As filed with the Securities and Exchange Commission on April 8, 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 or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
100 North Tampa Street, Suite 3900, 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 3900, Tampa, Florida 33602,
Telephone: (813) 274-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Martin A. Traber, Esq.
Foley & Lardner
100 North Tampa Street, Suite 2700, Tampa, Florida 33602
Telephone: (813) 229-2300
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
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. |_|
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.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class of Securities to Amount to be Offering Price Aggregate Offering Amount of
be Registered Registered Per Share(1) Price Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 293,500 $28.3125 $8,309,718.75 $2,310.11
============================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee. The proposed maximum offering price per share and the proposed
maximum aggregate offering price are based on the average of the high and low
sale prices on April 7, 1999, of the Registrant's Common Stock as reported on
the Nasdaq National Market.
<PAGE>
PROSPECTUS
293,500 SHARES
SYKES ENTERPRISES, INCORPORATED
COMMON STOCK
The common stock of Sykes Enterprises, Incorporated is quoted on the
Nasdaq National Market System under the symbol "SYKE." On April 7, 1999, the
last reported sale price of our common stock on the Nasdaq National Market
System was $28.75 per share.
------------------------
The shares of common stock offered by this prospectus will be sold from
time to time by the selling shareholders named in this prospectus. Sykes will
not receive any proceeds from the sale of shares by the selling shareholders.
------------------------
See "Risk Factors" beginning on Page 3 for a discussion of certain risk
factors that you should consider before purchasing shares offered by this
prospectus.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
------------------------
The date of this Prospectus is April 8, 1999.
<PAGE>
THE COMPANY
Sykes Enterprises, Incorporated ("Sykes") is a leading provider of
information technology outsourcing services throughout the United States,
Canada, Europe, Africa, and The Philippines. Through its 27 state-of-the-art
technical support call centers ("IT call centers"), Sykes provides services to
leading computer hardware and software companies by providing technical support
services to end users of their products, and to major companies by providing
corporate help desk and other support services. Through its staff of technical
professionals, Sykes also provides software development and related services to
large corporations, on a contract or temporary staffing basis, including
software design, development, integration and implementation; systems support,
maintenance, and documentation; foreign language translation; and software
localization. Through its SHPS, Incorporated ("SHPS") subsidiary, Sykes provides
on-line clinical managed care services, medical protocol products, and employee
benefit administration and support services. Sykes also provides customer
product services to computer hardware and software companies including design,
replication, material integration, packaging and distribution. The integration
of these services enables Sykes' customers to outsource a broad range of their
information technology services needs to Sykes. Sykes' customers include Adobe
Systems, Apple Computer, Compaq, Compuserve, Gateway, Hewlett Packard, IBM,
Intel, Microsoft, and Motorola.
In 1993, Sykes began providing technical product support to leading
computer hardware and software companies through its IT call centers. From two
domestic and one European IT call centers at the end of 1994, Sykes has grown to
twelve domestic IT call centers, three Canadian IT call centers, and 12 overseas
IT call centers as of December 1998.
Nine of Sykes' twelve domestic IT call centers have been built by Sykes
and are modeled after the same prototype, which enables Sykes to construct new
IT call centers rapidly and cost effectively. Sykes' strategy of locating its
domestic IT call centers in smaller communities, typically near a college or
university, has enabled it to benefit from a relatively lower cost structure and
a technically proficient, stable work force. The Company's domestic call centers
are located in Arizona, Colorado, Florida, Kansas, Kentucky, North Dakota,
Oklahoma, and Oregon. Through its IT call centers located in Canada, Sweden, The
Netherlands, France, Germany, South Africa, Scotland, Ireland, and The
Philippines, Sykes provides information technology support and translation
services to its multinational customers. Sykes also maintains 21 branch offices
located in metropolitan areas of the United States, Canada, Europe, Africa and
The Philippines, giving Sykes the ability to offer a broad range of professional
services on a local basis, and respond to changing market demands in each
geographical area served. Each branch office is responsible for staffing the
professional personnel needs of customers within its geographic region and
customers referred from other branch offices based on specialized needs.
Sykes believes that its ability to work in partnership with its
customers during the life cycle of their information technology products and
systems, from software design and systems implementation, through technical
documentation and foreign language translation, to end-user technical product
support, gives it a competitive advantage to become a preferred provider of
outsourced IT services to its customers. In particular, Sykes seeks to broaden
its IT outsourcing customer base in the retail, financial services, healthcare
and telecommunications industries.
In 1993, Sykes began providing technical product support to leading
computer hardware and software companies through its IT call centers. From two
domestic and one European IT call centers at the end of 1994, Sykes has grown to
twelve domestic IT call centers, three Canadian IT call centers, and 12 overseas
IT call centers as of December 1998.
Nine of Sykes' twelve domestic IT call centers have been built by Sykes
and are modeled after the same prototype, which enables Sykes to construct new
IT call centers rapidly and cost effectively. Sykes' strategy of locating its
domestic IT call centers in smaller communities, typically near a college or
university, has enabled it to benefit from a relatively lower cost structure and
a technically proficient, stable work force. The Company's domestic call centers
are located in Arizona, Colorado, Florida, Kansas, Kentucky, North Dakota,
Oklahoma, and Oregon. Through its IT call centers located in Canada, Sweden, The
Netherlands, France, Germany, South Africa, Scotland, Ireland, and The
Philippines, Sykes provides information technology support and translation
services to its multinational customers. Sykes also maintains 21 branch offices
located in metropolitan areas of the United States, Canada, Europe, Africa and
The Philippines, giving Sykes the ability to offer a broad range of professional
services on a local basis, and respond to changing market demands in each
geographical area served. Each branch office is responsible for staffing the
professional personnel needs of customers within its geographic region and
customers referred from other branch offices based on specialized needs.
Sykes believes that its ability to work in partnership with its
customers during the life cycle of their information technology products and
systems, from software design and systems implementation, through technical
documentation and foreign language translation, to end-user technical product
support, gives it a competitive advantage to become a preferred provider of
outsourced IT services to its customers. In particular, Sykes seeks to broaden
its IT outsourcing customer base in the retail, financial services, healthcare
and telecommunications industries.
Sykes believes 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 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. To capitalize
on this trend toward outsourcing, Sykes has developed a strategy which includes
the following key elements:
o rapidly expand information technology support services revenues
through additional IT call centers in the United States and abroad;
o market Sykes' array of services to existing customers to position
Sykes as a preferred vendor of outsourced information technology
support services;
o establish a competitive advantage through Sykes proprietary,
sophisticated technological capabilities; and
o expand its customer base through strategic alliances and selective
acquisitions.
SHPS, a wholly-owned subsidiary of Sykes, provides care management
services, technology solutions, customer services and outsourcing capabilities
to the health care and insurance industries. Through its technology solutions
and call center based operations, SHPS provides various managed care services to
a large population of users interested in controlling medical loss ratios. In
particular, SHPS provides utilization, demand, disease, and disability
management to its target markets, which include large self-funded employers as
well as traditional health insurance carriers, HMOs, integrated provider systems
and third party administrators.
Sykes also expanded its services and increased its IT call center
capabilities through the introduction of electronic technical support center
("ETSC") services that integrate hardware and software diagnostics with call
avoidance capabilities. Sykes' ETSC diagnostic tools provide a comprehensive
solution for end users of computer hardware and software products. Through its
ETSC services, end users can (i) work with a Sykes call center agent to expedite
problem resolution utilizing communications protocols that allow for voice and
data communications over a single telephone line, (ii) forward a request for
assistance from a Sykes call center agent via the internet, or (iii) diagnose
and solve their technical hardware or software problems without the assistance
of a Sykes call center agent. Sykes believes that its ETSC services will provide
it direct access to broader markets, including post-warranty support services
for home and small business users.
Sykes' principal executive offices are located at 100 North Tampa
Street, Suite 3900, Tampa, Florida 33602, and its telephone number is (813)
274-1000.
RISK FACTORS
An investment in the common stock involves certain risks. You should
carefully consider the following factors, in addition to the other information
included in or incorporated by reference into this prospectus before investing
in the shares.
This prospectus and documents incorporated into this prospectus by
reference contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are highly dependent upon a variety
of important factors that could cause actual results to differ materially from
those reflected in such forward-looking statements. The words "intend,"
"anticipate," "believe," "estimate," "plan" and "expect" and similar
expressions as they relate to Sykes identify such forward-looking statements.
These forward-looking statements are based largely on Sykes' current expecta-
tions and are not guarantees of future performance. These forward-looking
statements are subject to a number of risks and uncertainties, including without
limitation, those identified under "Risk Factors" and other risks and un-
certainties indicated from time to time in Sykes' filings with the SEC.
Actual results could differ materially from the 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:
o the diversion of management's attention to the integration of the
businesses to be acquired;
o the risk that the acquired businesses will fail to maintain the
quality of services that Sykes has historically provided;
o the need to implement financial and other systems and add management
resources;
o the risk that key employees of the acquired business will leave
after the acquisition;
o potential liabilities of the acquired business;
o unforeseen difficulties in the acquired operations;
o adverse short-term effects on Sykes' operating results;
o lack of success in assimilating or integrating the operations of
acquired businesses with those of Sykes;
o the dilutive effect of the issuance of additional equity securities;
o the incurrence of additional debt; and
o 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. Its 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. The inability of Sykes' 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.
Risks Associated With Rapidly Changing Technology and Reliance on Technology and
Computer Systems
Sykes' business is highly dependent on its telecommunications and
computer systems, which could be interrupted by fire, hurricane, or other
disaster, operating malfunction, or otherwise. 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 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' failure to maintain the
superiority of its telecommunications and computer technology or to respond
effectively to technological changes could have a material adverse effect on
Sykes' business, financial condition, and results of operation.
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 the Company's 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 mad 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.
The Company 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 the Company 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.
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, power failure, telecommunications failures, unauthorized intrusion,
computer viruses and other emergencies. 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, 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, closing 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.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of
common stock.
SELLING SHAREHOLDERS
On November 23, 1998, Sykes issued 587,000 shares of common stock to
the holders of all of the outstanding capital interests ("Quotas") of TAS GmbH
Nord Telemarketing und Vertriebsberatung ("TAS III") of Hanover, Germany. TAS
III operates information technology call centers and is a provider of technical
product support and services to numerous German industries. The shares were
issued in connection with the combination of TAS III and Sykes pursuant to an
Acquisition Agreement, dated November 23, 1998, among TAS III Quotasholders and
Sykes. Under the terms of the Registration Rights Agreement, dated November 23,
1998, entered into among the TAS III Quotasholders and Sykes in conjunction with
the consummation of the acquisition, Sykes agreed to file a registration
statement under the Securities Act of 1933, as amended, to register the sale of
up to 50% of the shares issued to the former TAS III Quotasholders, and to keep
such registration statement effective for a period not to exceed the first
anniversary date of issuance of the shares covered by this Prospectus.
Accordingly, 293,500 shares of common stock covered by this Prospectus are being
offered for sale by the former TAS III Quotasholders.
The following table sets forth certain information concerning the
selling shareholders:
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior Number of Owned After
to the Offering Shares The Offering
------------------- Being -------------------
Number Percent Offered Number Percent
------ ------- -------- ------ -------
<S> <C> <C> <C> <C> <C>
Stockmann, Georg J. (1) ............................. 528,300 * 264,150 264,150 *
Stockmann, Annette ............................. 58,700 * 29,350 29,350 *
--------
Total Shares Offered............................ 293,500
========
</TABLE>
*Less than 1%.
- ------------------------
(1) Georg J. Stockmann is employed by Sykes as general manager of TAS III,
a wholly owned subsidiary of Sykes.
PLAN OF DISTRIBUTION
The shares may be sold from time to time by the selling shareholders.
Such sales may be made in the over-the-counter market or on 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:
o 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;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of such
exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; or
o 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, as amended.
WHERE CAN WE 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
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. 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.
LEGAL MATTERS
The validity of the shares of common stock to which this prospectus
relates 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.
<PAGE>
- --------------------------------------------------------------------------------
No dealer, salesman, or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been so authorized. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy such securities
in any jurisdiction to any person to whom it is unlawful to make such an offer
or solicitation in such jurisdiction. Neither the delivery of this prospectus
nor any sale hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of Sykes since the date hereof or
that the information contained herein is correct as of any time subsequent to
its date.
TABLE OF CONTENTS
Page
Sykes................................................. 2
Risk Factors ......................................... 3
Use of Proceeds....................................... 8
Selling Stockholders.................................. 9
Plan of Distribution.................................. 9
Where We Can Find More Information.................... 10
Legal Matters......................................... 11
Experts............................................... 11
- --------------------------------------------------------------------------------
SYKES ENTERPRISES, INCORPORATED
293,500 SHARES
COMMON STOCK
-------------------------------------------
PROSPECTUS
-------------------------------------------
- --------------------------------------------------------------------------------
April ___, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission filing............................. $ 2,310
Accounting fees and expenses.......................................... 5,000
Legal fees and expenses............................................... 10,000
Blue Sky fees and expenses (including counsel fees)................... 0
Printing expenses..................................................... 1,000
Transfer agent's and registrar's fees and expenses.................... 500
Miscellaneous......................................................... 1,160
------
Total............................................................ $19,000
======
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 would agreed 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' 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 may obtain a liability insurance policy for its directors and
officers as permitted by the Florida Act, which may extend to, among other
things, liability arising under the Securities Act of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit
Number Description
4.1 Registration Rights Agreement, dated November 23, 1998, among Georg J.
Stockmann, Annette Stockmann, and Sykes Enterprises, Incorporated
(filed herewith)
5.1 Opinion of Foley & Lardner as to the legality of the shares of Common
Stock being registered (filed herewith)
23.1 Consent of Foley & Lardner (contained in its opinion filed herewith as
Exhibit 5 and incorporated herein by reference)
23.2 Consent of Ernst & Young LLP (filed herewith)
23.3 Consent of PricewaterhouseCoopers L.L.P. (filed herewith)
24.1 Power of Attorney (found in Part II on Page II-4)
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;
(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 has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tampa, and
State of Florida, on this 8th day of April, 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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John H. Sykes Chairman of the Board, President, April 8, 1999
- ---------------------------------------------- Chief Executive Officer and Director
John H. Sykes (Principal Executive Officer)
/s/ Scott J. Bendert Senior Vice President--Finance, April 8, 1999
- ---------------------------------------------- Treasurer, and Chief Financial Officer
Scott J. Bendert (Principal Financial and Accounting
Officer)
/s/ Furman P. Bodenheimer, Jr. Director April 8, 1999
- ----------------------------------------------
Furman P. Bodenheimer, Jr.
/s/ Gordon H. Loetz Director April 8, 1999
- ----------------------------------------------
Gordon H. Loetz
/s/ H. Parks Helms Director April 8, 1999
- ----------------------------------------------
H. Parks Helms
/s/ Ernest J. Milani Director April 8, 1999
- ----------------------------------------------
Ernest J. Milani
/s/ Adelaide A. Sink Director April 8, 1999
- ----------------------------------------------
Adelaide A. Sink
/s/ R. James Stroker Director April 8, 1999
- ----------------------------------------------
R. James Stroker
/s/ Iain A. Macdonald Director April 8, 1999
- ----------------------------------------------
Iain Macdonald
/s/ Linda McClintock-Greco Director April 8, 1999
- ----------------------------------------------
Linda McClintock-Greco
</TABLE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
November 23, 1998, is entered into by and among SYKES ENTERPRISES, INCORPORATED,
a Florida corporation ("Sykes"), Georg J. Stockmann and Annette Stockmann, each
an individual residing in the Federal Republic of Germany (collectively, the
"Sellers").
WHEREAS, this Agreement is made in connection with the sale by the
Sellers of all the outstanding capital interests (the "Quotas") of TAS GmbH
NORD) Telemarketing und Vertriebsberatung. a limited liability company organized
under the laws of the Federal Republic of Germany (the "Company"), to Sykes
Enterprises GmbH, a limited liability company organized under the laws of the
Federal Republic of Germany and a wholly-owned subsidiary of Sykes (the
"Buyer"), pursuant to the Acquisition Agreement dated November 23, 1998 by and
among Sykes, the Buyer and the Sellers (the "Acquisition Agreement");
WHEREAS, in order to induce the Sellers to enter into the Acquisition
Agreement. Sykes has agreed to provide the Sellers with the registration rights
set forth in this Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition to
the sale of the Quotas to the Buyer.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Definitions.
-----------
Closing: The closing of the transactions contemplated by the Acquisi-
tion Agreement.
Common Stock: The common stock, par value $.01 per share, of Sykes.
Date of Issuance: The Closing Date (as defined in the Acquisition
Agreement).
Holder: A Seller so long as such Seller owns any 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, and who
agree in writing, in form and substance satisfactory to Sykes, to be bound
hereby.
Registration Expenses: Any and all reasonable expenses actually
incurred incident to performance of or compliance with this Agreement other than
underwriting discounts and commissions and transfer taxes, if any, but including
up to $5,000 in the aggregate of the legal expenses of the Holders incurred with
respect to the registration of Registrable Securities.
Registrable Securities: 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 State-
ment, (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, (iii) such shares of Subject Common Stock shall have
been otherwise transferred in accordance with the provisions of this Agreement
and the Acquisition Agreement, and new certificates for them not bearing a
legend restricting further transfer shall have been delivered by Sykes, or
(iv) the transfer of such shares of Subject Common Stock is prohibited by
Section 4.28(1) of the Acquisition Agreement.
Registration Statement: Any registration statement of Sykes tiled with
the SEC which provides for 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.
SEC: The United States Securities and Exchange Commission.
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.
Subject Common Stock: The shares of Common Stock issued to the
Sellers pursuant to the Acquisition 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 on Demand.
----------------------
(i) Request for Registration. At any time during the period
beginning on the sixtieth day after the Date of Issuance and ending on the first
anniversary of the Date of Issuance and subject to Sections 2(c) and 2(d), the
Holder or Holders of a majority of the Registrable Securities then outstanding
may, by written notice to Sykes, require Sykes to effect the registration under
the Securities Act of Registrable Securities (a "Demand Registration"). The
notice requesting a Demand Registration shall specify the method of distribution
of the Registrable Securities to be covered. Upon receipt of such notice, Sykes
will promptly give written notice of such requested registration ( a "Section
2(a) Notice") to any and all other Holders who hold of record any Registrable
Securities and thereupon will file a Registration Statement in form and scope
sufficient to permit, under the Securities Act and any other applicable law and
regulations, the Registrable Securities to be registered in accordance with the
methods of distribution specified in such requests (the "Demand Registration
Statement"). Sykes shall use its best efforts to have the Demand Registration
Statement declared effective as promptly as practicable (but in no event later
than 120 days after such request) and to 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. The Demand
Registration Statement shall provide for the registration under the Securities
Act of:
(A) the Registrable Securities which Sykes has been so
requested to register by such Holder or Holders, and
(B) all other Registrable Securities which Sykes has been
requested to register by any other Holders of Registrable Securities by written
request (specifying the intended method of distribution thereof) given to Sykes
within 15 days after the giving of the Section 2(a) Notice.
Sykes may on one occasion only postpone filing a Demand Registration Statement
under this Section 2(a) for a reasonable period (not in excess of 90 days) if in
its reasonable judgment su.ch filing would require the disclosure of material
information that Sykes has a bona tide business purpose for preserving as
confidential. Sykes shall be obligated to effect a Demand Registration pursuant
to this Section 2(a) only once.
(ii) Registration Statement Form. Registrations under this
Section 2(a) shall be on such appropriate registration forms of the SEC as shall
be selected by Sykes, be reasonably acceptable to the Holder or Holders who are
the registered holders of at least a majority of the Registrable Securities to
be registered pursuant to this Section 2(a) and permit the disposition of
Registrable Securities in accordance with the intended method or methods of
disposition specified in the requests for registration relating thereto.
(iii) Expenses. Sykes shall pay all Registration Expenses in
connection with the registration pursuant to this Section 2(a) and the Holder or
Holders requesting registration pursuant to this Section 2(a) shall pay all
underwriting discounts and commissions, any transfer taxes and any expenses of
counsel for any Holder or Holders not expressly included in Registration
Expenses relating to the sale or disposition of such Holder's Registrable
Securities pursuant to such Registration Statement.
(iv) Effective Registration Statement. A registration requested
pursuant to Section 2(a) hereof will not be deemed to have been effected unless
it has been declared effective by the SEC and not less than eighty-five percent
(85%) of the Registrable Securities covered thereby are sold in accordance with
the terms and conditions set forth therein; provided, 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.
(v) Selection of Underwriter. If any of the Registrable
Securities covered by the Demand Registration are to be sold in an underwritten
offering, Sykes shall select the underwriter or underwriters in its sole discre-
tion. 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.
(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):
(A) after Sykes has delivered notice of a Piggyback
Registration pursuant to Section 2(b) and for so long as such Piggyback
Registration is pending;
(B) 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); or
(C) if the Demand Registration covers Registrable
Securities with an aggregate market value of less than $250,000 or which
represent less than a majority of the Registrable Securities then outstanding.
(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 of the Common Stock by Sykes for its own account and/or
on behalf of any of its security holders (other than (i) a registration on Form
S-8 or S4 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 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 subsection 2(d),
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 Common Stock 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 Common Stock to be registered for sale by Sykes, Sykes may,
at its election, give written notice of such determination to the Holder of
Registrable Securities 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, for the same period as the delay in registering such
Common Stock.
(ii) Piggyback Expenses. The Registration Expenses of the Holders
of Registrable Securities will be paid by Sykes in a Piggyback Registration.
Underwriting discounts and commissions and transfer taxes, if any, incurred with
respect to the Registrable Securities shall be borne by the Sellers.
(c) Underwriter's Cutback. Notwithstanding Sections 2(a) and 2(b), if
a Demand Registration or a Piggyback Registration is an underwritten offering
being made on behalf of Sykes, and the managing underwriter or underwriters
advise Sykes in writing that in their opinion the number of shares of Common
Stock 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 Common Stock offered in such offering or the timing
thereof, then the shares of Common Stock to be included in such registration
shall be the number of shares of Common Stock, 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 Common Stock to be
included. In an underwritten demand registration, the number of shares to be
sold by Sykes or other selling shareholders shall be reduced in accordance with
such opinion and, if necessary, eliminated, before there shall be any reduction
in the number of shares to be sold by Holders.
(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
brokered transaction under Rule 144 during any ninety (90) day period without
registration under the Securities Act and applicable state securities laws.
3. Hold-Back Agreements.
--------------------
(a) Restrictions on Public Sale by the Holders. In the event
Registrable Securities are covered by a Registration Statement tiled pursuant to
Section 2 of this Agreement, the Holders agree not to effect any public sale or
distribution of Common Stock, including a sale pursuant to Rule 144 under the
Securities Act, during the 15-day period prior to, and during the 90-day period
beginning on, the effective date of such Registration Statement (except pursuant
to such Registration Statement), if, and then only to the extent, so requested
in writing by Sykes, in the case of a non-underwritten public offering, or by
the managing underwriter or underwriters, in the case of an underwritten
offering.
(b) Restrictions on Public Security Sale by Sykes. 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 any security (other than any such
sale or distribution of such Common Stock 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) during the IS-day period prior
to, and during the 90-day period beginning on, the effective date of any
Registration Statement filed pursuant to Section 2(a) hereof.
4. Registration Procedures. In connection with Sykes' obligations under
Section 2 hereof, Sykes shall use it best efforts to effect or cause to be
effected the registration of the Registrable Securities under the Securities Act
to permit offers and sales in accordance with the intended method or methods of
distribution thereof. 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 and materials from its counsel and
accountants and to perform all requirements in connection with an offering
required by Section 2, including without limitation such customary opinions of
counsel and "cold comfort" letters from independent certified public accountants
as are reasonably requested by any underwriters. 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. Sykes had no such communication with the SEC but it is acknowledged that as
a result of such review or for an other reason, Sykes may elect to use
independent accountants other than Sykes further agrees to (i) if furnish
Holders for whom shares are registered such number of copies of a prospectus and
preliminary prospectus, 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;
arid (iv) list the shares registered on such Holder's or Holders' behalf on the
exchange or quotation system on which the Sykes Common Stock is at the time
listed.
5. Indemnification.
---------------
(a) Sykes agrees to indemnify, to the extent permitted by law, each
Holder of Registrable Securities and (as applicable) its officers and directors
and each person or entity who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any amend-
ment thereof 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 not misleading, (in the case of a prospectus, always in light of the
circumstances under which the statements are made) except insofar as the same
are caused by or contained in any information furnished in writing to Sykes by
such Holder or its affiliate 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
of Registrable Securities 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 directors and officers
and each person or entity and entity who controls Sykes (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the state-
ments therein not misleading, (in the case of a prospectus, always in light of
the circumstances under which the statements are made) 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 of Registrable Securities and the liability of each such Holder of
Registrable Securities 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 indemni-
fication 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 arid 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 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 Agree-
ment to the Sellers or which otherwise conflicts with the provisions hereof
(b) Amendments and Waivers. The provisions of this Agreement, includ-
ing the provisions of this sentence, may not be amended, modified or supple-
mented, 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 net, 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 Acquisi-
tion 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 Acquisition
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 of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent permitted Holder of
Registrable Securities. The registration rights of the Holders under this Agree-
ment may be transferred to any transferee who lawfully acquires at least fifteen
thousand (15,000) shares of the 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 tights under this Agreement are being assigned; and
provided further, that such transferee is a person who is reasonably
satisfactory to Sykes and executes an agreement in writing agreeing to be bound
by the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SYKES ENTERPRISES, INCORPORATED
By: /s/ Scott J. Bendert
-----------------------------
Name: Scott J. Bendert
Title: Chief Financial Officer
SELLERS:
/s/ Georg J. Stockmann
------------------------------------
Georg J. Stockmann
/s/ Annette Stockman
------------------------------------
Annette Stockmann
EXHIBIT 5.1
FOLEY & LARDNER
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
April 8, 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 293,5000 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 293,500 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
April 6, 1999
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the 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'
Annual Report on Form 10-K. We also consent to the reference to our firm under
the caption "Experts."
PricewaterhouseCoopers LLP
Tampa, Florida
April 8, 1999
