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EXHIBIT 3
SYBASE, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
AMENDMENT NO. 2
TO PREFERRED SHARES RIGHTS AGREEMENT
Dated as of September 25, 1996
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AMENDMENT NO. 2 TO RIGHTS AGREEMENT
PURSUANT TO ACTION BY WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
SYBASE, INC. DATED AUGUST 26, 1996
This Amendment No. 2 to Preferred Shares Rights Agreement is entered
into by and between Sybase, Inc., a Delaware corporation (the "Company"), and
The First National Bank of Boston (the "Rights Agent").
Section 1(a) of the Rights Agreement dated as of March 24, 1992 between
Sybase, Inc., a Delaware corporation (the "Company") and The First National Bank
of Boston is amended to read as follows:
"Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall
not include the Company, any subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall be deemed to be an Acquiring Person if (i) as the
result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
Acquiring Person, or (ii) the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the provisions of this paragraph (a), has become such
inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of the Common Shares that would
otherwise cause such Person to be an "Acquiring Person," as defined pursuant to
the provisions of this paragraph (a), or (B) such Person was aware of the extent
of the Common Shares it beneficially owned but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
divested or divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the provisions of this paragraph (a), then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any purposes of this
Agreement; or (iii) such Person reports Beneficial Ownership of Common Shares on
Schedule 13G under the Securities Exchange Act of 1934, as amended, representing
more than 15% but less than 20% of the Common Shares of the Company then
outstanding and utilizes said Schedule 13G in lieu of a Schedule 13D for such
reporting on the basis that such Person has no intention of changing or
influencing control of the Company.
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Notwithstanding the foregoing, Lotus Development Corporation ("Lotus")
shall not be considered an "Acquiring Person" as a result of being, at any date,
the Beneficial Owner of that number of Common Shares which it is permitted or
required to purchase on or before such date in accordance with the provisions of
the Series F Preferred Stock Purchase Agreement dated as of September 21, 1989
between the Company and Lotus (the "Lotus Purchase Agreement"); provided,
however, that if after the date hereof, (i) Lotus shall become the Beneficial
Owner of any Common Shares in excess of that number of Common Shares which it is
permitted or required to purchase in accordance with the provisions of the Lotus
Purchase Agreement, (ii) the Lotus Purchase Agreement shall be terminated in
accordance with its terms, by mutual agreement between Lotus and the Company or
otherwise or (iii) the provisions of Section 8.1.1 or 8.1.2 of the Lotus
Purchase Agreement shall come into effect so as to release Lotus from the
ownership limitations set forth in Section 8.1, then if Lotus would otherwise be
an Acquiring Person, it shall be deemed to be an Acquiring Person and all Common
Shares then beneficially owned by Lotus shall be counted for purposes of
determining whether Lotus is an Acquiring Person."
In all other respects, the Agreement shall continue in full force and
effect without change.
IN WITNESS WHEREOF, the Company and the Rights Agent have executed this
Amendment No. 2 as of the later of the dates set forth below, to be effective as
of August 26, 1996.
September 24, 1996 SYBASE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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September 25, 1996 THE FIRST NATIONAL BANK OF BOSTON
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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