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PROSPECTUS Filed under Rule 424(b)(3)
File No. 333-95753
7,381,917 SHARES
SYBASE, INC.
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Common Stock
($0.001 par value)
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Sybase, Inc., consolidated with its subsidiaries, is one of the largest
global independent software companies in the world. This Prospectus relates to
the public resale of up to 7,381,917 shares of Sybase, Inc. common stock, par
value $0.001, which we have issued or may in the future issue to the former
reselling stockholders and warrant holders of Home Financial Network, Inc., a
Delaware corporation, in connection with our acquisition of Home Financial
Network on January 20, 2000. All shares are being offered by the selling
stockholders.
These shares were, or will be, issued in reliance on the exemption from
registration set forth in Rule 506 of Regulation D. The shares offered consist
of 7,098,985 shares that we issued in exchange for outstanding Home Financial
Network common and preferred stock and 282,932 shares that are issuable upon any
future exercise of the warrants issued by Sybase in exchange for outstanding
Home Financial Network warrants in the acquisition. See "Selling Stockholders."
Our common stock is listed on the Nasdaq National Market under the
symbol "SYBS." On June 23, 2000, the last sale price of our common stock was
$22.9375 per share.
The selling stockholders have not advised us of any specific plans for
the distribution of the shares covered by this Prospectus. They may offer the
shares in one or more transactions at any price. Their offers and sales may be
made on the Nasdaq National Market or in privately negotiated transactions. The
selling stockholders may, or may not, effect their transactions by selling the
shares to or through broker-dealers. Broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling stockholders
or the purchasers of the shares. Broker-dealers may act as agent, buy or sell as
a principal, or both, and the broker-dealer's compensation in connection with
the offer and sale of the shares might be more than customary commissions. See
"Plan of Distribution".
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INVESTING IN OUR COMMON STOCK ENTAILS A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY READ THE ENTIRE PROSPECTUS BEFORE YOU INVEST IN OUR COMMON STOCK,
ESPECIALLY THE RISKS DESCRIBED UNDER "RISK FACTORS".
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE OFFER OR SALE OF THE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE 26, 2000.
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SUMMARY
THE COMPANY
Sybase, Inc. is a leading global provider of software solutions that
help businesses manage and deliver information wherever it is needed across
distributed mixed computing environments, including the Internet.
We were founded and incorporated in California on November 15, 1984, and
re-incorporated in Delaware on July 1, 1991. Our business is organized into four
principal operating divisions:
- Enterprise Solutions Division products and solutions provide
vertical applications to give enterprises the ability to integrate,
move and manage very large amounts of data and applications across
diverse computing environments. The Enterprise Solutions Division
also provides technical support and professional services required
by businesses to develop and maintain operational systems, including
e-business infrastructures.
- Mobile and Embedded Computing products and solutions extend
enterprise systems to remote and wireless devices to enable
e-business to be conducted anywhere, anytime.
- Business Intelligence Division products and solutions let businesses
consolidate and analyze large amounts of information from data
warehouses and data marts to facilitate better decision-making and
gain a competitive edge in sales and marketing, customer
satisfaction, trend and risk analysis, and other critical areas.
- Internet Applications Division products and solutions allow
businesses to design, build and deploy distributed and Web-based
applications, and to extend existing distributed client/server
applications (generally unsuitable for direct access on the
Internet) into the new Web environment.
Our customers are primarily Fortune 1000 companies in North America or
their equivalents in other geographic regions. Our primary markets include
financial services, insurance, telecommunications, healthcare, defense and
government agencies.
Our products are available on hardware platforms manufactured by Compaq
(Digital), Hewlett-Packard, IBM, Sun Microsystems and others. We also make
products that connect these platforms to other hardware platforms with large
installed bases. Our products are also available for a wide range of operating
systems including various UNIX environments, Windows, Windows NT, and Linux.
Our strategy is to leverage our existing strengths in data management
and software application development by expanding delivery of market-leading
computing solutions in three growing markets -- Internet applications, mobile
and embedded computing, and business intelligence.
Our principal executive offices are located at 6475 Christie Avenue,
Fifth Floor, Emeryville, California 94608. Our telephone number at that address
is (510) 922-3500.
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THE OFFERING
This resale registration statement on Form S-3 covers the shares of our
common stock issued or to be issued to the former stockholders and warrant
holders of Home Financial Network, as partial consideration for an acquisition
of that company in a reverse triangular merger during January 2000. See "Selling
Stockholders", "Risk Factors", and "Acquisition of Home Financial Network".
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RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the following information about these risks, as well as the other
information contained or incorporated by reference in this Prospectus, before
you decide to buy any of our common stock.
The results of past operations, as described in the documents that we
have filed with the SEC, are not necessarily indicative of results for the year
ending December 31, 2000 or any future period.
Our future operating results may vary substantially from period to
period because of a number of factors, many of which are beyond our control. If
our operating results are below the expectations of public market analysts or
investors, then the market price of our common stock could decline. Factors that
may affect our quarterly and annual results, but which are difficult to control
or predict include the following:
The Market for Our Stock Is Highly Volatile
The trading price of our common stock has fluctuated widely over the
last five years and may continue to fluctuate in the future. Several factors
have caused, and in the future may cause, the market price of our common stock
to fluctuate, including :
- quarterly variations in our operating and financial results,
- announcements by others of technological innovations,
- our ability, as compared to the ability of our competitors, to
develop new products or win customer contracts,
- changes in prices of our products or our competitors' products and
services,
- changes in our product mix,
- changes in our revenues and revenue growth rates, as a whole or for
individual geographic areas,
- changes in our business units, products or product categories, and
- statements or changes in opinions, ratings or earnings estimates
made by brokerage firms and industry analysts relating to us, our
products, the market in which we do business, and/or our
competitors.
In addition, the stock market has from time to time experienced extreme
price and volume fluctuations that have particularly affected the market price
for many high-technology companies and that often have been unrelated to the
operating performance of these companies.
The Timing and Amount of Our Revenues Varies Significantly and Estimation of Our
Revenues Is Difficult
The timing and amount of our revenues from license fees are subject to a
number of factors that make estimation of revenues and operating results before
the end of a quarter extremely uncertain. We have
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generally experienced a seasonal pattern of a decline in license fees from the
fourth quarter to the succeeding first quarter of each fiscal year. This
contributes to lower total revenues and poorer operating results in the first
quarter compared to the prior fourth quarter.
Historically, we have operated with little or no backlog . As a result,
license fee revenues in any quarter are primarily dependent on orders that are
booked and shipped in the same quarter. In addition, the uncertain timing of
closing of large license agreements increases the risk of quarter-to-quarter
fluctuations and the uncertainty of estimating quarterly operating results. We
have experienced a pattern of recording 50 percent to 70 percent of our
quarterly license fee revenues in the third month of each quarter, with a
concentration of our license fee revenues in the last two weeks of the third
month. Our operating expenses, however, are based on projected annual and
quarterly revenue levels and are incurred approximately ratably throughout each
quarter.
Because our operating expenses are relatively fixed in the short term,
if projected revenues are not realized in the expected period, our operating
results for that period would be adversely affected and could result in an
operating loss.
Failure to achieve revenues, earnings, and other operating and financial
results as forecast or anticipated by brokerage firms and industry analysts has
previously resulted in, and in the future could result in, an immediate and
substantial adverse effect on the market price of our stock.
We May Not Achieve a Growth Rate Consistent with Growth in the Markets in Which
We Compete
In the future, we may not achieve rates of growth projected for the
software markets in which we compete, which could have a material adverse effect
on our business. The factors that influence our growth rate include the
following:
- The market for our software products and services is extremely
competitive and characterized by dynamic customer demands, rapid
technological and marketplace changes, and frequent product
enhancements and new product introductions.
- To compete successfully against other software providers, our
products and services in each aspect of our business need to be
competitive with the products and services offered by our
competitors in each line of business.
- We may not successfully provide competitive solutions to customers
of our products and services and failure to do so could result in
the loss of existing customers or the inability to attract and
retain new customers.
- Our competitors, such as Oracle Corporation, Microsoft Corporation,
IBM Corporation and Computer Associates, Inc., and our potential
competitors have or may have significantly greater financial,
technical, sales and marketing resources, and a larger installed
product base than ours.
- Many of our competitors offer additional categories of products,
such as applications or operating systems that we do not offer,
which may provide those companies with a competitive advantage in
various circumstances.
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- New or enhanced products, many of which have been announced and many
of which are continually introduced by existing or future
competitors in the software industry, could increase the competition
faced by our products and result in greater price pressure on some
of our products, especially to the extent that market acceptance for
personal computer-oriented and Windows NT technologies increases at
the expense of UNIX-based systems upon which many of our products
are based.
- Many products we offer contain components developed by third
parties. If third party components prove to be defective or are not
properly supported, market acceptance of our products could be
adversely affected.
- Commercial acceptance of our products and services could be
adversely affected by critical or negative statements or reports by
brokerage firms, industry and financial analysts, and industry
periodicals concerning Sybase and our products, business or
competitors, or by the advertising or marketing efforts of
competitors that could affect customer perception.
- Customer perception could be adversely affected by financial
results, particularly revenues and profitability, we report, by
reductions in the applicable market share of our products and by
related press reports.
If We Are Unable to Enhance Existing Products and Introduce New Products, Our
Operating Results Will Suffer
Our future results of operations will depend in part on our ability to
enhance existing products, to introduce new products on a timely and
cost-effective basis that will meet dynamic customer requirements, and
ultimately to gain market acceptance for those products. Customer requirements
for products can rapidly change as a result of innovations or changes within the
computer hardware and software industries. For example, the widespread use of
the Internet is rapidly giving rise to new customer requirements as well as new
methods and practices of selling, marketing and distributing products and
services.
Our Introduction of New or Enhanced Products Could Reduce Revenues from Existing
Products
During 1998 and 1999, we announced the general availability of a variety
of new products and integrated sets of package applications for
customer-specific customization and data warehouse management. These
announcements were intended to enhance the ability of our partners and direct
sales force to market and sell more complete solutions to customers in a single
package and to improve productivity, revenues and profitability. The associated
elimination of the availability of individual products subsumed within
integrated product sets, however, could have an adverse effect on our other
license fees and service revenue, particularly if integrated product sets are
not well received in the marketplace.
Our Results of Operations Will Depend Increasingly on the Compatibility of Our
Products with Other Software Developed by Third Parties
The compatibility of our products with existing and future leading,
industry-standard application software products intended to be used in
connection with relational database management systems is important to our
success. Failure to meet existing or future interoperability and performance
requirements of independent vendors marketing software applications in a timely
manner has in the past and could in the
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future adversely affect the market for our products. Certain leading
applications are not interoperable with our relational database management
systems, and others may never be available on our systems.
In addition, we have designed our application development tools,
database design tools and some of our connectivity products for use with
relational database management systems offered by our competitors. Vendors of
relational database management systems and related products supplied by others
may become less willing in the future to provide us with access to products,
technical information and marketing and sales support. If existing and potential
customers, who use relational data base management systems and related products
supplied by others, refrain from purchasing our products due to concerns that
the development, quality and support of our products will diminish over time,
our business could be materially and adversely affected.
Customer Movement Toward Prepackaged Software Applications May Reduce the Demand
for Our Products
Many customers use our products to build and deploy their own custom
applications. Increased reliance on prepackaged applications and diversion of
internal information technology budgets to rectify Year 2000 compliance issues
has and may in the future continue to have the effect of reducing the internal
development of custom applications overall. This type of reduction has and may
in the future continue to have a material and adverse impact on the market for
the products we provide for custom applications.
Delays in Product Introduction Schedules Could Hurt Our Financial Results
Delays in the scheduled availability of our products, a lack of or
decrease in market acceptance of new or enhanced products, our failure to
accurately anticipate customer demand or to meet customer performance
requirements or our inability to anticipate competitive products and
developments could have a material adverse effect on our business and financial
results. We have experienced delays in introducing some new products in the
past. Unanticipated delays in product availability schedules could result from
various factors including:
- development or testing difficulties,
- feature changes,
- software errors,
- shortages in appropriately skilled software engineers, and
- project management problems.
Our Growth Is in Part Dependent upon a Robust Internet Industry
Because global commerce and online exchange of information on the
Internet and other similar open wide area networks are new and evolving, it is
difficult to predict with any assurance whether the Internet will prove to be
and remain a viable commercial marketplace for our products. Our ability to
derive revenues from Internet products and services will depend in part upon a
robust Internet industry and our ability to respond to the software development
challenges it presents. Moreover, critical issues concerning the commercial use
of the Internet, including security, reliability, cost, ease of use and access,
and quality of
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service, remain unresolved and may impact the growth of Internet use and our
products. If the Internet does not continue to grow as a commercial marketplace,
our business could be materially and adversely affected.
A Significant Portion of Our Revenues Are Derived from International Operations
For the fiscal year ended December 31, 1999, revenues from
international operations represented 39 percent of our total revenues. In 1998
and 1999, we determined that our operations in several foreign countries did not
generate sufficient revenue to support the cost of maintaining separate
subsidiaries in those countries. Consequently, we closed our foreign
subsidiaries in Mexico, Thailand, Chile, Peru and Venezuela and moved the sales
function in those countries to distributors. If the distributor relationships in
these countries are not successful or we experience other downturns in our
international business, our total revenue could be seriously harmed. Our
operations and financial results also could be significantly affected by factors
associated with international operations, such as:
- changes in foreign currency exchange rates,
- uncertainties relative to regional economic circumstances,
- strength of local economies,
- political instability in emerging markets,
- the introduction of the Euro currency units,
- difficulties in staffing and managing foreign operations, and
- the general volatility of software markets.
In addition, there have been several recent management and
organizational changes within our international operations. For example, during
1998 and 1999, the country managers for several countries where we operate
resigned or were replaced. International revenues in absolute dollars and as a
percentage of total revenues may fluctuate in part due to the growth and, in
some cases, the relative immaturity or closure of our international
organizations.
Foreign Currency Exchange Rates Can Affect Our Profitability
Although the pricing strategy for our international operations takes
into account changes in exchange rates over time, we face exposure to adverse
movements in foreign currency exchange rates. These exposures may change over
time as business practices evolve and could have a material adverse impact on
our financial position and results of operations. Historically, our primary
exposures have related to non-U.S.-dollar denominated sales and expenses in
Europe, Asia Pacific, Australia and Latin America.
In order to reduce the effect of foreign currency fluctuations, we hedge
our exposure on some transactional balances that are denominated in foreign
currencies through the use of foreign currency forward exchange contracts. For
the most part, these exposures consist of intercompany amounts owed by our
international subsidiaries to us, their parent company, as a result of local
sales of software licenses. The majority of these exposures are denominated in
European and Asia Pacific currencies, primarily the Euro and the Hong Kong
dollar. These forward exchange contracts are recorded at fair value and are
short-term in
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nature (primarily 30 days or less). The success of this activity depends upon
our accurate estimation of future transactions denominated in various
currencies. To the extent that these estimates are overstated or understated
during periods of currency volatility, unanticipated currency gains or losses
could affect our financial position and results of operations.
At December 31, 1999, we had forward exchange contracts to exchange
various foreign currencies for U.S. dollars in the amount of $9.2 million and to
exchange U.S. dollars, Euros and Hong Kong dollars into various foreign
currencies in the amounts of $16.4 million, $10.5 million and $0.9 million,
respectively. Neither the cost nor the fair value of these foreign currency
forward exchange contracts was material at December 31, 1999. Further, two major
U.S. multinational banks are a counter party to substantially all of these
contracts and their default on these exchange contracts could have an adverse
impact on our financial position and results of operations.
Our Products Cannot Be Completely Free of Errors and Defects
New products or new versions of existing products may, despite testing,
contain undetected errors or "bugs". This could delay the introduction, or
adversely affect commercial acceptance, of these products or give rise to
warranty or other customer claims, which could, in turn, adversely affect our
financial results. Complex software products, such as the type licensed by us
and our competitors, generally are not completely free from "bugs" and other
errors and defects. The existence of these "bugs" may cause our customers to
bring legal claims against us, notwithstanding standard provisions in our
license agreements disclaiming express and implied warranties against errors and
defects. Moreover, not all products or modified versions of products previously
licensed by us meet current standards for Year 2000 compliance, and many of
these are still in use by our customers. Customers using our older software that
is not Year 2000 compliant could have received, or in the future may receive,
erroneous data or experience other software failures of which we or our
customers are not yet aware. Any legal claims that our products are not Year
2000 compliant or are otherwise defective could have a materially adverse impact
on our business and results of operations.
We Have in the Past and May in the Future Acquire Other Businesses and Make
Strategic Investments, Which Will Involve Numerous Risks and Could Negatively
Affect Our Financial Results
We have made, and in the future may make, acquisitions of, or
significant investments in, other software businesses. For example:
In February 1998, we acquired Intellidex Systems, L.L.C., a provider of
meta data management technology for deploying and managing data warehouse
environments, for cash and contingent future payments of cash based on specified
performance criteria. We accounted for this transaction as a purchase. As a
result $5 million has been paid, and upon satisfaction of certain conditions, an
additional $10 million may be paid. Such payments are reflected as purchased
software, intangible assets or goodwill on our balance sheet and amortized to
expense over a period of no more than three years.
In February 1999, we acquired Data Warehouse Network, an Ireland-based,
privately held provider of packaged, industry-specific business intelligence
applications, for cash and contingent future payments of cash based on specified
performance criteria . We accounted for the transaction as a purchase. As a
result $4.6 million has been paid, and, upon satisfaction of certain conditions,
an additional $3.4 million may be paid. Such payments are reflected as purchased
software, intangible assets or goodwill on our balance sheet and amortized to
expense over a period of no more than three years.
In March 1999, we paid $5.3 million for Convertible Secured Promissory
Notes due December 31, 2002, issued by Demica PLC, a provider of a wholesale
banking application using our technology. The notes bear interest at 8 percent
per annum and are convertible into 29.9 percent of the share capital of Demica.
We
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account for this investment under the equity method of accounting and reflect a
portion of Demica's profits and losses in our results of operations. If Demica
were to experience a significant loss, it would hurt our results of operations.
In January 2000, we acquired Home Financial Network, a financial
services company specializing in the development of customized e-finance
Internet sites, for approximately $25,915,794 cash and approximately 7,381,917
shares of our common stock. In addition, we assumed the options (vested and
unvested) held by former Home Financial Network option holders. We accounted for
the acquisition as a purchase. The historical results of operations for Home
Financial Network and pro forma financial statements of the combined companies
have been included in our Current Report on Form 8-K filed February 3, 2000, as
amended, which is incorporated into this Prospectus by this reference. The
acquisition resulted in an excess of the purchase price over the fair value of
the net assets acquired of approximately $164.7 million. Of this excess, $20.0
million was allocated to customer lists, $18.0 million was allocated to
developed technology, $118.7 million was allocated to goodwill, and $8.0 million
was allocated to in-process research and development. The amount allocated to
in-process research and development will be charged to expense as a
non-recurring charge during 2000 since the in-process research and development
has not yet reached technological feasibility and has no alternative future
uses. The amount allocated to customer list, developed technology and goodwill
will be amortized on a straight-line basis over an average of 7 years.
The achievement of the desired benefits of these and future
acquisitions and the successful combination of businesses will depend upon,
among other things:
- whether the integration of the acquired businesses is achieved in an
efficient manner,
- successful integration of the companies' related product offerings
and coordination of their sales, marketing, and research and
development efforts, and
- the ability to manage geographically distant organizations.
Our prior or future acquisitions or investments also face risks commonly
encountered with respect to acquisitions of businesses may affect the stability
of revenues generated from customers or have a material adverse effect on our
financial results.
In connection with the Home Financial Network acquisition and any other
acquisitions, we may incur:
- costs, liabilities or additional expenses that could adversely
affect our results of operations and financial condition,
- difficulties of assimilating the operations and personnel of the
acquired businesses,
- disruption of our ongoing business,
- the inability of management to maximize our financial and strategic
position through the successful integration of the acquired
business,
- an inability to maintain uniform standards, controls, procedures and
policies, and
- impairment of relationships with existing and future customers and
other business associates, and revision of our business plans, which
in turn could result in unplanned expenses or a loss of anticipated
benefits from past investments.
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- Additional charges to earnings for amortization of goodwill, because
each acquisition accounted for as a purchase can increase the amount
of goodwill and other intangible assets recorded as an asset on our
financial statements.
Our Future Success Depends in Part on the Continued Service of Our Key Executive
and Technical Personnel and Our Ability to Identify, Hire and Retain Additional
Personnel
Our success and ability to achieve future revenue growth and earnings
depends in part on our ability to effectively recruit, retain and, in some
cases, train qualified officers, directors and other personnel and on our
officers and key personnel to manage growth and expenses successfully, through
the implementation of appropriate management systems and controls. High rates of
turnover, particularly among management, consulting, engineering or sales staff,
and failure to effectively implement or maintain appropriate systems and
controls could materially and adversely affect our product development efforts,
sales of products and services, business and results of operations.
The competition for officers, directors, and personnel is intense in the
software industry and has increased substantially in recent years. We have
recently experienced a high rate of employee turnover and there have been a
number of recent changes in our Board of Directors, and in our executive
management team. Although not anticipated at this time, if in the future there
were significant changes in management, significant increases in employee
turnover, or adverse comparisons between our financial and stock price
performance relative to companies with which we compete for employees, there
could be a resulting increase in employee turnover, which could make attraction
of quality management and other employees more difficult.
We Could Be Harmed by Costly Litigation
We were a defendant in several class action lawsuits that alleged
violations of federal and state securities laws by us and our officers and
directors and a purported stockholder derivative lawsuit which alleged that
present and former officers and/or directors of Sybase breached fiduciary duties
they owed to us in connection with the underlying circumstances alleged in the
securities class actions. These lawsuits have been settled and will have no
financial impact on us going forward.
We are a party to various legal disputes and proceedings arising from
the ordinary course of business. In the opinion of management, resolution of
these matters is not expected to have a material adverse effect on our
consolidated financial position. However, depending on the amount and timing, an
unfavorable resolution of some or all of these matters could materially affect
our future results of operations or cash flows in a particular period.
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Untimely Closure of Our Emeryville, California or Massachusetts Distribution
Facilities Could Adversely Affect Financial Results
Most of the products we ship in North America come from our Emeryville,
California and Massachusetts distribution facilities. Because of the pattern of
recording a high percentage of quarterly revenues within the last week or two
weeks of the quarter, the closure or inoperability of one or more of the
facilities or a disruption of business operations generally during these weeks,
due to natural calamity or due to a systems or power failure, could have a
material adverse effect on our ability to record revenues for the quarter and,
therefore, on the overall results of operations for the quarter.
Our Revenues Are Susceptible To Fluctuations Based On General Economic
Conditions
If a general economic downturn or a recession occurs in the United
States or other countries where we have substantial operations, then our
customers and potential customers may substantially and immediately reduce their
software budgets. If this type of an economic downturn occurs, there can be no
assurance that our business could be materially and adversely affected.
Revision of Our Revenue Recognition Accounting Practices to Conform to Future
Accounting Guidelines Could Cause Fluctuations in Our Results of Operations
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). SAB 101 provides guidance on the recognition, presentation, and disclosure
of revenue in financial statements. All registrants are expected to apply the
accounting and disclosures described in SAB 101. We are currently evaluating the
impact of SAB 101 and have not completed our assessment of the impact of
adoption. Any change in our revenue recognition policy resulting from SAB 101
will be reported as a change in accounting principles in the quarter ending June
30, 2000.
We adopted Statement of Position 97-2, "Software Revenue Recognition"
and Statement of Position 98-4 "Deferral of the Effective Date of a Provision of
SOP 97-2, Software Revenue Recognition" as of January 1, 1998. Statement of
Position 97-2 and Statement of Position 98-4 provide guidance for recognizing
revenue on software transactions and supersede Statement of Position 91-1,
"Software Revenue Recognition". The adoption of Statement of Position 97-2 and
Statement of Position 98-4 did not have a material impact on our consolidated
financial results.
In December 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-9, "Modification of SOP 97-2, Software Revenue
Recognition, with Respect to Certain Transactions". Statement of Position 98-9
amends Statement of Position 98-4 to extend the deferral of the application of
particular passages of Statement of Position 97-2, provided by Statement of
Position 98-4 through fiscal years beginning after March 15, 1999. We do not
expect a material impact from the final adoption of Statement of Position 98-9
on our future revenues and results of operations.
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities". Statement 133 establishes methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. In June 1999, the FASB
issued Statement No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133", which
amended Statement No. 133 by deferring the effective date to the fiscal year
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beginning after June 30, 2000. We have not determined the effect, if any, that
adoption will have on our financial position or results of operations.
Realization of Our Deferred Tax Asset Is Dependent Upon Generation of Sufficient
Taxable Income in Future Periods
At December 31, 1999, we had net deferred tax assets of $41.1 million.
Deferred tax assets are net of a valuation allowance of $20.6 million.
Realization of our net deferred tax assets is dependent upon the generation of
sufficient taxable income in future years in appropriate tax jurisdictions to
obtain benefit from the reversal of temporary differences and from tax credit
carry-forwards. The amount of deferred tax assets considered realizable is
subject to adjustment in future periods, if estimates of future taxable income
are reduced . These adjustments could have a material adverse impact on our
effective tax rate and results of operations in future periods.
Interest Rate Fluctuations Can Adversely Affect the Performance of Our
Investment Portfolio
We maintain an investment portfolio containing the securities of various
issuers, types and maturities. These securities are generally classified as
available for sale and, consequently, are recorded on the balance sheet at fair
value with unrealized gains and losses reported as a separate component of
stockholders' equity, net of tax, if material. Unrealized gains and losses at
December 31, 1999 were not material. Our cash, cash equivalent and short-term
cash investment balances of $309.2 million at December 31, 1999 consisted
primarily of short-term money market instruments with 81% having maturity dates
of less than 90 days, and 19% having maturities of 90 days to one year. Our
long-term cash investments of $43.7 million at December 31, 1999 primarily
consisted of commercial paper, bonds and mid-term notes that have maturity dates
of more than one year but less than two years. We do not believe that our
exposure to interest rate risk is material given the short-term nature of our
investment portfolio. However, there can be no assurance that this exposure will
not have an adverse effect on our financial performance.
The Anti-Takeover Provisions of Our Certificate of Incorporation and of the
Delaware General Corporation Law May Delay, Defer or Prevent a Change of
Control
We have adopted anti-takeover measures designed to prevent hostile
takeovers that are not approved by the Board of Directors, but that some, or a
majority of, our stockholders might nevertheless consider to be in their best
interests, including acquisition offers or attempted takeovers that might
otherwise result in the stockholders receiving a premium over the market price
of our common stock. Each outstanding share of our common stock includes a right
to purchase one one-thousandth of a share of our Series A Participating
Preferred Stock, which will generally be afforded economic rights similar to one
share of our common stock in specified events. In the event of the acquisition
of or announcement of a tender or exchange offer for, 15% or more of our common
stock, the rights separate from the common stock and become exercisable. In such
event, holders of the rights will generally be able to purchase, for an exercise
price of $250 a share, an amount of common stock (and in certain circumstances
securities of the acquirer), having a then current market value of two times the
exercise price. The shares of Series A Participating Preferred Stock are
redeemable, at our option, for a specified period at a price of $0.01 per share
and expire in March 2002.
-13-
<PAGE> 14
In addition, certain provisions of Delaware law, our Certificate of
Incorporation and our Bylaws contain provisions that could delay, deter or
prevent a merger, tender offer or other business combination or a change in
control of Sybase. Our Certificate of Incorporation and Bylaws, among other
things, restrict the ability of stockholders to call stockholders meetings by
allowing only stockholders holding, in the aggregate, not less than 10% of the
capital stock entitled to cast votes at these meetings to call a meeting,
preclude stockholders from raising new business for consideration at stockholder
meetings, unless the proponent has provided us with timely advance notice of the
new business, and limit business that may be conducted at stockholder meetings
to those matters properly specified in notices delivered to us. Moreover, we
have not opted out of Section 203 of the Delaware General Corporation Law, which
prohibits mergers, sales of material assets and some types of self-dealing
transactions between a corporation and a holder of 15% or more of the
corporation's outstanding voting stock for a period of three years following the
date the stockholder became a 15% holder, unless an applicable exemption from
the rule is available.
Future Issuance of Additional Shares of Sybase Capital Stock Could Adversely
Affect the Selling Price of the Shares
With the exception of the shares of our common stock issued or issuable
in connection with the acquisition of Home Financial Network, substantially all
of our outstanding shares of common stock are freely tradable. Although the
shares of common stock issued or issuable in the Home Financial Network
transaction are "restricted securities," they may be sold from time to time in
the market after the date of this Prospectus. This could cause the market price
of our common stock to drop, even if our business is doing well. The restricted
shares covered by this resale Prospectus consist of the following:
- 7,098,985 shares of common stock issued to the former Home Financial
Network shareholders, and
- 282,932 shares of our common stock issuable upon exercise of
warrants, at a weighted average exercise price of approximately
$7.72 per share, which warrants were issued to the former Home
Financial Network warrant holders.
In addition, in connection with the acquisition of Home Financial
Network, we assumed both the vested and unvested outstanding options to acquire
shares of Home Financial Network, converting such options into options to
acquire our common stock. Further, we also have issued, and in the future will
issue, other options to acquire our common stock, primarily to our employees,
directors, and/or consultants. The holders of these options may from time to
time exercise them and sell the common stock they thereby acquire. Such stock
sales could cause the market price of our common stock to drop, even if our
business is doing well. As of March 31, 2000, the outstanding options to acquire
our stock (including the option assumed in connection with the Home Financial
Network acquisition) consisted of the following:
- Vested options to purchase approximately 3,348,689 shares of
Sybase common stock, at a weighted average exercise price of
approximately $10.9423 per share issued to employees, directors
and consultants pursuant to individual agreements with our
management team and our directors and various stock option plans,
which are exercisable on or before March 31, 2010.
- Unvested options to purchase approximately 10,156,120 shares of
Sybase common stock, at a weighted average exercise price of
approximately $10.9423 per share, which are scheduled to vest over
the next 4 years issued to employees, directors and consultants
pursuant to our various stock option plans and individual agreements
with our management team and our directors and various
-14-
<PAGE> 15
stock option plans which an exercisable on or before March 31, 2010
if vested.
Approximately 22,728 of the shares of common stock subject to the vested
options described above and approximately 659,344 shares subject to the unvested
options described above, were assumed in connection with our acquisition of Home
Financial Network. If all of these outstanding vested and unvested options are
exercised, in addition to issuance of these shares of our common stock, we also
must pay a total of approximately $2.3 million, or approximately $3.315 per
share, in cash to the option holders pursuant to the terms of the Home Financial
Network acquisition agreement. Further, we issued 435,850 shares of our common
stock and paid $1.4 million in cash after the closing of the Home Financial
Network transaction to the holders of the options we assumed in that
transaction, following their exercise of such options. However, this liability
will be offset, in part, by receipt of the exercise price for the option, which
is approximately equal to a weighted average of $8.30 per share.
In addition to the foregoing, we may issue additional capital stock,
warrants and/or other securities to raise capital in the future, or in order to
attract and retain essential personnel.
The increase in the number of outstanding shares of common stock that
are available for sale without restriction due to the registration of these
shares and the perception that a substantial number of these shares may be sold
by the selling stockholders, or the actual sale of a substantial number of these
shares by the selling stockholders, could adversely affect the market price of
the common stock. Although we cannot predict the effect, if any, that future
sales of our common stock may have on the market price of the common stock
prevailing from time to time, sale of a substantial number of shares of our
common stock by us or by any of our stockholders, or the perception that these
types of sales could occur, could reduce the prevailing market price of our
common stock. In addition, this type of sale or perception could make the sale
of our equity securities in the future at a time and price we deem appropriate
more difficult.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated to this Prospectus by
reference contain forward-looking statements that involve risks and
uncertainties. The statements contained in this Prospectus that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act. Any statement
about our expectations, beliefs, objectives, assumptions, estimates, intentions,
strategies and future events or performance are not historical facts and may be
forward-looking. These statements are often, but not always, made through the
use of such words as "continuing," "ongoing," "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar words and
expressions. These statements are not guarantees of future performance and are
subject to risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results may differ materially from those expressed or
forecasted in a forward-looking statement. Any forward-looking statement is
qualified by the risk factors above and by other statements included or
incorporated by reference in this Prospectus.
Because the risk factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statement made by us, you should not place undue reliance on any forward-looking
statement. Further, any forward-looking statement speaks only as of the date on
which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for us to predict what
will arise. In addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking
statement.
-15-
<PAGE> 16
ACQUISITION OF HOME FINANCIAL NETWORK
We acquired Home Financial Network on January 20, 2000 in a tax-free
reverse triangular merger transaction accounted for as a purchase. In the merger
all outstanding capital stock of Home Financial Network, consisting of common
stock and Series A, B, and C convertible preferred stock, all unexpired and
unexercised outstanding options to purchase Home Financial Network common stock,
and all unexpired and unexercised outstanding warrants to purchase Home
Financial Network common stock were converted, exchanged and/or assumed by
Sybase. The offer and issuance of the Sybase securities to the former Home
Financial Services stockholders and warrant holders in connection with the
merger was exempt from the registration requirements of the Securities Act of
1933 by virtue of the exemption provided for in Rule 506 of Regulation D under
the Securities Act.
Each outstanding share of common stock and each outstanding share of
preferred stock of Home Financial Network was cancelled and extinguished, and
converted into a right to receive $1.153448 in cash and 0.34794 shares of Sybase
common stock. Each outstanding Home Financial Network warrant was exchanged for
a Sybase warrant exercisable for a number of "warrant units" equivalent to the
number of shares of Home Financial Network common stock that could have been
acquired pursuant to the surrendered Home Financial Network warrant. Each
"warrant unit" consists of $1.153448 in cash and 0.34794 shares of Sybase common
stock. The exercise price for each warrant unit under the Sybase warrant is
equal to the exercise price payable for each share of Home Financial Network
common stock issuable upon exercise of the Home Financial Network warrant.
Each option to acquire Home Financial Network common stock was assumed
by Sybase, subject to the same terms and conditions set forth immediately prior
to the merger in Home Financial Network's 1995 Stock Plan. Each option so
assumed by Sybase is now exercisable for that number of "option units"
equivalent to the number of shares of Home Financial Network common stock that
could have been acquired if the option had be exercised prior to the merger.
Each "option unit" consists of $1.153448 in cash and 0.34794 shares of Sybase
common stock. The exercise price for each option unit is equal to the exercise
price that would have been payable for each share of Home Financial Network
common stock upon exercise of the option before the merger.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered
pursuant to this Prospectus by the selling stockholders.
Some of the shares covered by this resale prospectus are issuable upon
exercise of warrants. When the warrants are exercised, we will receive the
proceeds from the issuance of the shares to the warrant holder, to the extent
that the warrants are exercised with cash consideration and not through warrant
conversion or "net exercise." If all warrants are exercised in full for cash
consideration, when we issue the 282,932 shares of our common stock pursuant to
the warrants, then, assuming no change in our current capital structure, we will
receive an aggregate of approximately $2,183,501 in cash. The shares have been
or will be issued pursuant to an exemption from registration under the
Securities Act of 1933 and are or will be "restricted securities." However,
those shares have been registered for resale pursuant to this Prospectus. We
receive no proceeds from the resale of the shares by the warrant holder. See
"Selling Stockholders" and "Plan of Distribution" described below.
-16-
<PAGE> 17
SELLING STOCKHOLDERS
As required by the Stockholder Agreement, dated as of January 20, 2000,
entered into with the former Home Financial Network stockholders and warrant
holders, we filed a Registration Statement on Form S-3 with the SEC under the
Securities Act to permit resale of the shares covered by this Prospectus by the
selling stockholders described below.
Each selling stockholder has represented to us that it will acquire the
shares and warrants covered by this Prospectus for investment and with no
present intention of distributing the shares or warrants, except pursuant to
this Prospectus or a sales exempt from the registration requirements of the
Securities Act.
The number and percentage of shares beneficially owned by each Selling
Stockholder is described below and is based on a total of shares of Sybase
common stock outstanding at January 20, 2000, determined in accordance with Rule
13d-3 of the Exchange Act. The information we have provided is not necessarily
indicative of beneficial ownership for any other purpose. Under Rule 13d-3,
beneficial ownership includes any shares of common stock over which an
individual has sole or shared voting or investment power, and also includes
shares of common stock that an individual has the right to acquire within 60
days through the exercise of any stock option or other right. Unless otherwise
indicated in the footnotes, the confirmations we have received indicate that
each person described below, or the person and his/her spouse, has sole voting
and investment power with respect to the shares of our common stock that may be
offered pursuant to this Prospectus shown as beneficially owned by that person
in the following chart.
<TABLE>
<CAPTION>
Shares of
Shares Of Common Stock Common Stock Shares Of Common Stock
Beneficially Owned Prior Offered By This Beneficially Owned
Selling Stockholder To This Offering Prospectus(1) After This Offering(2)
------------------------------ ------------------------ --------------- ----------------------
Number Percent Number Percent
--------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
InteliData Technologies 1,992,467 2.2% 1,992,467 -- --
Corporation(3)
Daniel M. Schley, Pell Redmon 1,289,364(5) 1.4% 1,287,364(4) 2,000(5) *
Trust Company, trustee, for the
Daniel M. Schley 2000 Trust,
and others
Eric T. Jacobsen, Elizabeth C. 1,218,936 1.4% 1,218,936 -- *
Jacobsen, Pell Redmon Trust
Company, trustee for the Eric T.
Jacobsen 2000 Trust and trustee
for the Elizabeth C. Jacobsen
2000 Trust, and others(6)
Continental Casualty Company 1,449,733 1.6% 1,449,733 -- --
William L. Schley and others(7) 17,395 * 17,395 -- --
Wendell W. Whitman, Trustee of 25,514 * 25,514 -- *
Anna I. Jacobsen Trust
Wendell W. Whitman, Trustee of 8,117 * 8,117 -- *
Laura C. Jacobsen Trust
Arne J. Jacobsen 3,479 * 3,479 -- --
Marlene A. Jacobsen 3,479 * 3,479 -- --
William S. Comfort 3,479 * 3,479 -- --
Helen Elizabeth Comfort 3,479 * 3,479 -- --
William E. Comfort and others(8) 13,916 * 13,916 -- --
Julia Carney Comfort (TOD) 3,479 * 3,479 -- --
Christina Feeny and Curtis Feeny 20,874 * 20,874 -- --
and others(9)
Conning Connecticut Insurance 43,492 * 43,492 -- --
Fund, LP
BVI Limited Partnership 125,024 * 125,024 -- --
Bear, Stearns International
Limited(11) 536,401 536,401
</TABLE>
-17-
<PAGE> 18
<TABLE>
<CAPTION>
Shares of
Common Stock
Shares Of Common Stock Offered By Shares Of Common Stock
Beneficially Owned Prior This Beneficially Owned
Selling Stockholder To This Offering Prospectus(1) After This Offering(2)
------------------------------ ------------------------ ------------- -------------------------
Number Percent Number Percent
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Chilton Investment Partners, L.P 106,932 * 106,932 - -
FG-HFN FGII 66,107 * 66,107 - -
Fleet Venture Resources, Inc. 231,957 * 231,957 - -
Fleet Financial Group
InterMedia Investment Group, Inc 12,757 * 12,757 - -
(Intermedia Investment Group, Inc.)
George H. Damman 23,195 * 23,195 - -
Arthur Calcagnini 23,195 * 23,195 - -
Merritt Hallowell 11,597 * 11,597 - -
Michael A. Harrison and Susan 11,597 * 11,597 - -
G. Harrison as Community Property
Michael J. Egan 1996 Gift Trust 11,597 * 11,597 - -
Catherine E. Egan 1996 Gift Trust 11,597 * 11,597 - -
Maureen E. Petracca 1996 Gift Trust 11,597 * 11,597 - -
Dr. Frank Wood 11,597 * 11,597 - -
Joseph J. Kulhowvick and 5,799 * 5,799 - -
Jacquiline P. Kulhowvick
William Polito 5,799 * 5,799 - -
Maurice Hoben 5,799 * 5,799 - -
Lisa Shufro 5,799 * 5,799 - -
Alex, Brown & Sons, Inc., 3,479 * 3,479 - -
cust. f/b/o J. William Drake
The Fredericks Investment, LP 2,899 * 2,899 - -
Coleman Family Trust u/a 1,159 * 1,159 - -
11/29/95 (Amended)
</TABLE>
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<PAGE> 19
<TABLE>
<CAPTION>
Shares of
Common Stock
Shares Of Common Stock Offered By Shares Of Common Stock
Beneficially Owned Prior This Beneficially Owned
Selling Stockholder To This Offering Prospectus(1) After This Offering(2)
------------------------------ ------------------------ ------------- --------------------------
Number Percent Number Percent
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Gaurang Desai 580 * 580 - -
Montgomery Securities(10) 25,457 * 25,457 - -
Speer Associates 34,794 * 34,794 - -
--------- --------- -----
Total 7,383,917 7,381,917 2,000(5)
========= ========= =====
</TABLE>
* Less than 1%
--------------
(1) A total of 532,428 shares, or approximately 7.5% of the number of
shares listed above for each selling stockholder, are held in an escrow
account to secure indemnification obligations the selling stockholders
have provided to us in connection with the acquisition of Home Financial
Network. It is expected that the escrowed shares remaining after any
distributions from the escrow account to us in satisfaction of the
indemnification claims we may have will be released from escrow and
distributed to the selling stockholders on or about January 20, 2001.
(2) Assumes that no Sybase common stock reported to us as owned by a selling
stockholder has been sold between the time of the report (i.e., on or
about January 20, 2000) and the date hereof and that all shares offered
by this Prospectus will be sold.
(3) Includes 222,681 shares subject to outstanding warrants, all of which
warrants are currently exercisable, and 1,769,786 shares currently held
by InteliData Technologies Corporation.
(4) Includes 91,334 shares held in the name of Daniel M. Schley, 1,126,443
shares held in the name of Pell Redmon Trust Company, Trustee for the
Daniel M. Schley 2000 Trust, and 69,587 shares held in the name of the
Schley Family Education Trust. Mr. Schley disclaims any control over
the shares held in the trusts and any beneficial ownership interest in
the shares held by the Schley Family Education Trust.
(5) In addition to the shares covered by this Prospectus, held in the names
and amounts described in footnote 4 above, includes 2,000 shares held
in the name of Pell Redmon Trust Company, Trustee for the Daniel M.
Schley 2000 Trust, which were acquired by Mr. Schley before the closing
of the Home Financial Network transaction and subsequently transferred
to the trust.
(6) Includes 45,449 held in the name of Eric T. Jacobsen, 45,449 shares held
in the name of Elizabeth C. Jacobsen, 560,540 shares held in the name of
Pell Redmon Trust Company, Trustee for the Eric T. Jacobson 2000 Trust,
560,540 shares held in the name of Pell Redmon Trust Company, Trustee
for the Elizabeth C. Jacobsen 2000 Trust, 3,479 shares held in the name
of Arne J. Jacobsen II, and 3,479 shares held in the name of Minnie
LaRue Jacobsen. Mr. Jacobsen and Ms. Jacobsen disclaim any control over
the trusts.
(7) Includes 3,479 shares held in the name of William L. Schley, 3,479
shares held in the name of Anne L. Schley, 3,479 shares held in the
name of Brook S. Schley, 3,479 shares held in the name of Emily Schley,
3,479 shares held in the name of Alec W. Schley.
(8) Includes 3,479 shares held in the name of William E. Comfort,
transferable on death to William E. Comfort and Julia Carney Comfort
Trustees, 3,479 shares held in the name of William E. Comfort, Custodian
for Julia Carney Comfort, successor custodian for William Joseph Comfort
(etc.), 3,479 shares held in the name of William E. Comfort for Rebecca
Comfort, and 3,479 shares held in the name of William E. Comfort for
Sarah Comfort.
(9) Includes 6,958 shares held in the name of Christina Feeny and Curtis
Feeny, Trustees for 1990 Feeny Family Trust, 3,479 shares held in the
name of Curtis Feeny, Custodian for Dana A. Feeny, 3,479 shares held in
the name of Curtis Feeny, Custodian for Jennifer A. Feeny, 3,479 shares
held in the name of Curtis Feeny, Custodian for Eric C. Feeny, and 3,479
shares held in the name of Curtis Feeny, Custodian for Jessie A. Feeny.
(10) All subject to outstanding warrants, which are currently exercisable.
-19-
<PAGE> 20
(11) Acquired shares from Conning Connecticut Insurance Fund, LP in a private
transaction after our acquisition of Home Financial Network.
Except as described below, none of the selling stockholders in the above
table has had any material relationship with us or any of our predecessors or
affiliates within the last three years, other than as an employee or consultant.
Prior to our acquisition of Home Financial Network, the following selling
stockholders had the following material relationships with Home Financial
Network:
- InteliData Technologies Corporation entered into a 1998 marketing
referral agreement and its predecessor entered into a 1995
out-sourced services agreement with Home Financial Network.
- Continental Casualty Company entered into a 1997 trademark licensing
agreement with Home Financial Network.
Following our acquisition of Home Financial Network on January 20, 2000
Selling Stockholders, Daniel M. Schley and Eric Jacobsen became officers of a
wholly owned subsidiary of Sybase.
PLAN OF DISTRIBUTION
The selling stockholders may offer and sell the shares covered by this
Prospectus from time to time and, in doing so, the selling stockholders will act
independently of Sybase in making decisions with respect to the timing, manner
and size of each sale. The sale of shares covered by this Prospectus by the
selling stockholders is subject to the contractual restrictions binding upon the
selling stockholders under the documents incorporated by reference into this
Registration Statement.
The shares covered by this Prospectus may be sold by the selling
stockholders on the Nasdaq National Market at prices and under terms then
prevailing, at prices related to the then current market price, or at negotiated
prices. The shares covered by this Prospectus may be sold by one or more of the
following means of distribution:
- block trades in which the broker-dealer so engaged will attempt to
sell shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account pursuant to this Prospectus;
-20-
<PAGE> 21
- over-the-counter distributions in accordance with the rules of the
Nasdaq National Market;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- privately negotiated transactions.
In addition, the selling stockholders may also:
- enter into hedging transactions with broker-dealers or other
financial institutions and, in connection with these transactions,
broker-dealers or other financial institutions may engage in short
sales of our common stock in the course of hedging the positions
they assume with selling stockholders;
- sell the shares short and redeliver them to close out these short
positions;
- enter into option or other transactions with broker-dealers or other
financial institutions that require the delivery to a broker-dealer
or other financial institution of the shares, which the
broker-dealer or other financial institution may resell pursuant to
this Prospectus, as supplemented or amended to reflect that
transaction;
- pledge the shares to a broker-dealer or other financial institution,
and, upon a default, the broker-dealer or other financial
institution may effect sales of these shares pursuant to this
Prospectus, as supplemented or amended to reflect that transaction;
and
- sell the shares, if they qualify for sale pursuant to Rule 144 ,
under Rule 144, rather than pursuant to this Prospectus.
To the extent required, we may amend or supplement this Prospectus from
time to time to describe a specific plan of distribution of the shares.
In effecting sales, brokers, dealers or agents engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling stockholders in amounts to be negotiated before the sale. The
participating broker or dealer, and any other participating broker or dealer,
may be deemed to be an "underwriter" within the meaning of the Securities Act in
connection with the sales, and the commissions, discounts or concessions may be
deemed to be underwriting discounts or commissions under the Securities Act.
In order to comply with the securities laws of various states, which may
be applicable to the shares covered by this Prospectus, the shares must be sold
in some jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states, the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and there has been
compliance thereof. Compliance with state securities laws applicable to any
resale of the shares is the responsibility of the selling stockholder.
The anti-manipulation rules of Regulation M under the Exchange Act may
apply to the selling stockholders' sales of shares covered by this Prospectus in
the market and to the associated activities of the selling stockholders and
their affiliates. In addition, the selling stockholders may indemnify any
broker-dealer
-21-
<PAGE> 22
that participates in transactions involving the sale of the shares against
liabilities, including liabilities arising under the Securities Act.
We will make copies of this Prospectus available to the selling
stockholders and have informed the selling stockholders of the need for delivery
of copies of this Prospectus to purchasers of the shares that may be offered
pursuant to this Prospectus at or prior to the time of any sale of the shares.
At the time a particular offer of shares covered by this Prospectus is
made, if required, a Prospectus Supplement will be distributed that will
describe the number of shares being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid
by any underwriter, any discount, commission and other item constituting
compensation, any discount, commission or concession allowed or reallowed or
paid to any dealer, and the proposed selling price to the public.
We have agreed to indemnify the selling stockholders and any person
controlling a selling stockholder from our violations of any state or federal
securities law in connection with an offering pursuant to the Registration
Statement and against liabilities and losses arising under applicable state or
federal securities laws because of untrue statements in such Registration
Statement, omissions of information required to be stated in the Registration
Statement, or omissions of information necessary to make the statements in the
Registration Statement not misleading, other than the violations, liabilities
and losses resulting from our reliance upon written information furnished for
our use in connection with the Registration Statement by the selling
stockholders. Each selling stockholder has also agreed to indemnify us for
liabilities and losses arising out of any written information provided by the
selling stockholder, which is not accurate or omits information required to make
the provided information not misleading.
We have agreed with selling stockholders to keep the Registration
Statement on Form S-3 effective until the earlier of January 20, 2002, or the
date on which all of the shares that may be offered pursuant to this Prospectus
are either:
- sold by the selling stockholder identified in this Prospectus,
- included in an offering pursuant to a Form S-1 or S-4 registration
statement,
- not included, at the election of the stockholder of the shares, in
an offering pursuant to a Form S-1 registration statement,
- exchanged for shares registered by another method,
- not exchanged, at the election of the stockholder of the shares, for
shares registered by another method and offered to the stockholder,
or
- eligible for sale in a single three-month period pursuant to Rule
144.
WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The following public documents, which we
previously filed with the SEC, are incorporated by reference into this
Prospectus:
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<PAGE> 23
- Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999 with Amendment No. 1 on Form 10-K/A filed May 10, 2000, and
Amendment No. 2 on Form 10-K/A filed June 19, 2000;
- Our description of our common stock contained in our Registration
Statement on Form 8-A filed with the SEC on March 4, 1992, as
amended by subsequently filed reports; and
- Our current Report on Form 8-K filed February 3, 2000 with Amendment
No. 1 on Form 8-K/A filed April 3, 2000, and Amendment No. 2 on
Form 8-K/A filed June 19, 2000, and our current Report on Form 8-K
filed April 27, 2000.
In addition, all other reports and other documents we file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act after the date
of this Prospectus and prior to the termination of this offering from and after
the date of filing of the reports and documents also are incorporated by
reference into this Prospectus.
Any statement contained in this Registration Statement or in any other
subsequently filed document incorporated in this Registration Statement will be
modified or superseded by any later statement contained in a subsequently filed
document made part of this Registration Statement.
Statements contained in this Registration Statement concerning any
document filed as an exhibit are not necessarily complete and, in each instance,
we refer you to the complete copy of document filed as an exhibit to the
Registration Statement and qualify the statement by the provisions of that
document.
Upon written or oral request we will provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, a copy of any or all of the foregoing documents, other than the
exhibits to the documents not specifically incorporated by reference into those
documents. Requests for the documents may be submitted in writing to Investor
Relations, Sybase, Inc., 6475 Christie Avenue, Emeryville, California 94608, or
by telephone at (510) 922-3500.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 and does not contain all of the information for the Registration Statement,
parts of which are omitted and incorporated only by reference as permitted by
the rules and regulations of the SEC.
We are subject to the informational requirements of the Securities
Exchange Act of 1934, and file reports, proxy and information statements and
other information with the SEC pursuant to the Exchange Act. These reports,
proxy and information statements and other information may be inspected and
copied at the public reference room maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, and at the
following Regional Offices of the SEC: New York Regional Office, Seven World
Trade Center, Suite 1300, New York, New York 10048 and Chicago Regional Office,
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Please call the SEC at 1-800-SEC-0330 for further information on
additional public reference rooms, including locations of other regional
offices. Copies of such material may also be obtained by mail at prescribed
rates from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth
Street, NW, Washington, D.C. 20549. The SEC maintains an Internet Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the
site is http://www.sec.gov.
Our common stock is listed on the Nasdaq National Market, and such
reports, proxy and information statements and other information may be inspected
at the offices of Nasdaq Operations, 1735 K Street, NW, Washington, D.C. 20006.
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<PAGE> 24
LEGAL MATTERS
Our legal counsel, Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto will pass upon the validity of the shares of common stock
being sold in this offering.
EXPERTS
Ernst & Young LLP, our independent auditors, have audited our
consolidated financial statements and schedule included in our Annual Report on
Form 10-K for the year ended December 31, 1999, as set forth in their report,
which is incorporated by reference in this Prospectus and Registration
Statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
-24-
<PAGE> 25
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You should rely only upon the information contained in this Prospectus.
We have not authorized anyone to provide you with any other information.
Information or representations not contained in this Registration Statement
should not be relied upon and have not been authorized by Sybase, Inc., any
Selling Stockholder or any other person.
This Prospectus may only be used where it is legal to sell these
securities. It does not constitute an offer to sell or a solicitation of an
offer to buy any security, other than the shares described in this Prospectus,
nor does it constitute an offer to sell or a solicitation of an offer to buy any
of the shares offered by this Prospectus to any person in any jurisdiction in
which it is unlawful to make an offer or solicitation with respect to the
shares.
Neither the delivery of this Prospectus nor any sale of or offer to sell
the shares made under this Prospectus shall, under any circumstances, create any
implication that there has been no change in the affairs of Sybase, Inc., since
the date hereof or that the information contained in this Registration Statement
is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus............................................................. 1
Summary................................................................ 2
Risk Factors........................................................... 4
Forward Looking Statements............................................. 15
Acquisition of Home Financial Network.................................. 16
Use of Proceeds........................................................ 16
Selling Stockholders................................................... 17
Plan of Distribution................................................... 20
Where You Can Find More Information.................................... 22
Legal Matters.......................................................... 24
Experts................................................................ 24
</TABLE>
SYBASE, INC.
7,381,917 SHARES
OF
COMMON STOCK
________________________
PROSPECTUS
_________________________
June 26, 2000
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