SYBASE INC, PRE 14A, 1999-03-31

SYBASE INC
PRE 14A, 1999-03-31
PREPACKAGED SOFTWARE

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<PAGE> 1
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

SYBASE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

Registrant
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

-------------------------
(2) Aggregate number of securities to which transaction applies:

-------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

-------------------------

(4) Proposed maximum aggregate value of transaction:

-------------------------

(5) Total fee paid:

-------------------------

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: __________________________
(2) Form, Schedule or Registration Statement No.: __________________
(3) Filing Party: ______________________
(4) Date Filed: _______________________

<PAGE> 2
SYBASE, INC.
----------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 27, 1999

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Sybase, Inc., a Delaware corporation (the "Company"), will be held on Thursday,
May 27, 1999 at 10:00 a.m. at the offices of the Company, 1650 - 65th Street,
Emeryville, California 94608, for the following purposes:

1. To elect two Class I directors, each to serve a three-year term expiring
upon the 2002 Annual Meeting of Stockholders, or until their successors
are duly elected and qualified.

2. To approve an amendment to the 1996 Stock Plan increasing the total
number of shares of Common Stock reserved for issuance thereunder by
1,800,000 shares.

3. To approve an amendment to the Amended and Restated 1991 Employee Stock
Purchase Plan and Amended and Restated 1991 Foreign Subsidiary Employee
Stock Purchase Plan increasing the total number of shares of Common
Stock reserved for issuance thereunder by 2,300,000 shares.

4. To approve an amendment to the 1992 Director Stock Option Plan to
increase the amount of the annual stock option grant made to nonemployee
directors from 12,000 shares to 16,000 shares.

5. To approve an amendment to the Company's Restated Certificate of
Incorporation to reorganize the Board of Directors into a single class.

6. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for the year ending December 31, 1999.

7. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Only stockholders of record at the close of business on April 2, 1999
are entitled to notice of and to vote at the meeting.

All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as promptly as possible in the postage
prepaid envelope provided for that purpose. Any stockholder attending the
meeting may vote in person even if he or she returned a Proxy.

By Order of the Board of Directors

Mitchell L. Gaynor
Vice President, General Counsel,
and Secretary
Emeryville, California
April 14, 1999

<PAGE> 3
SYBASE, INC.
----------

PROXY STATEMENT

INFORMATION CONCERNING PROXY SOLICITATION AND VOTING

GENERAL

The enclosed Proxy is solicited on behalf of the Board of Directors (the
"Board") of Sybase, Inc. (the "Company" or "Sybase"), for the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Thursday, May 27, 1999 at
10:00 a.m. at the offices of the Company, 1650 - 65th Street, Emeryville,
California 94608, or any adjournment or adjournments thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting. The Company's
principal executive offices are located at 6475 Christie Avenue, Emeryville,
California 94608, and its telephone number at that location is (510) 922-3500.

These Proxy materials were mailed to stockholders on or about April 19,
1999.

RECORD DATE; OUTSTANDING SHARES

Only stockholders of record at the close of business on April 2, 1999
(the "Record Date") are entitled to receive notice of and to vote at the
meeting. The outstanding voting securities of the Company on the Record Date
consisted of _______ shares of Common Stock. No shares of Preferred Stock are
outstanding. The closing market price of the Company's Common Stock on the
NASDAQ National Market on April 2, 1999 was $_____ per share.

REVOCABILITY OF PROXIES

The enclosed Proxy is revocable at any time before its use by delivery
to the Company of a written notice of revocation or a duly executed Proxy
bearing a later date. If a person who has executed and returned a Proxy is
present at the meeting and wishes to vote in person, he or she may elect to do
so and thereby suspend the power of the proxy holders to vote his or her Proxy.

VOTING AND SOLICITATION

Each share of Common Stock issued and outstanding as of the Record Date
shall have one vote on each of the matters presented herein. Stockholders do not
have the right to cumulate votes in the election of directors. The required
quorum for the transaction of business at the Annual Meeting is a majority of
the votes eligible to be cast by holders of shares of Common Stock issued and
outstanding on the Record Date. Shares that are voted "For", "Against" or
"Withheld From" a matter are treated as being present at the meeting for
purposes of establishing a quorum and are also treated as shares entitled to
vote at the Annual Meeting (the "Votes Cast") with respect to such matter.
Abstentions and broker non-votes also will be counted by the Company as present
at the meeting for purposes of determining the presence of a quorum. Abstentions
will be counted by the Company in determining the total number of Votes Cast
with respect to a proposal (other than the election of directors) and,
therefore, will have the same effect as a vote against the proposal. Broker
non-votes will not be counted in determining the number of Votes Cast with
respect to a proposal and, therefore, will not affect the outcome of the voting
on a proposal that requires a majority of the Votes Cast (such as the proposed
plan amendments).

The cost of soliciting Proxies will be borne by the Company. Proxies may
be solicited by certain of the Company's directors, officers and regular
employees, without additional compensation, in person or by telephone,
electronic mail or facsimile. In addition, the Company has retained the services
of Georgeson & Company Inc. to assist in the solicitation of proxies for an
estimated fee of $7,000 plus reimbursement of expenses. The Company may also
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation materials to such
beneficial owners.

- 1 -
<PAGE> 4
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's Annual Meeting of Stockholders
to be held in 2000, and that such stockholders desire to have included in the
Company's proxy statement relating to such meeting, must be received by the
Company no later than December 15, 1999 in order that they may be considered for
possible inclusion in the proxy statement and form of proxy relating to that
meeting.

If a stockholder wishes to present a proposal at the Company's Annual
Meeting in 2000 and the proposal is not intended to be included in the Company's
proxy statement relating to that meeting, the stockholder must give advance
notice to the Company prior to the deadline computed in accordance with the
Company's bylaws (the "Bylaw Deadline") for such meeting, as described below
under "Other Matters". If a stockholder gives notice of such a proposal after
the Bylaw Deadline, the stockholder will not be permitted to present the
proposal to the stockholders for a vote at the meeting.

SEC rules also establish a deadline for submission of stockholder
proposals that are not intended to be included in the Company's proxy statement
with respect to discretionary voting (the "Discretionary Vote Deadline"). The
Discretionary Vote Deadline for the Company's Annual Meeting in 2000 is February
28, 2000 (45 calendar days prior to the anniversary of the mailing date of this
Proxy Statement). If a stockholder gives notice of such a proposal after the
Discretionary Vote Deadline, the Company's proxy holders will be allowed to use
their discretionary voting authority to vote against the stockholder proposal
when and if the proposal is raised at the Company's Annual Meeting in 2000.
Because the Bylaw Deadline is not capable of being determined until the Company
publicly announces the date for its next annual meeting, it is possible that the
Bylaw Deadline may occur after the Discretionary Vote Deadline. In such a case,
a proposal received after the Discretionary Vote Deadline but before the Bylaw
Deadline would be eligible to be presented at next year's annual meeting and the
Company believes that its proxy holders would be allowed to use the
discretionary authority granted by the proxy card to vote against the proposal
at the meeting without including any disclosure of the proposal in the proxy
statement relating to such meeting.

The Company has not been notified by any stockholder of his or her
intent to present a stockholder proposal from the floor at this year's Annual
Meeting. The enclosed proxy card grants the proxy holders discretionary
authority to vote on any matter properly brought before the Annual Meeting,
including any stockholder proposals received between the date of this Proxy
Statement and the Bylaw Deadline for this year's Annual Meeting, which is April
24, 1999.

SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth the beneficial ownership of Common Stock
of the Company as of March 12, 1999 as to (a) each current director and nominee
for director; (b) each executive officer and former executive officer named in
the Summary Compensation Table (hereafter referred to as the "named executive
officers"); (c) all current directors and executive officers as a group; and (d)
each person known to the Company to beneficially own at that time more than 5%
of the outstanding shares of its Common Stock. On March 12, 1999, there were
82,358,255 shares of Common Stock outstanding.

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<PAGE> 5
<TABLE>
<CAPTION>
Approximate
Shares Percent of
Beneficially Class
Name of Beneficial Owner Owned(1) Owned
------------- -----------
<S> <C> <C>
Entities affiliated with George Soros and Purnendu 5,702,200 6.92%
Chatterjee(2)
888 Seventh Avenue
New York, NY 10106

Entities affiliated with Dodge & Cox(3) 4,834,987 5.87%
One Sansome Street
San Francisco, CA 94104

Robert S. Epstein(4) 1,497,697 1.82%

Mitchell E. Kertzman(5) 0 *

John S. Chen(6) 305,975 *

Richard C. Alberding(7) 51,750 *

Jack L. Acosta(8) 169,793 *

Michael H. Forster(9) 267,271 *

L. William Krause(10) 26,750 *

Michael S. Gardner(11) 73,786 *

Richard N. LaBarbera(12) 24,716 *

Alan B. Salisbury(13) 72,750 *

Robert P. Wayman(14) 46,166 *

Jeffrey T. Webber(15) 56,750 *

All current executive officers and directors as a group 2,474,397 3.00%
(16 persons)(16)
</TABLE>

- --------

* Less than one percent.

(1) The table is based upon information supplied by current and former
executive officers, directors and principal stockholders. Unless
otherwise indicated, each of the stockholders named in the table has
sole voting and investment power with respect to all securities shown as
beneficially owned, subject to applicable community property laws and to
the information contained in the footnotes to the table.

(2) Includes 682,400 shares held by Mr. Soros over which he holds sole
voting and dispositive power; 672,200 shares beneficially owned by
Quantum Partners LDC ("Quantum"), which has sole voting and dispositive
power over such shares; 317,600 shares beneficially owned by Quantum
Industrial Partners LDC ("QIP"), which has shared dispositive and shared
voting power over such shares; 1,403,000 shares beneficially owned by
Winston Partners II LLC ("WLLC"), which has sole voting and dispositive
power over such shares; 465,000 shares beneficially owned by Winston
Partners, L.P. ("WLP") which has sole voting and dispositive power over
such shares; and 2,162,000 shares beneficially owned by Winston Partners
II LDC ("WLDC"), which has sole voting and dispositive power over such
shares. Mr. Soros and Mr. Stanley F. Drukenmiller may be deemed to be
the beneficial owners of the shares beneficially owned by Quantum and
QIP. Dr. Chatterjee has sole voting and dispositive power over the
shares held by WLLC, WLP, WLDC, and shared voting and dispositive power
over the shares held by QIP.

(3) Represents shares held by investor accounts managed by Dodge & Cox, a
registered investment advisor, which has sole dispositive power over all
such shares, sole voting power with respect to 4,331,087 of such shares
and shared voting power with respect to 78,000 of such shares.

(4) Includes 124,581 shares subject to options that are exercisable within
60 days of March 12, 1999.

(5) Mr. Kertzman ceased to be an employee in November 1998.

(6) Includes 291,666 shares subject to options that are exercisable within
60 days of March 12, 1999.

(7) Includes 50,750 shares subject to options that are exercisable within 60
days of March 12, 1999.

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<PAGE> 6
(8) Mr. Acosta ceased to be an employee in January 1999.

(9) Includes 244,200 shares subject to options that are exercisable within
60 days of March 12, 1999.

(10) Includes 25,750 shares subject to options that are exercisable within 60
days of March 12, 1999.

(11) Includes 72,916 shares subject to options that are exercisable within 60
days of March 12, 1999. Mr. Gardner ceased to be an employee on March
26, 1999.

(12) Includes 18,749 shares subject to options that are exercisable within 60
days of March 12, 1999.

(13) Includes 71,750 shares subject to options that are exercisable within 60
days of March 12, 1999.

(14) Includes 45,166 shares subject to options that are exercisable within 60
days of March 12, 1999.

(15) Includes 55,750 shares subject to options that are exercisable within 60
days of March 12, 1999.

(16) Includes 1,017,400 shares subject to options that are exercisable within
60 days of March 12, 1999.

ELECTION OF DIRECTORS

DIRECTORS

The Company currently has seven directors divided among three classes as
follows: Class I -- John S. Chen and Alan B. Salisbury; Class II -- Robert S.
Epstein and Richard C. Alberding; and Class III -- L. William Krause, Robert P.
Wayman and Jeffrey T. Webber.

Two Class I directors are to be elected at the Annual Meeting for a
three-year term ending at the Annual Meeting of Stockholders in 2002. The Board
has nominated each of John S. Chen and Alan B. Salisbury for election as a Class
I director. Unless otherwise instructed, the proxy holders will vote the Proxies
received by them for Messrs. Chen and Salisbury. In the event that a nominee is
unable or declines to serve as a director at the time of the Annual Meeting, the
Proxies will be voted for any nominee who shall be designated by the present
Board to fill the vacancy. The Company is not aware of any reason that either of
Messrs. Chen or Salisbury will be unable or will decline to serve as a director.
Under the Company's bylaws, stockholders may nominate other individuals for
election as directors only if the proposed nomination is set forth in a written
notice to the Company's Secretary that complies with certain requirements
described below in "Other Matters".

Certain information regarding the nominees and the incumbent members of
the Board whose terms will continue after the Annual Meeting is set forth below:

<TABLE>
<CAPTION>
Name of Director or Nominee Age Current Term Expires
--------------------------- --- --------------------
<S> <C> <C>
John S. Chen 43 1999
Robert S. Epstein 46 2000
Richard C. Alberding 68 2000
L. William Krause 56 2001
Alan B. Salisbury 62 1999
Robert P. Wayman 53 2001
Jeffrey T. Webber 46 2001
</TABLE>

Mr. Chen is the Chief Executive Officer, President and Chairman of the
Board. He has served as Chief Executive Officer and Chairman of the Board since
November 1998 and as President and a director since August 1997. Mr. Chen served
as Co-Chief Executive Officer between February 1998 and November 1998 and as
Chief

- 4 -
<PAGE> 7
Operating Officer between August 1997 and February 1998. Before joining Sybase,
Mr. Chen served between March 1995 and July 1997 as the President of the Open
Enterprise Computing Division of Siemens Nixdorf, a computer and electronics
company, and as Chief Executive Officer and Chairman of the Siemens Pyramid
subsidiary of Siemens Nixdorf. Before its acquisition by Siemens Nixdorf in
March 1995, Mr. Chen served in various executive capacities with Pyramid
Technology Corporation, a computer company, where he became Chief Operating
Officer in October 1992 and President in June 1993. Mr. Chen is a director of
Beyond.com Corporation.

Dr. Epstein is a founder of the Company and has served as Executive Vice
President and as a director since November 1984. From November 1996 until August
1998, Dr. Epstein also served as Chief Information Officer of the Company. He
currently is the Chairman of the Board of Colorado Microdisplay, a privately
held company, where he has been a director since August 1996.

Mr. Alberding has served as a director since September 1993. From 1958
to 1991, he served in various management positions with Hewlett-Packard Company,
an electronics and computer manufacturer, serving most recently as Executive
Vice President. Mr. Alberding is now retired and is also a director of Digital
Microwave Corp., Paging Network Inc., Digital Link Corporation, JLK Direct
Distribution, Inc., Kennametal, Inc., and Walker Interactive Systems.

Mr. Krause has served as a director of Sybase since February 1995. Since
November 1998, he has been President of LWK Ventures, a private investment
company. Mr. Krause served as President, Chief Executive Officer and as a
director of Storm Technology, Inc. a provider of computer peripherals and
software for digital imaging, from October 1991 until November 1998 when it
filed for protection under federal bankruptcy laws. Prior to that, Mr. Krause
spent ten years at 3Com Corporation, a manufacturer of networking systems, where
he served as President and Chief Executive Officer until he retired in September
1990. Mr. Krause continued as Chairman of the Board for 3Com Corporation until
1993. Previously, Mr. Krause served in various marketing and general management
positions at Hewlett-Packard Company. Mr. Krause currently serves as a director
of Aureal Semiconductor, Inc. and Infoseek Corporation.

Dr. Salisbury has served as a director since July 1993. From April 1993
through August 1998, he served as President and General Manager of Learning Tree
International USA, Inc., a provider of advanced technology and technical
management training. Since August 1998, he has served as Chairman of Learning
Tree International USA, Inc. Between June 1991 and April 1993, Dr. Salisbury
served as Executive Vice President and Chief Operating Officer of
Microelectronics and Computer Technology Corp., an information technology
research and development consortium. From November 1984 through September 1987,
Dr. Salisbury served as the Commanding General of the U.S. Army Information
Systems Engineering Command. Dr. Salisbury is also a director of TelePad Corp.,
Template Software, Inc., and Learning Tree International.

Mr. Wayman has served as a director since July 1995. He has served as
Executive Vice President, Finance and Administration and Chief Financial Officer
of Hewlett-Packard Company since 1992, and served as Senior Vice President and
Chief Financial Officer of Hewlett-Packard between 1987 and 1992. Mr. Wayman is
also a director of Hewlett-Packard and CNF Transportation, Inc.

Mr. Webber has served as a director since October 1993. Mr. Webber
founded and, since January 1991, has served as President of R.B. Webber &
Company, Inc., a management consulting firm. Since 1997,he has served as a
general partner of The Entrepreneurs' Fund, an early stage venture capital fund.
From 1987 to January 1991, he served as a partner in Edgar, Dunn & Company, a
management consulting firm. Mr. Webber is also a director of Commerce One,
enCommerce, Inc., Persistence Software, Inc., Sagent Technology, Inc., Spear
Technologies, Inc. and WorkWise., Inc.

BOARD MEETINGS AND COMMITTEES

The Board of Directors held twelve meetings during the fiscal year ended
December 31, 1998. The Board has an Audit Committee, a Compensation Committee, a
Stock Committee, and a Board Affairs Committee. No incumbent director who was a
director during the year ended December 31, 1998 attended fewer than 83% of the
aggregate number of meetings of the Board and the committees of the Board on
which he served.

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<PAGE> 8
The Audit Committee currently consists of Messrs. Salisbury (Chairman),
Wayman and Webber. The Audit Committee, which held six meetings during the last
fiscal year, recommends the engagement of the Company's independent auditors and
is primarily responsible for approving their services to the Company. The
Committee also reviews and evaluates the Company's accounting principles, its
system of internal accounting controls, the charter and projects undertaken by
the Company's internal audit function and the adequacy of the Company's
financial reports. In connection with these reviews, the Audit Committee meets
with appropriate financial personnel of the Company and the organizations
responsible for internal audit.

The Compensation Committee, which currently consists of Messrs.
Alberding (Chairman) and Krause, held seven meetings during the last fiscal
year. The principal functions of the Compensation Committee are to review and
approve the Company's executive compensation policies and programs and, under
certain circumstances, to administer the Company's Stock Option and Employee
Stock Purchase Plans.

The Stock Committee, currently consisting of Mr. Chen, is authorized to
make grants of stock options within certain authorized limits to employees who
are not executive officers of the Company. The Stock Committee acted by
unanimous written consents during the last fiscal year.

The Board Affairs Committee currently consists of Messrs. Wayman
(Chairman) and Krause. This Committee was formed in February 1999, and held no
meetings during the last fiscal year. The principal function of the Committee is
to oversee the Company's corporate governance standards regarding the conduct,
operation of meetings and deliberations of the Board, and to serve as a
nominating committee. The Board Affairs Commmittee will consider recommendations
for nominees submitted by stockholders. Such recommendations should be sent to:
Secretary, Sybase, Inc., 6475 Christie Avenue, Emeryville, CA 94608.

The Company's corporate governance standards, adopted in March 1996,
provide for, among other things, the election of one outside director as the
lead outside director. Mr. Wayman is the current lead outside director, and has
served in such capacity since May 1998. The outside directors meet separately
from management and employee directors in executive sessions conducted as part
of regular Board meetings and also confer informally from time to time.

DIRECTOR COMPENSATION

In 1998, each nonemployee director received an annual retainer of
$20,000, paid in four quarterly installments. In addition, the chairpersons of
the Compensation Committee and the Audit Committee each received an additional
annual retainer of $2,000, paid in four quarterly installments. The lead outside
director received an additional annual retainer of $4,000, paid in four
quarterly installments. In addition to the annual retainer, nonemployee
directors received $1,500 for each regular Board meeting attended in person;
$750 for each regular Board meeting attended by telephone or video conference;
$750 for each special Board meeting exceeding one hour in duration, attended in
person or by telephone or video conference; $750 for each Committee meeting
attended in person (whether or not held on the same day as another Board or
Committee meeting); and $375 for each Committee meeting attended by telephone or
video conference. Nonemployee directors are also reimbursed for out-of-pocket
travel expenses associated with their attendance at meetings of the Board. For
1998, Messrs. Alberding, Krause, Salisbury, Wayman and Webber received aggregate
fees and reimbursements of $35,498, $31,625, $42,336, $36,500, and $33,125,
respectively. Nonemployee directors also receive annual stock option grants
under the terms of the Company's 1992 Director Stock Option Plan (the "Director
Plan"). Under the Director Plan, Messrs. Alberding, Krause, Salisbury, Wayman,
Webber and David E. Liddle (whose term expired in May 1998) each received in
1998 a stock option to purchase 12,000 shares at an exercise price of $8.6875
per share, which vests ratably over a four-year period. Employee directors do
not receive any compensation, expense reimbursement or stock option grants for
serving as directors or for attending Board or Committee meetings.

REQUIRED VOTE

The two nominees for Class I director receiving the highest number of
affirmative votes of the shares of the Company's Common Stock voted at the
Annual Meeting shall be elected as the Class I directors. Votes withheld from
any nominee will be counted for purposes of determining the presence or absence
of a quorum but have no other effect under Delaware law.

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<PAGE> 9
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
ELECTION OF EACH OF JOHN S. CHEN AND ALAN B. SALISBURY AS A CLASS I DIRECTOR OF
THE COMPANY.

AMENDMENT OF THE 1996 STOCK PLAN

Competition for skilled software engineers and other key employees in
the enterprise software industry is intense and the use of significant stock
options for recruitment, retention and motivation of such personnel is
widespread. Approximately 64% of the Company's total employees held outstanding
options as of March 12, 1999. In March 1996 and May 1996, the Board of Directors
and the stockholders, respectively, approved the 1996 Stock Plan (the "Stock
Plan"). During 1997 and 1998, the Board of Directors and the stockholders,
respectively, approved increases in the shares reserved for issuance under the
Stock Plan, bringing the total to 7,927,000 shares after the 1998 Annual Meeting
of Stockholders. The Board believes that an increase in the number of shares
available for grant under the Stock Plan is critical to enabling the Company to
recruit highly qualified new employees, promote long-term retention of key
employees, provide new incentives to individuals who became employees as a
result of an acquisition of their company by Sybase, motivate high levels of
performance and recognize employee contributions to the success of the Company.
The Board further believes that without the ability to effectively grant
options, the Company will be at a competitive disadvantage in the market for
skilled employees, particularly in the Silicon Valley, Boston and Boulder
technology centers.

PROPOSED AMENDMENT TO THE PLAN

In March 1999, the Board approved an amendment that would further
increase the total number of shares reserved for issuance under the Stock Plan
by 1,800,000 shares, an amount that is equal to approximately 2.2% of the
outstanding shares of Common Stock on March 12, 1999. The amendment increases
the total shares authorized by the Plan to 9,727,000 shares. The stockholders
are being asked to ratify and approve the amendment to the Stock Plan at the
Annual Meeting.

1998 STOCK OPTION ACTIVITY

As of March 12, 1999, options to purchase 365,845 shares under the Stock
Plan had been exercised and options to purchase 3,224,519 shares were
outstanding. Without taking into account the proposed amendment to the Stock
Plan, 4,336,636 shares remained available for future grant as of March 12, 1999.
The grant of future options under the Stock Plan is subject to the discretion of
the Administrator (see "Summary of the 1996 Stock Plan Administration of Plan")
and accordingly, future grants are not currently determinable.

The following table sets forth information with respect to options
granted under the Company's existing employee stock option plans during 1998 to
the named executive officers, to all executive officers as a group, and to
non-executive officer employees as a group (nonemployee directors are not
eligible to participate in the Stock Plan). Several individuals received more
than one option grant during 1998.

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<PAGE> 10
<TABLE>
<CAPTION>
Weighted Average
Name of Individual or Identity of Group Exercise Price Number of Shares
and Position of Individual During 1998 Per Share Underlying Options Granted
- -------------------------------------- ---------------- --------------------------
<S> <C> <C>

Mitchell E. Kertzman, Chairman and Chief $9.4062 250,000(2)
Executive Officer(1) $6.8750 905,000(3)

John S. Chen, Chairman, President and Chief $9.4062 250,000(2)
Executive Officer $6.8750 750,000(3)

Robert S. Epstein, Executive Vice President -- 0(2)
and Chief Information Officer $6.8750 175,000(3)

Jack L. Acosta, Executive Vice President, $9.4062 75,000(2)
Finance and Chief Financial Officer $6.8750 300,000(3)

Michael S. Gardner, Senior Vice President, $9.4062 250,000(2)
Corporate Marketing $6.8750 250,000(3)

Richard N. LaBarbera, Senior Vice President $8.2981 65,000(2)
and General Manager, Enterprise Solutions $6.8750 50,000(4)
Division

Michael H. Forster, Senior Vice President, -- 0(2)
Worldwide Field Operations $6.8750 299,200(3)

All executive officers as a group(5) $9.1024 1,124,000(2)
$6.8750 2,957,450(3)

All other employees as a group $8.1054 5,232,079(2)
$6.8750 8,235,392(3)
</TABLE>

- --------

(1) Mr. Kertzman ceased to be an employee in November 1998, whereupon Mr.
Chen became sole Chief Executive Officer.

(2) Number of options newly granted during 1998 (excluding repriced options
granted in July 1998).

(3) Number of repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to the
employee prior to July 1998. See "Board Compensation Committee Report on
Executive Compensation and Repricing of Options - 1998 Option Repricing
Program."

(4) Number of repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to Mr.
LaBarbera prior to July 1998, but excluding 15,000 options newly granted
after July 1998 which were not repriced.

(5) Includes individuals who were executive officers as of December 31,
1998.

SUMMARY OF THE 1996 STOCK PLAN

General. The Stock Plan provides for the grant to employees of stock
options and stock purchase rights pursuant to which shares of the Company's
Common Stock may be acquired. Options granted under the Stock Plan may be either
"incentive stock options," as defined in Section 422 of the Internal Revenue
Code of 1986 (the "Code"), or nonstatutory stock options.

Purpose. The purposes of the Stock Plan are to attract and retain the
best available personnel for the Company for positions of substantial
responsibility, to provide additional incentive to the employees of the Company
and to promote the success of the Company's business.

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<PAGE> 11
Administration of the Stock Plan. The Stock Plan may be administered by
multiple administrative bodies. With respect to officers who are subject to
Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), the Stock
Plan will be administered by either the Board or one or more committees
designated by the Board as may be necessary to comply with Rule 16b-3 under the
Exchange Act. With respect to persons other than Section 16 officers, the Stock
Plan will be administered by the Board or a committee designated by the Board as
necessary to comply with applicable law. These multiple administrative bodies
shall hereinafter be collectively referred to as the "Administrator." The
Administrator may, without stockholder approval, amend the terms of outstanding
stock options (subject to the terms of the Stock Plan and the consent of the
optionee).

Eligibility. Incentive and nonstatutory stock options may be granted
only to employees. The Administrator selects the employees who will be granted
options and determines the number of shares subject to each option. In making
such determination, the Administrator takes into account the duties and
responsibilities of the employee, the value of the services of the employee, his
or her present and potential contributions to the success of the Company and
other relevant factors. As of March 12, 1999, approximately 4,200 employees were
eligible to receive options under the Stock Plan.

Exercise of Options. Options become exercisable at such times as are
determined by the Administrator and set forth in the option agreement.
Generally, it is anticipated that options granted under the Stock Plan will
become exercisable over a four-year period. However, in 1996, the Company
granted to approximately 300 non-officer employees performance-oriented options
to purchase approximately 1,200,000 shares that become exercisable over a period
as long as six years or as short as one year depending on the achievement by the
individual and the Company of certain specified objectives. An option is
exercised by giving notice of exercise to the Company specifying the number of
full shares of Common Stock to be purchased and tendering payment of the
purchase price to the Company. The method of payment of the exercise price of
the shares purchased upon exercise of an option shall be determined by the
Administrator, and may include, among other methods, cash, check, other shares
of Sybase Common Stock or an agreement from an approved broker to remit the
exercise price to the Company from the proceeds of a same-day sale of such
shares.

Limitations on Number of Options. No employee shall be granted options
to purchase more than 500,000 shares under the Stock Plan in any fiscal year,
except that in connection with his or her initial employment, an employee can be
granted up to an additional 500,000 shares.

Exercise Price. The exercise price of options granted under the Stock
Plan is determined by the Administrator. In the case of incentive stock options,
the exercise price must not be less than 100% of the fair market value of the
Common Stock on the date of grant. In the case of nonstatutory stock options,
the exercise price must not be less than 85% of the fair market value of the
Common Stock on the date of grant; provided that for any calendar year, the
number of shares subject to stock options granted with exercise prices below
100% of the fair market value on the relevant grant date can not exceed 5% of
the total number of shares subject to options and stock purchase rights granted
in the preceding calendar year. During 1998, no options with exercise prices
below the fair market value on the date of grant were granted under the Stock
Plan or under the Company's 1988 Stock Option Plan.

Termination of Employment. Upon termination of an optionee's continuous
status as an employee, the options terminate as provided in such employee's
option agreement; provided that an incentive stock option that is not exercised
within three months following such termination will become a nonstatutory
option, unless such termination resulted from the death or permanent disability
of the optionee, in which case such option will become a nonstatutory option if
not exercised within 12 months after termination. The period in which options
may be exercised following termination of employment will generally be three
months, except in the case of disability (one year), death (two years) or
retirement (the balance of the option's term). Notwithstanding the foregoing,
the post-termination exercise period may be terminated five days following
written notice in the event the optionee commits an act of misconduct, as
defined in the Stock Plan, such as a felony involving dishonesty or moral
turpitude or a breach of a non-disclosure or non-compete agreement.

Term of Option. Options granted under the Stock Plan expire as
determined by the Administrator, but in no event later than 10 years after the
date of grant. No option may be exercised by any person after such expiration.

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<PAGE> 12
Non-Transferability of Options. An option is non-transferable by the
holder, other than by will or the laws of descent and distribution, and is
exercisable during the holder's lifetime only by the optionee, or in the event
of the optionee's death, by a person who acquires the right to exercise the
option by bequest or inheritance or by reason of the death of the holder.

Adjustment Upon Changes in Capitalization; Change of Control. In the
event any change is made in the Company's capitalization, such as a stock split
or stock dividend, appropriate adjustment shall be made in the exercise price
and in the number of shares subject to outstanding options and shares available
for future grant. In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, each outstanding option that is not fully exercisable will only be
accelerated and become fully exercisable if the successor corporation has not
agreed to assume all outstanding options or substitute equivalent options
therefor. If the successor corporation has agreed to assume or substitute such
equivalent options, the options that are not fully exercisable will not be so
accelerated. Notwithstanding the foregoing, the Board has authorized employment
arrangements with certain designated executive officers that provide for a
partial acceleration of exercisability in the event that the executive officer's
employment is terminated within 18 months following a change of control. See
"Executive Compensation - Employment Agreements and Certain Transactions." All
shares of Common Stock issued pursuant to the Stock Plan and the 1991 Employee
Stock Purchase Plan and 1991 Foreign Subsidiary Employee Stock Purchase Plan
discussed below will also include one preferred stock purchase right ("Right")
pursuant to the Company's Preferred Share Rights Agreement, as amended (the
"Rights Plan"), that was adopted in 1992. The Rights Plan provides for a
dividend of Rights, which can not be exercised until certain events occur, to
purchase shares of Preferred Stock of the Company or, after certain events,
shares of Common Stock. Each stockholder of record receives one Right for each
share of Common Stock that the shareholder owns, and until the occurrence of
certain events, such Rights trade with the shares of Common Stock. Each share of
Common Stock outstanding on the Record Date also includes a Right.

Stock Purchase Rights. The Stock Plan permits the Company to grant
rights to purchase Common Stock of the Company ("Stock Purchase Rights") either
alone, in addition to, or in tandem with other awards under the Stock Plan or
cash awards made outside the Plan at prices determined by the Administrator of
the Stock Plan; provided that for any calendar year, the number of shares
subject to Stock Purchase Rights granted with prices below 100% of the fair
market value on the respective grant date can not exceed 10% of the total number
of shares subject to options and stock purchase rights granted in the preceding
calendar year. Upon the granting of a Stock Purchase Right under the Stock Plan,
the offeree shall be advised in writing of the terms, conditions and
restrictions related to the offer, including the number of shares of Common
Stock that the offeree shall be entitled to purchase, the price to be paid and
the time within which the offeree must accept such offer (which shall in no
event exceed six months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right). The offer shall be accepted by
execution of a stock purchase agreement between the Company and the offeree.

Unless the Administrator of the Stock Plan determines otherwise, the
stock purchase agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser's employment with
the Company for any reason (including death or permanent and total disability).
The purchase price for shares repurchased pursuant to the stock purchase
agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may determine. Upon
exercise of a Stock Purchase Right, the purchaser shall have rights equivalent
to those of a shareholder of the Company. Stock Purchase Rights granted to
persons subject to Section 16 of the Exchange Act, and shares of Common Stock
purchased in connection with such Stock Purchase Rights, may impose or be
subject to additional restrictions necessary to comply with Rule 16b-3.

Amendment and Termination of the Stock Plan. The Board may at any time
amend or terminate the Stock Plan without approval of the stockholders except to
the extent required by applicable state and federal law. The Code and the rules
and regulations thereunder governing incentive stock option plans currently
require stockholder approval for any increase in the number of shares issuable
under a plan and for changes in the eligibility standards under a plan. The
Stock Plan terminates in August 2006. The termination of the Stock Plan will not
affect options previously granted under the Stock Plan.

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<PAGE> 13
UNITED STATES TAX INFORMATION

Options granted under the Stock Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory options.

An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the optionee. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income will be characterized as long-term or short-term
capital gain or loss, depending on the holding period.

All options that do not qualify as incentive stock options are referred
to as nonstatutory options. An optionee will not recognize any taxable income at
the time he or she is granted a nonstatutory option. However, upon its exercise,
the optionee will recognize taxable income generally measured as the excess of
the then fair market value of the shares exercised over the exercise price. Any
taxable income recognized in connection with an option exercise by an optionee
who is also an employee of the Company will be subject to tax withholding by the
Company by payment in cash or out of the current earnings paid to the optionee.
Upon resale of such shares by the optionee, any difference between the sales
price and the optionee's exercise price, to the extent not recognized as taxable
income as described above, will be treated as long-term or short-term capital
gain or loss, depending on the holding period. The Company will generally be
entitled to a tax deduction in the same amount as the ordinary income recognized
by the optionee with respect to shares acquired upon exercise of a nonstatutory
option.

An individual will not recognize any taxable income at the time he or
she is granted a Stock Purchase Right. However, to the extent shares purchased
pursuant to a Stock Purchase Right are subject to a Company repurchase option,
the purchaser will recognize ordinary income for tax purposes as and when such
repurchase option lapses (i.e., "vests"), measured at that time by the excess of
the then fair market value of the shares over the purchase price. The date of
taxation (and the date of measurement of taxable ordinary income) and the
commencement of the purchaser's long-term capital gain holding period may be
accelerated to the date the shares are purchased if the purchaser files an
election under Section 83(b) of the Code. Upon the individual's resale of such
shares, any difference between the sale price and the purchase price, to the
extent not recognized as ordinary income as provided above, will be treated as
capital gain or loss. Subject to limitations on deductibility of compensation
paid to certain purchasers, the Company will be entitled to a tax deduction in
the same amount and at the same time that the individual recognizes ordinary
income with respect to the shares purchased.

THE FOREGOING SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME
TAXATION LAWS UPON THE OPTIONEE OR PURCHASER AND THE COMPANY IN CONNECTION WITH
THE STOCK PLAN IS NOT EXHAUSTIVE, AND REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS TAX
CONSEQUENCES RELATING TO DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

REQUIRED VOTE

The approval of the amendment to the Stock Plan requires the affirmative
vote of a majority of the Votes Cast on this proposal at the Annual Meeting. An
abstention is treated as a Vote Cast but not as an affirmative vote and,
therefore, will have the same effect as a vote against the proposal. A broker
non-vote will not be treated as a Vote Cast on this proposal at the Annual
Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE STOCK PLAN.

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<PAGE> 14
AMENDMENT OF
EMPLOYEE STOCK PURCHASE PLANS

The Amended and Restated 1991 Employee Stock Purchase Plan (the
"Purchase Plan"), and the Amended and Restated 1991 Foreign Subsidiary Employee
Stock Purchase Plan, which contains terms and conditions mirroring the terms and
conditions of the Purchase Plan (the "Foreign Subsidiary Plan"), provide an
opportunity for employees to invest in the Company's Common Stock at a discount
from the market price through voluntary payroll deductions. Employee
participation in the Purchase Plan and Foreign Subsidiary Plan has been
broad-based. On February 26, 1999 (the last day of the September 1, 1998 through
February 26, 1999 purchase period), there were approximately 3,875 employees
worldwide eligible to participate in the plans. Of that number, 1,428 employees,
representing approximately 37% of all eligible employees, participated in these
plans. The Board believes that the continued opportunity for employee equity
participation under the Purchase Plan and Foreign Subsidiary Plan will be
beneficial to the Company and its stockholders, by promoting the attraction and
retention of employees and by motivating employees to contribute to the
Company's success, and has resulted in increased stock ownership by employees.
As a result of the high levels of participation in the plans, the Board of
Directors concluded that an increase in the number of shares available for
issuance under the plans is essential to continuation of these plans. A summary
of the Purchase Plan and Foreign Subsidiary Plan is set forth below.

PROPOSED AMENDMENT

The Purchase Plan and Foreign Subsidiary Plan were adopted by the Board
of Directors on April 30, 1991 and approved by the stockholders in June 1991.
The Foreign Subsidiary Plan applies to certain employees employed by designated
foreign subsidiaries of the Company. Amendments to these plans were approved by
the Board and the stockholders in 1991, 1993, 1994, 1995, 1997 and 1998. In
March 1999, the Board further amended the Purchase Plan and Foreign Subsidiary
Plan to increase the total number of shares of Common Stock reserved for
issuance under the Purchase Plan and the Foreign Subsidiary Plan by 2,300,000
shares (approximately 2.8% of the shares of Common Stock outstanding on March
12, 1999). At the Annual Meeting, the stockholders are being asked to approve
this amendment.

PURCHASE PLAN ACTIVITY

As of February 26, 1999, the Company had issued and sold an aggregate of
7,500,000 shares of Common Stock pursuant to the Purchase Plan and Foreign
Subsidiary Plan. As of that date, no remaining shares were available for future
purchase under those plans.

Participation in the Purchase Plan and Foreign Subsidiary Plan is
voluntary and is dependent on each eligible employee's election to participate
and his or her designation as to the level of payroll deductions. Accordingly,
future purchases under the Purchase Plan and Foreign Subsidiary Plan are not
determinable.

The following table sets forth certain information regarding shares
purchased during 1998 under the Purchase Plan and Foreign Subsidiary Plan by
each of the named executive officers, all current executive officers as a group
and all other employees as a group (nonemployee directors are not eligible to
participate in the plans):

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<PAGE> 15
<TABLE>
<CAPTION>
Name of Individual or Identity of Group
and Position of Individual During 1998 Dollar Value(2) Number of Shares Purchased
- --------------------------------------- --------------- --------------------------
<S> <C> <C>

Mitchell E. Kertzman, Chairman and Chief $ 16,937(3) 1,613
Executive Officer(1)

John S. Chen, Chairman, President and $ 29,369(3) 2,797
Chief Executive Officer

Robert S. Epstein, Executive Vice -- --
President and Chief Information Officer

Jack L. Acosta, Executive Vice President, $ 16,937(3) 1,613
Finance and Chief Financial Officer

Michael S. Gardner, Senior Vice President, -- --
Corporate Marketing

Richard N. LaBarbera, Senior Vice $ 18,453(4) 2,684
President and General Manager, Enterprise
Solutions Division

Michael H. Forster, Senior Vice -- --
President, Worldwide Field Operations

All executive officers as a group(5) $ 102,543(3) 9,766
$ 58,699(4) 8,538
All other employees as a group $8,336,213(3) 793,925
$5,690,733(4) 830,764
</TABLE>

- --------

(1) Mr. Kertzman ceased to be an employee in November 1998, whereupon Mr.
Chen became sole Chief Executive Officer.

(2) Market value of the shares on date of purchase. The purchase price paid
by each participant in the Purchase Plan was at least 15% below the
market value. See "Summary of Purchase Plan - Purchase Price."

(3) Based on February 27, 1998 market value of $10.50 per share.

(4) Based on August 31, 1998 market value of $6.875 per share.

(5) Includes individuals who were executive officers as of December 31,
1998.

SUMMARY OF PURCHASE PLAN

The purpose of the Purchase Plan and Foreign Subsidiary Plan is to
provide employees (including officers) of the Company and subsidiaries
designated by the Board (each a "Designated Subsidiary") with an opportunity to
purchase Common Stock of the Company through payroll deductions and to assist
the Company in attracting, retaining and motivating valued employees. All
discussion regarding the terms and conditions of the Purchase Plan contained
herein shall also include, without reference thereto, the terms and conditions
of the Foreign Subsidiary Plan.

Administration. The Purchase Plan is administered by the Board of
Directors of the Company or a committee appointed by the Board (the
"Administrator"). All questions of interpretation or application of the Purchase
Plan are determined by the Board of Directors or its appointed committee, and
its decisions are final, conclusive and binding upon all participants.

Eligibility. Each employee (including officers) of the Company (or a
Designated Subsidiary), except for employees who are classified as temporary
employees or who are scheduled to work less than 20 hours per week or less than
five months per calendar year, and employees who are prohibited by the laws of
the nation of their residence or employment from participating in the Purchase
Plan, is eligible to participate in an offering under the Purchase Plan, subject
to certain limitations imposed by Section 423 of the Code and subject to
limitations on stock ownership as set forth in the Purchase Plan. Eligible
employees become participants in the Purchase Plan by filing with the payroll
department of the Company an enrollment form authorizing payroll deductions
prior to the applicable offering date, unless a later time for filing the
enrollment form has been set by the Board.

Participation in an Offering. Each offering of Common Stock under the
Purchase Plan ("Offering") currently extends for a period of six months
("Enrollment Period") and consists of a single six-month purchase period
("Purchase Period") within each such Enrollment Period, unless the participant
withdraws or terminates employment earlier. The Administrator may establish
shorter or longer Enrollment Periods and may change the length of Purchase
Periods without stockholder approval. To participate in the Purchase Plan, each
eligible employee must authorize payroll deductions pursuant to the Purchase
Plan. Such payroll deductions must be at least 1%, and may not exceed 10%, of a
participant's base salary, wages, bonuses, overtime, shift premiums and

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<PAGE> 16
commissions received during a Purchase Period. Every six months, eligible
employees may elect to enroll in the Purchase Plan and commence an Enrollment
Period. Once an employee becomes a participant in the Purchase Plan, the
employee will automatically participate in each successive Enrollment Period
until such time as the employee withdraws from the Purchase Plan or the
employee's employment terminates.

Grant of Option. At the beginning of each Enrollment Period, each
participant is automatically granted an option to purchase shares of the
Company's Common Stock. Unless the option is terminated earlier, the option is
exercised at the end of the Purchase Period to the extent of the payroll
deductions accumulated during such Purchase Period.

The Administrator may, in its sole discretion, grant bonus options, in
addition to those contemplated above, to each eligible employee, with terms not
to exceed 27 months and for a uniform number of shares. Any bonus options shall
be subject to such additional terms and conditions, not inconsistent with the
terms of the Purchase Plan as interpreted by the Administrator, as may be
established from time to time by the Administrator. No bonus options were
granted during 1998.

Purchase Price. Shares of Common Stock generally may be purchased under
the Purchase Plan at a price equal to 85% of the lesser of the fair market value
of the Common Stock on (i) the first day of the Enrollment Period or (ii) the
last day of the six-month Purchase Period. Notwithstanding the foregoing, any
shares that are approved for issuance at an annual meeting of stockholders after
the first day of an Enrollment Period may be purchased in the then-current
Purchase Period at a price equal to 85% of the lesser of the fair market value
of the Common Stock on (i) the date of such annual meeting of stockholders, or
(ii) the last day of the six-month Purchase Period.

Shares Purchased. The number of shares of Common Stock a participant
purchases in each Purchase Period is determined by dividing the total amount of
payroll deductions withheld from the participant's compensation during that
Purchase Period by the purchase price per share determined as described above.
In addition to the limitation on the maximum payroll deduction, the option
granted to the participant, together with any bonus option granted by the Board,
may not give a participant the right to purchase shares under the Purchase Plan
at a rate per calendar year in excess of $25,000 (based on the market price on
the first day of the Enrollment Period).

Termination of Employment. Termination of a participant's employment for
any reason, including retirement or death, or the failure of the participant to
remain in the continuous scheduled employ of the Company or a Designated
Subsidiary as a regular employee, or for at least 20 hours per week (or five
months per year) during the applicable Enrollment Period, immediately cancels
his or her option and participation in the Purchase Plan. In such event, the
payroll deductions credited to the participant's account are returned to him or
her or, in the case of death, to the person or persons entitled thereto as
provided in the Purchase Plan.

Withdrawal. A participant may withdraw from an Offering at any time
without affecting his or her eligibility to participate in future Enrollment
Periods. However, once a participant withdraws from a particular Offering, that
participant may not participate again in the same Offering.

Capital Changes. In the event any change is made in the Company's
capitalization during an Offering period, such as a stock split or stock
dividend, which results in an increase or decrease in the number of shares of
Common Stock outstanding without receipt of consideration by the Company,
appropriate adjustment shall be made in the purchase price and in the number of
shares subject to outstanding options under the Purchase Plan and shares
available for future issuance thereunder.

Amendment and Termination of the Plan. The Board of Directors may at any
time amend or terminate the Purchase Plan, including amendments to existing
options (subject to the consent of the participant). No amendment shall be
effective unless within 12 months after it is adopted by the Board it is
approved by the holders of a majority of the Votes Cast at a duly held
stockholders' meeting, if such amendment would require stockholder approval
under the Code. Such amendments would include an increase in the number of
shares reserved under the Purchase Plan.

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<PAGE> 17
UNITED STATES TAX INFORMATION

The Purchase Plan, and the right of participants to make purchases
thereunder, are intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Plan are sold or otherwise disposed of.
Upon sale or other disposition of the shares, the participant will generally be
subject to tax, and the amount of the tax will depend upon the holding period.
If the shares are sold or otherwise disposed of more than two years from the
first day of the Enrollment Period and one year from the date the shares are
purchased, the participant will recognize ordinary income measured as the lesser
of (a) the excess of the fair market value of the shares at the time of such
sale or disposition over the purchase price, or (b) an amount equal to 15% of
the fair market value of the shares as of the first day of the Enrollment
Period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company is not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or disposition of shares
prior to the expiration of the holding period(s) described above, subject to
limitations on the deductibility imposed under Section 162(m) of the Code.

THE FOREGOING SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME
TAXATION UPON THE PARTICIPANT AND THE COMPANY IN CONNECTION WITH THE PURCHASE
PLAN IS NOT EXHAUSTIVE, AND REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE TAX
CONSEQUENCES OF DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

REQUIRED VOTE

The approval of the amendment to the Purchase Plan and Foreign
Subsidiary Plan requires the affirmative vote of a majority of the Votes Cast on
this proposal at the Annual Meeting. An abstention is treated as a Vote Cast but
not as an affirmative vote and, therefore, will have the same effect as a vote
against the proposal. A broker non-vote will not be treated as a Vote Cast on
this subject matter at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE PURCHASE PLAN AND FOREIGN SUBSIDIARY PLAN.

AMENDMENT TO THE 1992 DIRECTOR STOCK OPTION PLAN

The Company's 1992 Director Stock Option Plan (the "Director Plan") was
originally adopted by the Board in January 1992 and by the stockholders in May
1992. Under the Director Plan, each nonemployee director is eligible to receive
an annual stock option to purchase 12,000 shares of the Company's Common Stock
which vests ratably over a four-year period. Employee directors are not eligible
to receive option grants under the Director Plan. In February 1999, the Board of
Directors approved an amendment to the Director Plan that increases the amount
of the annual stock option grant to 16,000 shares. The Board requests that the
stockholders approve the amendment to the Director Plan at the Annual Meeting.

As of December 31, 1998, the Company had granted options for an
aggregate of 419,166 shares of Common Stock (net of options cancelled) pursuant
to the Director Plan, of which options to purchase an aggregate of 54,957 shares
had been exercised and options to purchase 364,209 shares remained outstanding,
with a weighted average exercise price of $27.3097 per share. As of December 31,
1998, 280,834 shares remained available for future grant. A summary of the
Director Plan is set forth below.

SUMMARY OF DIRECTOR PLAN

Purposes. The purposes of the Director Plan are to attract and retain
the best available individuals for service as outside directors of the Company,
to provide additional incentive to such directors and to encourage their
continued service on the Board.

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<PAGE> 18
Administration. The Director Plan is administered by the Board, members
of which receive no additional compensation for such administrative service. All
grants of options under the Director Plan are automatic and nondiscretionary.
All questions of interpretation or application of the Director Plan are
determined by the Board, whose decisions are final and binding upon all
participants.

Eligibility. Options under the Director Plan may be granted only to
nonemployee directors. On March 31, 1999, there were five nonemployee directors
of the Company.

Participation in the Plan. Each nonemployee director is automatically
granted an option to purchase 12,000 shares ("Initial Option") as of the date on
which such individual first becomes a director, whether through election by the
stockholders of the Company or by appointment by the Board in order to fill a
vacancy. Thereafter, on the first trading day of February in each calendar year,
each nonemployee director is granted an additional option to purchase 12,000
shares ("Additional Option"). The proposed amendment to the Director Plan would
increase the amount of the Initial and Additional Options to 16,000 shares.

Exercise of Option. Options become exercisable at the rate of 1/48th of
the optioned stock per month. Options granted under the Director Plan expire 10
years following the date of grant. An option is exercised by giving written
notice of exercise to the Company specifying the number of full shares of Common
Stock to be purchased.

Exercise Price. The per share exercise price for shares to be issued
pursuant to the exercise of an option under the Director Plan is 100% of the
fair market value per share of the Company's Common Stock on the date of grant
of the option.

Resignation as Director. If an optionee ceases to serve as a director
for any reason (other than death), he or she may, but only within 12 months
after the date he or she ceases to be a director of the Company, exercise the
option to the extent that he or she was entitled to exercise it at the date of
such termination. To the extent that he or she was not entitled to exercise the
option at the date of such termination or if he or she does not exercise such
option within the time specified, the option terminates.

Death. In the event of the death of a director during the term of his or
her service as such, any option held by the director may be exercised within 12
months following the date of death by the optionee's estate or a person who
acquired the right to exercise the option by bequest or inheritance, but only to
the extent the optionee had a right to exercise the option at the date of death.

Dissolution or Liquidation. In the event of liquidation or dissolution
of the Company, options under the Director Plan shall terminate; provided that,
the Company shall give each optionee notice at least 30 days prior to such
dissolution or liquidation and, upon receipt of such notice, all options shall
become fully exercisable.

Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding option which is not fully exercisable shall be
accelerated and become fully exercisable; provided, however, that if the
successor corporation agrees to assume all outstanding options or substitute
equivalent options therefor, then the Board, in its sole discretion, shall have
the power to determine that options that are not fully exercisable shall not be
so accelerated but shall be assumed or such equivalent options be substituted
therefor.

Non-transferability of Options. Options granted pursuant to the Director
Plan may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the optionee, only by the optionee.

Capital Changes. In the event of any changes made in the Company's
capitalization that result in an exchange of Common Stock for a greater or
lesser number of shares without receipt of consideration, appropriate adjustment
shall be made in the exercise price and in the number of shares subject to
options outstanding under the Director Plan, as well as in the number of shares
reserved for issuance under the Director Plan.

- 16 -
<PAGE> 19
Amendment and Termination of the Plan. The Board may at any time amend
or terminate the Director Plan without approval of the stockholders.

UNITED STATES TAX INFORMATION

Options granted pursuant to the Director Plan are "nonstatutory options"
and will not qualify for any special tax benefits to the optionee.

An optionee will not recognize any taxable income at the time the option
is granted. Upon exercise of the option, the optionee will recognize ordinary
income for federal tax purposes generally measured by the excess, if any, of the
fair market value of the shares at the time of exercise over the exercise price.

Upon the sale of shares acquired pursuant to an option under the
Director Plan, the difference between the sales price and the optionee's
exercise price, to the extent not recognized as ordinary income as described
above, will be treated as long-term or short-term capital gain or loss,
depending on the holding period.

The Company will be entitled to a tax deduction at the same time and in
the same amount as ordinary income recognized by optionees in connection with
exercise of options under the Director Plan.

The foregoing summary of the effect of United States federal income
taxation upon the optionee and the Company in connection with the Director Plan,
does not purport to be complete, and reference should be made to the applicable
provisions of the Code. In addition, this summary does not discuss the
provisions of the income tax laws of any municipality, state or foreign country
in which the participant may reside.

REQUIRED VOTE

The approval of the amendment to the Director Plan requires the
affirmative vote of a majority of the Votes Cast on this proposal at the Annual
Meeting. An abstention is treated as a Vote Cast but not as an affirmative vote
and, therefore, will have the same effect as a vote against the proposal. A
broker non-vote will not be treated as a Vote Cast on this subject matter at the
Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE DIRECTOR PLAN.

AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION

The Company's Restated Certificate of Incorporation currently provides
for a so-called "classified board" in which the Board of Directors are divided
into three classes, each serving a three-year term. The Company currently has
seven directors divided among three classes as follows: Class I -- John S. Chen
and Alan B. Salisbury; Class II -- Robert S. Epstein and Richard C. Alberding;
and Class III -- L. William Krause, Robert P. Wayman and Jeffrey T. Webber.
Under this structure, the Company's shareholders vote on approximately one-third
of the Board at each annual meeting of stockholders. At the 1998 Annual Meeting
of Stockholders, the shareholders approved a shareholder proposal that
recommended, but did not effectuate, the elimination of the classified board
structure. In February 1999, the Board approved the following amendment to
Section 1 of Article Eleventh of the Company's Restated Certificate of
Incorporation ("Amendment") to reorganize the Board into a single class:

"Section 1. At each annual meeting of stockholders, directors of the
Corporation shall be elected to hold office until the expiration of the
term for which they are elected, and until their successors have been
duly elected and qualified; except that if any such election shall not
be so held, such election shall take place at a stockholders' meeting
called and held in accordance with the Delaware General Corporation Law.
Notwithstanding the foregoing, each director elected prior to the 2000
Annual Meeting of Stockholders shall hold office until the expiration of
the applicable three year term for which such director was elected and
shall not become subject to election until the expiration of such
director's existing term."

- 17 -
<PAGE> 20
After the Amendment is approved and becomes effective, nominees for each
of the Company's directors will stand for election annually following expiration
of their existing terms, if any.

REQUIRED VOTE

The approval of the amendment to the Restated Certificate of
Incorporation requires the affirmative vote of a majority of shares outstanding
on the Record Date. Abstentions and broker non-votes will have the same effect
as a vote against the proposal.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
AMENDMENT OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board has selected Ernst & Young LLP, independent auditors, to audit
the financial statements of the Company for the year ending December 31, 1999
and recommends that the stockholders ratify such selection. In the event of a
negative vote, the Board will reconsider its selection. Ernst & Young LLP (or
its predecessor) has audited the Company's annual financial statements since the
inception of the Company. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table provides certain summary information concerning
compensation earned for the fiscal years ended December 31, 1996, 1997 and 1998,
by each person who served as the Company's Chief Executive Officer during the
last fiscal year, each of the four other most highly compensated current
executive officers of the Company determined as of December 31, 1998, and Mr.
Forster, who was an executive officer until April 1998.

- 18 -
<PAGE> 21
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------------- ------------
Number of All
Other Shares Other
Name and Principal Annual Underlying Compen-
Position in 1998 Year Salary($)(1) Bonus($)(2) Compensation($) Options(#) sation
- ------------------ ---- ------------ ----------- --------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mitchell E. Kertzman 1998 $468,750 -- -- 1,155,000(20) $139,761(4)
Chairman of the Board and 1997 $516,667 -- $1,088,290(5) 160,000 $ 500(6)
Chief Executive Officer(3) 1996 $420,833 $100,000 435,319(7) $ 495,000(8) $ 500(6)

John S. Chen 1998 $525,000 -- $ 58,389(10) 1,000,000(21) $ 9,509(11)
Chairman of the Board, 1997 $208,333 $104,167 $ 30,816(12) 500,000 $ 500(6)
President and Chief
Executive Officer(9)

Robert S. Epstein 1998 $295,500 -- -- 175,000(22) $ 500(6)
Executive Vice President and 1997 $330,000 -- -- 100,000 $ 500(6)
Chief Information Officer 1996 $330,000 $ 85,500 -- -- $ 500(6)

Jack L. Acosta 1998 $350,000 -- -- 375,000(23) $ 500(6)
Executive Vice President, 1997 $305,000 -- -- 145,000 $ 500(6)
Finance, and Chief Financial 1996 $218,453 $ 55,093 -- 80,000 $ 500(6)
Officer(14)

Michael S. Gardner 1998 $305,518 $137,421 -- 500,000(24) $ 500(6)
Sr. Vice President, Corporate
Marketing(15)

Richard N. LaBarbera 1998 $256,250 $115,313 -- 115,000(25) $ 500(6)
Senior Vice President and
General Manager, Enterprise
Solutions Division(13)

Michael H. Forster 1998 $370,000 $ 14,576(16) -- 299,200(26) $ 64,321(17)
Sr. Vice President, 1997 $370,000 $114,038 $134,399(18) 40,000 $ 500(6)
Worldwide Field Operations(16) 1996 $356,250 $401,914(19) -- 259,200(27) $ 500(6)
</TABLE>

(1) Salary includes amounts earned in the year indicated but deferred
pursuant to the Company's 401(k) savings plan or pursuant to the
Executive Deferred Compensation Plan.

(2) Bonuses for each year include amounts earned for that year, regardless
of when paid. Bonuses paid during the year are excluded if they were
earned for and reported in a prior year.

(3) Mr. Kertzman joined Sybase in February 1995 and became Chief Executive
Officer in July 1996. He resigned from the Company as of November 2,
1998.

(4) Includes $91,667 severance payment, $47,594 for accrued unused vacation,
and $500 Company contribution under 401(k) plan which vests ratably over
four years.

(5) Relocation expense.

(6) Company contribution under 401(k) plan which vests ratably over four
years.

(7) Includes aircraft transportation reimbursement of $311,859.

(8) Includes option to purchase 45,000 shares issued in exchange for an
option to purchase an equal number of shares granted prior to 1996 that
was cancelled in connection with the Company's 1996 option repricing
program. Excludes options to purchase 100,000 shares granted in 1996 but
later cancelled in 1996 in exchange for options to purchase an equal
number of shares (which are reflected in the table) at a lower price in
connection with the 1996 option repricing program.

(9) Mr. Chen joined Sybase in August 1997 as President and Chief Operating
Officer. In February 1998, Mr. Chen became President and Co-Chief
Executive Officer, sharing the Chief Executive Officer position with Mr.
Kertzman. Mr. Chen became the Company's sole Chief Executive Officer
when Mr. Kertzman resigned from the Company in November 1998.

(10) Includes $18,000 of auto allowance, $30,923 in supplemental health, life
and disability insurance benefits, and reimbursement of $9,466 for tax
preparation fees.

(11) Includes $500 Company contribution under 401(k) plan which vests ratably
over four years, and $9,009 to equalize Mr. Chen for a 401(k) plan
contribution that he would have received from a former employer.

(12) Includes $ 7,500 of auto allowance and $23,316 in supplemental health,
life and disability insurance benefits.

(13) Mr. LaBarbera became an executive officer in December 1998.

(14) Mr. Acosta became an executive officer in August 1996. He resigned from
the Company in January 1999.

- 19 -
<PAGE> 22
(15) Mr. Gardner became an executive officer in December 1998, and ceased to
be an employee on March 26, 1999.

(16) Mr. Forster ceased to be an executive officer in April 1998. Bonus paid
in connection with Mr. Forster's Retirement Agreement and General
Release. See "Employment Agreements and Certain Transactions."

(17) Includes $32,018 payment for accrued unused vacation, $31,803 for
one-time relocation expenses in connection with Mr. Forster's Retirement
Agreement and General Release, and $500 Company contribution under
401(k) plan which vests ratably over four years. See "Employment
Agreements and Certain Transactions."

(18) Relocation and housing expenses.

(19) Includes a one-time bonus of $173,178 paid in connection with Mr.
Forster's promotion to Senior Vice President, Worldwide Field
Operations.

(20) Includes 905,000 repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to the
employee prior to July 1998. See "Board Compensation Committee Report on
Executive Compensation and Repricing of Options - 1998 Option Repricing
Program."

(21) Includes 750,000 repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to the
employee prior to July 1998. See "Board Compensation Committee Report on
Executive Compensation and Repricing of Options - 1998 Option Repricing
Program."

(22) Repriced options granted in July 1998 in exchange for cancellation of an
equal number of options originally granted to the employee prior to July
1998. See "Board Compensation Committee Report on Executive Compensation
and Repricing of Options - 1998 Option Repricing Program."

(23) Includes 300,000 repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to the
employee prior to July 1998. See "Board Compensation Committee Report on
Executive Compensation and Repricing of Options - 1998 Option Repricing
Program."

(24) Repriced options granted in July 1998 in exchange for cancellation of an
equal number of options originally granted to the employee prior to July
1998. See "Board Compensation Committee Report on Executive Compensation
and Repricing of Options - 1998 Option Repricing Program."

(25) Includes 50,000 repriced options granted in July 1998 in exchange for
cancellation of an equal number of options originally granted to the
employee prior to July 1998. See "Board Compensation Committee Report on
Executive Compensation and Repricing of Options - 1998 Option Repricing
Program."

(26) Repriced options granted in July 1998 in exchange for cancellation of an
equal number of options originally granted to the employee prior to July
1998. See "Board Compensation Committee Report on Executive Compensation
and Repricing of Options - 1998 Option Repricing Program."

(27) Includes 159,200 repriced options granted in 1996 in exchange for
cancellation of an equal number of options granted prior to 1996.
Excludes options to purchase 100,000 shares granted in 1996 but later
cancelled in 1996 in exchange for options to purchase an equal number of
shares (which are reflected in the table) at a lower price in connection
with the 1996 option repricing program.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table contains information concerning the grant of stock
options in fiscal year 1998 to the named executive officers and the potential
realizable value of such stock options at assumed annual rates of stock
appreciation over the terms of such stock options:

- 20 -
<PAGE> 23
<TABLE>
<CAPTION>
Potential Realizable Value At
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants(1) Term(2)
------------------------------------------------ --------------------------------
<S> <C> <C>
<CAPTION>
Number of % of Total
Shares Options Granted Exercise
Underlying to Employees Price Per Expiration
Name Options Granted in 1998 Share Date 5% 10%
- ---- --------------- ------- ------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell E. Kertzman 250,000 1.40 $9.4062 2/18/08 $1,478,927.32 $3,747,815.09
250,000* 1.40 $6.8750 2/18/08 $ 82,496.92 $ 206,876.36
350,000* 1.96 $6.8750 8/12/06 $1,168,414.66 $2,807,279.28
45,000* 0.25 $6.8750 9/27/05 $ 131,038.79 $ 307,362.30
40,000* 0.22 $6.8750 1/22/06 $ 122,649.62 $ 290,218.06
60,000* 0.34 $6.8750 3/26/06 $ 189,018.74 $ 449,389.88
160,000* 0.89 $6.8750 4/1/07 $ 585,603.84 $1,432,174.48

John S. Chen(3) 250,000 1.40 $9.4062 2/18/08 $1,478,927.16 $3,747,815.08
500,000* 2.80 $6.8750 8/4/07 $1,918,766.08 $4,738,092.29
250,000* 1.40 $6.8750 2/18/08 $1,031,211.52 $2,585,954.50

Robert S. Epstein 60,000* 0.34 $6.8750 5/20/07 $ 223,755.24 $ 549,293.24
75,000* 0.42 $6.8750 1/28/02 $ 98,268.40 $ 209,356.61
40,000* 0.22 $6.8750 4/1/07 $ 146,400.96 $ 358,043.62

Jack L. Acosta 75,000 0.42 $9.4062 2/18/08 $ 443,678.15 $1,124,344.52
70,000* 0.40 $6.8750 4/1/07 $ 256,201.68 $ 626,576.33
75,000* 0.42 $6.8750 2/18/08 $ 309,363.46 $ 775,786.35
15,000* 0.08 $6.8750 4/1/06 $ 47,375.34 $ 112,685.32
55,000* 0.31 $6.8750 12/12/04 $ 139,760.56 $ 320,873.85
10,000* 0.06 $6.8750 4/7/05 $ 26,882.45 $ 62,249.22
40,000* 0.22 $6.8750 7/9/06 $ 133,215.59 $ 320,066.08
75,000* 0.42 $6.8750 12/1/07 $ 300,697.36 $ 749,419.01

Michael S. Gardner 250,000 1.40 $9.4062 2/18/08 $1,478,927.16 $3,747,815.08
250,000* 1.40 $6.8750 2/18/08 $1,031,211.52 $2,585,954.50

Richard N. LaBarbera 40,000 0.23 $8.6250 1/9/08 $ 216,968.64 $ 549,841.15
10,000* 0.06 $9.4062 2/18/08 $ 59,157.09 $ 149,912.60
40,000* 0.23 $6.8750 1/9/08 $ 162,647.54 $ 406,596.17
10,000* 0.06 $6.8750 2/18/08 $ 41,248.46 $ 103,438.18
15,000* 0.08 $6.6875 9/2/08 $ 63,085.99 $ 159,872.29

Michael H. Forster(4) 40,000* 0.22 $6.8750 1/23/07 $ 142,587.92 $ 346,902.24
100,000* 0.56 $6.8750 3/26/06 $ 315,031.24 $ 748,983.13
134,200* 0.75 $6.8750 4/18/04 $ 301,610.87 $ 680,581.21
25,000* 0.14 $6.8750 4/7/05 $ 67,206.11 $ 155,623.04
</TABLE>

- --------

* Option granted under 1998 option repricing program in exchange for
cancellation of an equal number of previously outstanding options. See
"Board Compensation Committee Report on Executive Compensation and
Repricing of Options - 1998 Option Repricing Program."

(1) All options in the table have an exercise price equal to the fair market
value on the date of grant and, except for repriced options, and the
options granted to Messrs. Chen and Forster, become exercisable for
12.5% of the shares six months after the grant date and for the balance
in equal monthly installments over the 42-month period thereafter, so
long as employment with the Company or one of its subsidiaries
continues. Except for repriced options, and the options granted to
Messrs. Chen and Forster, all of the options granted have a 10-year
term. With respect to each repriced option, the expiration date for
purposes of the term and the deemed commencement date for the period
over which the options become exercisable is identical to that of the
related option that was exchanged and cancelled. Such cancelled options
generally vested over a 48-month period. Accordingly, the actual term of
the repriced options is less than 10 years, and such actual term is used
to compute the potential realizable values in the table. In

- 21 -
<PAGE> 24
the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another
corporation, each outstanding option that is not fully exercisable shall
be accelerated and become fully exercisable; provided, however, that if
the successor corporation agrees to assume all outstanding options or
substitute equivalent options therefor, then the Board in its sole
discretion shall have the power to determine that options that are not
fully exercisable shall not be so accelerated but shall be so assumed or
such equivalent options shall be substituted therefor.

(2) The 5% and 10% rates of appreciation are specified by the rules of the
Securities and Exchange Commission and do not represent the Company's
estimates or projections of future Common Stock prices.

(3) Mr. Chen's options became exercisable for 25% of the shares on the grant
date, with the balance of the shares subject to the options becoming
exercisable at the rate of approximately 2.1% per month commencing on
the 13th month following the grant date through the 48th month
thereafter.

(4) Mr. Forster's options would have vested 48 months following the date of
grant unless he achieved certain specified objectives, in which case the
options would have become exercisable earlier.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table provides information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and the number and value of unexercised in-the-money options held as of the
end of the last fiscal year.

<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Fiscal Year-End(3) Fiscal Year-End($)(2)(3)
------------------------------ ------------------------------
Shares Aggregate
Acquired Value
Name on Exercise Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mitchell E. Kertzman - -- 429,892 0 $227,843 0
John S. Chen - -- 0 218,749 0 $115,937
Robert S. Epstein - -- 0 115,415 0 $ 61,170
Jack L. Acosta - -- 0 121,871 0 $ 64,592
Richard N. LaBarbera - -- 0 11,249 0 $ 5,962
Michael S. Gardner - -- 0 52,083 0 $ 27,604
Michael H. Forster - -- 0 242,116 0 $128,321
</TABLE>

- --------

(1) Market value of underlying securities on the date of exercise, minus the
exercise price.

(2) Market value of underlying securities on December 31, 1998 ($7.4063 per
share), minus the exercise price of in-the-money options.

(3) Options granted in connection with the 1998 option repricing program may
not be exercised until April 5, 1999.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND REPRICING OF
OPTIONS

Compensation Committee Report. The Compensation Committee of the Board
currently consists of two outside directors. The Compensation Committee believes
that the Company's executive compensation programs should enable the Company to
attract and retain strong performers. The Company's compensation programs

- 22 -
<PAGE> 25
motivate the senior management team to achieve or exceed key objectives by
making individual compensation directly dependent on the Company's achievement
of financial goals and by providing significant rewards for exceeding those
goals. The Committee believes that strong financial performance, on a sustained
basis, is the surest way for the Company to positively affect long-term
stockholder return.

Compensation Program Considerations. The Company takes the following
factors into consideration in designing various executive compensation programs:

(a) Compensation positioning and comparative framework.

In order to attract and retain the talent that it needs to meet
corporate objectives, the Company's executive compensation programs are designed
to deliver overall cash compensation and employee benefits competitive with
comparable technology companies if corporate objectives are achieved and, if
objectives are exceeded, to deliver compensation that is in some cases above
market. Bonuses are tied closely to corporate performance, such that actual
awards vary considerably according to overall Company performance.

The Company uses market compensation information obtained
through technology company surveys, customized surveys, and consulting
arrangements to establish appropriate compensation levels at target,
exceptional, or below target performance. In particular, with respect to 1998
compensation, the Company used information obtained in a survey of 16 technology
companies, primarily publicly-held software and computer companies located in
Northern California, in determining 1998 compensation. The companies in this
survey were selected based on the similarity of technology, annual sales, and
geographic location and included Sybase's three principal competitors. Of such
companies, 12 are included in the approximately 250 companies comprising the
Hambrecht & Quist Technology Index. This compensation information is also used
to evaluate relative market position and to assist in designing programs that
reward executives according to both their job function and their actual
performance.

(b) Mix of compensation.

The Company's executive compensation program has three primary
components. All three are intended to attract and retain outstanding executives
and focus management on achieving or exceeding Company objectives.

(i) Base Salary and Basic Benefits. The Committee
believes that executive salaries and the basic employee benefit package must be
sufficiently competitive to attract and retain key executives. Base pay and
annual increases to base pay are determined primarily through an analysis of the
individual's salary and total target compensation relative to salaries for
similar positions within the Company and at other companies and, to a lesser
extent, through a subjective analysis of individual contributions to the
Company's success. As a result of this analysis, the Committee increased the
base salaries of five of the 12 then-serving executive officers who had been
employees of the Company during 1997. Executive officers are eligible for
participation in the standard health plans, 401(k) savings plan and employee
stock purchase plans offered by the Company to its employees generally. The
Chairman of the Board, Chief Executive Officer, President and all Vice
Presidents are eligible to defer, subject to certain terms and conditions,
portions of their compensation under an Executive Deferred Compensation Plan.

(ii) Annual, Quarterly and Special Bonuses. The
Committee believes that one of the key differentiators of executive compensation
should be the variable portion provided by short-term cash incentive plans. The
Company's executive bonus plan is designed such that if the Company performs
significantly above its stated objectives, bonus awards may be significantly
above the award target. If the Company performs below its stated objectives,
awards may be significantly reduced, and may be eliminated altogether if
performance is below defined thresholds. In February 1998, the Committee
established a target incentive bonus amount for each executive. This target
amount varied from executive to executive and ranged between 35% and 82% of the
executive's base salary. The target amount of 1998 executive bonuses was to be
based 100% on the achievement of corporate operating profit margin objectives,
provided that no amounts would be paid unless the Company achieved specified
minimum operating profit margins. In addition, if actual total revenues for 1998
exceeded 100% of the revenue target, a bonus up to an additional 100% of the
target would be paid based on the amount of such over-achievement. Because the
Company did not achieve operating profit margin objectives or exceed the

- 23 -
<PAGE> 26
revenue target, executive officers (other than Messrs. Gardner and LaBarbera)
did not receive any performance-based bonuses in 1998. Mr. Gardner joined the
Company in February 1998 and his target incentive compensation was guaranteed
for the first two quarters of 1998 (prorated based on the actual number of days
of service with respect to the first quarter). As a result, Mr. Gardner received
a 1998 bonus of $137,421. Mr. LaBarbera's bonus for 1998 was earned under a
non-executive officer bonus plan that ceased to apply to him once he became an
executive officer in December 1998.

In May 1998, in response to the results of operations for the
first quarter, the Compensation Committee approved a Key Management Incentive
Program which was applicable to nearly all of the Company's employees of
director level or higher, including all executive officers. Under the terms of
this program, a target bonus amount was designated for each eligible employee.
The target bonus was expressed as a percentage of annual base salary: 20% for
directors, 30% for vice presidents and the previously established target for
executive officers described above. Under the terms of the Key Management
Incentive Program, 60% of the target bonus would vest and be paid on March 31,
1999 and 40% of the target would vest and be paid on March 31, 2000, provided
that the individual was an active employee on such vesting date. In the event of
a change of control or an involuntary termination for reasons other than cause,
the vesting would be accelerated to the date of such event. If the eligible
employee voluntarily terminated or was terminated for cause, no unvested amounts
would become vested. Amounts paid under this program to employees in the United
States would be paid as voluntary employer contributions under the Company's
Executive Deferred Compensation Plan. No executive officers became eligible to
receive any amounts in 1998 under the Key Management Incentive Program because
the first vesting date did not occur until March 31, 1999.

In addition, the Compensation Committee may approve
discretionary executive awards proposed by the President or a member of the
Compensation Committee. Such discretionary awards are based on a subjective
evaluation of an executive officer's contribution to the Company's success and
are not based on predetermined measures of corporate performance or achievement
of specified corporate objectives. None of the persons serving as executive
officers in 1998 received any discretionary bonus with respect to 1998.

(iii) Long-term Incentives. These are provided through
initial stock option grants at date of hire and periodic additional stock option
grants. Executives realize gains only if the stock price increases over the
exercise price of their options and they exercise their options. Stock options
generally vest over a four-year period and the Committee believes they are
instrumental in focusing executives on sustaining strong financial performance
over a number of years. The initial option grant is designed to be competitive
with those of comparable technology companies for the level of job the executive
holds, and to motivate the executive to make the kinds of decisions and
implement strategies and programs that will contribute to an increase in the
Company's stock price over time. Periodic additional stock options within a
competitive range for the job are granted to reflect the executive's ongoing
contributions to the Company's success, to create an incentive to remain with
the Company, and to provide a long-term incentive to achieve or exceed the
Company's financial goals. Such options are generally granted once a year. In
determining the amount of such periodic additional grants, if any, for an
individual, the Committee considers the amount of options previously granted,
the amount of options outstanding, the vesting schedule of the outstanding
options, the aggregate amount of the outstanding options and new awards, and the
relative quantities of options offered by other companies for comparable
positions. Special additional stock options are granted from time to time to
executive officers in connection with promotions or changes in responsibilities.

Because the Company believes that Company-provided benefits
programs in general should be similar for all employees, perquisites are not
ordinarily used to compensate its executives. In 1998, no executive perquisites
were included in the Company's compensation programs for named executive
officers, except for certain one-time relocation and housing expenses for
Messrs. Forster and Kertzman paid in connection with their respective severance
arrangements with the Company, and a transportation allowance for Mr. Gardner.
Pursuant to his employment agreement, the Company agreed to provide Mr. Chen
with benefits comparable to the benefits he received from his prior employer.
Accordingly, Mr. Chen received an automobile allowance, an employer contribution
to his 401(k) account, reimbursement of certain tax and legal expenses and
supplemental insurance and health benefits during 1998.

1998 Compensation for the Chief Executive Officers. Until late February
1998, Mr. Chen served as the Company's President and Chief Operating Officer and
Mr. Kertzman served as Chairman and Chief Executive Officer. From late February
to November 1998, Mr. Kertzman and Mr. Chen shared the position of Chief

- 24 -
<PAGE> 27
Executive Officer. In November 1998, Mr. Kertzman left the Company and Mr. Chen
became the sole Chief Executive Officer. In February 1998, the Compensation
Committee established the base salary and target total compensation for Messrs.
Kertzman and Chen at a level approximately equal to the average base salary and
average total compensation for the chief executive officers of comparable
technology companies. The total compensation of the Chief Executive Officer is
designed to compensate him at market levels when operating profit targets are
met and above market levels when operating income targets are exceeded. In the
case of Messrs. Chen and Kertzman, the full Board of Directors approved the
recommendation of the Compensation Committee with respect to their 1998 target
total compensation level (base salary plus incentive). The incentive award
portion of each of Messrs. Chen's and Kertzman's compensation comprised 45% of
total target compensation and was dependent on the achievement of corporate
operating profit margin objectives, provided that no amounts would be paid
unless the Company achieved specified minimum operating profit margins. In
addition, if actual total revenues for 1998 exceeded 100% of the revenue target,
a bonus up to an additional 100% of the target would be paid based on the amount
of such over-achievement. In 1998, the corporate objectives were not met, and
neither Messrs. Chen nor Kertzman received any bonus for the year.

The Compensation Committee held seven meetings in 1998. At several of
the meetings, the Chief Executive Officers made recommendations to the
Compensation Committee with respect to compensation for executive officers other
than themselves and with respect to the structure and terms of the executive
incentive programs. However, the Chief Executive Officers did not participate in
the portions of the meetings during which their specific compensation and awards
were deliberated.

Compensation Limitations. Under Section 162(m) of the Code, adopted in
August 1993, and regulations adopted thereunder by the Internal Revenue Service,
publicly-held companies may be precluded from deducting certain compensation
paid to certain executive officers in excess of $1.0 million in a year. The
regulations exclude from this limit performance-based compensation and stock
options provided certain requirements, such as stockholder approval, are
satisfied. The Company believes that its 1996 Stock Plan qualifies for the
exclusions. The Company does not currently anticipate taking actions necessary
to qualify the Company's executive annual cash bonus plans for the exclusions.

1998 Option Repricing Program. Competition for skilled employees in the
software industry is intense and the use of significant stock options for
retention and motivation of such personnel is widespread in the high technology
industries. The Compensation Committee and the Board believe that stock options
are a critical component of the compensation offered by the Company to promote
long-term retention of key employees, motivate high levels of performance and
recognize employee contributions to the success of the Company. Over 1997 and
the first half of 1998, the market price of the Company's Common Stock decreased
substantially from a high of $20.00 in the first quarter of 1997 to a low of
$6.13 in the second quarter of 1998. The Company also experienced higher than
industry average employee turnover during this period. In light of this
substantial decline in market price and high rate of employee turnover, the
Board believed that the large numbers of outstanding stock options with an
exercise price in excess of the actual market price were no longer an effective
tool to encourage employee retention or to motivate high levels of performance.
As a result, the Board approved on June 23, 1998 an option repricing program.

Specifically excluded from the repricing program were all nonemployee
directors of the Company. All other employees, including executive officers,
were eligible to participate. Under the program, the eligible optionees were
permitted to exchange one or more of their existing stock options with an
exercise price above $6.875 ("Old Options") for new stock options ("Repriced
Options") covering a number of shares equal to the number of unexercised shares
covered by the applicable Old Option. Each exchanged Old Option was cancelled.
The exercise price of the Repriced Options was equal to the closing market price
per share ($6.875) on July 2, 1998, the last trading day of the period during
which option holders could elect to participate in the program. The schedule on
which a Repriced Option became exercisable and the expiration date of the
Repriced Option were, subject to the exercise black-out period described below,
identical to the applicable exchanged and cancelled Old Option. Notwithstanding
the foregoing and except for the circumstances described below, each Repriced
Option was prohibited from being exercised, in whole or in part (notwithstanding
any amount that may have previously been exercisable), until April 5, 1999, at
which time the same number of shares that would have been exercisable on April
5, 1999 under the Old Option became exercisable under the Repriced Option. As a
result of this restriction, optionees who voluntarily left the Company or who
were involuntarily terminated for cause before April 5, 1999 did not have an
opportunity to exercise any portion of their Repriced Options.

- 25 -
<PAGE> 28
The prohibition on exercise did not apply if an employee's employment was
involuntarily terminated for reasons other than cause, such as job elimination,
restructuring, or reduction in force.

Report Submitted by:

Richard C. Alberding (Chairman)
L. William Krause
David E. Liddle (term expired May 1998)

OPTION REPRICINGS

The following table sets forth information regarding all of the options
repriced between the date of the Company's initial public offering in August
1991 and December 31, 1998 that were held by persons who were executive officers
of the Company at the time of the applicable repricing.

<TABLE>
<CAPTION>
Length of
Number of Market Exercise Original
Shares Price of Price at Option Term
Underlying Stock at Time of Remaining
Options Time of Repricing New at Date of
Repriced Repricing or Exercise Repricing
Name and Position (1) Date or Amended(#) or Amendment($) Amendment($/Sh) Price or Amendment
- --------------------- ---- ------------- --------------- --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jack Acosta 10/21/96 15,000 $19.2500 $26.8750 $19.2500 8.14 years
(Former) Executive 10/21/96 10,000 $19.2500 $25.8750 $19.2500 8.46 years
Vice President and Chief 10/21/96 15,000 $19.2500 $22.7500 $19.2500 9.44 years
Financial Officer (2) 7/2/98 40,000 $6.8750 $18.3750 $6.8750 8.02 years
7/2/98 10,000 $6.8750 $19.2500 $6.8750 6.76 years
7/2/98 15,000 $6.8750 $19.2500 $6.8750 6.45 years
7/2/98 15,000 $6.8750 $19.2500 $6.8750 7.75 years
7/2/98 70,000 $6.8750 $13.1250 $6.8750 8.75 years
7/2/98 75,000 $6.8750 $14.0000 $6.8750 9.42 years
7/2/98 75,000 $6.8750 $9.4060 $6.8750 9.63 years

Michael W. Bealmear 6/19/95 75,000 $26.8750 $44.8750 $26.8750 9.42 years
(Former) Senior Vice 10/21/96 25,000 $19.2500 $25.8750 $19.2500 8.45 years
President Worldwide 10/21/96 75,000 $19.2500 $26.8750 $19.2500 8.07 years
Services (2) 10/21/96 40,000 $19.2500 $24.6250 $19.2500 9.43 years

L. Mindi Butterfield 7/2/98 4,800 $6.8750 $16.4060 $6.8750 0.21 years
(Former) Vice President, 7/2/98 10,000 $6.8750 $15.6250 $6.8750 8.04 years
Marketing (2) 7/2/98 9,000 $6.8750 $19.2500 $6.8750 8.30 years
7/2/98 40,000 $6.8750 $13.1250 $6.8750 8.75 years
7/2/98 10,000 $6.8750 $9.4062 $6.8750 9.63 years

John S. Chen 7/2/98 500,000 $6.8750 $14.6880 $6.8750 9.09 years
President and Chief 7/2/98 250,000 $6.8750 $9.4060 $6.8750 9.63 years
Executive Officer

Michael D. Engelhardt 6/19/95 14,000 $26.8750 $47.2500 $26.8750 9.33 years
(Former) Vice President 6/19/95 10,000 $26.8750 $46.8750 $26.8750 9.58 years
External Affairs (2)
</TABLE>

- 26 -
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Robert S. Epstein 7/2/98 75,000 $6.8750 $13.3750 $6.8750 3.58 years
Executive Vice President 7/2/98 40,000 $6.8750 $13.1250 $6.8750 8.75 years
7/2/98 60,000 $6.8750 $16.7500 $6.8750 8.88 years

Michael H. Forster 10/21/96 25,000 $19.2500 $25.8750 $19.2500 8.46 years
(Former) Sr. Vice 10/21/96 134,200 $19.2500 $26.8750 $19.2500 7.49 years
President, Worldwide 10/21/96 100,000 $19.2500 $24.6250 $19.2500 9.43 years
Field Operations (2)

Michael S. Gardner 7/2/98 250,000 $6.8750 $9.4060 $6.8750 9.63 years
(Former) Senior Vice
President, Corporate
Marketing

Dominic Gattuso, Jr. 6/19/95 33,334 $26.8750 $28.7500 $26.8750 7.75 years
(Former) Sr. Vice 6/19/95 25,000 $26.8750 $45.1250 $26.8750 8.75 years
President and 6/19/95 15,000 $26.8750 $47.3750 $26.8750 8.92 years
General Manager, 6/19/95 10,800 $26.8750 $46.7500 $26.8750 9.67 years
Worldwide Sales
and Field Operations (2)

Mitchell L. Gaynor 7/2/98 6,000 $6.8750 $19.2500 $6.8750 4.61 years
Vice President, General 7/2/98 2,200 $6.8750 $19.2500 $6.8750 6.84 years
Counsel and Secretary 7/2/98 1,000 $6.8750 $19.2500 $6.8750 5.21 years
7/2/98 5,500 $6.8750 $19.2500 $6.8750 5.37 years
7/2/98 2,000 $6.8750 $19.2500 $6.8750 5.87 years
7/2/98 1,500 $6.8750 $19.2500 $6.8750 6.37 years
7/2/98 1,000 $6.8750 $19.2500 $6.8750 6.62 years
7/2/98 5,000 $6.8750 $19.2500 $6.8750 7.26 years
7/2/98 4,750 $6.8750 $19.2500 $6.8750 7.75 years
7/2/98 30,000 $6.8750 $18.4380 $6.8750 8.56 years
7/2/98 10,000 $6.8750 $13.1250 $6.8750 8.75 years
7/2/98 30,000 $6.8750 $9.4060 $6.8750 9.63 years

Laurie B. Keating 6/19/95 24,376 $26.8750 $27.3750 $26.8750 7.58 years
(Former) Senior Vice 6/19/95 30,000 $26.8750 $36.1880 $26.8750 8.42 years
President, General 10/21/96 24,376 $19.2500 $26.8750 $19.2500 6.27 years
Counsel and 10/21/96 30,000 $19.2500 $26.8750 $19.2500 7.07 years
Secretary (2)
10/21/96 30,000 $19.2500 $31.7500 $19.2500 8.93 years
10/21/96 60,000 $19.2500 $35.0000 $19.2500 9.26 years

Mitchell E. Kertzman 10/21/96 45,000 $19.2500 $29.3750 $19.2500 8.93 years
(Former) Chief Executive 10/21/96 40,000 $19.2500 $35.0000 $19.2500 9.26 years
Officer and President (2) 10/21/96 60,000 $19.2500 $24.6250 $19.2500 9.43 years
7/2/98 350,000 $6.8750 $17.5000 $6.8750 8.11 years
7/2/98 45,000 $6.8750 $19.2500 $6.8750 7.24 years
7/2/98 40,000 $6.8750 $19.2500 $6.8750 7.56 years
7/2/98 60,000 $6.8750 $19.2500 $6.8750 7.73 years
7/2/98 160,000 $6.8750 $13.1250 $6.8750 8.75 years
7/2/98 250,000 $6.8750 $9.4060 $6.8750 9.63 years

Richard N. LaBarbera 7/2/98 40,000 $6.8750 $8.6250 $6.8750 9.52 years
Senior Vice President 7/2/98 10,000 $6.8750 $9.4060 $6.8750 9.63 years
and General Manager,
</TABLE>

- 27 -
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Enterprise Solutions
Division

Juanita Lott 6/19/95 12,000 $26.8750 $33.4380 $26.8750 7.92 years
(Former) Vice President 6/19/95 13,000 $26.8750 $47.3750 $26.8750 8.92 years
Worldwide Human
Resources(2)

Dennis L. McEvoy 6/19/95 100,000 $26.8750 $42.3130 $26.8750 9.17 years
(Former) Senior Vice
President, Enterprise
Products Group(2)

Eric L. Miles 7/2/98 125,000 $6.8750 $13.0000 $6.8750 9.44 years
Senior Vice President 7/2/98 15,000 $6.8750 $9.4060 $6.8750 9.63 years
and General Manager,
Business Intelligence
Division

Raj Nathan 7/2/98 80,000 $6.8750 $13.0000 $6.8750 9.44 years
Senior Vice President 7/2/98 25,000 $6.8750 $9.4060 $6.8750 9.63 years
and General Manager,
Internet Applications
Division

Kathryn C. Nyrop 6/19/95 14,000 $26.8750 $36.1880 $26.8750 8.42 years
(Former) Vice President
and Treasurer(2)

Peter F. Pervere 6/19/95 20,000 $26.8750 $27.3750 $26.8750 7.58 years
(Former) Vice President 6/19/95 20,000 $26.8750 $36.1880 $26.8750 8.42 years
and Corporate 10/21/96 2,000 $19.2500 $25.7500 $19.2500 6.24 years
Controller(2) 10/21/96 20,000 $19.2500 $26.8750 $19.2500 6.27 years
10/21/96 20,000 $19.2500 $26.8750 $19.2500 7.07 years
10/21/96 25,000 $19.2500 $31.7500 $19.2500 8.93 years
10/21/96 30,000 $19.2500 $35.0000 $19.2500 9.26 years

Terry Stepien 7/2/98 2,000 $6.8750 $15.6250 $6.8750 8.04 years
Senior Vice President 7/2/98 5,000 $6.8750 $14.5000 $6.8750 8.20 years
and General Manager, 7/2/98 9,600 $6.8750 $19.2500 $6.8750 5.61 years
Mobile and Embedded 7/2/98 2,400 $6.8750 $19.2500 $6.8750 6.57 years
Computing Division 7/2/98 3,000 $6.8750 $19.2500 $6.8750 7.09 years
7/2/98 8,000 $6.8750 $19.2500 $6.8750 7.42 years
7/2/98 10,000 $6.8750 $17.6250 $6.8750 8.53 years
7/2/98 20,000 $6.8750 $12.8750 $6.8750 8.76 years
7/2/98 5,000 $6.8750 $16.7500 $6.8750 8.88 years
7/2/98 25,000 $6.8750 $9.2660 $6.8750 8.63 years

Pieter A. Van der Vorst 7/2/98 2,000 $6.8750 $9.7500 $6.8750 0.44 years
Vice President and 7/2/98 1,000 $6.8750 $12.8750 $6.8750 0.54 years
Chief Financial Officer 7/2/98 4,000 $6.8750 $16.0000 $6.8750 8.14 years
7/2/98 2,000 $6.8750 $19.2500 $6.8750 4.54 years
7/2/98 4,000 $6.8750 $19.2500 $6.8750 6.84 years
7/2/98 5,000 $6.8750 $19.2500 $6.8750 5.51 years
</TABLE>

- 28 -
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
7/2/98 3,000 $6.8750 $19.2500 $6.8750 6.12 years
7/2/98 2,000 $6.8750 $19.2500 $6.8750 6.62 years
7/2/98 1,000 $6.8750 $19.2500 $6.8750 7.26 years
7/2/98 500 $6.8750 $19.2500 $6.8750 7.75 years
7/2/98 9,000 $6.8750 $13.8750 $6.8750 8.72 years
7/2/98 20,000 $6.8750 $15.5000 $6.8750 9.35 years
7/2/98 10,000 $6.8750 $9.2660 $6.8750 9.63 years

Nita White-Ivy 7/2/98 30,000 $6.8750 $10.0000 $6.8750 9.70 years
Vice President,
Worldwide Human
Resources
</TABLE>

- --------

(1) Identifies most recent position held as an executive officer.

(2) Former executive officer no longer with the Company.

EMPLOYMENT AGREEMENTS AND CERTAIN TRANSACTIONS

In July 1997, the Company entered into an employment agreement with Mr.
Chen pursuant to which he became President and Chief Operating Officer and a
director. The agreement provided for an initial annual base salary of $500,000,
target incentive compensation equal to 50% of base salary, grant of a stock
option to purchase 500,000 shares and employee benefits comparable to those he
received from his prior employer. The agreement also provides that, if Mr.
Chen's employment is terminated for reasons other than cause prior to April 1,
1999, he is entitled to severance equal to 150% of base pay and continuation of
employee benefits for a period of one year. If his employment terminates under
certain circumstances after April 1, 1999, Mr. Chen's agreement provides for a
severance payment equal to 100% of base pay and continuation of employee
benefits for a period of one year.

In December 1997, Eric Miles joined Sybase as Senior Vice President,
Product Operations. Mr. Miles' prior employer had extended to him a loan of
$100,000 that became due in connection with his leaving that company to join
Sybase. In connection with his commencement of employment, the Company made an
unsecured loan to Mr. Miles in January 1998 of $100,000 bearing interest at a
rate of 7% per annum, and having terms comparable to those of the loan
previously extended by his prior employer. The maximum amount of indebtedness
outstanding under this loan in 1998 was $100,000. As long as Mr. Miles remains
an employee of Sybase, $25,000 of the indebtedness will be forgiven on each
anniversary of the loan. As of March 31, 1999, $82,000 in total indebtedness was
outstanding under the loan. The loan becomes immediately due and payable in the
event Mr. Miles' employment is terminated for any reason.

In December 1997, Richard LaBarbera joined Sybase as Senior Vice
President, Customer Service and Support. Mr. LaBarbera's prior employer had
extended to him a loan of $200,000 that became due in connection with his
leaving that company to join Sybase. In connection with his commencement of
employment, the Company made an unsecured loan to Mr. LaBarbera in December 1997
of $200,000 bearing interest at a rate of 6% per annum, due March 1, 2001, and
having terms comparable to those of the loan previously extended by his prior
employer. The maximum amount of indebtedness outstanding under this loan in 1998
was $210,000. Under the terms of the loan, interest will be forgiven and the
note will become interest-free if Mr. La Barbera serves as an employee of Sybase
for three years or if he is terminated by the Company without cause prior to the
end of such three years. If Mr. LaBarbera voluntarily leaves the Company or is
terminated for cause, the loan becomes

- 29 -
<PAGE> 32
immediately due and payable. As of March 31, 1999, $213,000 in total
indebtedness was outstanding under the loan.

Mr. Gardner's employment agreement with Sybase provides that he receives
severance equal to six months' base salary, target incentive and employee
benefits, if he is terminated without cause.

In January 1998, the Company entered into a short-term secured loan
agreement with Mr. Kertzman pursuant to which the Company agreed to extend
short-term secured loans to Mr. Kertzman bearing interest at 10% per annum. The
largest amount of principal and interest outstanding under this loan agreement
in 1998 was $739,494. The loan was repaid in full in November 1998.

In February 1998, the Company entered into a Retirement Agreement and
General Release with Mr. Forster relating to Mr. Forster's retirement. Under
this agreement, Mr. Forster continued to be an employee through 1998 and
received his salary and benefits through March 31, 1999. In connection with Mr.
Forster's joining Micro Decisionware, Inc. ("MDI") as Chief Executive Officer in
1993, MDI made certain loans to Mr. Forster to facilitate his purchase of shares
of MDI stock and his relocation in the amounts of $675,000 (the "Stock Note")
and $250,000 (the "Residence Note"), respectively. In 1994, Sybase acquired MDI
and assumed those notes. As of March 11, 1999, approximately $566,217 was
outstanding under the Stock Note and bearing interest at 6% per annum, and
approximately $195,138 was outstanding under the Residence Note bearing interest
at prime plus 2% per annum. Pursuant to the Retirement Agreement and General
Release, these loans were consolidated into a single non-recourse loan owing to
Sybase in the principal amount of $761,355 due on March 31, 1999, bearing
interest at the rate of 5.7%, and secured by 23,071 shares of Common Stock owned
by Mr. Forster and by the after-tax profits, if any, from the exercise of any of
his stock options. The maximum amount owed under this loan in 1998 was $796,399,
and the amount outstanding as of March 31, 1999 was $810,865.

The Company has entered into statements of employment terms with the
Company's current Chief Executive Officer and General Counsel providing for
severance payments equal to two times annual base salary and up to one year's
target incentive compensation and acceleration of exercisability of 50% of the
officer's then unvested options in the event of a change of control of the
Company. The Company has entered into similar statements of employment terms
with all current executive officers that provide for identical benefits in the
event that the officer's employment is terminated within eighteen months
following a change of control.

PERFORMANCE GRAPH

The following graph and table compare the cumulative total return on a
$100 investment in the Company's Common Stock with the cumulative total return
on a $100 investment (assuming reinvestment of dividends, if any) in the
Standard & Poor's 500 Stock Index and the Hambrecht & Quist Technology Index for
the period commencing on December 31, 1993 through December 31, 1998:

<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sybase $100.00 $123.81 $ 85.71 $ 39.73 $ 31.70 $ 17.63
Hambrecht & Quist Technology Index $100.00 $120.12 $179.61 $223.23 $261.72 $407.08
S&P 500 Index $100.00 $ 97.75 $138.26 $170.01 $208.58 $293.21
</TABLE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file an initial report of securities ownership
on Form 3 and reports of changes in securities ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC"). Such officers, directors and 10%
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms that they file. Based solely on its review of the

- 30 -
<PAGE> 33
copies of such forms received by it, or written representations from certain
reporting persons that no Forms 4 or 5 were required for such persons, the
Company believes that, for the reporting period from January 1, 1998 to December
31, 1998, all required Section 16(a) filings were made on a timely basis, except
one Form 4 for Jeffrey T. Webber reporting a single transaction that was filed
late.

OTHER MATTERS

The Board of Directors does not know of any other matters to be brought
before the Annual Meeting. However, if any other matters properly come before
the Annual Meeting, it is the intention of the appointees named in the enclosed
proxy card to vote in accordance with their best judgment on such matters. Under
the Company's bylaws, in order for a matter (including nominations for director)
to be deemed properly brought before the Annual Meeting by a stockholder, notice
must be delivered to, or mailed and received by, the Secretary of the Company,
not less than 90 days prior to the Annual Meeting; provided, however, if less
than 100 days' notice or prior public disclosure of the date of the Annual
Meeting has been given, notice by the stockholder to be timely must be received
by the Secretary of the Company not later than the close of business on the
tenth day following the day on which such notice of the Annual Meeting was
mailed or publicly disclosed. The stockholder's notice must set forth, as to
each proposed matter: (a) the name and address of the stockholder and the nature
of the business to be proposed, (b) a representation that the stockholder is a
holder of record of stock of the Company and is entitled to vote at the meeting,
(c) if the matter to be proposed is a nomination, the name and address of the
nominee, a statement as to whether the stockholder intends to appear in person
or by proxy to make such nomination, and a description of all arrangements and
understandings between the stockholder and each nominee pursuant to which the
nomination is being made, and (d) such other information as would be required in
a proxy statement had such proposal or nomination been made by the Board of
Directors. The presiding officer of the meeting may refuse to acknowledge any
matter not made in compliance with the foregoing procedure.

THE BOARD OF DIRECTORS

Dated: April 14, 1999

- 31 -
<PAGE> 34
Map to the offices of the Company

- 32 -
<PAGE> 35
FORM OF PROXY

PROXY
SYBASE, INC.
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of SYBASE, INC., a Delaware Corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated as of April 14, 1999, and hereby
appoints John S. Chen, Pieter A. Van der Vorst and Teresa D. Chuh, and each of
them, proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1999 Annual Meeting of Stockholders of SYBASE, INC. to be held on May 27, 1999
at 10:00 a.m. local time, at the offices of the Company, located at 1650 - 65th
Street, Emeryville, California 94608, and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock which the undersigned would be
entitled to vote, if then and there personally present, on the matters set forth
on the reverse side.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

/ SEE REVERSE /
/ SIDE________/

<PAGE> 36
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS
RECOMMENDS VOTING

FOR PROPOSAL 1
FOR PROPOSAL 2
FOR PROPOSAL 3
FOR PROPOSAL 4
FOR PROPOSAL 5
FOR PROPOSAL 6

/X/ Please mark
votes as in
this example

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF THE NOMINATED DIRECTORS, FOR THE APPROVAL OF
EACH OF PROPOSALS 2, 3 AND 4 SET FORTH BELOW, AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.

1. Election of Class I Directors
NOMINEES: John S. Chen and
Alan B. Salisbury

FOR WITHHELD

[____] [______]
MARK HERE ______
FOR ADDRESS / /
CHANGE AND / /
[____] ________________________________ NOTE BELOW /______/
For all nominees except as noted above

2. Proposal to approve an amendment to the 1996 For Against Abstain
Stock Plan to increase the total number of / / / / / /
shares of Common Stock issuable thereunder by /_____/ /_____/ /_____/
1,800,000 shares.

3. Proposal to approve amendments to the Amended For Against Abstain
and Restated 1991 Employee Stock Purchase / / / / / /
Plan and Amended and Restated 1991 Foreign /_____/ /_____/ /_____/
Subsidiary Employee Stock Purchase Plan to
increase the total number of shares of Common
Stock issuable thereunder by 2,300,000
shares.
</TABLE>

<PAGE> 37
<TABLE>
<S> <C>
4. Proposal to approve an amendment to the 1992 For Against Abstain
Director Stock Option Plan to increase the / / / / / /
amount of the annual stock option grant made /_____/ /_____/ /_____/
to nonemployee directors from 12,000 shares
to 16,000 shares.

5. Proposal to approve an amendment to the For Against Abstain
Company's Restated Certificate of Incorporation / / / / / /
to reorganize the Board of Directors into a /_____/ /_____/ /_____/
single class.

6. Proposal to ratify the appointment of Ernst & For Against Abstain
Young LLP as independent accountants for the / / / / / /
Company for fiscal year 1999. /_____/ /_____/ /_____/

7. In their discretion, the proxies are authorized to vote upon such other
matters which may properly come before the meeting or any adjournment or
adjournments thereof.

(This proxy should be marked, dated, signed by each stockholder exactly as such
stockholder's name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If shares
are held by joint tenants or as community property, both should sign.)

Signature: __________ Date: __________ Signature: ___________ Date: ___________
</TABLE>
<PAGE> 38

APPENDIX A

SYBASE, INC.
1991 AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
(As amended on March 26, 1999)

1. Purpose

This Amended and Restated Sybase, Inc. 1991 Employee Stock
Purchase Plan (the "Plan") is designed to encourage and assist employees of
Sybase, Inc. ("Sybase") and participating subsidiaries (together, the "Company")
to acquire an equity interest in the Company through the purchase of shares of
Sybase common stock (the "Common Stock").

2. Administration

The Plan shall be administered by the Board of Directors of
Sybase (or a committee of "disinterested" directors no fewer in number than
required by Rule 16b-3 of the Securities and Exchange Commission ("Rule 16b-3")
as in effect with respect to the Company from time to time, which in either case
is referred to as the "Board") in accordance with Rule 16b-3. The Board may from
time to time select a committee or persons (the "Administrator"), to be
responsible for any matters for which a "disinterested administrator" is not
required by Rule 16-b. Subject to the express provisions of the Plan, to the
overall supervision of the Board, and to the limitations of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), the Administrator may
administer and interpret the Plan in any manner it believes to be desirable, and
any such interpretation shall be conclusive and binding on the Company and all
participants.

3. Number of Shares

(a) The Company has reserved for sale under the Plan 9,800,000
shares of Common Stock (after giving effect to the November 1993 2-for-1 stock
split) less any shares sold under the Sybase 1991 Amended and Restated Foreign
Subsidiary Employee Stock Purchase Plan. Shares sold under the Plan may be newly
issued shares or shares reacquired in private transactions or open market
purchases, but all shares sold under the Plan, regardless of source, shall be
counted against the 9,800,000 share limitation.

(b) In the event of any reorganization, recapitalization,
stock split, reverse stock split, stock dividend, combination of shares, merger,
consolidation, offering of rights, or other similar change in the capital
structure of the Company, the Board may make such adjustment, if any, as it
deems appropriate in the number, kind, and purchase price of the shares
available for purchase under the Plan and in the maximum number of shares
subject to any option under the Plan.

4. Eligibility Requirements

(a) Each employee of the Company, except those described in
the next paragraph, shall become eligible to participate in the Plan in
accordance with Section 5 on the first Enrollment Date on or following
commencement of his or her employment

<PAGE> 39

by the Company or following such period of employment as is designated by the
Board from time to time. Participation in the Plan is entirely voluntary.

(b) The following employees are not eligible to participate in
the Plan:

(i) employees who would, immediately upon enrollment
in the Plan, own directly or indirectly, or hold options or rights to acquire
stock possessing, five percent or more of the total combined voting power or
value of all classes of stock of Sybase or any subsidiary of Sybase;

(ii) employees who are categorized after August 31,
1999 as temporary employees or who are customarily employed by the Company less
than 20 hours per week or less than five months in any calendar year; and

(iii) employees who are prohibited by the laws of the
nation of their residence or employment from participating in the Plan.

Employees who are also directors or officers of the Company may participate only
in accordance with Rule 16b-3 of the Securities and Exchange Commission.

(c) "Employee" shall mean any individual who is an employee of
the Company or a Participating Subsidiary within the meaning of Section 3401(c)
of the Code and the Treasury Regulations thereunder. "Subsidiary" shall mean any
corporation described in Section 425(e) or (f) of the Code. "Participating
Subsidiary" shall mean a subsidiary which has been designated by the
Administrator as covered by the Plan.

5. Enrollment

Any eligible employee may enroll or re-enroll in the Plan each
year as of the first trading day of (i) the month immediately following the
closing of the Company's initial public offering of shares of its Common Stock
on a Registration Statement on Form S-1 (except that if such closing occurs
during the last month of a fiscal quarter (e.g. September), then the first
Enrollment Date will be the first trading day of the second month of the quarter
immediately following the closing (e.g. November)), (ii) the sixth month
following such month, and (iii) each yearly anniversary of such months (e.g. any
March and September or May and November), or such other days as may be
established by the Board from time to time (the "Enrollment Dates"). In order to
enroll, an eligible employee must complete, sign, and submit to the Company an
enrollment form. Any enrollment form received by the Company by the 15th day of
the month preceding an Enrollment Date (or by the Enrollment Date in the case of
employees hired after such 15th day), or such other date established by the
Administrator from time to time, will be effective on that Enrollment Date. For
purposes of the Plan, a "trading day" is any day on which regular trading occurs
on any established stock exchange or market system on which the Common Stock is
traded.

6. Grant of Option on Enrollment

(a) Enrollment or re-enrollment by a participant in the Plan
on an Enrollment Date will constitute the grant by the Company to the
participant of an option to purchase shares of Common Stock from the Company
under the Plan. Any participant whose option expires and who has not withdrawn
from the Plan will automatically be re-

<PAGE> 40

enrolled in the Plan and granted a new option on the Enrollment Date immediately
following the date on which the option expires.

(b) Except as provided in Section 9, each option granted under
the Plan shall have the following terms:

(i) each option granted under the Plan will have a
term of not more than 24 months or such shorter option period as may be
established by the Board from time to time; notwithstanding the foregoing,
however, whether or not all shares have been purchased thereunder, the option
will expire on the earlier to occur of (A) the completion of the purchase of
shares on the last Purchase Date occurring within 24 months after the Enrollment
Date for such option, or such shorter option period as may be established by the
Board before an Enrollment Date for all options to be granted on such date or
(B) the date on which the employee's participation in the Plan terminates for
any reason; (ii) payment for shares purchased under the option will be made only
through payroll withholding in accordance with Section 7;

(iii) purchase of shares upon exercise of the option
will be effected only on the Purchase Dates established in accordance with
Section 8;

(iv) the price per share under the option will be
determined as provided in Section 8;

(v) the number of shares available for purchase under
the option will, unless otherwise established by the Board before an Enrollment
Date for all options to be granted on such date, be determined by dividing
$25,000 by the fair market value of a share of Common Stock on the Enrollment
Date and by multiplying the result by the number of calendar years included in
whole or in part in the period from grant to expiration of the option;

(vi) the option (taken together with all other
options then outstanding under this and all other similar stock purchase plans
of Sybase and any subsidiary of Sybase, collectively "Options") will in no event
give the participant the right to purchase shares at a rate per calendar year
which accrues in excess of $25,000 of fair market value of such shares, less the
fair market value of any shares accrued and already purchased during such year
under Options which have expired or terminated, determined at the applicable
Enrollment Dates; and

(vii) the option will in all respects be subject to
the terms and conditions of the Plan, as interpreted by the Administrator from
time to time.

7. Payroll and Tax Withholding; Use by Company

(a) Each participant shall elect to have amounts withheld from
his or her compensation paid by the Company during the option period, at a rate
equal to any whole percentage up to a maximum of 10 percent, or such lesser
percentage as the Board may establish from time to time before an Enrollment
Date. Compensation includes regular salary payments, annual and quarterly
performance bonuses, hire-on bonuses, cash recognition awards, commissions,
overtime pay, shift premiums, and elective

<PAGE> 41

contributions by the participant to qualified employee benefit plans, but
excludes all other payments including, without limitation, long-term disability
or workers compensation payments, car allowances, employee referral bonuses,
relocation payments, expense reimbursements (including but not limited to
travel, entertainment, and moving expenses), salary gross-up payments, and
non-cash recognition awards. The participant shall designate a rate of
withholding in his or her enrollment form and may elect to increase or decrease
the rate of contribution effective as of any Enrollment Date, by delivery to the
Company, not later than 15 days before such Enrollment Date, of a written notice
indicating the revised withholding rate.

(b) Payroll withholdings shall be credited to an account
maintained for purposes of the Plan on behalf of each participant, as soon as
administratively feasible after the withholding occurs. The Company shall be
entitled to use the withholdings for any corporate purpose, shall have no
obligation to pay interest on withholdings to any participant, and shall not be
obligated to segregate withholdings.

(c) Upon disposition of shares acquired by exercise of an
option, the participant shall pay, or make provision adequate to the Company for
payment of, all federal, state, and other tax (and similar) withholdings that
the Company determines, in its discretion, are required due to the disposition,
including any such withholding that the Company determines in its discretion is
necessary to allow the Company to claim tax deductions or other benefits in
connection with the disposition. A participant shall make such similar
provisions for payments that the Company determines, in its discretion, are
required due to the exercise of an option, including such provisions as are
necessary to allow the Company to claim tax deductions or other benefits in
connection with the exercise of the option.

8. Purchase of Shares

(i) the fair market value of the Common Stock on the
Enrollment Date for such option (except that with respect to shares which are
sold on a Purchase Date that were added by an amendment of the Plan between the
Enrollment Date for the option applicable to such Purchase Date and that
Purchase Date, it shall be the fair market value of the Common Stock on the date
the Stockholders approved such amendment); or

(ii) the fair market value of the Common Stock on
that Purchase Date.

<PAGE> 42

exchange or market system if the Common Stock is traded on more than one), if
the Common Stock is not so traded then the mean between the bid and asked prices
for Common Stock on such date as quoted on NASDAQ or reported in The Wall Street
Journal or similar publication if such prices are so quoted or reported, or the
fair market value on such date as determined by the Administrator if shares of
Common Stock are not so traded, quoted, or reported.

(b) Any funds in an amount less than the cost of one share of
Common Stock left in a participant's payroll withholdings account on a Purchase
Date shall be carried forward in such account for application on the next
Purchase Date, and any additional amount shall be distributed to the participant
.

(c) If at any Purchase Date, the shares available under the
Plan are less than the number all participants would otherwise be entitled to
purchase on such date, purchases shall be reduced proportionately to eliminate
the deficit. Any funds that cannot be applied to the purchase of shares due to
such a reduction shall be refunded to participants as soon as administratively
feasible.

9. Grant of Additional Options

In addition to the options which may be granted under Section
6 of this Plan, the Board, in its sole discretion, may grant, to each employee
satisfying the eligibility requirements of Section 4, additional options, for a
term not to exceed 27 months and for an identical number of shares. The options
granted hereunder shall be subject to the limitations of Section 6(b)(v) and
6(b)(vi); provided, however, that immediately before the grant of such
additional options, the limitations imposed thereby upon each recipient's
Options subject to payroll withholdings shall be adjusted to the minimum extent
necessary to permit the grant. The option price shall not be less than 85% of
the lower of (i) the fair market value of the stock on the grant date for such
option, or (ii) the fair market value on the date of exercise. The option will
be subject to such additional terms and conditions, not inconsistent with the
terms of the Plan as interpreted by the Administrator, as may be established
from time to time by the Board.

10. Withdrawal from the Plan

A participant may withdraw from the Plan in full (but not in
part) at any time, effective after written notice thereof is received by the
Company. All funds credited to a participant's payroll withholdings account
shall be distributed to him or her without interest within 60 days after notice
of withdrawal is received by the Company. Any eligible employee who has
withdrawn from the Plan may enroll in the Plan again on any subsequent
Enrollment Date in accordance with the provisions of Section 5.

11. Termination of Employment

Participation in the Plan terminates immediately when a
participant ceases to be employed by the Company for any reason whatsoever
(including death or disability) or otherwise becomes ineligible to participate
in the Plan. As soon as administratively feasible after termination, the Company
shall pay to the participant or his or her beneficiary or legal representative,
all amounts credited to the participant's payroll withholdings account;
provided, however, that if a participant ceases to be

<PAGE> 43

employed by the Company because of the commencement of employment with a
Subsidiary of the Company that is not a Participating Subsidiary, funds then
credited to such participant's payroll withholdings account shall be applied to
the purchase of whole shares of Common Stock at the next Purchase Date and any
funds remaining after such purchase shall be paid to the participant.

12. Designation of Beneficiary

(a) Each participant may designate one or more beneficiaries
in the event of death and may, in his or her sole discretion, change such
designation at any time. Any such designation shall be effective upon receipt in
written form by the Company and shall control over any disposition by will or
otherwise.

(b) As soon as administratively feasible after the death of a
participant, amounts credited to his or her account shall be paid in cash to the
designated beneficiaries or, in the absence of a designation, to the executor,
administrator, or other legal representative of the participant's estate. Such
payment shall relieve the Company of further liability with respect to the Plan
on account of the deceased participant. If more than one beneficiary is
designated, each beneficiary shall receive an equal portion of the account
unless the participant has given express contrary written instructions.

13. Assignment

(a) The rights of a participant under the Plan shall not be
assignable by such participant, by operation of law or otherwise. No participant
may create a lien on any funds, securities, rights, or other property held by
the Company for the account of the participant under the Plan, except to the
extent that there has been a designation of beneficiaries in accordance with the
Plan, and except to the extent permitted by the laws of descent and distribution
if beneficiaries have not been designated.

(b) A participant's right to purchase shares under the Plan
shall be exercisable only during the participant's lifetime and only by him or
her, except that a participant may direct the Company in the enrollment form to
issue share certificates to the participant and his or her spouse in community
property, to the participant jointly with one or more other persons with right
of survivorship, or to certain forms of trusts approved by the Administrator.

14. Administrative Assistance

If the Administrator in its discretion so elects, it may
retain a brokerage firm, bank or other financial institution to assist in the
purchase of shares, delivery of reports, or other administrative aspects of the
Plan. If the Administrator so elects, each participant shall (unless prohibited
by the laws of the nation of his or her employment or residence) be deemed upon
enrollment in the Plan to have authorized the establishment of an account on his
or her behalf at such institution. Shares purchased by a participant under the
Plan shall be held in the account in the name in which the share certificate
would otherwise be issued pursuant to Section 13(b).

15. Costs

<PAGE> 44

All costs and expenses incurred in administering the Plan
shall be paid by the Company, except that any stamp duties or transfer taxes
applicable to participation in the Plan may be charged to the account of such
participant by the Company. Any brokerage fees for the purchase of shares by a
participant shall be paid by the Company, but brokerage fees for the resale of
shares by a participant shall be borne by the participant.

16. Equal Rights and Privileges

All eligible employees shall have equal rights and privileges
with respect to the Plan so that the Plan qualifies as an "employee stock
purchase plan" within the meaning of Section 423 of the Code and the related
Treasury Regulations. Any provision of the Plan which is inconsistent with
Section 423 of the Code shall without further act or amendment by the Company or
the Board be reformed to comply with the requirements of Section 423. This
Section 16 shall take precedence over all other provisions of the Plan.

17. Applicable Law

The Plan shall be governed by the substantive laws (excluding
the conflict of laws rules) of the State of California.

18. Modification and Termination

(a) The Board may amend, alter, or terminate the Plan at any
time, including amendments to outstanding options. No amendment shall be
effective unless within 12 months after it is adopted by the Board, it is
approved by the holders of a majority of the votes cast at a duly held
shareholders' meeting at which a quorum of the voting power of the Company is
represented in person or by proxy, if such amendment would:

(i) increase the number of shares reserved for
purchase under the Plan; or

(ii) require shareholder approval in order to comply
with SEC Rule 16b-3.

(b) In the event the Plan is terminated, the Board may elect
to terminate all outstanding options either immediately or upon completion of
the purchase of shares on the next Purchase Date, or may elect to permit options
to expire in accordance with their terms (and participation to continue through
such expiration dates). If the options are terminated prior to expiration, all
funds contributed to the Plan that have not been used to purchase shares shall
be returned to the participants as soon as administratively feasible.

(c) In the event of the sale of all or substantially all of
the assets of Sybase or the Company, or the merger of Sybase or the Company with
or into another corporation, or the dissolution or liquidation of Sybase, a
Purchase Date shall occur on the trading day immediately preceding the date of
such event, unless otherwise provided by the Board in its sole discretion,
including provision for the assumption or substitution

<PAGE> 45

of each option under the Plan by the successor or surviving corporation, or a
parent or subsidiary thereof.

19. Rights as an Employee

Nothing in the Plan shall be construed to give any person the
right to remain in the employ of the Company or to affect the Company's right to
terminate the employment of any person at any time with or without cause.

20. Rights as a Shareholder; Delivery of Certificates

Unless otherwise determined by the Board, certificates
evidencing shares purchased on any Purchase Date shall be delivered to
participants as soon as administratively feasible. Participants shall be treated
as the owners of their shares effective as of the Purchase Date.

21. Board and Shareholder Approval

The Plan was approved by the Board of Directors on April 30,
1991, and by the holders of a majority of the votes cast at a duly held
shareholders' meeting on June 13, 1991, at which a quorum of the voting power of
the Company was represented in person or by proxy. As amended and restated to
adopt amendments not requiring shareholder approval, the Plan was approved by
the Board of Directors on July 30, 1991. The Plan was amended by the Board of
Directors on January 28, 1993, January 27, 1994, January 24, 1995, January 21,
1997 and March 13, 1998 and such amendments were approved by the holders of a
majority of the votes cast at a duly held shareholders' meeting on May 18, 1993,
May 24, 1994, May 23, 1995, May 20, 1997 and May 27, 1998, respectively. The
Plan also was amended by the Board of Directors on March 26, 1999.

SYBASE, INC.

By: MITCHELL L. GAYNOR
---------------------------------
Its: Vice President, General
Counsel and Secretary
Date: March 26, 1999

<PAGE> 46

SYBASE, INC.
1991 AMENDED AND RESTATED
FOREIGN SUBSIDIARY EMPLOYEE STOCK PURCHASE PLAN
(As Amended March 26, 1999)

1. Purpose

This Amended and Restated Sybase, Inc. 1991 Foreign Subsidiary
Employee Stock Purchase Plan (the "Plan") is designed to encourage and assist
employees of designated subsidiaries of Sybase, Inc. ("Sybase" or the "Company")
to acquire an equity interest in the Company through the purchase of shares of
Sybase common stock (the "Common Stock").

2. Administration

The Plan shall be administered by the Board of Directors of
Sybase or a committee (the "Committee") selected from time to time by the Board.
Subject to the express provisions of the Plan and to the overall supervision of
the Board, the Committee may administer and interpret the Plan in any manner it
believes to be desirable, and any such interpretation shall be conclusive and
binding on the Company and all participants. If and to the extent that Rule
16b-3 of the Securities and Exchange Commission ("Rule 16b-3") becomes
applicable to the Plan, the Board and the Committee shall use their best efforts
to cause the Plan to be administered in accordance therewith.

3. Number of Shares

(a) The Company has reserved for sale under the Plan 9,800,000
shares of Common Stock (after giving effect to the November 1993 2-for-1 stock
split) less any shares sold under the Sybase 1991 Amended and Restated Employee
Stock Purchase Plan. Shares sold under the Plan may be newly issued shares or
shares reacquired in private transactions or open market purchases, but all
shares sold under the Plan, regardless of source, shall be counted against the
9,800,000 share limitation.

(b) In the event of any reorganization, recapitalization,
stock split, reverse stock split, stock dividend, combination of shares, merger,
consolidation, offering of rights, or other similar change in the capital
structure of the Company, the Committee may make such adjustment, if any, as it
deems appropriate in the number, kind, and purchase price of the shares
available for purchase under the Plan and in the maximum number of shares
subject to any option under the Plan.

4. Designation of Subsidiaries; Employee Eligibility Requirements

(a) The Board may at any time designate one or more
Subsidiaries as participating in the Plan. The names of all Participating
Subsidiaries shall be shown on Exhibit A to the Plan, which shall be amended
from time to time to reflect additions and deletions of Participating
Subsidiaries; failure to show a Participating Subsidiary on Exhibit A shall not,
however, prevent otherwise eligible employees of that Subsidiary from
participating in the Plan. No Subsidiary participating in the Company's 1991
Employee Stock Purchase Plan may be designated for participating in the Plan.

<PAGE> 47

(b) Each employee of a Participating Subsidiary, except those
described in the next paragraph, shall become eligible to participate in the
Plan in accordance with Section 5 on the first Enrollment Date on or following
commencement of his or her employment by the Participating Subsidiary or
following such period of employment as is designated by the Board from time to
time. Participating in the Plan is entirely voluntary.

(c) Except to the extent otherwise determined by the Board or
provided by the Plan, the following employees are not eligible to participate in
the Plan:

(ii) employees who are categorized after August 31,
1999 as temporary employees or who are customarily employed by the Participating
Subsidiary less than 20 hours per week or less than five months in any calendar
year; and

(iii) employees who are prohibited by the laws of the
nation of their residence or employment from participating in the Plan.

Employees who are also directors or officers of the Company may participate only
in accordance with Rule 16b-3 of the Securities and Exchange Commission.

(d) "Employee" shall mean any individual who is an employee of
a Participating Subsidiary within the meaning of Section 3401(c) of the Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
thereunder. "Subsidiary" shall mean any corporation described in Section 425(e)
or (f) of the Code. "Participating Subsidiary" shall mean a subsidiary which has
been designated by the Committee as covered by the Plan.

5. Enrollment

Any eligible employee may enroll or re-enroll in the Plan each
year as of the first trading day of (i) the month immediately following the
closing of the Company's initial public offering of shares of its Common Stock
on a Registration Statement on Form S-1 (except that if such closing occurs
during the last month of a fiscal quarter (e.g., September), then the first
Enrollment Date will be the first trading day of the second month of the quarter
immediately following the closing (e.g., November)), (ii) the sixth month
following such month, and (iii) each yearly anniversary of such months (e.g.,
any March and September or May and November), or such other days as may be
established by the Board from time to time (the "Enrollment Dates"). In
addition, for purposes of participating in the Plan by an eligible employee
following termination of such employee's participation in the Sybase 1991
Amended and Restated Employee Stock Purchase Plan (the "U.S. Plan") a deemed
Enrollment Date may be designated corresponding to the employee's most recent
Enrollment Date under the U.S. Plan. In order to enroll, an eligible employee
must complete, sign, and submit to the Company or the Participating Subsidiary
an enrollment form. Any enrollment form received by the

<PAGE> 48

Participating Subsidiary or the Company by the 15th day of the month preceding
an Enrollment Date (or by the Enrollment Date in the case of employees hired
after such 15th day), or such other date established by the Committee from time
to time, will be effective on that Enrollment Date. For purposes of the Plan, a
"trading day" is any day on which regular trading occurs on any established
stock exchange or market system on which the Common Stock is traded.

6. Grant of Option on Enrollment

(b) Except as provided in Section 9 or Section 11, each option
granted under the Plan shall have the following terms unless otherwise
determined by the Board:

(ii) payment for shares purchased under the option
will be made only through payroll withholding in accordance with Section 7;

(iii) purchase of shares upon exercise of the option
will be effected only on the Purchase Dates established in accordance with
Section 8;

(iv) the price per share under the option will be
determined as provided in Section 8;

(v) the number of shares available for purchase under
an option will, unless otherwise established by the Board before an enrollment
Date for all options to be granted on such date, be determined by dividing
$25,000 by the fair market value of a share of Common Stock on the Enrollment
Date and by multiplying the result by the number of calendar years included in
whole or in part in the period from grant to expiration of the option;

<PAGE> 49

right to purchase shares at a rate per calendar year which accrues in excess of
$25,000 of fair market value of such shares, less the fair market value of any
shares accrued and already purchased during such year under Options which have
expired or terminated, determined at the applicable Enrollment Dates; and

(vii) the option will in all respects be subject to
the terms and conditions of the Plan, as interpreted by the Committee from time
to time.

7. Payroll and Tax Withholding; Use by Participating Subsidiary
and the Company

(a) Each participant shall elect to have amounts withheld from
his or her compensation and paid to the Company during the option period, at a
rate equal to any whole percentage up to a maximum of 10 percent, or such lesser
percentage as the Board may establish from time to time before an Enrollment
Date. Compensation includes regular salary payments, annual and quarterly
performance bonuses, hire-on bonuses, cash recognition awards, commissions,
overtime pay, shift premiums, and elective contributions by the participant to
qualified employee benefit plans, but excludes all other payments including,
without limitation, long-term disability or workers compensation payments, car
allowances, employee referral bonuses, relocation payments, expense
reimbursements (including but not limited to travel, entertainment, and moving
expenses), salary gross-up payments, and non-cash recognition awards. The
participant shall designate a rate of withholding in his or her enrollment form
and may elect to increase or decrease the rate of contribution effective as of
any Enrollment Date, by delivery to the Participating Subsidiary, not later than
15 days before such Enrollment Date, of a written notice indicating the revised
withholding rate.

(b) Payroll withholdings shall be credited to an account
maintained for purposes of the Plan on behalf of each participant in local
currency, as soon as administratively feasible after the withholding occurs. The
Participating Subsidiary and the Company shall be entitled to use the
withholdings for any corporate purpose, shall have no obligation to pay interest
on withholdings to any participant, and shall not be obligated to segregate
withholdings.

(c) Upon disposition of shares acquired by exercise of an
option, the participant shall pay, or make provision adequate to the Company and
the Participating Subsidiary for payment of, all federal, state, and other tax
(and similar) withholdings that the Company or the Participating Subsidiary
determines, in its discretion, are required due to the disposition, including
any such withholding that the Company or the Participating Subsidiary
determines, in its discretion, is necessary to allow the Company or the
Participating Subsidiary to claim tax deductions or other benefits in connection
with the disposition. A participant shall make such similar provisions for
payment that the Company or the Participating Subsidiary determines, in its
discretion, are required due to the exercise of an option, including such
provisions as are necessary to allow the Company or the Participating Subsidiary
to claim tax deductions or other benefits in connection with the exercise of the
option.

<PAGE> 50

8. Purchase of Shares

(a) On the last trading day of each month immediately
preceding a month containing an Enrollment Date, or on such other days as may be
established by the Board from time to time, prior to an Enrollment Date for all
options to be granted on an Enrollment Date (each a "Purchase Date"), the
Company shall convert each participant's account balance, including amounts
carried forward pursuant to Section 8(b) below, to U.S. Dollars determined as of
such Purchase Date (or applying such formula as may be established by the
Administrator) and shall apply the funds then credited to each participant's
payroll withholdings account to the purchase of whole shares of Common Stock.
The cost to the participant for the shares purchased under any option shall be
not less than 85 percent of the lower of:

(ii) the fair market value of the Common Stock on
that Purchase Date.

The "fair market value" of the Common Stock on a date shall be the closing price
of the Common Stock on such date on any established stock exchange or market
system if the Common Stock is traded on such an exchange or market system (and
the largest such exchange or market system if the Common Stock is traded on more
than one), if the Common Stock is not so traded then the mean between the bid
and asked prices for Common Stock on such date as quoted on NASDAQ or reported
in The Wall Street Journal or similar publication if such prices are so quoted
or reported, or the fair market value on such date as determined by the
Committee if shares of Common Stock are not so traded, quoted, or reported.

9. Grant of Additional Options

In addition to the options which may be granted under Section
6 of this Plan, the Committee, in its sole discretion, may grant, to each
employee of a Participating Subsidiary satisfying the eligibility requirements
of Section 4, additional options, for a term not to exceed 27 months and for an
identical number of shares. The

<PAGE> 51

options granted hereunder shall be subject to the limitations of Section 6(b)(v)
and 6(b)(vi); provided, however, that immediately before the grant of such
additional options, the limitations imposed thereby upon each recipient's
Options subject to payroll withholdings shall be adjusted to the minimum extent
necessary to permit the grant. The option price shall not be less than 85% of
the lower of (i) the fair market value of the stock on the grant date for such
option, or (ii) the fair market value on the date of exercise. The option will
be subject to such additional terms and conditions, not inconsistent with the
terms of the Plan as interpreted by the Committee, as may be established from
time to time by the Board.

10. Withdrawal from the Plan

11. Termination of Employment

(a) Except as provided in Section 11(b) below, participation
in the Plan terminates immediately when a participant ceases to be employed by a
Participating Subsidiary for any reason whatsoever (including death or
disability) or otherwise becomes ineligible to participate in the Plan. Transfer
of a participant's employment from one Participating Subsidiary to another
without material interruption shall not be deemed a termination of employment
for purposes of this Section 11. As soon as administratively feasible after
termination, the Company shall pay to the participant or his or her beneficiary
or legal representative, all amounts credited to the participant's payroll
withholdings account.

(b) Following transfer of a participant's employment without
material interruption from a Participating Subsidiary to the Company or any
subsidiary of the Company other than a participating Subsidiary, any outstanding
option granted to such participant under the Plan shall not terminate until the
occurrence of the earliest of: (i) the last Purchase Date included in the term
of such option; (ii) enrollment of the participant in the U.S. Plan; or (iii)
any event or change of condition or status (other than the transfer described in
this Section 11(b)) that would have caused the option to terminate if the
transfer of employment described in this Section 11(b) had not occurred. While
an option remains outstanding pursuant to this Section 11(b), the Company or
other subsidiary to which the participant is transferred shall, in accordance
with Section 7, effect payroll withholdings under the option and shall remit
them to the Company or the Participating Subsidiary that employed the
participant at the time of the transfer; such withholdings shall be credited to
the Participant's payroll withholdings account at the time withheld by the
Company or other subsidiary and in the currency of the Company or subsidiary by
which the participant is employed at the time of the withholdings.

12. Designation of Beneficiary

<PAGE> 52

(a) Each participant may designate one or more beneficiaries
in the event of death and may, in his or her sole discretion, change such
designation at any time. Any such designation shall be effective upon receipt in
written form by the Company or the Participating Subsidiary and shall control
over any disposition by will or otherwise.

(b) As soon as administratively feasible after the death of a
participant, amounts credited to his or her account shall be paid in cash to the
designated beneficiaries or, in the absence of a designation, to the executor,
administrator, or other legal representative of the participant's estate. Such
payment shall relieve the Participating Subsidiary of further liability with
respect to the Plan on account of the deceased participant. If more than one
beneficiary is designated, each beneficiary shall receive an equal portion of
the account unless the participant has given express contrary written
instructions.

13. Assignment

(a) The rights of a participant under the Plan shall not be
assignable by such participant, by operation of law or otherwise. No participant
may create a lien on any funds, securities, rights, or other property held by
the Company or the Participating Subsidiary for the account of the participant
under the Plan, except to the extent that there has been a designation of
beneficiaries in accordance with the Plan, and except to the extent permitted by
the laws of descent and distribution if beneficiaries have not been designated.

14. Administrative Assistance

If the Committee in its discretion so elects, it may retain a
brokerage firm, bank, or other financial institution to assist in the purchase
of shares, delivery of reports, or other administrative aspects of the Plan. If
the Committee so elects, each participant shall (unless prohibited by the laws
of the nation of his or her employment or residence) be deemed upon enrollment
in the Plan to have authorized the establishment of an account on his or her
behalf at such institution. Shares purchased by a participant under the Plan
shall be held in the account in the name in which the share certificate would
otherwise be issued pursuant to Section 13(b).

15. Costs

<PAGE> 53

but brokerage fees for the resale of shares by a participant shall be borne by
the participant.

16. Equivalent Rights and Privileges

It is intended that all eligible employees shall have
substantially equivalent rights and privileges with respect to the Plan;
notwithstanding any other provision of the Plan, however, the Committee may make
such changes in the terms of eligibility and participation from Subsidiary to
Subsidiary that it determines, in its discretion, to be necessary or desirable
to reflect or comply with local laws or conditions.

17. Applicable Law

The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of California.

18. Modification and Termination

(a) The Board may amend, alter, or terminate the Plan at any
time, including amendments to outstanding options. To the extent required for
the Plan to comply with Rule 16b-3 or applicable tax laws or regulations, no
amendment shall be effective unless within 12 months after it is adopted by the
Board, it is approved by the holders of a majority of the votes cast at a duly
held shareholders' meeting at which a quorum of the voting power of the Company
is represented in person or by proxy, if such amendment would:

(i) increase the number of shares reserved for
purchase under the Plan;

(ii) increase the benefits accruing to participants
under the Plan; or

(iii) modify the requirements as to eligibility for
participation in the Plan.

(c) In the event of the sale of all or substantially all of
the assets of Sybase or a Participating Subsidiary, or the merger of Sybase or a
Participating Subsidiary with or into another corporation, or the dissolution or
liquidation of Sybase, a Purchase Date shall occur on the trading day
immediately preceding the date of such event, unless otherwise provided by the
Board in its sole discretion, including provision for the assumption or
substitution of each option under the Plan by the successor or surviving
corporation, or a parent or subsidiary thereof.

<PAGE> 54

19. Rights as an Employee

Nothing in the Plan shall be construed to give any person the
right to remain in the employ of the Participating Subsidiary or to affect the
Participating Subsidiary's right to terminate the employment of any person at
any time with or without cause.

20. Rights as a Shareholder; Delivery of Certificates

21. Board and Shareholder Approval

The Plan was approved by the Board of Directors on April 30,
1991, and by the holders of a majority of the votes cast at a duly held
shareholders' meeting on June 13, 1991, at which a quorum of the voting power of
the Company was represented in person or by proxy. As amended and restated to
adopt amendments not requiring shareholder approval, the Plan was approved by
the Board of Directors on July 30, 1991. The Plan was amended by the Board of
Directors on January 28, 1993, January 27, 1994, January 24, 1995, January 21,
1997 and March 13, 1998 and such amendments were approved by the holders of a
majority of the votes cast at a duly held shareholders' meeting on May 18, 1993,
May 24, 1994, May 23, 1995, May 20, 1997 and May 27, 1998, respectively.
The Plan also was amended by the Board of Directors on March 26, 1999.

SYBASE, INC.

By: MITCHELL L. GAYNOR
---------------------------------
Its: Vice President, General
Counsel and Secretary
Date: March 26, 1999
<PAGE> 55

APPENDIX B

SYBASE, INC.

1992 DIRECTOR OPTION PLAN
(as amended February 3, 1999)

1. Purposes of the Plan. The purposes of this 1992 Director Option Plan
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.

All options granted hereunder shall be "non-statutory stock
options."

2. Definitions. As used herein, the following definitions shall apply:

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the Internal Revenue Code of 1986, as amended.

(d) "Company" means Sybase, Inc., a Delaware corporation.

(e) "Continuous Status as a Director" means the absence of any
interruption or termination of service as a Director.

(f) "Director" means a member of the Board.

(g) "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.

(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(i) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or

exchange (or the exchange with the greatest volume of trading in Common Stock)
on the date of grant, as reported in the Wall Street Journal or such other
source as the Board deems reliable;

(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the bid and
asked prices for the

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<PAGE> 56

Common Stock on the last market trading day prior to the day of determination,
as reported in The Wall Street Journal or such other source as the Board deems
reliable, or;

(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

(j) "Option" means a stock option granted pursuant to the Plan.

(k) "Optioned Stock" means the Common Stock subject to an
Option.

(l) "Optionee" means an Outside Director who receives an Option.

(m) "Outside Director" means a Director who is not an Employee.

(n) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

(o) "Plan" means this 1992 Director Option Plan.

(p) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.

(q) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Internal Revenue Code
of 1986.

3. Stock Subject to the Plan. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 700,000 Shares (the "Pool") of Common Stock. The Shares may be
authorized but unissued, or reacquired Common Stock.

If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which are
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.

4. Administration of and Grants of Options under the Plan.

(a) Administrator. Except as otherwise required herein, the Plan
shall be administered by the Board.

(b) Procedure for Grants. The provisions set forth in this
Section 4(b) shall not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. All grants of Options to Outside
Directors under this Plan shall be automatic and non-discretionary and shall be
made strictly in accordance with the following provisions:

(i) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors, the exercise price
thereof or the timing of the grant of such Options.

(ii) Each new Outside Director who first becomes a
Director after March 26, 1996 (excluding each Outside Director who, at the time
he or she first becomes a Director, holds unvested options to purchase Shares or
securities convertible into or exchangeable for Shares as a result of such
Outside Director's service as a director of an affiliate of the Corporation),
shall be automatically granted an Option to purchase 20,000 Shares upon the date
on which such person first becomes a Director, whether

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<PAGE> 57

through the election by the stockholders of the Company or appointment by the
Board to fill a vacancy. In addition, on the first trading day of February in
each calendar year beginning with 2000, each Outside Director serving on that
date as an Outside Director who has served as an Outside Director for at least
five months shall be automatically granted an Option to purchase 16,000 Shares.

(iii) The terms of each Option granted hereunder shall
be as follows:

(A) the term of the Option shall be ten (10)
years.

(B) except as set forth in Section 8 hereof, the
Option shall be exercisable only while the Outside Director remains a Director.

(C) the Option shall become exercisable in
installments cumulatively with respect to 1/48th of the Optioned Stock one month
after the date of grant and as to an additional

1/48th of the Optioned Stock each month thereafter, so that one hundred percent
(100%) of the Optioned Stock shall be exercisable four years after the date of
grant; provided, however, that in no event shall any Option be exercisable prior
to obtaining stockholder approval of the Plan.

(iv) In the event that any Option granted under the Plan
would cause the number of Shares subject to outstanding Options plus the number
of Shares previously purchased under Options to exceed the Pool, then the
remaining Shares available for Option grant shall be granted under Options to
the Outside Directors on a pro rata basis. No further grants shall be made until
such time, if any, as additional Shares become available for grant under the
Plan through an increase in the number of Shares which may be issued under the
Plan or through cancellation or expiration of Options previously granted
hereunder.

(c) Powers of the Board. Subject to the provisions and
restrictions of the Plan, the Board shall have the authority, in its discretion:
(i) to determine, upon review of relevant information and in accordance with
Section 2(i) of the Plan, the Fair Market Value of the Common Stock; (ii) to
interpret the Plan; (iii) to prescribe, amend and rescind rules and regulations
relating to the Plan; (iv) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (v) to make all other determinations deemed necessary or
advisable for the administration of the Plan.

(d) Effect of Board's Decision. All decisions, determinations
and interpretations of the Board shall be final.

5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.

The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.

6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company as described in Section 16 of the Plan. It shall continue in effect for
a term of ten (10) years unless sooner terminated under Section 11 of the Plan.

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<PAGE> 58

7. Exercise Price and Consideration.

(a) Exercise Price. The per Share exercise price for Optioned
Stock shall be 100% of the Fair Market Value per Share on the date of grant of
the Option.

(b) Form of Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Board and may consist entirely of (i) cash, (ii)
check, (iii) promissory note, (iv) other Shares which (A) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised, (v) delivery of a properly executed
exercise notice together with such other documentation as the Company and the
broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, (vi) any combination of the foregoing methods of payment, or
(vii) such other consideration and method of payment for the issuance of Shares
to the extent permitted under applicable law.

8. Exercise of Option.

(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable until
stockholder approval of the Plan in accordance with Section 16 hereof has been
obtained.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 7(b) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to me date the stock certificate is issued, except as provided in
Section 10 of the Plan.

Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

(b) Rule 16b-3. Options granted to Outside Directors must comply
with the applicable provisions of Rule 16b-3 promulgated under the Exchange Act
or any successor thereto and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.

(c) Termination of Continuous Status as a Director. In the event
of an Optionee's Continuous Status as a Director terminates (other than upon the
Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within twelve (12) months from the date of such termination, and only to the
extent that the Optionee was

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<PAGE> 59

entitled to exercise it as the date of such termination (but in no event later
than the expiration of its ten (10) year term). To the extent that the Optionee
was not entitled to exercise an Option at the date of such termination, and to
the extent that the Optionee does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.

(d) Disability of Optionee. In the event Optionee's Continuous
Status as a Director terminates as a result of total and permanent disability
(as defined in Section 22(e)(3) of the Code), the Optionee may exercise his or
her Option, but only within twelve (12) months from the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option at the date of termination, or if he or she does not exercise
such Option (to the extent otherwise so entitled) within the time specified
herein, the Option shall terminate.

(e) Death of Optionee. In the event of an Optionee's death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it at the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option at the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

9. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

10. Adjustments Upon Changes in Capitalization, Dissolution, Merger,
Asset Sale or Change of Control.

(a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of Shares covered by each
outstanding Option and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option.

(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action; provided, however, that the Company shall
give each Optionee notice of such dissolution or liquidation at least thirty
(30) days prior to the consummation of such dissolution or liquidation and, upon
receipt of such notice, all options shall become fully exercisable.

(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation or the sale of substantially all of the
assets of the Company, outstanding Options may be assumed or equivalent options
may be substituted by the successor corporation or a Parent or Subsidiary

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<PAGE> 60

thereof (the "Successor Corporation"). If an Option is assumed or substituted
for, the Option or equivalent option shall continue to be exercisable as
provided in Sections 4 and 8 hereof for so long as the Optionee serves as a
Director or as a director of the Successor Corporation. Following such
assumption or substitution, if the Optionee's status as a Director or as a
director of the Successor Corporation, as applicable, is terminated other than
upon a voluntary resignation by the Optionee, the Option or option shall become
fully exercisable, including as to Shares for which it would not otherwise be
exercisable. Thereafter, the Option or equivalent option shall remain
exercisable in accordance with Sections 8(c) through (e) above.

If the Successor Corporation does not assume and outstanding Option or
substitute for it an equivalent option, the Option shall become fully vested and
exercisable, including as to Shares for which it would not otherwise be
exercisable. In such event the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of not less than forty-five (45) days
from the date of such notice, and upon the expiration of such period the Option
shall terminate.

For the purposes of this Section 10(c), an Option shall be considered
assumed if, following the merger or sale of assets, the Option confers the right
to purchase or receive, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the Successor Corporation, the Board may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the Successor Corporation
equal in fair market value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.

11. Amendment and Termination of the Plan.

(a) Amendment and Termination. Except as set forth in Section 4
or as further limited by the Rule 16b-3 provisions relating to formula award
plans, the Board may at any time amend, alter, suspend, or discontinue the Plan,
but no amendment, alteration, suspension, or discontinuation shall be made which
would impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and desirable
to comply with Rule 16b-3 promulgated under the Exchange Act (or any other
applicable law or regulation), the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as is required.

(b) Effect of Amendment, Etc. Any such amendment, alteration,
suspension or discontinuation of the Plan shall not affect Options already
granted and such Options shall remain in full force and effect as if this Plan
has not been amended, altered, suspended or discontinued.

12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

13. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange or
quotation system upon which the Shares may then be listed or quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.

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<PAGE> 61

As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

14. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

15. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.

16. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the first granting of an Option
hereunder. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law.

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<PAGE> 62
APPENDIX C

SYBASE, INC.
1996 STOCK PLAN
(as amended March 26, 1999)

1. Purposes of the Plan. The purposes of this Stock Plan are:

- to attract and retain the best available personnel
for positions of substantial responsibility,

- to provide additional incentive to Employees and
Consultants, and

- to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.

(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option, restricted stock and incentive stock plans
under state corporate and securities laws and the Code.

(d) "Code" means the Internal Revenue Code of 1986, as
amended.

(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

(f) "Common Stock" means the Common Stock of the Company.

(g) "Company" means Sybase, Inc.

(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.

(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated.

<PAGE> 63

Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the one hundred eighty-first (181st) day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.

(j) "Director" means a member of the Board.

(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as the closing sales price for such Common Stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable.

(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

(p) "Misconduct" means the Optionee or purchaser, as
applicable, (i) is convicted of a felony involving dishonesty or moral
turpitude, (ii) committed an act of dishonesty intended to result in substantial
personal enrichment, (iii) engaged in actions intended to cause significant
injury to the Company (including derogatory statements regarding the Company,
but excluding statements made in connection with any legal action filed against
the Company), or (iv) breached the non-disclosure, non-compete or non-solicit
provisions of any agreement between the Optionee and the Company.

(q) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

(r) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Right grant.
The Notice of Grant is part of the Option Agreement.

<PAGE> 64

(s) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(t) "Option" means a stock option granted pursuant to the
Plan.

(u) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

(v) "Optioned Stock" means the Common Stock subject to an
Option or Right.

(w) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Right.

(x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

(y) "Plan" means this 1996 Stock Plan.

(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.

(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

(bb) "Retirement" means the termination of employment pursuant
to the Company's retirement policies for an Employee who has attained the age of
fifty-five (55) and whose Continuous Status as an Employee was not interrupted
during the previous five (5) years.

(cc) "Right" means a Stock Purchase Right granted pursuant to
the Plan.

(dd) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(ee) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.

(ff) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

(gg) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
<PAGE> 65

(hh) "Subsidiary" means a "subsidiary corporation", whether
now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 14
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 9,727,000. The Shares may be authorized, but unissued, or
reacquired Common Stock.

If an Option or Right expires or becomes unexercisable without
having been exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original purchaser of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.

4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.

(ii) Administration With Respect to Directors and
Officers Subject to Section 16(b). With respect to Options or Rights grants made
to Employees who are also Officers or Directors subject to Section 16(b) of the
Exchange Act, the Plan shall be administered by (A) the Board, if the Board may
administer the Plan in a manner complying with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made, or (B) a committee designated by the Board to administer the
Plan, which committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

(iii) Administration With Respect to Other Persons.
With respect to Options or Rights grants made to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the

<PAGE> 66

Board, which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;

(ii) to select the Consultants and Employees to whom
Options and Rights may be granted hereunder;

(iii) to determine whether and to what extent Options
and Rights or any combination thereof, are granted
hereunder;

(iv) to determine the number of shares of Common Stock
to be covered by each Option and Right granted
hereunder;

(v) to approve forms of agreement for use under the
Plan;

(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Rights may be exercised
(which may be based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction or limitation regarding any
Option or Right or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;

(vii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

(ix) to modify or amend each Option or Right (subject
to Section 16(c) of the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options;

(x) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Right
previously granted by the Administrator;
<PAGE> 67

(xi) to determine the terms and restrictions
applicable to Options and Rights and any Restricted Stock;

(xii) to determine whether and under what
circumstances an Option may be settled in cash under Section 10(f) instead of
Common Stock;

(xiii) to determine whether, to what extent and under
what circumstances Common Stock and other amounts
payable with respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including providing for and
determining the amount (if any) of any deemed earnings on any deferred amount
during any deferral period); and

(xiv) to make all other determinations deemed
necessary or advisable for administering the Plan.

(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Rights.

5. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Right may be granted additional Options or Rights.

6. Limitations.

(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

(b) Neither the Plan nor any Option or Right shall confer upon
an Optionee any right with respect to continuing the Optionee's employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.

(i) No Employee shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.
<PAGE> 68

(ii) In connection with his or her initial employment,
an Employee may be granted Options to purchase up to
an additional 500,000 Shares which shall not count against the limit set forth
in subsection (i) above.

(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 14.

7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company as described in Section 20 of the
Plan. It shall continue in effect for a term of ten (10) years unless terminated
earlier under Section 16 of the Plan.

8. Term of Option. The term of each Option shall be stated in the
Notice of Grant and shall be ten (10) years from the date of grant or such
shorter term as may be provided in the Notice of Grant.

9. Option Exercise Price and Consideration.

(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

(i) In the case of an Incentive Stock Option, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator, but in no
case shall the per Share exercise price be less than 85% of the Fair Market
Value per Share on the date of grant; provided, however, that for any calendar
year, the aggregate number of Shares subject to Nonstatutory Stock Options
granted during such calendar year with a per Share exercise price less than the
Fair Market Value per Share on the date of grant shall not exceed five percent
(5%) of the number of Shares subject to Options granted in the preceding
calendar year.

(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period or the
attainment of certain performance goals determined by the Administrator.

(c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

(i) cash;
<PAGE> 69

(ii) check;

(iii) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised;

(iv) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;

(v) a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

(vi) any combination of the foregoing methods of
payment; or

(vi) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

10. Exercise of Option.

(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement.

An Option may not be exercised for a fraction of a
Share.

An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14 of the Plan.
<PAGE> 70

Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

(b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than as provided for in Sections 10(c), 10(d) and 10(e), the Optionee may
exercise his or her Option, but only within such period of time as is specified
in the Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. If, on
the date of termination, the Optionee is not entitled to exercise the Optionee's
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.

(i) Notwithstanding the above, in the event an
Optionee's Continuous Status as an Employee or Consultant terminates and the
Optionee performs an act of Misconduct, all unexercised Options held by such
Optionee shall expire five (5) business days following written notice from the
Company to the Optionee.

(ii) Notwithstanding the above, in the event of an
Optionee's change in status from Consultant to Employee or Employee to
Consultant, an Optionee's Continuous Status as an Employee or Consultant shall
not automatically terminate solely as a result of such change in status.
However, in the event of an Optionee's change of status from Employee to
Consultant, an Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option three (3) months and one (1) day following such change
of status.

(c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

<PAGE> 71

death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall immediately revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

(e) Retirement. In the event that an Optionee's Continuous
Status as an Employee terminates as a result of the Optionee's Retirement, the
Optionee may exercise his or her Option at any time subject to the limitations
in the Plan and the Notice of Grant, but only to the extent that the Optionee
was entitled to exercise the Option at the time of such termination, unless
otherwise expressly provided in a written agreement between the Optionee and the
Company. However, any Incentive Stock Options not exercised within three (3)
months of the termination of the Optionee's Continuous Status as an Employee
shall be treated for tax purposes as Nonstatutory Stock Options three (3) months
and one (1) day following such Retirement.

(f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

(g) Rule 16b-3. Options granted to individuals subject to
Section 16 of the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.

11. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer, which shall
in no event exceed six (6) months from the date upon which the Administrator
made the determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator. The Administrator may grant a Stock Purchase
Right at a price equal to or in excess of the par value of the Shares; provided,
however, for any calendar year, the aggregate number of shares subject to grants
of Stock Purchase Rights granted during such calendar year with a per Share
exercise price less than the Fair Market Value per Share on the date of grant
shall not exceed ten percent (10%) of the number of Shares subject to Options
granted in the preceding calendar year.

(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment or in the event of the purchaser's Misconduct with
the Company for any reason (including death or Disability). The

<PAGE> 72

purchase price for Shares repurchased pursuant to the Restricted Stock purchase
agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at a rate determined by the Administrator.

(c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and
Shares purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.

(d) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

(e) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.

12. Withholding Taxes. In accordance with any applicable administrative
guidelines it establishes, the Administrator may allow a purchaser to pay the
amount of taxes required by law to be withheld as a result of a purchase of
Shares or a lapse of restrictions in connection with Shares purchased pursuant
to an Option or Right, by withholding from any payment of Common Stock due as a
result of such purchase or lapse of restrictions, or by permitting the purchaser
to deliver to the Company, Shares having a Fair Market Value, as determined by
the Administrator, equal to the amount of such required withholding taxes.

13. Non-Transferability of Options and Rights. Unless otherwise
specified by the Administrator in the Notice of Grant, an Option or Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.

14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any

<PAGE> 73

other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option or Right.

(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Right until ten (10) days prior
to such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option or Right would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase rights
applicable to any Shares purchased upon exercise of an Option or Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Right will terminate immediately prior
to the consummation of such proposed action.

(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Right shall be assumed or
an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation (the "Successor Corporation"),
unless the Successor Corporation refuses to assume or substitute for the Option
or Right, in which case the Optionee shall have the right to exercise the Option
or Right as to all of the Optioned Stock, including Shares as to which it would
not otherwise be exercisable. If an Option or Right is exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Right shall be fully exercisable for a period of not less than
forty-five (45) days from the date of such notice, and the Option or Right shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Right shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option or Right
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the Successor Corporation, the
Administrator may, with the consent of the Successor Corporation, provide for
the consideration to be received upon the exercise of the Option or Right, for
each Share of Optioned Stock subject to the Option or Right, to be solely common
stock of the Successor Corporation equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
<PAGE> 74

15. Date of Grant. The date of grant of an Option or Right shall be,
for all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.

16. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

(b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.

(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.

17. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Right unless the exercise of such Option or Right
and the issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock exchange or quotation system
upon which the Shares may then be listed or quoted, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise
of an Option or Right, the Company may require the person exercising such Option
or Right to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.

18. Liability of Company.

(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
<PAGE> 75

(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Right exceeds, as of the date of grant, the number of
Shares which may be issued under the Plan without additional shareholder
approval, such Option or Right shall be void with respect to such excess
Optioned Stock, unless shareholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 16(b) of the Plan.

19. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

20. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.

<PAGE> 76

NOTICE OF GRANT OF STOCK OPTIONS SYBASE, INC. STOCK PLAN DEPT.
AND GRANT AGREEMENT ID: 94-2951005
6475 CHRISTIE AVE. , 4th Fl
EMERYVILLE, CA 94608
(510) 922-4566 FAX# 922-5502

NAME
ADDRESS

Option Number:
Plan: 96
ID:

Effective ___________ ("Date of Grant"), you have been granted a(n) [Incentive
Stock Option][Non-qualified Stock Option] to buy _____________ shares of Sybase,
Inc. (the "Company") Common Stock at $_________ per share.

Shares in each period will become fully vested on the dates shown:

Shares: Vest Type: Full Vest: Expiration:

This Option is granted subject to the terms of and conditions of the 1996 Stock
Plan, as amended ("Plan"), and this Option Agreement. The "Exercise Price" is
equal to the Option Price per Share set forth above. Vesting Commencement Date
is the Date of Grant [Hire]. This Option expires ten years following the Date of
Grant. The Option may be exercised only with respect to shares that have vested
in accordance with the following vesting schedule: 1/8 of the total number of
shares granted shall vest six months after the Vesting Commencement Date, and
1/48 of the total number of shares shall vest for each month which has expired
thereafter. By accepting this Option, Optionee agrees that the vesting of the
shares hereunder is earned only by continuing employment at the will of the
Company (and not through the act of being hired, being granted this Option, or
by purchasing shares hereunder) and that all decisions or interpretations of the
Administrator with respect to questions arising under the Plan or Option are
binding, conclusive and final on Optionee. A copy of the Plan and Prospectus
relating thereto are available through electronic means. DO NOT RETURN. KEEP
THIS FOR YOUR RECORDS.

<PAGE> 77

II. AGREEMENT

1. Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 16(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option
under Section 422 of the Code. However, if this Option is intended to be an
Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

2. Exercise of Option.

(a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, Disability or other termination of Optionee's employment or
consulting relationship, the exercisability of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.

This Option may not be exercised for a fraction of a Share.

(b) Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with all relevant provisions
of law and the requirements of any stock exchange or quotation service upon
which the Shares are then listed. Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Optionee on
the date the Option is exercised with respect to such Exercised Shares.

In lieu of receiving the written notice of exercise referred
to above, the Company may dispense with receipt of such notice and instead act
and rely upon, and accept as evidence of Optionee's exercise of this option,
reports, confirmations or instructions received from a Designated Broker in a
form acceptable to the Administrator. A "Designated Broker" is a broker (i) that
the Optionee has authorized in writing to act upon Optionee's instructions
regarding the exercise of Optionee's stock options and/or sale of Company Common
Stock and (ii) that the Company's Employee Shareholder Services organization has
designated as an authorized broker.

3. Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:
<PAGE> 78

(a) cash; or

(b) check; or

(c) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or

(d) surrender of other Shares which (i) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, AND (ii) have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.

4. Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

5. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

6. Restrictions on Exercise. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation or warranty
to the Company as may be required by any applicable law or regulation.

7. Termination of Employment or Consulting Relationship.

(a) General. Upon termination of an Optionee's Continuous
Status as an Employee or Consultant, other than as provided for in Sections
7(b), 7(c), 7(d) and 7(e) the Optionee may exercise his or her Option within
three (3) months after the date of such termination, but only to the extent that
the Optionee was entitled to exercise it at the date of termination (and in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

(b) Misconduct. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates and the Optionee performs an act
of Misconduct, all unexercised Options held by such Optionee shall expire five
(5) business days following written notice from the Company to the Optionee.

(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within twenty-four (24) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), but the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
of inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the Optionee
was not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

8. Tax Consequences. Some of the federal and state tax consequences
relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

(a) Exercising the Option.

(i) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax and state income tax liability upon exercise of a
NSO. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price. If the Optionee is an Employee or a former Employee,
the Company will be required to withhold from his or her compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.

(ii) Incentive Stock Option. If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax or state income
tax liability upon its exercise, although the excess, if any, of the Fair Market
Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable
income for federal tax purposes and may subject the Optionee to alternative
minimum tax in the year of exercise. In the event that the Optionee undergoes a
change of status from Employee to Consultant, any Incentive Stock Option of the
Optionee that remains unexercised shall cease to qualify as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option three
(3) months and one (1) day following such change of status.

(b) Disposition of Shares.
<PAGE> 80

(i) NSO. If the Optionee holds NSO Shares for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

(ii) ISO. If the Optionee holds ISO Shares for at
least one year after exercise and two years after the grant date, any gain or
loss realized on disposition of the Shares will be treated as long-term capital
gain or loss for federal income tax purposes. If the Optionee disposes of ISO
Shares within one year after exercise or two years after the grant date, any
gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the excess, if any, of the
lesser of (A) the difference between the Fair Market Value of the Shares
acquired on the date of exercise and the aggregate Exercise Price, or (B) the
difference between the amount realized on the sale of such Shares and the
aggregate Exercise Price.

(c) Notice of Disqualifying Disposition of ISO Shares. If
the Optionee sells or otherwise disposes of any of the Shares acquired pursuant
to an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

9. Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.

10. NO GUARANTEE OF EMPLOYMENT. OPTIONEE ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN
EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT
CAUSE.

This Option is granted under and governed by the terms and conditions of the
Plan and this Option Agreement. Optionee has reviewed the Plan and this Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated on the attached Notice of Grant.