prospectus is delivered. You may request these
filings at no cost by writing us at 100 N. Tampa Street, Suite 3900, Tampa,
Florida 33602, attention Chief Financial Officer, or by telephone at (813)
274-1000.
You should rely only on the information provided in this prospectus or
incorporated in this prospectus by reference. We have not authorized anyone else
to provide you with different information. This prospectus only may be used
where it is legal to sell these securities. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this prospectus.
<PAGE>
<TABLE>
<CAPTION>
============================================================ =========================================================
<S> <C>
No dealer, salesperson or any other person has been
authorized to give any information or to make any
representation other than those contained in this
Prospectus in connection with the offer made by this 983,332 Shares
Prospectus and, if given or made, such information or
representation must not be relied upon as having been
authorized by the Company, the Selling Shareholders or any
underwriter. This Prospectus does not constitute an offer SYKES ENTERPRISES, INCORPORATED
to sell, or a solicitation of any offer to buy, any
securities other than the shares of Common Stock offered by
this Prospectus, nor does it constitute an offer to sell or
a solicitation of an offer to buy such shares of
Common Stock in any circumstances in which such offer or Common Stock
solicitation is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been
no change in the affairs of the Company since the date
hereof or that the information contained herein is correct
as of any time subsequent to the date hereof.
--------------------------------- -------------------------
TABLE OF CONTENTS PROSPECTUS
--------------------------------- -------------------------
Page
Sykes..................................................1
Risk Factors...........................................2
Use of Proceeds.......................................11
Selling Shareholders..................................12
Plan of Distribution..................................12
Legal Matters.........................................13
Experts...............................................13
Where We Can Find More Information....................13
May __, 1999
============================================================ =========================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission filing fee.................. $ 7,398
Accountants' fees and expenses................................. 5,000
Legal fees and expenses........................................ 10,000
Registrar and Transfer Agent's fees and expenses............... 500
Printing expenses.............................................. 5,000
Miscellaneous.................................................. 2,102
-------
Total...................... $30,000
=======
- --------------------------
All of the fees, costs and expenses set forth above will be paid by
Sykes. Other than the SEC filing fee, all fees and expenses are estimated.
Item 15. Indemnification of Directors and Officers.
The Florida Business Corporation Act (the "Florida Act") permits a
Florida corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the corporation
in related capacities) for liabilities, including legal expenses, arising by
reason of service in such capacity if such person shall have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe his conduct was unlawful. However, in the case of
actions brought by or in the right of the corporation, no indemnification may be
made with respect to any matter as to which such director or officer shall have
been adjudged liable, except in certain limited circumstances.
Sykes' Articles of Incorporation and Bylaws provide that Sykes shall
indemnify directors and executive officers to the fullest extent now or
hereafter permitted by the Florida Act. In addition, Sykes may enter into
Indemnification Agreements with its directors and executive officers in which
Sykes may agree to indemnify such persons to the fullest extent now or hereafter
permitted by the Florida Act.
The indemnification provided by the Florida Act and Sykes' Articles of
Incorporation and Bylaws is not exclusive of any other rights to which a
director or officer may be entitled. The general effect of the foregoing
provisions may be to reduce the circumstances which an officer or director may
be required to bear the economic burden of the foregoing liabilities and
expense.
Sykes has a standard policy of directors' and officers' liability
insurance covering directors and officers of the corporation with respect to
liabilities incurred as a result of their service in such capacities, which may
extend to, among other things, liability arising under the Securities Act of
1933.
Item 16. Exhibits.
Exhibit
Number Exhibit Description
------- -------------------
4.1 Registration Rights Agreement dated December 29, 1998 among Sykes
and the shareholders of Oracle Service Networks Corporation.
5.1 Opinion of Foley & Lardner.
23.1 Consent of Foley & Lardner (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers, LLP.
24.1 Power of Attorney relating to subsequent amendments (included
on the signature page of this Registration Statement).
- --------------------
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs 1(i) and 1(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(5) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(6) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tampa, State of Florida, on this 4th day of May,
1999.
SYKES ENTERPRISES, INCORPORATED
By: /s/ Scott J. Bendert
-----------------------------------------
Scott J. Bendert
Senior Vice President-Finance, Treasurer
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints John H. Sykes and Scott J. Bendert, and each of them
individually, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any and all Registration
Statements filed pursuant to Rule 462(b) under the Securities Act of 1933, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or either of them, may lawfully do or cause to be done by virtue
hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John H. Sykes Chairman of the Board, Chief Executive May 4, 1999
- ------------------------------------ Officer and Director (Principal Executive
John H. Sykes Officer)
/s/ Scott J. Bendert Senior Vice President-Finance, Chief May 4, 1999
- ------------------------------------ Financial Officer and Treasurer (Principal
Scott J. Bendert Financial and Accounting Officer)
/s/ Gordon H. Loetz Vice Chairman of the Board and Director May 4, 1999
- ------------------------------------
Gordon H. Loetz
/s/ Furman P. Bodenheimer, Jr. Director May 4, 1999
- ------------------------------------
Furman P. Bodenheimer, Jr.
/s/ H. Parks Helms Director May 4, 1999
- ------------------------------------
H. Parks Helms
/s/ Iain A. Macdonald Director May 4, 1999
- ------------------------------------
Iain A. Macdonald
/s/ Linda McClintock-Greco Director May 4, 1999
- ------------------------------------
Linda McClintock-Greco
/s/ Ernest J. Milani Director May 4, 1999
- ------------------------------------
Ernest J. Milani
/s/ Adelaide A. Sink Director May 4, 1999
- ------------------------------------
Adelaide A. Sink
/s/ R. James Stroker Director May 4, 1999
- ------------------------------------
R. James Stroker
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
------- -------------------
4.1 Registration Rights Agreement dated December 29, 1998 among Sykes
and the shareholders of Oracle Service Networks Corporation.
5.1 Opinion of Foley & Lardner.
23.1 Consent of Foley & Lardner (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers, LLP.
24.1 Power of Attorney relating to subsequent amendments (included
on the signature page of this Registration Statement).
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated December
29, 1998, is between SYKES ENTERPRISES, INCORPORATED, a Florida corporation
("Sykes"), STILCO INVESTMENTS LIMITED, an Ontario corporation, SLEMKO INVESTMENT
CORPORATION an Ontario corporation, and HAMBRO INSURANCE SERVICES GROUP PLC, an
English public limited company (each, a "Seller," and collectively, the
"Sellers") of Oracle Service Networks Corporation, an Ontario corporation (the
"Company").
WHEREAS, this Agreement is made in connection with acquisition by Sykes
of the Company via a reorganization of capital of the Company pursuant to a
Combination Agreement dated December 9, 1998 among Sykes, the Company, and the
Sellers (the "Combination Agreement");
WHEREAS, to induce the Sellers to enter into the Combination Agreement,
Sykes has agreed to provide the Sellers with the registration rights set forth
in this Agreement
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions in this
Agreement, the parties agree as follows:
1. DEFINITIONS.
-----------
(a) Closing: The consummation of the transactions contemplated by the
Combination Agreement.
(b) Common Stock: The common stock, par value $.01 per share, of Sykes.
(c) Date of Issuance: The Closing Date (as defined in the Combination
Agreement).
(d) Exchangeable Shares: has the meaning set forth in the Combina-
tion Agreement).
(e) Floor Price: The average closing price of the Common Stock for the
five trading days preceding the Closing Date.
(f) Holder: A Seller so long as such Seller owns any Registrable
Securities or any exchangeable Shares exchangeable for Registrable Securities
and any of such Seller's respective successors and assigns who acquire rights in
accordance with this Agreement with respect to Registrable Securities directly
or indirectly from such Seller, or from such other successor and assign.
(g) Registrable Securities: Two-thirds (2/3) of the shares constituting
the Subject Common Stock; provided, however, that specific shares of the Subject
Common Stock shall not be Registrable Securities if and to the extent that (i) a
Registration Statement with respect to such shares of Subject Common Stock shall
have been declared effective under the Securities Act and such shares of Subject
Common Stock shall have been disposed of in accordance with such Registration
Statement, (ii) such shares of Subject Common Stock shall have been distributed
to the public in accordance with Rule 144 (or any successor provision)
promulgated under the Securities Act and the purchaser thereof does not receive
"restricted securities" as defined in Rule 144, or (iii) such shares of Subject
Common Stock shall have been otherwise transferred in accordance with the
provisions of this Agreement and the Combination Agreement, and new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by Sykes and subsequent public distribution of them shall not, in the
opinion of counsel for Sykes, require registration under the Securities Act.
(h) Registration Expenses: Any and all reasonable expenses actually
incurred incident to performance of or compliance with this Agreement (including
without limitation all registration and filing fees, all fees of any national
securities exchange or automated quotations system, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, fees and disbursements of
counsel to Sykes and of its independent public accountants) other than (i)
underwriting discounts and commissions and transfer taxes, and (ii) expenses of
counsel of the Holders incurred with respect to the registration of Registrable
Securities.
(i) Registration Statement: Any registration statement filed by Sykes
with the SEC which permits the registration for sale or other transfer of the
Registrable Securities (in whole or in part), including the prospectus included
therein, all amendments and any supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
(j) SEC: The United States Securities and Exchange Commission.
(k) Securities Act: The Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulations of the SEC
thereunder, all as in effect at the time.
(l) Subject Common Stock: The shares of Common Stock issued or issuable
to the Sellers upon exchange of the Exchangeable Shares issued to the Sellers
pursuant to the Combination Agreement and any additional shares of Common Stock
or shares of any other security of Sykes issued in respect of such shares, by
way of stock splits, stock dividends, or otherwise.
2. REGISTRATION UNDER THE SECURITIES ACT.
-------------------------------------
(a) REGISTRATION.
------------
(i) Filing of Registration Statement. Sykes will prepare and file
with the SEC a Registration Statement in form and scope sufficient to permit,
under the Securities Act and any other applicable United States law and
regulations, the Registrable Securities to be registered pursuant to a shelf
registration for sale from to time in the open market, privately negotiated
transactions or through one or more underwriters selected by Sykes in a firm
commitment public offering (the "Demand Registration Statement"). Sykes shall
use its best efforts to have the Demand Registration Statement declared
effective no later than May 15, 1999, and Sykes shall file with the SEC the
Demand Registration Statement by such date as is appropriate to achieve this
result; provided, however, that Sykes is not required to have the Demand
Registration Statement declared effective before May 15, 1999. In addition,
Sykes shall use its best efforts to (i) keep the Demand Registration Statement
continuously effective until the first anniversary of the Date of Issuance or,
if shorter, until such time as all the Registrable Securities covered by the
Demand Registration Statement have been sold pursuant thereto, (ii) prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection with the Registration Statement as may be
necessary to comply with the provision of the Securities Act with respect to the
disposition of all Registrable Securities covered by the Demand Registration
Statement, and (iii) otherwise use its best efforts to comply with applicable
rules and regulations of the SEC in connection with the Demand Registration
Statement.
(ii) Number of Registrations. Sykes shall be obligated to effect a
Demand Registration pursuant to this Section 2(a) only once.
(iii) Registration Statement Form. Registrations under this Section
2(a) shall be on such appropriate registration form of the SEC as shall be
selected by Sykes and shall permit the disposition of Registrable Securities by
the Holders as contemplated by Section 2(a)(i).
(iv) Expenses. Sykes shall pay all Registration Expenses in
connection with the registration pursuant to this Section 2(a). The Holder or
Holders shall pay any underwriting discounts and commissions, any transfer
taxes, and any expenses of counsel of any Holder or Holders relating to the sale
or disposition of such Holder's Registrable Securities pursuant to such
Registration Statement.
(v) Effective Registration Statement. A Demand Registration will
not be deemed to have been effected unless it has been declared effective by the
SEC; provided, however that if a Demand Registration does not become effective
solely by reason of any act or omission on the part of the Holder or Holders
requesting such Demand Registration, such Demand Registration shall nevertheless
fulfill Sykes' obligations under this Section 2(a) to effect a Demand
Registration; provided further, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by a stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such registration will be
deemed not to have become effective or to have been effected.
(vi) Registration Not Required. Notwithstanding the other
provisions of Section 2(a), Sykes shall not be required to effect a Demand
Registration under this Section 2(a) for Registrable Securities owned by any
Holder that did not, by delivering the requisite notice, exercise its right to
register such Registrable Securities in a Piggyback Registration when so offered
by Sykes under Section 2(b).
(b) PIGGYBACK REGISTRATIONS.
-----------------------
(i) Right to Piggyback. Subject to Sections 2(c) and 2(d) hereof,
if at any time prior to the first anniversary of the Date of Issuance, Sykes
proposes to file a Registration Statement under the Securities Act with respect
to any offering that will close on or after May 15, 1999 (or, if earlier, on or
after the date that Sykes publishes the 30-day combined financial results of
Sykes and the Company), other than by the Holders, of securities of the same
class as the Registrable Securities for its own account or on behalf of any of
its security holders (other than (i) a registration on Form S-8 or S-4 or any
successor form, (ii) a registration relating to a transaction subject to Rule
145 under the Securities Act, or (iii) any registration of securities as it
relates to an offering and sale to management of Sykes pursuant to any employee
stock plan or other employee benefit plan arrangement) then, as soon as
practicable (but in no event less than twenty (20) days prior to the proposed
date of filing such Registration Statement), Sykes shall give written notice
(including the proposed offering price or range of offering prices, the type and
amount of securities proposed to be registered, proposed distribution
arrangements and the name of the managing underwriter) of such proposed filing
to the Holders, and such notice shall offer the Holders the opportunity to
register such number of Registrable Securities as the Holders may request (a
"Piggyback Registration"). Subject to Section 2(d) hereof, Sykes shall include
in such Registration Statement all Registrable Securities requested within
fifteen (15) days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by the Holders to
be included in the registration for such offering pursuant to a Piggyback
Registration), provided, however, that if, at any time after giving written
notice of its intention to register securities of the same class as the
Registrable Securities and prior to the effective date of the Registration
Statement filed in connection with such registration, Sykes shall determine for
any reason not to register or to delay registration of the securities of the
same class as the Registrable Securities to be registered for sale by Sykes,
Sykes may, at its election, give written notice of such determination to the
Holder and, thereupon, (i) in the case of a determination not to register, shall
be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities.
(ii) Piggyback Expenses. Sykes shall pay all Registration Expenses
in connection with the registration pursuant to this Section 2(b). The Holder or
Holders shall pay any underwriting discounts and commissions, any transfer
taxes, and any expenses of counsel of any Holder or Holders relating to the sale
or disposition of such Holder's Registrable Securities pursuant to such
Registration Statement.
(c) UNDERWRITER'S CUTBACK. Notwithstanding Sections 2(a) and 2(b), if a
Demand or Piggyback Registration is an underwritten offering and the managing
underwriter or underwriters advise Sykes in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering or would be reasonably likely to
adversely affect the price or distribution of the securities offered in such
offering or the timing thereof, then the securities to be included in such
registration shall be the amount of securities, adjusted on a pro rata basis,
that, in the opinion of such underwriter or underwriters, can be sold without an
adverse effect on the price, timing or distribution of the securities to be
included.
(d) REGISTRATION NOT REQUIRED. Notwithstanding Sections 2(a) and 2(b),
in the event the Holder or Holders request that any of the Registrable
Securities covered by this Agreement be sold in an underwritten offering or
otherwise request registration pursuant to this Agreement, Sykes shall not be
required to take the action required or contemplated herein to accommodate or
permit such underwritten offering or other registration of the shares subject to
the request if Sykes has provided to the requesting Holders an unqualified
opinion of counsel knowledgeable in Securities Act matters to the effect that
all of such Registrable Securities may immediately be sold by such Holders in a
brokers transaction under Rule 144 during any ninety (90) day period without
registration under the Securities Act and applicable state securities laws.
(e) SELECTION OF UNDERWRITER AND FLOOR PRICE. Notwithstanding anything
in this Agreement to the contrary, Sykes shall have the right, in its sole
discretion, to cause the Holders to sell their Registrable Securities in an
underwritten public offering (including a Piggyback Registration under Section
2(b)), provided that such offering closes before June 15, 1999. Holders shall
not sell Registrable Securities under the Demand Registration Statement until
June 15, 1999, provided that Sykes is diligently pursuing an underwritten public
offering relating to such Registrable Securities. If any of the Registrable
Securities are to be sold in an underwritten offering, Sykes shall have the sole
discretion to select the underwriter or underwriters. Sykes and the Holders will
take all reasonable steps to cooperate with the underwriter or underwriters so
selected to conduct the offering in a manner customary for such underwritten
offering, including without limitation entering into an underwriting agreement
with such underwriters, subject to the Floor Price and other provisions
described in this Section. In the event Registrable Securities are covered by a
Registration Statement filed pursuant to Section 2(a) or (b) hereof in an
underwritten offering, the Holders shall sell their Registrable Securities (in
the case of a Piggyback Registration, to the extent that they have requested to
have Registrable Securities included in such registration) in such underwritten
offering if the proceeds received per Registrable Security in the underwritten
offering (net of any discounts) is equal to or above the Floor Price.
Notwithstanding the foregoing, if the closing price of such underwritten
offering (net of any discounts) is less than the Floor Price, the Holders may,
but shall not be obligated to, sell their Registrable Securities in the
underwritten offering.
3. HOLD-BACK AGREEMENTS.
--------------------
(a) RESTRICTIONS ON PUBLIC SALE BY THE HOLDERS. In the event
Registrable Securities are covered by a Registration Statement filed pursuant to
Section 2 of this Agreement in an underwritten offering, if and to the extent
the underwriters of such offering shall request in writing, the Holders agree
not to effect any public sale or distribution of the class of securities
registered, including a sale pursuant to Rule 144 under the Securities Act,
except with the prior written consent of the managing underwriter, during the
period beginning on the effective date of such Registration Statement (except
pursuant to such Registration Statement) and ending on the earlier of the date
that Sykes agrees with the underwriter not to sell the class of securities
registered and the date 90 days after such effective date.
(b) RESTRICTIONS ON PUBLIC SECURITY SALE BY SYKES. In the event
Registrable Securities are covered by a Registration Statement filed pursuant to
Section 2 of this Agreement in an underwritten offering, if and to the extent
the underwriters of such offering shall request in writing, Sykes agrees not to
make any filing to register and agrees not to effect or offer to effect any
public sale or distribution of or purchase of the class of securities registered
(other than any such sale or distribution of such securities in connection with
any transaction subject to Rule 145 under the Securities Act or in connection
with offers and sales to employees under employee benefit plans), except with
the prior written consent of the managing underwriter, during the period
beginning on the effective date of such Registration Statement (except pursuant
to such Registration Statement) and ending on the earlier of the date that the
Holders who sell under such Registration Statement agree with the underwriter
not to sell the class of securities registered and the date 90 days after such
effective date.
4. REGISTRATION PROCEDURES. Sykes may require the Holders to use their best
efforts to furnish to Sykes such information regarding the distribution of the
Registrable Securities as Sykes may from time to time reasonably request in
writing. Sykes agrees to obtain customary services from its accountants in
connection with any offering required by Section 2 of this agreement. Sykes has
been informed by PricewaterhouseCoopers, LLP ("PWC") that isolated trades in
Sykes Common Stock by members of PWC has caused the SEC to review independence
standards governing PWC. As a result of such review or for any other reason,
Sykes may elect to use independent accountants other than PWC. Sykesfurther
agrees to (i) furnish Holders for whom shares are registered such number of
copies of the Registration Statement, a preliminary prospectus, a final
prospectus, a prospectus supplement, and amendments or supplements thereto, if
applicable, as such Holders may reasonably request; (ii) enter into customary
agreements, including an underwriting agreement (which shall include the
indemnification and contribution provisions under Section 5 or similar
provisions), and to make customary representations to any underwriters with
respect to the registration statement; (iii) make available to any underwriters
its offices and records as reasonably requested for the purpose of allowing the
underwriters to conduct a customary "due diligence" investigation; (iv)
cooperate with the underwriter or underwriters in making any filing or
submissions (including information filed therewith) required to be made with the
National Association of Securities Dealers, Inc., and (v) cause all Registrable
Securities that are registered as described herein to be listed or quoted on the
exchange or quotation system on which the Sykes Common Stock is at the time
listed or quoted. During periods in which a Registration Statement is effective
and during which the Holders must deliver a prospectus to comply with the
prospectus delivery requirements of the Securities Act, Sykes agrees (i) to
notify each Holder of the occurrence of an event which causes the prospectus or,
in the absence of a prospectus, the preliminary prospectus included in such
Registration Statement to contain any untrue statement of a material fact or to
omit to state a material fact necessary to make the statements therein not
misleading in light of the circumstances in which they were made, and (ii) upon
the occurrence of any such event, to supplement or amend such prospectus or
preliminary prospectus as soon as reasonably practicable so that such prospectus
or preliminary prospectus does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein to make the
statements therein not misleading in light of the circumstances in which they
were made.
5. INDEMNIFICATION.
---------------
(a) Sykes agrees to indemnify, to the extent permitted by law, each
Holder of Registrable Securities and (as applicable) its officers, directors,
partners, members, agents, and affiliates and each person or entity who controls
such Holder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses, joint or several, to which such
Seller or any such director, officer, partner, member, agent, affiliate or
controlling person may become subject under the Securities Act or otherwise,
including without limitation, the reasonable fees and expenses of legal counsel
(including those incurred in connection with any claim for indemnity hereunder),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise of or
are based upon any untrue or alleged untrue statement of material fact contained
in any Registration Statement, any preliminary prospectus, final prospectus or
supplemental prospectus contained therein, or any amendment or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which the statements were made, not misleading, except
insofar as the same are caused by or contained in any information furnished in
writing to Sykes by such Holder or any of its officers, directors, partners,
members, agents, affiliates or controlling persons expressly for use therein or
by such Holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after Sykes has furnished
such Holder with a sufficient number of copies of the same. In connection with
an underwritten offering, Sykes will indemnify such underwriters, their officers
and directors and each person or entity who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities.
(b) In connection with any Registration Statement in which a Holder is
participating, each such Holder will furnish to Sykes in writing such
information and affidavits as Sykes reasonably requests for use in connection
with any such Registration Statement or prospectus and, to the extent permitted
by law, will indemnify Sykes, its officers, directors, partners, members,
agents, and affiliates and any entity who controls Sykes (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses, joint or several, to which Sykes or any director, officer, partner,
member, agent, affiliate or controlling person of Sykes may become subject under
the Securities Act or otherwise, including without limitation, the reasonable
fees and expenses of legal counsel (including those incurred in connection with
any claim for indemnity hereunder), insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise of or are based upon any untrue or alleged untrue
statement of material fact contained in any Registration Statement, any
preliminary prospectus, final prospectus or supplemental prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which the statements
were made, not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in writing by
such Holder or its affiliate; provided that the obligation to indemnify will be
several, not joint and several, among such Holders and the liability of each
such Holder in the event that more than one Holder is liable will be in
proportion to and limited to the net amount received by such Holder from the
sale of Registrable Securities pursuant to such Registration Statement.
(c) Any person or entity entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification; provided, however, that failure to give such
notice will not prejudice such person's or entity's right to indemnification
from the indemnifying party, except as to any losses suffered by such person or
entity which are attributable to such person's or entity's failure to promptly
give such notice to such indemnifying party and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. The indemnifying party will not be
subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director, partner, agent, member,
affiliate or controlling person or entity of such indemnified party and will
survive the transfer of securities and the termination of this Agreement. Sykes
also agrees to make such provisions as are reasonably requested by any
indemnified party for contribution to such party in the event Sykes
indemnification is unavailable or unenforceable for any reason.
6. REGULATION S OFFERING. The Sellers agree that none of the Registrable
Securities will be offered for sale pursuant to Regulation S (as promulgated by
the SEC) without the prior written consent of Sykes.
7. MISCELLANEOUS.
-------------
(a) NO INCONSISTENT AGREEMENTS. Sykes has not entered into and will not
on or after the date of this Agreement enter into any agreement with respect to
the Common Stock which is inconsistent with the rights granted in this Agreement
to the Sellers or which otherwise conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless (i) Sykes has obtained the written consent of the Holders to such
amendment, modification, or supplement or (ii) Sykes has obtained from each
Holder a waiver or consent to such departure.
(c) NOTICES. All notices, requests, demands and other communications
(collectively, "Notices") that are required or may be given under this Agreement
shall be in writing. All Notices shall be deemed to have been duly given or
made: if by hand, immediately upon delivery; if by telecopier or similar device,
immediately upon sending, provided notice is sent on a business day during the
hours of 9:00 a.m. and 6:00 p.m. at the location of the party receiving the
Notice, but if not, then immediately upon the beginning of the first business
day after being sent; if by FedEx, Express Mail or any other reputable overnight
delivery service, three business days after being placed in the exclusive
custody and control of said courier; and if mailed by certified mail, return
receipt requested, ten business days after mailing. Notwithstanding the
foregoing, with respect to any Notice given or made by telecopier or similar
device, such Notice shall not be effective unless and until (i) the telecopier
or similar advice being used prints a written confirmation of the successful
completion of such communication by the party sending the Notice, and (ii) a
copy of such Notice is deposited in first class mail to the appropriate address
for the party to whom the Notice is sent. In addition, notwithstanding the
foregoing, a Notice of a change of address by a party hereto shall not be
effective until received by the party to whom such Notice of a change of address
is sent. All Notices are to be given or made to the parties at the following
addresses (or to such other address as either party may designate by Notice in
accordance with the provisions of this Section):
(i) if to the Holders, at the address set forth in the
Combination Agreement, or at the most current address given by the Holders to
Sykes by means of a notice given in accordance with the provisions of this
Section 7(c)
(ii) if to Sykes, at the address set forth in the Combination
Agreement, or at the most current address given by Sykes to the Sellers by means
of a notice given in accordance with the provisions of this Section 7(c).
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida.
(g) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(h) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective permitted successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or other permitted Holders are also for the benefit of,
and enforceable by, any subsequent permitted Holder. The registration rights of
the Holders under this Agreement may be transferred to any transferee who
lawfully acquires (including without limitation in compliance with the transfer
restrictions contained in the Combination Agreement) at least 15,000 shares of
the Registrable Securities or Exchangeable Shares exchangeable for 15,000
Registrable Securities; provided, however, that Sykes is given written notice by
the Holder at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being assigned; and provided further, that such transferee
executes an agreement in writing agreeing to be bound by the provisions of this
Agreement.
[signatures begin on next page]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date written above.
SYKES ENTERPRISES, INCORPORATED
By: /s/ Scott J. Bendert
---------------------------------
Scott J. Bendert
Senior Vice President - Finance,
Treasurer and Chief Financial
Officer
SELLERS:
STILCO INVESTMENTS LIMITED
By: /s/
---------------------------------
Name:
Title:
SLEMKO INVESTMENT CORPORATION
By: /s/
---------------------------------
Name:
Title:
HAMBRO INSURANCE SERVICES GROUP PLC
By: /s/
Name:
Title:
EXHIBIT 5.1
FOLEY & LARDNER
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
May 4, 1999
Sykes Enterprises, Incorporated
100 North Tampa Street, Suite 3900
Tampa, Florida 33602
Re: Registration Statement on Form S-3
Gentlemen:
This opinion is being furnished in connection with the Registration
Statement on Form S-3 (the "Registration Statement") of Sykes Enterprises,
Incorporated (the "Company") under the Securities Act of 1933, as amended (the
"Act"), for the registration of 983,382 shares of common stock, par value $.01
(the "Shares"). As counsel for the Company, we have examined and are familiar
with the Articles of Incorporation and Bylaws of the Company; the proceedings of
the Board of Directors of the Company relating to the issuance of the Shares;
and such other Company records, documents and matters of law as we have deemed
to be pertinent. Based upon our examination of such documents and our
familiarity with such proceedings, it is our opinion that:
1. The Company has been duly incorporated and its status is active
under the laws of the State of Florida.
2. The Shares are duly authorized, validly issued, fully paid and
nonassessable. We hereby consent to the inclusion of this opinion as Exhibit 5
in the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Act or the rules or regulations of the
Securities and Exchange Commission promulgated thereunder.
FOLEY & LARDNER
By: /s/ Martin A. Traber
Martin A. Traber
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Sykes
Enterprises, Incorporated (Sykes) for the registration of 983,332 shares of its
common stock and to the incorporation by reference therein of our report dated
March 5, 1999, with respect to the consolidated financial statements of Sykes
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1998, and the related financial statement schedule included
therein, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Tampa, Florida
May 4, 1999
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Sykes Enterprises, Incorporated and subsidiaries on Form S-3 of our
report dated March 6, 1998 on our audits of the consolidated financial
statements of Sykes Enterprises, Incorporated and subsidiaries as of December
31, 1997, and for the years ended December 31, 1996 and 1997, which report is
incorporated by reference in Sykes Enterprises, Incorporated and subsidiaries'
1998 Annual Report on Form 10-K. We also consent to the reference to our firm
under the caption "Experts."
PricewaterhouseCoopers LLP
Tampa, Florida
May 4, 1999
