<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarter Ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission File Number 0-19395
SYBASE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-2951005
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
6475 Christie Avenue, Emeryville, CA 94608
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (510) 922-3500
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
On April 30, 1997, 78,679,325 shares of the Registrant's Common Stock, $.001 par
value, were outstanding.
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SYBASE, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I: Financial Information
Item 1: Financial Statements
Condensed Consolidated Balance Sheets at March 31, 3
1997 and December 31, 1996.
Condensed Consolidated Statements of Operations for the 4
three months ended March 31, 1997
and March 31, 1996.
Condensed Consolidated Statements of Cash Flows 5
for the three months ended March 31, 1997 and
March 31, 1996.
Notes to Condensed Consolidated Financial Statements 7
Item 2: Management's Discussion and Analysis of 8
Financial Condition and Results of Operations.
Part II: Other Information
Item 1: Legal Proceedings 21
Item 6: Exhibits and Reports on Form 8-K. 21
Signatures 22
</TABLE>
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<PAGE> 3
PART I
ITEM 1: FINANCIAL STATEMENTS
SYBASE, INC.
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
(In thousands, except share data) 1997 1996
--------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 176,260 $ 156,796
Short-term cash investments 17,798 17,726
--------- ---------
Total cash and short-term cash investments 194,058 174,522
Accounts receivable, net 214,880 239,466
Deferred income taxes 13,726 13,729
Other current assets 24,603 17,551
--------- ---------
Total current assets 447,267 445,268
Property, equipment and improvements, net 182,310 191,328
Deferred income taxes 27,406 27,406
Capitalized software, net 34,721 19,974
Other assets 67,358 67,915
--------- ---------
TOTAL ASSETS $ 759,062 $ 751,891
========= =========
Current liabilities:
Accounts payable $ 21,549 $ 21,563
Accrued compensation and related expenses 39,309 47,829
Accrued income taxes 25,127 26,952
Other accrued liabilities 80,352 89,386
Deferred revenue 169,152 166,482
--------- ---------
Total current liabilities 335,489 352,212
Other liabilities 2,996 2,871
Stockholders' equity:
Preferred stock, $0.001 par value, 8,000,000
shares authorized; none issued or outstanding - -
Common stock, $0.001 par value, 200,000,000
shares authorized; 78,445,297 shares issued
and outstanding (1996-76,608,794) 78 77
Additional paid-in capital 382,030 359,161
Retained earnings 49,622 46,081
Accumulated translation adjustments (11,153) (8,511)
--------- ---------
Total stockholders' equity 420,577 396,808
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 759,062 $ 751,891
========= =========
</TABLE>
See accompanying notes.
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<PAGE> 4
SYBASE, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-----------------------
(In thousands, except per share data) 1997 1996
-------- ---------
<S> <C> <C>
Revenues:
License fees $135,173 $ 147,945
Services 106,729 95,719
-------- ---------
Total revenues 241,902 243,664
Costs and expenses:
Cost of license fees 8,058 7,117
Cost of services 61,878 56,139
Sales and marketing 114,597 130,293
Product development and engineering 35,300 43,091
General and administrative 17,363 18,726
-------- ---------
Total costs and expenses 237,196 255,366
-------- ---------
Operating income (loss) 4,706 (11,702)
Other income and expense, net 1,006 2,494
-------- ---------
Income (loss) before income taxes 5,712 (9,208)
Provision (benefit) for income taxes 2,171 (2,302)
-------- ---------
Net income (loss) $ 3,541 ($6,906)
======== =========
Net income (loss) per share $ 0.05 ($0.09)
======== =========
Shares used in calculation of per share amounts 78,524 73,630
======== =========
</TABLE>
See accompanying notes.
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<PAGE> 5
SYBASE, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands) Three Months Ended March 31,
----------------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash and cash equivalents, beginning of period $ 156,796 $ 180,877
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,541 ($ 6,906)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 26,282 23,348
Deferred income taxes 3 1,148
Changes in assets and liabilities:
Accounts receivable 25,388 (12,114)
Other current assets (6,973) (2,213)
Accounts payable (14) (6,222)
Accrued compensation and
related expenses (8,520) (6,568)
Other accrued liabilities (9,967) (8,181)
Deferred revenues 1,941 8,780
Accrued income taxes (1,825) (276)
Other (56) 874
--------- ---------
Net cash provided (used) by operating activities 29,800 (8,330)
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchases of available-for-sale cash investments (12,228) (28,994)
Maturities of available-for-sale cash investments 3,978 35,612
Sales of available-for-sale cash investments 8,200 0
Business combinations, net of cash acquired (3,031) (6,151)
Purchases of property, equipment and improvements (11,569) (22,582)
Capitalized software development costs (4,088) (4,683)
Decrease(increase) in other assets 1,328 (796)
--------- ---------
Net cash used for investing activities (17,410) (27,594)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES -
Net proceeds from issuance of common stock 10,870 23,950
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C>
Effect of exchange rate changes on cash (3,796) (1,065)
--------- ---------
Net increase (decrease) in cash and cash equivalents 19,464 (13,039)
--------- ---------
Cash and cash equivalents, end of period $ 176,260 $ 167,838
Cash investments, end of period 17,798 36,226
--------- ---------
Total cash, cash equivalents, and cash investments,
end of period $ 194,058 $ 204,064
========= =========
Supplemental disclosures:
Interest paid $ 140 $ 0
========= =========
Income taxes paid $ 4,465 $ 4,702
========= =========
</TABLE>
See accompanying notes.
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SYBASE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements include
the accounts of Sybase and its subsidiaries, and, in the opinion of
management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary to fairly state the Company's
consolidated financial position, results of operations and cash flows
for the periods stated. The condensed consolidated balance sheet as of
December 31, 1996 has been prepared from the audited financial
statements of the Company.
This report on Form 10-Q should be read in conjunction with the
Company's audited financial statements for the year ended December 31,
1996 and notes included therein. The results of operations for the
three months ended March 31, 1997 are not necessarily indicative of
results for the entire fiscal year ending December 31, 1997.
2. On February 21, 1997 the Company acquired Purchase Net Inc., a
developer of application development software. The Company issued
750,000 shares of its common stock with a fair market value of
approximately $12,000,000 for all of the outstanding shares of common
stock of Purchase Net Inc. The total purchase cost was $12,763,000,
including direct cost and expenses related to the acquisition, of this
amount $12,693,000 was allocated to purchased software and included in
capitalized software in the condensed consolidated balance sheet. The
transaction was accounted for as a purchase. The results of operations
of Purchase Net Inc., which have not been material in relation to those
of the Company, have been included in the consolidated results of
operations for periods subsequent to the acquisition date.
3. Net income (loss) per share is computed using the weighted average
number of shares of outstanding common stock and dilutive common stock
equivalents from the assumed exercise of stock options (using the
treasury stock method).
4. In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted
on December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating
primary earnings per share, the dilutive effect of stock options will
be excluded. The impact of Statement 128 on the calculation of fully
diluted earnings per share for those quarters is not expected to be
material.
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<PAGE> 8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Revenues
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
License fees $135.2 $147.9 -9%
Percentage of 56% 61%
total revenues
Services 106.7 95.7 12%
Percentage of 44% 39%
total revenues
Total revenues $241.9 $243.7 -1%
Total revenues for the first quarter of 1997 decreased 1 percent to $241.9
million from the $243.7 million achieved in the first quarter of 1996. License
fees decreased 9 percent to $135.2 million in the first quarter of 1997, from
$147.9 million recorded in the first quarter of last year.
Services revenues grew 12 percent to $106.7 million in the first quarter of
1997, up from $95.7 million recorded in the year earlier period. Services
revenues consist primarily of support and maintenance service fees and
consulting, education and other services related to the development and
deployment of applications using the Company's software products. Services
revenues as a percentage of total revenues increased to 44 percent in the first
quarter of 1997 from 39 percent in the same period of 1996.
The increase in services revenues resulted, in part, from the increase in
support and maintenance service fees related to the Company's growing installed
base and the renewal of maintenance contracts. The increase in services revenues
also resulted from increased demand for the Company's consulting and other
services.
Services revenues in any given period are significantly affected by the amount
of license fee revenues generated in the same and immediately preceding periods.
The Company expects services revenues to continue to increase modestly in
absolute dollars in 1997, due partially to a larger installed base of customers.
However, as this is a forward-looking statement, actual future results may
differ. See "Future Operating Results."
The impact of price changes on the increase in revenues during the first quarter
of 1997 was not significant.
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<PAGE> 9
Geographical Revenues
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
North American $149.5 $150.8 -1%
Percentage of 62% 62%
total revenues
International:
European $55.3 $59.3 -7%
Percentage of 23% 24%
total revenues
Intercontinental $37.0 $33.6 10%
Percentage of 15% 14%
total revenues
Total international $92.4 $92.9 -1%
Percentage of 38% 38%
total revenues
Total revenues $241.9 $243.7 -1%
North American revenues (United States, Canada and Mexico) declined 1 percent in
the first quarter of 1997 to $149.5 million from $150.8 million in the first
quarter of 1996. International revenues decreased 1 percent in the first quarter
of 1997 to $92.4 million from $92.9 million in the year earlier period, with
European revenues decreasing 7 percent partially offset by Intercontinental
revenues (principally Asia, Australia, and Latin America) increasing 10 percent.
The Company attributes reduced North American and European revenues, and reduced
rates of growth in Intercontinental revenues, to the overall decline in license
revenues.
International revenues comprised 38 percent of total revenues in each of the
first quarters of 1997 and 1996. The stronger total Intercontinental revenue
growth rate in the first quarter compared to the North American and European
growth rates reflects, in part, the effects of actions taken and investments
made in expanding the Company's Intercontinental organization over the past few
years.
The Company takes into account changes in exchange rates over time in its
pricing and strategy, the Company's business and results of operations could be
materially and adversely affected by fluctuations in foreign currency exchange
rates. See "Future Operating Results."
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<PAGE> 10
Costs and Expenses
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
Cost of license fees $8.1 $7.1 13%
Percentage of 6% 5%
license fees
Cost of services $61.9 $56.1 10%
Percentage of 58% 59%
services revenues
Sales and marketing $114.6 $130.3 -12%
Percentage of 47% 53%
total revenues
Product development
and engineering $35.3 $43.1 -18%
Percentage of 15% 18%
total revenues
General and administrative $17.4 $18.7 -7%
Percentage of 7% 8%
total revenues
Cost of license fees. Cost of license fees, consisting primarily of product
costs (media and documentation); amortization of capitalized software
development costs; cost of acquired technologies; and third-party royalty costs,
represented 6 percent of license fees in the first quarter of 1997 and 5 percent
in the same period of 1996, totaling $8.1 million and $7.1 million,
respectively. The increase in cost of licenses over the prior year, both in
dollars and as a percent of license revenues, is partially due to certain
required payments required under royalty agreements, a higher proportion from
tools products which have a greater cost of license associated with them and
increased amortization of capitalized software. Amortization of capitalized
software costs included in cost of license fees was $2.0 million in the first
quarter of 1997, up from $1.7 million in the first quarter of last year due to
increased capitalized software over the preceding quarters.
Cost of services. Cost of services, consisting primarily of maintenance,
consulting and education expenses and, to a lesser degree, services-related
product costs (media and documentation), decreased as a percentage of services
revenues to 58 percent in the first quarter of 1997 from 59 percent in the first
quarter of 1996. The decrease in cost of services as a percentage of services
revenues is primarily due to the elimination of certain reoccurring expenses as
a result of a Company-wide restructuring that commenced in the third quarter of
1996. The increase in absolute dollars in the first quarter compared to the same
period in 1996 reflects the expansion of the customer support and the
professional services organizations, made in order to better support
-10-
<PAGE> 11
the growth in customer sites, to enable the migration of the Company's customer
base to the latest versions of Sybase(R) database products, and to better enable
customers to develop and deploy the Company's existing and new software
products.
Sales and marketing. Sales and marketing expenses decreased as a percentage of
total revenues to 47 percent in the first quarter of 1997 compared to 53 percent
in the first quarter of 1996. Total expenses decreased to $114.6 million in the
first quarter of 1997 from $130.3 million in the first quarter of 1996. The
decrease in total expenses and expenses as a percentage of revenues are due to
expense reduction efforts that commenced with a third quarter 1996 restructuring
which reduced levels of reoccurring expenses, combined with less than expected
license revenues which impacted the first quarter of 1996.
Product development and engineering. Product development and engineering
expenses (net of capitalized software development costs) declined as a percent
of revenues to 15 percent in the first quarter of 1997 compared to 18 percent in
the same period in 1996. The decrease in product development and engineering
expenses as a percent of total revenues in the first three months of 1997 is
primarily the result of the Company's third quarter 1996 restructuring which
reduced levels of reoccurring expenses, combined with lower than anticipated
license revenues in the first three months of 1996. In absolute dollars, product
development and engineering expenses in the first quarter of 1997 decreased 18
percent compared to the first quarter of 1996. Much of the reduction in expenses
between 1997 and 1996 were the result of discontinuation of certain product
lines in 1996. These product lines included interactive television, wireless
messaging and multimedia authoring tools. Expenditures in the first quarter of
1997 were made to further develop the System 11(TM) suite of products, including
enhancements to Sybase(R) SQL Server(TM), SQL Anywhere(TM), and Replication
Server(R) products and certain other existing database products; the Company's
interoperability products, including EnterpriseConnect(TM) products; and
application development tools, including PowerBuilder(R), PowerJ(TM),
PowerDesigner(TM) and Power++(TM). The Company capitalized approximately $4.1
million and $4.7 million of software development costs in the first quarter of
1997 and 1996, respectively, representing 12 percent and 11 percent,
respectively, of gross product development and engineering expenditures in each
period. The capitalization of product development costs in the first three
months of 1997 reflects major development programs such as Powersoft PowerJ,
Powersoft Jaguar CTS(TM) and several EnterpriseConnect interoperability products
all of which achieved technological feasibility for purposes of capitalization.
In the first quarter of 1997, the Company also recorded capitalized software
cost of $12.7 million in connection with its Purchase Net acquisition. (See Note
3 of Notes to Condensed Consolidated Financial Statements) The Company believes
that product development and engineering expenditures are essential to
technology and product leadership.
General and administrative. General and administrative expenses decreased to 7
percent of revenues in the first quarter of 1997 compared to 8 percent in the
same period of 1996. The absolute dollar amount of expenses decreased to $17.4
million in the first quarter of 1997 from $18.7 million in the first quarter of
1996. The decrease in general and administrative expenses, in absolute dollars,
resulted partially from the Company's third quarter 1996 restructuring which
reduced levels of reoccurring expenses. The Company plans to continue tightly
managing general and administrative expenses and limit infrastructure growth in
the near-term. The decline in general and administrative expenses as a percent
of revenues was due primarily to less than expected revenues in the first
quarter of 1996.
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Operating Income (Loss)
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
Operating income (loss) $4.7 ($11.7) -140%
Percentage of 2% -5%
total revenues
The Company realized operating income of $4.7 million in the first quarter of
1997, compared to an operating loss of $11.7 million in the same period of 1996
as a result of the operating factors described above.
Other Income and Expense, Net
(Dollars in millions)
Quarter Quarter
Ended Ended
3/31/97 3/31/96
Other income and expense, net $1.0 $2.5
Percentage of 0% 1%
total revenues
Other income consists primarily of interest earned on cash investments. Other
expense and other (net) includes interest expense from capital lease obligations
incurred in prior years, bank fees and expenses, net gains and losses resulting
from the Company's foreign currency exposures and hedging activities and the
related costs. The decrease in interest income in absolute dollars in the first
quarter of 1997 is largely due to smaller average invested cash balances than in
the year earlier period. Net foreign exchange gains and losses resulting from
the Company's hedging activities were immaterial for all periods covered.
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<PAGE> 13
Provision (Benefit) for Income Taxes
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
Provision (benefit) for
income taxes $2.2 ($2.3) *
- ----------
* Not meaningful
The Company recorded an income tax provision of $2.2 million in the first
quarter of 1997 and a benefit of $2.3 million in the first quarter of 1996.
Realization of the Company's net deferred tax assets, which totaled $41.1
million at March 31, 1997, is dependent upon the Company generating sufficient
taxable income in future years in appropriate tax jurisdictions to obtain
benefit from the reversal of temporary differences and from net operating loss
and tax credit carryforwards. The amount of deferred tax assets considered
realizable is subject to adjustment in future periods if estimates of future
taxable income are reduced and any such adjustments could have an impact on the
Company's effective tax rate in future periods. See "Future Operating Results."
Net Income (Loss) and Net Income (Loss) Per Share
(In millions, except per share amounts)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
Net income (loss) $3.5 ($6.9) *
Percentage of 1% -3%
total revenues
Net income (loss)
per share $0.05 ($0.09) *
Shares used in
per share
computation 78.5 73.6
- ----------
* Not meaningful
The Company generated net income of $3.5 million, or $0.05 per share, in the
first quarter of 1997 compared to a net loss of $6.9 million, or $0.09 per
share, in the first quarter of 1996. Shares used in the per share computation
increased 7 percent from the first quarter of 1996 to the first quarter of 1997
as a result of shares issued under employee stock option and stock purchase
plans and in connection with business combinations and stock equivalents from
employee stock options in the computation for the first quarter of 1997.
-13-
<PAGE> 14
Financial Condition
(Dollars in millions)
Quarter Quarter
Ended Ended Percent
3/31/97 3/31/96 Change
Working capital $111.8 $144.7 -23%
Cash, cash equivalents and
Cash investments $194.1 $204.1 -5%
Net cash provided (used) by
operating activities $29.8 ($8.3) *
Net cash used for investing
activities $17.4 $27.6 -37%
Net cash provided by
financing activities $10.9 $24.0 -55%
- -------------
* not meaningful
Net cash provided by operating activities was $29.8 million in the first quarter
of 1997 compared to $8.3 million used in the first quarter of 1996. Net cash
provided by operating activities during the first quarter of 1997 reflects net
income of $3.5 million compared to a net loss of $6.9 million in the first
quarter of 1996 and a decrease in accounts receivable of $25.4 million in the
first quarter of 1997 compared to an increase of $12.1 million in the first
quarter of 1996.
Net cash used for investing activities decreased to $17.4 million in the first
quarter of 1997 compared to $27.6 million in the first quarter of 1996.
Investing activities included capital expenditures of $11.6 million in the first
three months of 1997 compared to $22.6 million in the first three months of
1996, which reflect lower expenditures required to support the Company's
employee base around the world. The Company's headcount has been reduced to
5,471 at March 31, 1997 from 6,191 at March 31, 1996.
Net cash provided by financing activities for the first quarter of 1997 was
$10.9 million compared to $24.0 million in the first quarter of 1996. Financing
activities in both periods consisted of the issuance of common stock upon the
exercise of employee stock options and the sale of shares through employee stock
purchase plans.
The Company engages in business operations around the world and is therefore
exposed to foreign currency fluctuations. As of March 31, 1997, the Company had
identifiable assets totaling $141.0 million associated with its European
operations and $100.7 million associated with its Intercontinental operations.
The Company experiences foreign exchange transaction exposures from short-term
intercompany payables and receivables denominated in different currencies. The
Company hedges certain of these short-term exposures under a plan approved by
the Sybase
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<PAGE> 15
Board of Directors (see Note 2 of Notes to Consolidated Financial Statements of
1996 Sybase Annual Report). The Company also experiences foreign exchange
translation exposure on its other net assets denominated in different
currencies. Substantially all of the other net assets were considered by Sybase,
the U.S. parent company, to be a permanent investment in each subsidiary. The
foreign currency translation gains and losses related thereto are reflected in
stockholders' equity as part of accumulated foreign currency translation
adjustments.
Cash, cash equivalents, and short-term cash investments totaled $194.1 million
at March 31, 1997 compared to $204.1 million at March 31, 1996.
The Company believes that it has the financial resources needed to meet its
presently anticipated business requirements, including capital expenditure and
strategic operating programs, for the foreseeable future.
-15-
<PAGE> 16
FUTURE OPERATING RESULTS
The Company's future operating results may vary substantially from period to
period. The price of the Company's common stock will fluctuate in the future,
and an investment in the Company's common stock is subject to a variety of
risks, including but not limited to the specific risks identified below. The
results of operations for the quarter ended March 31, 1997 are not necessarily
indicative of results for the fiscal year ending December 31, 1997 or any other
future period. Expectations, forecasts, and projections by the Company or others
are by nature forward-looking statements, and future results cannot be
guaranteed. Forward-looking statements that were true at the time made may
ultimately prove to be incorrect or false. Inevitably, some investors in the
Company's securities will experience gains while others will experience losses
depending on the prices at which they purchase and sell securities. Prospective
and existing investors are strongly urged to carefully consider the various
cautionary statements and risks set forth in this report.
The timing and amount of the Company's license fee revenues are subject to a
number of factors that make estimation of revenues and operating results prior
to the end of a quarter extremely uncertain. Sybase has experienced a seasonal
pattern of license fee decline between the fourth quarter and the succeeding
first quarter contributing to lower total revenues and operating earnings in the
first quarter compared to the prior fourth quarter. For example, revenues and
earnings in the first quarter of 1997 were lower than in the fourth quarter of
1996. The Company has operated historically with little or no backlog and, as a
result, license fees in any quarter are dependent on orders booked and shipped
in that quarter. In addition, the timing of closing of large license agreements
increases the risk of quarter-to-quarter fluctuations and the uncertainty of
estimating quarterly operating results. The Company has experienced a pattern of
recording 50 percent to 70 percent of its quarterly revenues in the third month
of the quarter, with a concentration of such revenues in the last two weeks of
such third month. The Company's operating expenses are based on projected annual
and quarterly revenue levels and are incurred approximately ratably throughout
each quarter. Because the Company's operating expenses are relatively fixed in
the short term, if projected revenues are not realized in the expected period,
the Company's operating results for that period would be adversely affected and
could result in an operating loss, as occurred in the first and second quarters
of 1996. Failure to achieve revenue, earnings, and other operating and financial
results as forecast or anticipated by brokerage firm and industry analysts could
result in an immediate and adverse effect on the market price of the Company's
stock. The Company's rate of year-over-year growth slowed significantly in each
of the past seven quarters compared to the year earlier periods. The Company may
not achieve, in the future, the relatively high rates of growth experienced by
the Company in 1991 through 1994 or the rates of growth projected for the
software markets in which Sybase competes.
Throughout 1996, the Company implemented a variety of changes to the sales
organization, including a new sales model, changes to sales compensation
programs, and an increased focus on sales through indirect channels. Although
such changes are intended to enhance overall revenues, such changes could, in
the short-run, materially and adversely affect the sales process and revenues.
For example, the Company believes that these changes may have contributed in
part to the lower than expected revenues in the first two quarters of 1996. In
the second quarter of 1996, the Company announced several other management and
organizational changes, including changes in the senior management of the sales
and marketing organizations. In the third quarter of 1996, Mitchell Kertzman
succeeded Mark Hoffman as the Company's President and Chief Executive Officer,
with Mr. Hoffman continuing as the Company's Chairman of the Board. Also in the
third quarter of 1996 Jack Acosta became the Company's Chief Financial
Officer. The Company
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<PAGE> 17
may make other management and organization changes in the future. Organizational
and management changes are intended to enhance productivity and competitiveness.
However, such changes may not produce the desired results and could materially
adversely affect productivity, expenses, and revenues.
The market for the Company's stock is highly volatile. The trading price of the
Company's common stock fluctuated widely in 1995 and 1996 and may in the future
continue to be subject to wide fluctuations in response to quarterly variations
in operating and financial results, announcements of technological innovations,
new products, or customer contracts won by the Company or its competitors,
changes in prices of the Company's or its competitors' products and services,
changes in product mix, changes in the Company's revenue and revenue growth
rates for the Company as a whole or for individual geographic areas, business
units, products or product categories, as well as other events or factors.
Statements or changes in opinions, ratings, or earnings estimates made by
brokerage firms and industry analysts relating to the market in which the
Company does business, the Company's competitors, or the Company or its products
specifically, have resulted, and could in the future result, in an immediate and
adverse effect on the market price of the Company's common stock. In particular,
due to a variety of factors, the Company's stock price declined significantly
during the third quarter of 1994, the second quarter of 1995, and the first
quarter of 1996. In addition, the stock market has from time to time experienced
extreme price and volume fluctuations that have particularly affected the market
price for many high-technology companies and which often have been unrelated to
the operating performance of these companies.
An increased portion of the Company's revenues in recent quarters has been
derived from its international operations. Several of the Company's
international subsidiaries have been only recently acquired or formed. For
example, the Company has recently acquired operations in Chile and Argentina. In
addition there have been several management and organizational changes within
the international operations. International revenues, in absolute dollars and as
a percentage of total revenues, may fluctuate in part due to the growth and, in
some cases, the relative immaturity of international organizations. The
Company's operations and financial results could be significantly affected by
factors associated with international operations such as changes in foreign
currency exchange rates and uncertainties relative to regional economic
circumstances, political instability in emerging markets, and difficulties in
staffing and managing foreign operations, as well as by other risks associated
with international activities.
The market for the Company's software products and services is extremely
competitive and characterized by dynamic customer demands, rapid technological
and marketplace changes, and frequent product enhancements and new product
introductions. The Company competes with a number of companies, including Oracle
Corporation, Informix Corporation, Microsoft Corporation, IBM Corporation, and
Computer Associates, Inc. Many of the Company's competitors and potential
competitors have significantly greater financial, technical, sales, and
marketing resources, and a larger installed base than the Company. Each of
Informix, IBM, Microsoft, and Oracle has announced the development of enhanced
versions of their principal database products that are intended to improve the
performance or expand the capabilities of their existing products. New or
enhanced products introduced by existing or future competitors could increase
the competition faced by the Company's products and result in greater price
pressure on certain of the Company's database products, especially to the extent
that market acceptance for personal computer oriented technologies increases. A
failure by the Company to compete successfully with its existing competitors or
with new competitors could have a material adverse
-17-
<PAGE> 18
effect on the Company's business and results of operations and on the market
price of the Company's common stock.
Existing and future competition or changes by the Company in its product
offerings or product pricing structure could result in an immediate reduction in
the prices of the Company's products. The Company introduced changes in its
pricing and licensing structure in the first quarter of 1996 that increased the
prices for certain products or configurations and reduced the prices for other
products and configurations. The Company will introduce price and licensing
changes from time to time in the future. If recently implemented or future
changes in the Company's products, pricing structure, or existing or future
competition, for example from Microsoft, were to result in significant revenue
declines, the Company's business and financial results would be adversely
affected.
The Company's future results will depend in part on its ability to enhance its
existing products and to introduce new products, on a timely and cost-effective
basis, that meet dynamic customer requirements. Customer requirements for
products can rapidly change as a result of innovations or changes within the
computer hardware and software industries. For example, the widespread use of
the Internet is rapidly giving rise to new customer requirements as well as new
methods and practices of selling, marketing, and distributing products and
services. Sybase's future results will depend in part on its success in
developing new products, making generally available products that have been
previously announced, enhancing its existing products and adapting its existing
products to changing customer requirements, and ultimately on the market
acceptance received by such new or enhanced products. The Company has announced
the development and anticipated availability dates of several products -- for
example, PowerJ, a rapid application development tool for Java and Adaptive
Server(TM), a new version of the Company's flagship relational database
management system; the Company currently plans to commence commercial shipment
of these products in 1997. The Company has experienced delays in introducing
some new products in the past. For example, the commercial shipment of Sybase
IQ(TM), which became commercially available in February 1996, was previously
planned for the second half of 1995. Unanticipated delays in product
availability schedules could result from various factors including development
or testing difficulties, feature changes, software errors, shortages in
appropriately skilled software engineers, and project management problems.
Delays in the scheduled availability of these or other products, a lack of or
decrease in market acceptance of new or enhanced products, particularly the
Company's new Adaptive Component Architecture(TM) which was announced in April,
or the Company's failure to accurately anticipate customer demand or to meet
customer performance requirements or to anticipate competitive products and
developments could have a material adverse effect on the Company's business and
financial results. New products or new versions of existing products may,
despite testing, contain undetected errors or bugs that could delay the
introduction or adversely affect commercial acceptance of such products or give
rise to warranty or other customer claims, which could, in turn, adversely
affect the Company's financial results.
Sybase's results will also depend increasingly on the ability of its products to
interoperate and perform well with existing and future leading,
industry-standard application software products intended to be used in
connection with relational database management systems. Failure to meet existing
or future interoperability and performance requirements of certain independent
vendors marketing such applications in a timely manner has in the past and could
in the future adversely affect the market for Sybase's products. Certain leading
applications will not be interoperable with Sybase relational database
management systems ("RDBMSs") until certain features are added to the Company's
RDBMS, and others may never be available on Sybase's RDBMS. In addition, the
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<PAGE> 19
Company's application development tools, database design tools, and certain
connectivity products are designed for use with RDBMS offered by the Company's
competitors. Vendors of non-Sybase RDBMSs and related products may become less
willing in the future to provide the Company with access to products, technical
information, and marketing and sales support. If existing and potential
customers of the Company who use non-Sybase RDBMSs refrain from purchasing such
products due to concerns that over time the development, quality, and support of
products for non-Sybase RDBMSs will diminish, the Company's business, results of
operations, and financial condition could be materially and adversely affected.
Commercial acceptance of the Company's products and services could be adversely
affected by critical or negative statements or reports by brokerage firms,
industry and financial analysts, and industry periodicals concerning the Company
and its products, business, or competitors, or by the advertising or marketing
efforts of competitors or other factors that could affect customer perception,
such as the criticism of the scalability of the Company's SQL Server 10 database
product experienced in 1995. In addition, customer perception of Sybase and its
products could be adversely affected by financial results, particularly revenues
and profitability, reported for the 1996 fiscal year or other future periods, by
the market share of the Company's products and by press reports related to the
foregoing.
As the number of software products in the industry and the number of software
patents increase, the Company believes that software developers may become
increasingly subject to infringement claims. Third parties have in the past
asserted and may in the future assert that their patents or other proprietary
rights are violated by products offered or in development by the Company. Any
such claims, with or without merit, can be time consuming and expensive to
defend or settle, and could have an adverse effect on the Company's business and
results of operations.
The Company's ability to achieve its future revenues and earnings will depend in
part on the ability of its officers and key personnel to manage growth, costs,
and expenses successfully through the implementation of appropriate management
systems and controls. Failure to effectively implement or maintain such systems
and controls could adversely affect the Company's business and results of
operations. The success of the Company also depends in part on its ability to
attract and retain qualified technical, managerial, sales, and marketing
personnel. The competition for such personnel is intense in the software
industry and, Sybase believes, has increased substantially in recent years. In
particular, there have been several changes in 1996 and 1997 to the Company's
executive management team. For example, David Litwack, Executive Vice President
Products, left the Company in May 1997. Changes in management, the Company's
recent financial performance, and a reduction in the overall number of Sybase
employees made in the third quarter of 1996 could cause an increase in the
amount of employee turnover. The failure to effectively recruit, train, and
retain qualified personnel or high rates of employee turnover, particularly
among engineering or sales staff, could adversely affect the Company's product
development efforts, product sales, and other aspects of the Company's
operations and results. During 1996, the software industry generally, and Sybase
specifically, experienced higher than historical rates of employee turnover.
Sybase currently enters most of its North American customer orders in its
Burlington, Massachusetts, operations center and ships all of its products in
North America (other than its Powersoft(TM) products) from its Emeryville,
California, distribution facility. Because of the pattern of recording a high
percentage of quarterly revenues within the last week or two weeks of the
quarter, the closure or inoperability of one or both of these facilities during
such weeks due to
-19-
<PAGE> 20
natural calamity or due to a systems or power failure could have a material
adverse effect on the Company's ability to record revenues for such quarter.
The Company has acquired a number of companies in the past, most recently a
small software technology company and two distributors in Latin America in the
first quarter of 1997. The Company will acquire other distributors, companies,
products, or technologies in the future. The achievement of the desired benefits
of these and future acquisitions will depend in part upon whether the
integration of the acquired businesses is achieved in an efficient and effective
manner. The successful combination of businesses will require, among other
things, integration of the companies' related product offerings and coordination
of their sales, marketing, and research and development efforts. The
difficulties of such coordination may be increased by the geographic distance
between separate organizations. The Company may be unable to integrate
effectively these or future acquired businesses and may not obtain the
anticipated or desired benefits of such acquisitions. Such acquisitions may
result in costs, liabilities, or additional expenses that could adversely affect
the Company's results of operations and financial condition. In addition,
acquisitions or changes in business or market conditions may cause the Company
to revise its plans, which could result in unplanned expenses or a loss of
anticipated benefits from past investments.
During the third quarter of 1996 the Company incurred a restructuring
charge of approximately $49.2 million. The Company will continue to evaluate its
business, products, and results of operations, and accordingly the Company may
incur restructuring charges sometime in the future.
-20-
<PAGE> 21
PART II: OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Following the Company's announcement on April 3, 1996 of its
preliminary results for the second fiscal quarter ended March 31, 1996, several
class action lawsuits were filed against the Company and certain of its officers
in the U.S. District Court, Northern District of California. The complaints are
similar and allege violations of federal and state securities laws and request
unspecified monetary damages. These actions have been consolidated, and a
consolidated amended class action complaint was served on August 7, 1996, and
the parties are in pretrial discovery. Management believes that the claims
contained in the consolidated amended complaint are without merit and intends to
defend against the claims vigorously. In the opinion of management, resolution
of this litigation is not expected to have a material adverse effect on the
financial position of the Company. However, depending on the amount and timing,
an unfavorable resolution of this matter could materially affect the Company's
future results of operations or cash flows in a particular period.
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.2 Bylaws, as amended
11.1 Computation of Earnings (Loss) Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
-21-
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
May 14, 1997 SYBASE, INC.
By /s/ JACK L. ACOSTA
----------------------------------
Jack L. Acosta
Senior Vice President, Finance
and Chief Financial Officer
(Principal Financial Officer)
By /s/ PIETER VAN DER VORST
----------------------------------
Pieter Van der Vorst
Vice President, Tax and
Corporate Accounting
(Principal Accounting Officer)
-22-
<PAGE> 23
EXHIBIT INDEX TO SYBASE, INC.
QUARTERLY REPORT ON FORM 10-Q
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
3.2 Bylaws, as amended
11.1 Computation of Earnings (Loss) Per Share
27 Financial Data Schedule
</TABLE>
-23-
<PAGE> 1
Exhibit 3.2
BYLAWS
OF
SYBASE, INC.
(as amended April 1, 1997)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - CORPORATE OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 REGISTERED OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 OTHER OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - MEETINGS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 PLACE OF MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 NOTICE OF STOCKHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES
AND STOCKHOLDER BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 ADJOURNED MEETING; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.9 VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT
WITHOUT A MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING;
GIVING CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.13 PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.15 CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III - DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 NUMBER OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 ELECTION QUALIFICATION AND TERM OF OFFICE OF DIRECTORS . . . . . . . . . . . . . . . . . . . . 7
3.4 RESIGNATION AND VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 FIRST MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 SPECIAL MEETINGS; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 ADJOURNED MEETING; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING . . . . . . . . . . . . . . . . . . . . . . 10
3.14 FEES AND COMPENSATION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 APPROVAL OF LOANS TO OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.16 REMOVAL OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV - COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 COMMITTEES OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 COMMITTEE MINUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 MEETINGS AND ACTION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 ELECTION OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 REMOVAL AND RESIGNATION OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4 CHAIRMAN OF THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5 PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6 VICE PRESIDENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.8 TREASURER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 ASSISTANT SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.10 ASSISTANT TREASURER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.11 AUTHORITY AND DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI - INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 INDEMNIFICATION OF OTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII - RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 MAINTENANCE AND INSPECTION OF RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 INSPECTION BY DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII - GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 STOCK CERTIFICATES; PARTLY PAID SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 LOST CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3 CONSTRUCTION; DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.4 DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.5 FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
8.6 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.7 TRANSFER OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.8 STOCK TRANSFER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.9 REGISTERED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX - AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE X - DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XI - CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 DUTIES OF CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
-iii-
<PAGE> 5
BYLAWS
OF
SYBASE, INC.
(as amended April 1, 1997)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation in the State of Delaware
shall be in the City of Wilmington, County of New Castle, State of Delaware.
The name of the registered agent of the corporation at such location is
Corporation Trust Company.
1.2 OTHER OFFICES
The board of directors may at any time establish other offices at any
place or places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at the principal executive
offices of the corporation, or at any other place, within or outside the State
of Delaware, designated by the board of directors. In the absence of any such
designation, stockholders' meetings shall be held at the principal executive
offices of the corporation.
2.2 ANNUAL MEETING
An annual meeting of stockholders shall be held for the election of
directors at such date, time and place, either within or without the State of
Delaware, as may be designated by resolution of the board of directors from
time to time. Any other proper business may be transacted at the annual
meeting.
2.3 SPECIAL MEETINGS
A special meeting of the stockholders may be called at any time by the
board of directors, or
<PAGE> 6
by the chairman of the board, by the president or by the chief executive
officer, or by one or more stockholders holding shares in the aggregate
entitled to cast not less than ten percent of the votes at that meeting.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of
such meeting and the general nature of the business proposed to be transacted,
and shall be delivered personally or sent by registered mail or by telegraphic
or other facsimile transmission to the chairman of the board, the president,
chief executive officer, or the secretary of the corporation. No business may
be transacted at such special meeting otherwise than specified in such notice.
The officer receiving the request shall cause notice to be promptly given to
the stockholders entitled to vote, in accordance with the provisions of
Sections 2.4 and 2.5, that a meeting will be held at the time requested by the
person or persons who called the meeting, not less than thirty- five (35) nor
more than sixty (60) days after the receipt of the request. If the notice is
not given within twenty (20) days after the receipt of the request, the person
or persons requesting the meeting may give the notice. Nothing contained in
this paragraph of this Section 2.3 shall be construed as limiting, fixing, or
affecting the time when a meeting of stockholders called by action of the board
of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings with stockholders shall be in writing and
shall be sent or otherwise given in accordance with Section 2.6 of these bylaws
not less than ten (10) nor more than sixty (60) days before the date of the
meeting to each stockholder entitled to vote at such meeting. The notice shall
specify the place, date, and hour of the meeting, and, in the case of a special
meeting, the purpose or purposes for which the meeting is called.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
To be properly brought before an annual meeting or special meeting,
nominations for the election of director or other business must be (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors, (b) otherwise properly brought before
the meeting by or at the direction of the board of directors, or (c) otherwise
properly brought before the meeting by a stockholder. For such nominations or
other business to be considered properly brought before the meeting by a
stockholder such stockholder must have given timely notice and in proper form
of his intent to bring such business before such meeting. To be timely, such
stockholder's notice must be delivered to or mailed and received by the
secretary of the corporation not less than ninety (90) days prior to the
meeting; provided, however, that in the event that less than one-hundred (100)
days notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. To be in proper form, a stockholder's notice to the
secretary shall set forth:
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(i) the name and address of the stockholder who intends
to make the nominations or propose the business and, as the
case may be, the name and address of the person or persons to
be nominated or the nature of the business to be proposed;
(ii) a representation that the stockholder is a holder of
record of stock of the corporation entitled to vote at such
meeting and, if applicable, intends to appear in person or by
proxy at the meeting to nominate the person or persons
specified in the notice or introduce the business specified in
the notice;
(iii) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made
by the stockholder;
(iv) such other information regarding each nominee or each
matter of business to be proposed by such stockholder as would
be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission
had the nominee been nominated, or intended to be nominated,
or the matter been proposed, or intended to be proposed by the
board of directors; and
(v) if applicable, the consent of each nominee to serve
as director of the corporation if so elected.
The chairman of the meeting may refuse to acknowledge the nomination
of any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent
of the corporation that the notice has been given shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
2.7 QUORUM
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum is not present or represented at any
meeting of
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the stockholders, then either (i) the chairman of the meeting or (ii) the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.
When a quorum is present or represented at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provisions of the statutes or
of the certificate of incorporation, a different vote is required, in which
case such express provision shall govern and control the decision of the
question.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact
any business that might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.12 and Section
2.14 of these bylaws, subject to the provisions of Sections 217 and 218 of the
General Corporation Law of Delaware (relating to voting rights of fiduciaries,
pledgors and joint owners of stock and to voting trusts and other voting
agreements).
Except as may otherwise be provided in the certificate of
incorporation or the last paragraph of this Section 2.9, each stockholder shall
be entitled to one vote for each share of capital stock held by such
stockholder.
At a stockholders' meeting at which directors are to be elected, or at
elections held under special circumstances, a stockholder shall be entitled to
cumulate votes (i.e., cast for any candidate a number of votes greater than the
number of votes which such stockholder normally is entitled to cast). Each
holder of stock of any class or series who elects to cumulate votes shall be
entitled to as many votes as equals the number of votes which (absent this
provision as to cumulative voting) he would be entitled to cast for the
election of directors with respect to his shares of stock multiplied by the
number of directors to be elected by him, and he may cast all of such votes for
a single director or may distribute them among the number to be voted for, or
for any two or more of them, as he may see fit, so long as the name of the
candidate for director shall have been placed in nomination prior to the voting
and the stockholder, or any other holder of the same class or series of stock,
has given notice at the meeting prior to the voting of the intention to
cumulate votes; provided that, except as
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may otherwise be provided in the certificate of incorporation, effective upon
such time as (i) shares of the capital stock of the corporation are designated
as qualified for trading as National Market System securities on the National
Association of Securities Dealers, Inc. Automated Quotation System (or any
successor national market system) and (ii) the corporation has at least 800
holders of shares of its capital stock, the cumulative voting rights set forth
in this Section 2.9 shall terminate.
2.10 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice unless so required by the certificate of incorporation or
these bylaws.
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Effective upon the closing of the corporation's initial public
offering of securities pursuant to a registration statement filed under the
Securities Act of 1933, as amended, the stockholders of the corporation may not
take action by written consent without a meeting but must take any such actions
at a duly called annual or special meeting.
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof or entitled to express consent or dissent to corporate action in
writing without a meeting (if otherwise permitted by these bylaws and the
corporation's certificate of incorporation), or entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the board of directors may fix,
in advance, a record date, which shall be not more than sixty (60) nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any other action.
If the board of directors does not so fix a record date, the fixing of
such record date shall be governed by the provisions of Section 213 of the
General Corporation Law of Delaware.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
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2.13 PROXIES
Each stockholder entitled to vote at a meeting of stockholders or
entitled to express consent or dissent to corporate action in writing without a
meeting (if otherwise permitted by these bylaws and the corporation's
certificate of incorporation) may authorize another person or persons to act
for him by a written proxy, signed by the stockholder and filed with the
secretary of the corporation, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be deemed signed if the stockholder's name is placed on
the proxy (whether by manual signature, typewriting, telegraphic transmission
or otherwise) by the stockholder or the stockholder's attorney-in-fact. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(c) of the General Corporation Law of
Delaware.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list of
stockholders or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders and of the number of shares held by each such
stockholder.
2.15 CONDUCT OF BUSINESS
Meetings of stockholders shall be presided over by the chairman of the
board, if any, or in his absence by the president, or in his absence by a vice
president, or in the absence of the foregoing persons by a chairman designated
by the board of directors, or in the absence of such designation by a chairman
chosen at the meeting. The secretary shall act as secretary of the meeting,
but in his absence the chairman of the meeting may appoint any person to act as
secretary of the meeting. The chairman of any meeting of stockholders shall
determine the order of business and the procedures at the meeting, including
such matters as the regulation of the manner of voting and conduct of business.
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ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware
and any limitations in the certificate of incorporation or these bylaws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction
of the board of directors.
3.2 NUMBER OF DIRECTORS
The number of directors of the corporation is fixed at nine (9), of
which two shall be designated Class I, three shall be designated as Class II
directors and four shall be designated Class III directors. No reduction of
the authorized number of directors shall have the effect of removing any
director before that director's term of office expires.
3.3 ELECTION QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Each director shall hold office until his successor is elected and
qualified or until his earlier resignation or removal. Directors need not be
stockholders unless so required by the certificate of incorporation or these
bylaws. Election of directors need not be by written ballot.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon written notice to the
corporation. Stockholders may remove directors with or without cause. Any
vacancy occurring in the board of directors with or without cause may be filled
by a majority of the remaining members of the board of directors, although such
majority is less than a quorum, or by a plurality of the votes cast at a
meeting of stockholders, and each director so elected shall hold office until
the expiration of the term of office of the director whom he has replaced.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting
from any increase in the authorized number of directors
elected by all of the stockholders having the right to vote as
a single class may be filled by a majority of the directors
then in office, although less than a quorum, or by a sole
remaining director.
(ii) Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors
by the provisions of
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the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled
by a majority of the directors elected by such class or
classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or estate of a stockholder may apply to the Court of Chancery for a
decree summarily ordering an election as provided in Section 211 of the General
Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as
aforesaid, which election shall be governed by the provisions of Section 211 of
the General Corporation Law of Delaware as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors of the corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or
these bylaws, members of the board of directors, or any committee designated by
the board of directors, may participate in a meeting of the board of directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
3.6 FIRST MEETINGS
The first meeting of each newly elected board of directors shall be
held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to
fix the time or place of such first meeting of the newly elected board of
directors, or in the event such meeting is not held at the time and place so
fixed by the stockholders, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the board of directors, or as shall be specified in a written
waiver signed by all of the directors.
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3.7 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time and at such place, within or without the State of Delaware, as
shall from time to time be determined by the board.
3.8 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors may be held at such time
and at such place, within or without the State of Delaware, whenever called by
the chairman of the board, by the president, by the secretary or by any two
directors.
When given by the chairman of the board, the president or the
secretary, notice of the time and place of special meeting shall be delivered
personally or by telephone or facsimile to each director at least 24 hours in
advance of the date and time of the special meeting.
When given by any two directors, notice of the time and place of the
special meeting shall be delivered personally or by telephone or facsimile to
each director or sent by first-class mail to them, charges prepaid addressed to
each director at that director's address as it is shown on the records of the
Corporation. Such notice shall be given at least four days before the time of
the holding of the meeting. If the notice is mailed, it shall be deposited in
the United States mail at least six days before the time of the holding of the
meeting. If the notice is delivered personally or by telephone, facsimile or
by telegram, it shall be delivered personally or by telephone, facsimile or to
the telegraph company at least four days before the time of the holding of the
meeting.
Any oral notice (when given by either the chairman, the president, the
secretary or any two directors) given either personally or by telephone may be
communicated either to the director or to a person at the office of the
director whom the person giving the notice has reason to believe will promptly
communicate it to the director. No notice need specify the place for the
meeting if the meeting is to be held at the principal executive office of the
Corporation.
3.9 QUORUM
At all meetings of the board of directors, a majority of the number of
authorized directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation.
3.10 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such
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meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
directors, or members of a committee of directors, need be specified in any
written waiver of notice unless so required by the certificate of incorporation
or these bylaws.
3.11 ADJOURNED MEETING; NOTICE
If a quorum is not present at any meeting of the board of directors,
then the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is
present.
3.12 CONDUCT OF BUSINESS
Meetings of the board of directors shall be presided over by the
chairman of the board, if any, or in his absence by the president, or in their
absence by a chairman chosen at the meeting. The secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting. The chairman of any
meeting shall determine the order of business and the procedures at the
meeting.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or
these bylaws, any action required or permitted to be taken at any meeting of
the board of directors, or of any committee thereof, may be taken without a
meeting if all members of the board or committee, as the case may be, consent
thereto in writing and the writing or writings are filed with the minutes of
proceedings of the board or committee.
3.14 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or
these bylaws, the board of directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if any,
of attendance at each meeting of the board of directors and may be paid a fixed
sum for attendance at each meeting of the board of directors or a stated salary
as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
3.15 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan,
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guaranty or other assistance may be with or without interest and may be
unsecured, or secured in such manner as the board of directors shall approve,
including, without limitation, a pledge of shares of stock of the corporation.
Nothing in this section shall be deemed to deny, limit or restrict the powers
of guaranty or warranty of the corporation at common law or under any statute.
3.16 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided, however,
that, so long as stockholders of the corporation are entitled to cumulative
voting, if less than the entire board is to be removed, no director may be
removed without cause if the votes cast against his or her removal would be
sufficient to elect him or her if then cumulatively voted at an election of the
entire Board of Directors.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist
of one or more of the directors of the corporation. The board may designate
one or more directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors or in the bylaws of the corporation, shall
have and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers that may
require it; but no such committee shall have the power or authority to (i)
amend the certificate of incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of shares of stock adopted by the board of directors as provided in Section
151(a) of the General Corporation Law of Delaware, fix any of the preferences
or rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the corporation),
(ii) adopt an agreement of merger or consolidation under Sections 251 or 252 of
the General Corporation Law of Delaware, (iii) recommend to the stockholders
the sale, lease or exchange of all or substantially all of
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the corporation's property and assets (iv) recommend to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or (v) amend
the bylaws of the corporation; and, unless the board resolution establishing
the committee, the bylaws or the certificate of incorporation expressly so
provide, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock, or to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law of
Delaware.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these bylaws,
Section 3.5 (place of meetings and meetings by telephone), Section 3.7 (regular
meetings), Section 3.8 (special meetings and notice), Section 3.9 (quorum),
Section 3.10 (waiver of notice), Section 3.11 (adjournment and notice of
adjournment), Section 3.12 (conduct of business) and Section 3.13 (action
without a meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of
directors and its members; provided, however, that the time of regular meetings
of committees may also be called by resolution of the board of directors and
that notice of special meetings of committees shall also be given to all
alternate members, who shall have the right to attend all meetings of the
committee. The board of directors may adopt rules for the government of any
committee not inconsistent with the provisions of these bylaws.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a president, one or more vice
presidents, a secretary, and a treasurer. The corporation may also have, at
the discretion of the board of directors, a chairman of the board, one or more
assistant vice presidents, assistant secretaries, assistant treasurers, and any
such other officers as may be appointed in accordance with the provisions of
Section 5.2 of these bylaws. Any number of offices may be held by the same
person.
5.2 ELECTION OF OFFICERS
Except as otherwise provided in this Section 5.2, the officers of the
corporation shall be chosen by the board of directors, subject to the rights,
if any, of an officer under any contract of employment. The board of directors
may appoint, or empower the president to appoint (whether or not such officer
is described in this Article V), such officers and agents of the business as
the
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corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these bylaws or as
the board of directors may from time to time determine. Any vacancy occurring
in any office of the corporation shall be filled by the board of directors or
may be filled by the president (if the president appointed such officer).
5.3 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors or, in the case of an officer appointed by
the president, by the president.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall not
be necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.4 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.5 of these bylaws.
5.5 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president, unless otherwise determined by the board of directors, shall be
the chief executive officer of the corporation and shall, subject to the
control of the board of directors, have general supervision, direction, and
control of the business and the officers of the corporation. He shall preside
at all meetings of the shareholders and, in the absence or nonexistence of a
chairman of the board, at all meetings of the board of directors. He shall
have the general powers and duties of management usually vested in the office
of president of a corporation and shall have such other powers and duties as
may be prescribed by the board of directors or these bylaws.
5.6 VICE PRESIDENTS
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors,
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shall perform all the duties of the president and when so acting shall have all
the powers of, and be subject to all the restrictions upon, the president. The
vice presidents shall have such other powers and perform such other duties as
from time to time may be prescribed for them respectively by the board of
directors, these bylaws, the president or the chairman of the board.
5.7 SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors, and shareholders. The minutes shall show
the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names
of all shareholders and their addresses, the number and classes of shares held
by each, the number and date of certificates evidencing such shares, and the
number and date of cancellation of every certificate surrendered for
cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the board of directors required to be given by law
or by these bylaws. He shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or by these bylaws.
5.8 TREASURER
The treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The treasurer shall deposit all money and other valuables in the name
and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of all of his
transactions as treasurer and of the financial condition of the corporation,
and shall have such other powers and perform such other duties as may be
prescribed by the board of directors or these bylaws.
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<PAGE> 19
5.9 ASSISTANT SECRETARY
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
5.10 ASSISTANT TREASURER
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
5.11 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from
time to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware, indemnify each of its
directors and officers against expenses (including attorneys' fees), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding, arising by reason of the fact that such person
is or was an agent of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation includes any person (i) who is or
was a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, including, without
limitation, any direct or indirect subsidiary of the corporation, or (iii) who
was a director or officer of a corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such predecessor
corporation.
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<PAGE> 20
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the extent and in the manner
permitted by the General Corporation Law of Delaware, to indemnify each of its
employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation. For
purposes of this Section 6.2, an "employee" or "agent" of the corporation
(other than a director or officer) includes any person (i) who is or was an
employee or agent of the corporation, (ii) who is or was serving at the request
of the corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including, without limitation, any
direct or indirect subsidiary of the corporation, or (iii) who was an employee
or agent of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
6.3 INSURANCE
The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of the General Corporation Law of Delaware.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean
a purpose reasonably related to such person's interest as a stockholder. In
every instance where an attorney or other agent is the person who seeks the
right to inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing that authorizes the attorney or other agent to
so act on behalf of the stockholder. The demand under oath shall be directed
to the corporation at its registered office in Delaware or at its principal
place of business.
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<PAGE> 21
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of
Chancery is hereby vested with the exclusive jurisdiction to determine whether
a director is entitled to the inspection sought. The Court may summarily order
the corporation to permit the director to inspect any and all books and
records, the stock ledger, and the stock list and to make copies or extracts
therefrom. The Court may, in its discretion, prescribe any limitations or
conditions with reference to the inspection, or award such other and further
relief as the Court may deem just and proper.
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the president, any vice president, the
treasurer, the secretary or assistant secretary of this corporation, or any
other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority
granted herein may be exercised either by such person directly or by any other
person authorized to do so by proxy or power of attorney duly executed by such
person having the authority.
ARTICLE VIII
GENERAL MATTERS
8.1 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of a corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the
board of directors, every holder of stock represented by certificates and, upon
request, every holder of uncertificated shares, shall be entitled to have a
certificate signed by, or in the name of the corporation by the chairman or
vice-chairman of the board of directors, or the president or vice-president,
and by the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of such corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
issue.
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<PAGE> 22
The corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the consideration to be
paid therefor. Upon the face or back of each stock certificate issued to
represent any such partly paid shares, or upon the books and records of the
corporation in the case of uncertificated partly paid shares, the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated. Upon the declaration of any dividend on fully paid shares, the
corporation shall declare a dividend upon partly paid shares of the same class,
but only upon the basis of the percentage of the consideration actually paid
thereon.
8.2 LOST CERTIFICATES
Except as provided in this Section 8.2, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnity it against any claim that may be made against it
on account of the alleged loss, theft or destruction of any such certificate or
the issuance of such new certificate or uncertificated shares.
8.3 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules
of construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these bylaws. Without limiting the generality of
this provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.
8.4 DIVIDENDS
The directors of the corporation, subject to any restrictions
contained in the certificate of incorporation, may declare and pay dividends
upon the shares of its capital stock pursuant to the General Corporation Law of
Delaware. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock.
The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve.
8.5 FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.6 SEAL
The corporation may adopt a corporate seal, which may be altered at
pleasure, and may use
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<PAGE> 23
the same by causing it or a facsimile thereof to be impressed or affixed or in
any other manner reproduced.
8.7 TRANSFER OF STOCK
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.
8.8 STOCK TRANSFER AGREEMENTS
The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock
of the corporation to restrict the transfer of shares of stock of the
corporation of any one or more classes owned by such stockholders in any manner
not prohibited by the General Corporation Law of Delaware.
8.9 REGISTERED STOCKHOLDERS
The corporation shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends
and to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of another person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.
ARTICLE IX
AMENDMENTS
The original or other bylaws of the corporation may be adopted,
amended or repealed by the stockholders entitled to vote; provided, however,
that the corporation may, in its certificate of incorporation, confer the power
to adopt, amend or repeal bylaws upon the directors. The fact that such power
has been so conferred upon the directors shall not divest the stockholders of
the power, nor limit their power to adopt, amend or repeal bylaws.
Notwithstanding any other provision of these bylaws or any provision
of law which might otherwise permit a lesser vote or no vote, but in addition
to any affirmative vote of the holders of the capital stock required by law or
by these bylaws, the affirmative vote of at least two-thirds (2/3) of the
combined voting power of all of the then-outstanding shares of the corporation
entitled to vote shall be required to alter, amend or repeal Article II,
Section 2.9 or Section 2.11 of these bylaws or this Article IX or any provision
thereof, or to add or amend any other bylaw in order to change or nullify the
effect of such provisions, unless such amendment shall be approved by a
majority of the directors of the corporation not affiliated or associated with
any person or entity holding (or which
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<PAGE> 24
has announced an intent to obtain) 26% or more of the voting power of the
corporation's outstanding capital stock.
ARTICLE X
DISSOLUTION
If it should be deemed advisable in the judgment of the board of
directors of the corporation that the corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation
entitled to vote thereon votes for the proposed dissolution, then a certificate
stating that the dissolution has been authorized in accordance with the
provisions of Section 275 of the General Corporation Law of Delaware and
setting forth the names and residences of the directors and officers shall be
executed, acknowledged, and filed and shall become effective in accordance with
Section 103 of the General Corporation Law of Delaware. Upon such
certificate's becoming effective in accordance with Section 103 of the General
Corporation Law of Delaware, the corporation shall be dissolved.
ARTICLE XI
CUSTODIAN
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
The Court of Chancery, upon application of any stockholder, may
appoint one or more persons to be custodians and, if the corporation is
insolvent, to be receivers, of and for the corporation when:
(i) at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect
successors to directors whose terms have expired or would have
expired upon qualification of their successors; or
(ii) the business of the corporation is suffering or is
threatened with irreparable injury because the directors are
so divided respecting the management of the affairs of the
corporation that the required vote for action by the board of
directors cannot be obtained and the stockholders are unable
to terminate this division; or
(iii) the corporation has abandoned its business and has
failed within
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<PAGE> 25
a reasonable time to take steps to dissolve, liquidate or
distribute its assets.
11.2 DUTIES OF CUSTODIAN
The custodian shall have all the powers and title of a receiver
appointed under Section 291 of the General Corporation Law of Delaware, but the
authority of the custodian shall be to continue the business of the corporation
and not to liquidate its affairs and distribute its assets, except when the
Court of Chancery otherwise orders and except in cases arising under Sections
226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.
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<PAGE> 1
Exhibit 11.1
SYBASE, INC.
SUPPLEMENTAL COMPUTATIONS OF EARNINGS PER SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-----------------------
1997 1996
------ --------
<S> <C> <C>
Actual weighted average shares outstanding for the period:
Common stock 77,504 73,630
Dilutive employee stock options
and warrants (1) 1,020 -
------ --------
Total common and common
equivalent shares 78,524 73,630
====== ========
Net income (loss) $3,541 ($ 6,906)
====== ========
Net income (loss) per share $ 0.05 ($ 0.09)
====== ========
</TABLE>
(1) Computed using the treasury stock method. Not included if anti-dilutive.
-24-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF SYBASE, INC. AS OF MARCH 31, 1997
AND FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 176,260
<SECURITIES> 17,798
<RECEIVABLES> 249,932
<ALLOWANCES> 35,052
<INVENTORY> 0
<CURRENT-ASSETS> 447,267
<PP&E> 415,628
<DEPRECIATION> 233,318
<TOTAL-ASSETS> 759,062
<CURRENT-LIABILITIES> 335,489
<BONDS> 0
0
0
<COMMON> 78
<OTHER-SE> 420,499
<TOTAL-LIABILITY-AND-EQUITY> 759,062
<SALES> 135,173
<TOTAL-REVENUES> 241,902
<CGS> 8,058
<TOTAL-COSTS> 184,533
<OTHER-EXPENSES> 52,663
<LOSS-PROVISION> 401
<INTEREST-EXPENSE> 140
<INCOME-PRETAX> 5,712
<INCOME-TAX> 2,171
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,541
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
