<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0 - 19395
SYBASE, INC.
(Exact name of registrant as Specified in its Charter)
Delaware 94-2941005
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6475 Christie Avenue, Emeryville, California 94608
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (510) 922-3500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Preferred Share Purchase Rights
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing sale price of the Common Stock on March
24, 2000 as reported on the NASDAQ National Market System, was approximately
$2,110,475,333. Shares of Common Stock held by each officer and director and by
each person who owns 10% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes. As of March 24, 2000, Registrant had 89,851,184 shares of Common Stock
outstanding.
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AMENDMENT AND CORRECTION TO ANNUAL REPORT ON FORM 10-KA
FOR FISCAL YEAR 1999
The disclosure appearing on pages 17 and 18, Part II, Item 7 - "Management's
Discussion and Analysis of Financial Condition and Results of Operations" under
the heading "Cost (Reversal) of Restructuring" and under the subheading of
"Estimated product and employee termination liabilities" is hereby replaced with
the following:
In the first quarter of 1998, the Company recorded restructuring charges of
approximately $6.7 million associated with anticipated liabilities for claims
resulting from the abandonment of products no longer core to the Company's
business and from the termination of employees. Of this amount, $5.0 million was
associated with anticipated liabilities for claims and the associated cost of
litigation resulting from the abandonment of products no longer core to the
Company's business, and $1.7 million was associated with anticipated liabilities
for legal expenses, claims and the associated cost of litigation resulting from
the termination of employees. The accrual relating to the abandonment of
products no longer core to the Company's business was based on the Company's
recent experience with obligations arising from its discontinuance of products
in prior years. The amounts related to the employee terminations were accrued
based on the Company's recent history of legal claims associated with employee
terminations, its experience with employees filing claims when terminated as
part of previous restructuring plans and, legal counsel's estimate of associated
legal and litigation expenses.
In the fourth quarter of 1998, the Company reevaluated this liability. Based on
actual claims received, amounts paid to date and legal counsel's estimate of
future obligations to customers and employees, the Company reduced the liability
by approximately $5.0 million. Of the liability reversed, $4.3 million was
associated with the discontinuance of products, and $0.7 million was associated
with employee terminations.
Legal costs included in the estimated product and employee termination
liabilities, described above, include: the estimated cost of formal legal
filings and proceedings required for the termination of employees in various
foreign countries; the cost of outside legal assistance in the planning and
preparing the proper forms of termination notification; and, other advice
specific to the restructure. The restructuring charges in 1998 also included
accounting costs related to additional fees incurred by our independent
auditors, specifically related to their consultation, review and audit, of the
1998 restructuring charges. The fees in connection with these services were in
excess and separate from the annual audit fees approved by our Audit Committee.
These legal costs and accounting fees would not have been incurred if not for
the restructuring and the services received did not benefit activities to be
continued after the restructuring.
The amounts accrued were based on the Company's previous experience with
obligations associated with end-of-life products and employee terminations,
including payments made in connection with restructuring in 1996.
In the fourth quarter of 1998, the Company reevaluated this liability. Based on
actual claims received, amounts paid to date and legal counsel's estimate of
future obligations to customers and employees, the Company reduced the liability
by approximately $5.0 million.
During 1999, the Company reversed by credit to operating expenses $8.5 million
of restructuring costs related to the 1998 Plan. The reversals included $3.8
million related to termination payments to employees and other related costs;
$4.2 million related to lease cancellations and commitments; and $0.5 million of
legal and other fees. The significant components of the reversal to the accrual
for termination payments to employees and other related costs included:
termination payments due to employees who were terminated as part of the 1998
Plan, which were not claimed by the affected employees or were not utilized
because the employee did not stay a specified period to qualify for the benefit;
termination payments due to employees who were terminated as part of the 1998
Plan but were asked to stay with the Company to fill open positions; and an
accrual relating to an employee note receivable that was subsequently collected
by the Company. The significant components of the reversal relating to the
accrual for lease cancellations and commitments included accruals where the
Company was able to sublet certain closed facilities earlier than
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anticipated or was able to negotiate a settlement with the landlord for the
termination of the leases on certain closed facilities for an amount less than
the amount provided in the 1998 Plan.
The Company assessed the status of the restructure accrual at the end of each
quarter in 1999. As of March 31, 1999, no new information had arisen since the
restructure actions were taken in December 1998, which warranted a reversal of
the accrual. A $5.6 million reversal of the restructuring charge was recorded as
of June 30, 1999. This reversal primarily related to termination payments to
employees and lease cancellations and commitments associated with 20 locations,
which arose for the reasons described above during the quarter. As of September
30, 1999 no significant additional developments occurred that required the
accrual to be adjusted further. During the quarter ended December 31, 1999, $2.9
million of restructure charges were reversed in connection with certain leased
facilities, primarily two facilities in Germany, and in connection with certain
terminated employees. The nature of the significant reversals to the accrual for
terminated employees and leases occurring in the fourth quarter were
substantially the same as those occurring in the second quarter. The 1999
reversals were primarily attributable to termination payments and associated
benefits for 110 employees and lease cancellation and commitment accruals
relating to facilities in approximately 22 locations.
The following table summarizes the activity related to the restructuring
liability at December 31, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
Accrued Accrued
liabilities Amounts liabilities
at written Amounts Amounts at
12/31/98 off paid reversed 12/31/99
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Termination payments to employees
and other related costs $12,483 -- $ 8,208 $ 3,833 $ 442
Lease cancellations and commitments 9,538 -- 4,041 4,201 1,296
Costs related to closing of
subsidiaries, including write-off
of goodwill 2,730 2,730 -- -- --
Other 2,567 -- 1,701 494 372
------- ------- ------- ------- -------
$27,318 $ 2,730 $13,950 $ 8,528 $ 2,110
======= ======= ======= ======= =======
</TABLE>
The Company has substantially completed all actions associated with its
restructuring and believes that it has achieved the desired results. Operating
expenses, excluding cost (reversal) of restructuring, decreased by $87.0 million
in 1999, compared to 1998. The Company believes that this decrease was largely
due to the benefit of the restructuring, partially offset by higher third party
royalty expense, legal fees and litigation costs. In 1999, total employee
related expenses decreased by approximately $54.5 million, depreciation expense
decreased by approximately $18.2 million, and rent expense decreased by
approximately $22.7 million, each of which was primarily due to the
restructuring. The amount of the cost reduction achieved during 1999 was
consistent with the objectives of the restructuring plan.
The remaining restructuring reserve primarily relates to certain lease payments
contractually required of the Company on certain closed facilities, net of
associated sublease amounts, and certain severance payments and termination
benefits payable to approximately eight employees terminated as part of the 1998
Plan. The leases expire at various dates through 2003, and substantially all the
remaining severance payments and termination benefits are expected to be paid in
the first quarter of 2000. The remaining severance payments and termination
benefits include those payable to four employees in Europe, who were notified in
1998 that their positions would be eliminated as certain general and
administrative functions were eliminated from selected European subsidiaries.
These employees were notified in 1998 that they would be entitled to such
payments if they stayed until such activities were completed. The remaining
severance payments and termination benefits also includes severance payments due
to four employees terminated in 1998 in Brazil,
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who refused to collect their severance payments and instead chose to file a
claim for additional money from the Company. These claims and related severance
accruals were still outstanding at December 31, 1999.
Except as noted above, Sybase, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, filed on March 30, 2000 and subsequently amended
on May 10, 2000 remains as filed with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K/A
to be signed on its behalf of the undersigned, thereunto duly authorized.
SYBASE, INC.
By: /s/ JOHN S. CHEN
---------------------------------
June 19, 2000 John S. Chen
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report on 10-K/A has been signed by the following persons in the capacities
and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JOHN S. CHEN Chairman of the Board, President, June 19, 2000
------------------------------ Chief Executive Officer (Principal
(John S. Chen) Executive Officer) and Director
/s/ PIETER VAN DER VORST Vice President and June 19, 2000
------------------------------ Chief Financial Officer (Principal
(Pieter Van der Vorst) Financial Officer)
/s/ MARTIN J. HEALY Vice President and Corporate June 19, 2000
------------------------------ Controller (Principal Accounting
(Martin J. Healy) Officer)
/s/ RICHARD C. ALBERDING Director June 19, 2000
------------------------------
(Richard C. Alberding)
/s/ L. WILLIAM KRAUSE Director June 19, 2000
------------------------------
(L. William Krause)
/s/ ALAN B. SALISBURY Director June 19, 2000
------------------------------
(Alan B. Salisbury)
/s/ ROBERT P. WAYMAN Director June 19, 2000
------------------------------
(Robert P. Wayman)
/s/ CECILIA CLAUDIO Director June 19, 2000
------------------------------
(Cecilia Claudio)
</TABLE>
