<PAGE>
As filed with the Securities and Exchange Commission on November 1, 1996.
Registration No. 333-13955
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
STERLING COMMERCE, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2623341
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8080 North Central Expressway, Suite 1100
Dallas, Texas 75206
(214) 891-8600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------
Albert K. Hoover With a copy to:
Vice President, Legal
Sterling Commerce, Inc. James E. O'Bannon
4600 Lakehurst Court Jones, Day, Reavis & Pogue
Dublin, Ohio 43016 2300 Trammell Crow Center
(614) 793-7000 2001 Ross Avenue
Dallas, Texas 75201
(Name, address, including zip code, and (214) 220-3939
telephone number, including area code,
of agent for service)
----------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] .
----------
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] .
---------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated November 1, 1996
PROSPECTUS
17,450,400 Shares
STERLING COMMERCE, INC.
Common Stock
This Prospectus relates to the offer and sale by Sterling Commerce, Inc.
("Sterling Commerce" or the "Company") of up to 17,450,400 shares (the "Shares")
of the Company's common stock, par value $0.01 per share (the "Common Stock"),
issuable by the Company upon exercise of options ("Options") granted or to be
granted from time to time to eligible persons pursuant to the provisions of the
Sterling Commerce, Inc. Amended and Restated 1996 Stock Option Plan (the "Plan")
and which may be offered and sold from time to time by such persons or permitted
transferees (the "Selling Stockholders"). This Prospectus also relates to such
indeterminate number of additional shares of Common Stock as may become subject
to awards under the Plan as a result of the antidilution provisions contained
therein.
Sales by the Selling Stockholders may be made on one or more exchanges,
including the New York Stock Exchange (the "NYSE"), or in the over-the-counter
market, or in negotiated transactions, in each case at prices and at terms then
prevailing or at prices related to the then current market price or at
negotiated prices and terms. Upon any sale of the Shares offered hereby, the
Selling Stockholders and participating agents, brokers or dealers may be deemed
to be underwriters as that term is defined in the Securities Act of 1933, as
amended (the "Securities Act"), and commissions or discounts or any profit
realized on the resale of such securities may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of Distribution."
The Common Stock is listed for trading on the NYSE under the symbol "SE."
On October 31, 1996, the closing price of the Common Stock on the NYSE was
$28.125. The Company will pay all expenses in connection with this offering,
which are estimated to be approximately $182,000.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is November __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission and that is
located at http://www.sec.gov. Documents filed by the Company can also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005, on which exchange the Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act relating to the securities
issuable pursuant to the Plan and offered hereby. This Prospectus omits certain
of the information contained in the Registration Statement, and reference is
hereby made to the Registration Statement and to the exhibits relating thereto
for further information with respect to the Company and the securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and in each instance reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus (i) the
Company's Registration Statement on Form S-1 (Registration No. 33-80595); (ii)
the Company's Quarterly Reports on Form 10-Q for the periods ended March 31,
1996 and June 30, 1996; (iii) the Company's Current Reports on Form 8-K dated
May 29, 1996, September 23, 1996 and September 30, 1996; and (iv) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A (Commission File No. 1-14196), filed
February 9, 1996.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to: Sterling Commerce, Inc., 4600 Lakehurst Court, Dublin,
Ohio 43016, Attention: Albert K. Hoover, Vice President, Legal (telephone:
(614) 793-7000).
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<PAGE>
THE COMPANY
Sterling Commerce is a leading provider of electronic data interchange and
other electronic commerce products and services worldwide. The Company
develops, markets and supports electronic commerce software products and
provides electronic commerce network services that enable businesses to engage
in business-to-business electronic communications and transactions. The
Company's principal executive offices are located at 8080 N. Central Expressway,
Suite 1100, Dallas, Texas 75206, and the Company's telephone number at such
address is (214) 891-8600.
USE OF PROCEEDS
The proceeds from the issuance of the Shares upon exercise of Options will
be added to the Company's funds and used for general corporate purposes. The
Company will not receive any of the proceeds from the sale of Shares by the
Selling Stockholders.
SELLING STOCKHOLDERS
This Prospectus covers the purchase from the Company of an aggregate of up
to 17,450,400 Shares, plus such indeterminate number of additional shares as may
become subject to awards under the Plan as a result of the antidilution
provisions contained therein, by the holders of Options upon the exercise
thereof in accordance with their terms and the subsequent offer and resale of
Shares previously acquired or to be acquired by certain holders of Options upon
the exercise thereof.
Pursuant to the provisions of the Plan, the Board of Directors of the
Company (the "Board"), the Stock Option Committee of the Board (the "Stock
Option Committee") or the Special Stock Option Committee of the Board (the
"Special Stock Option Committee") will, among other things, determine from time
to time (i) the individuals, from among the executive officers, directors,
employees, advisors and consultants of the Company and its subsidiaries, to whom
Options will be granted, (ii) the number of shares of Common Stock to be covered
by each Option (provided the maximum aggregate number of shares of Common Stock
with respect to which Options may be granted to any participant under the Plan
may not exceed 10,000,000 shares), and (iii) the purchase price of Common Stock
subject to each Option, which may not be less than the fair market value of the
Common Stock on the date of grant.
The following table sets forth certain information as of October 31, 1996,
with respect to Selling Stockholders who currently hold Options to purchase
Shares, including any positions, offices or other material relationships of the
Selling Stockholders with the Company. The Company is unaware of whether the
Selling Stockholders listed below presently intend to sell the Shares they may
acquire upon exercise of Options. The Company in the future may grant
additional Options to the persons listed below and to persons other than those
listed below whose subsequent sale of Shares will be covered by this Prospectus,
which, in such case, will be supplemented.
-3-
<PAGE>
<TABLE>
<CAPTION>
Common Stock Common Stock
Ownership Ownership After
Prior to Offering (1)(2) Offering (2)
-------------------------- Common Stock --------------------------
Name and Position Number Percentage Offered Hereby Number Percentage
- --------------------------------------- ------ ---------- ---------------- ------ ----------
<S> <C> <C> <C> <C> <C>
John Blaine (3) 16,114 * 16,000 114 *
Controller
Warner C. Blow (4) 2,007,184 2.6% 2,000,000 7,184 *
President, Chief Executive
Officer and Director
Robert E. Cook (5) 111,943 * 100,000 11,943 *
Director
Honor R. Hill (6) 100,000 * 100,000 0 *
Director
Albert K. Hoover (7) 181,010 * 180,000 1,010 *
Vice President, Legal
James Hoyt (8) 63,808 * 50,000 13,808 *
Vice President, Technology
William W. Hymes (9) 232,257 * 200,000 32,257 *
Senior Vice President and
Group President
Thomas A. Lutz (10) 205,118 * 150,000 55,118 *
Vice President and Group
President
Jeannette P. Meier (11) 751,995 * 750,000 1,995 *
Executive Vice President,
Chief Financial Officer,
General Counsel and Secretary
Phillip A. Moore (12) 251,714 * 190,000 61,714 *
Executive Vice President
Paul L.H. Olson (13) 306,931 * 300,000 6,931 *
Senior Vice President and
Group President
Stephen R. Perkins (14) 275,575 * 275,000 575 *
Senior Vice president and
Group President
J. Brad Sharp (15) 278,907 * 275,000 3,907 *
Senior Vice President and
Group President
Stephen P. Shiflett (16) 202,779 * 200,000 2,779 *
Vice President, Finance
Dawn Wheeler (17) 70,566 * 70,000 566 *
Vice President, Investor
Relations
Sterling L. Williams (18) 4,006,370 5.1 4,000,000 6,370 *
Chairman of the Board
and Director
G. Clark Woodford (19) 180,408 * 180,000 408 *
Vice President, Business
Development
Charles J. Wyly, Jr. (20) 2,089,846 2.8 500,000 1,589,846 2.1%
Director
Sam Wyly (21) 2,269,442 6.0 1,000,000 1,269,442 1.7
Director
The Little Woody 1,600,000 2.1 1,600,000 0 *
International Trust (22)
The Scotty Trust (23) 200,000 * 200,000 0 *
The Crazy Horse Trust (24) 3,000,000 3.8 3,000,000 0 *
</TABLE>
-4-
<PAGE>
- --------------------------
* Less than 1% of class.
(1) Based on ownership as of October 31, 1996.
(2) Based on 75,000,000 shares of Common Stock issued and outstanding as of
October 31, 1996.
(3) Includes 16,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 14 shares of Common Stock held
pursuant to the Sterling Commerce, Inc. Savings and Security Plan ("Savings
Plan").
(4) Includes 2,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 5,034 shares of Common Stock
held pursuant to the Savings Plan.
(5) Includes 100,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 1,592 shares of Common Stock
held by the REC Enterprises, Inc. Defined Benefit Pension Trust, of which
Robert E. Cook and spouse are co-trustees.
(6) Includes 100,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus.
(7) Includes 180,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 1,010 shares of Common Stock
held pursuant to the Savings Plan.
(8) Includes 50,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 473 shares of Common stock
held pursuant to the Savings Plan.
(9) Includes 200,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 5,183 shares of Common Stock
held pursuant to the Savings Plan.
(10) Includes 150,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 3,350 shares of Common Stock
held pursuant to the Savings Plan.
(11) Includes 750,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus.
(12) Includes 190,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 3 shares of Common Stock held
pursuant to the Savings Plan.
(13) Includes 300,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 1,474 shares of Common Stock
held pursuant to the Savings Plan.
(14) Includes 275,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 575 shares of Common Stock
held pursuant to the Savings Plan.
(15) Includes 275,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 1,907 shares of Common Stock
held pursuant to the Savings Plan.
(16) Includes 200,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 2,779 shares of Common Stock
held pursuant to the Savings Plan.
(17) Includes 70,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 566 shares of Common Stock
held pursuant to the Savings Plan.
(18) Includes 4,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, 1,000,000 of which are exercisable within 60 days of the
date of this Prospectus.
(19) Includes 180,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes approximately 408 shares of Common Stock
held pursuant to the Savings Plan.
(20) Includes 500,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes 703,447 shares of Common Stock directly
owned by family trusts of which Mr. Charles J. Wyly, Jr. is trustee and
886,399 shares of Common Stock (477,780 of which are also beneficially
owned by Mr. Sam Wyly) held of record by two limited partnerships of which
Mr. Charles J. Wyly, Jr. is a general partner. Does not include 1,600,000
Shares issuable upon exercise of Options granted under the Plan owned by
irrevocable trusts of which Charles J. Wyly, Jr. and his family are
included as beneficiaries. Mr. Charles J. Wyly, Jr. disclaims beneficial
ownership of the excluded Shares.
(21) Includes 1,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. Also includes 570,909 Shares of Common Stock directly
owned by family trusts of which Mr. Sam Wyly is trustee and 698,533 shares
of Common stock (477,780 of which are also beneficially owned by Mr.
Charles J. Wyly, Jr.) held of record by two limited partnerships of which
Mr. Sam Wyly is a general partner. Does not include 3,000,000 Shares
issuable upon exercise of Options granted under the Plan owned by
irrevocable trusts of which Sam Wyly and his family are included as
beneficiaries. Mr. Sam Wyly disclaims beneficial ownership of the excluded
Shares.
(22) Includes 1,600,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. The Selling Stockholder named in the table is an
irrevocable trust established by Charles J. Wyly, Jr. and of which Charles
J. Wyly, Jr. and his family are included as beneficiaries. Charles J. Wyly,
Jr. is a director of the Company.
(23) Includes 200,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. The Selling Stockholder named in the table is an
irrevocable trust established by Evan A. Wyly and of which Evan A. Wyly and
his family are included as beneficiaries. Evan A. Wyly is a director of the
Company.
(24) Includes 3,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are exercisable within 60 days of the date of
this Prospectus. The Selling Stockholder named in the table is an
irrevocable trust established by Sam Wyly and of which Sam Wyly and his
family are included as beneficiaries. Sam Wyly is a director of the
Company.
5
<PAGE>
1996 STOCK OPTION PLAN
General
A copy of the Plan has been filed as an exhibit to the Registration Statement
of which this Prospectus constitutes a part. The summaries of certain
provisions of the Plan do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the Plan,
including the definitions therein of certain terms. Copies of the Plan and
additional information regarding the Plan and the Plan's administrators may be
obtained by contacting the Company. See "Incorporation of Certain Documents by
Reference". Capitalized terms not otherwise defined below or elsewhere in this
Prospectus have the meanings given to such terms in the Plan.
Purpose and Adoption
The Plan is intended to provide an equity interest in the Company to certain
of the Company's executive officers, directors, employees, advisors and
consultants and to provide additional incentives for such persons to devote
themselves to the Company's business. The Plan is also intended to aid in
attracting persons of outstanding ability to serve, and remain in the service
of, the Company. The Board adopted the Plan on February 12, 1996. Prior to the
completion of the initial public offering (the "Offering") of shares of the
Common Stock, the Plan was approved by Sterling Software, Inc. as the sole
stockholder of the Company. Following completion of the Offering, the
stockholders of the Company approved the adoption of the Plan on May 30, 1996.
The Plan was amended and restated effective as of September 13, 1996.
Shares Covered
As of October 31, 1996, the total number of shares of Common Stock available
for issuance under the Plan was 17,450,400 and Options exercisable for
16,705,000 of such shares had been granted, resulting in Options for 745,400
shares being available for grant as of such date. Under the terms of the Plan,
if at the close of business on the last day of any subsequent fiscal quarter of
the Company, the sum of (i) the total number of shares of Common Stock
theretofore issued upon the exercise of Options, (ii) the total number of shares
of Common Stock then subject to outstanding Options, and (iii) the total number
of shares of Common Stock then remaining available under the Plan to be made
subject to future grants of Options (such sum being the "Actual Number") is less
than 20% of the total number of shares of Common Stock then outstanding,
computed on a fully-diluted basis (the "Target Number"), the number of shares of
Common Stock available for issuance under the Plan will automatically be
increased to a number that will result in the Actual Number being equal to the
Target Number. Shares of Common Stock issued under the Plan may be authorized
but unissued shares, shares held in treasury or a combination thereof.
Options
The Plan authorizes the grant of Options to purchase shares of Common Stock
that are not intended to qualify as incentive stock options under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and which permit a
participant to benefit from increases in the value of shares of Common Stock
above a predetermined purchase price per share. Options are more fully
described under "-- Description of Awards" below.
Administration
The Plan is administered by the Stock Option Committee, the Special Stock
Option Committee and the Board, which have the authority to determine from time
to time the individuals to whom Options will be granted, the number of shares to
be covered by each Option and the time or times at which Options will become
exercisable; provided that the Special Stock Option Committee has exclusive
administrative authority with respect to Options intended to comply with Section
162(m) of the Code. All of the members of the Special Stock Option Committee,
which may not be comprised of less than two members, are intended to
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<PAGE>
qualify as "outside directors" within the meaning of Section 162(m) of the Code
and as "Non-Employee Directors" within the meaning of Rule 16b-3 under the
Exchange Act. Although each of the Board, the Special Stock Option Committee
and the Stock Option Committee has the authority under the Plan to make grants
of Options to any Plan participant, it is anticipated that the Special Stock
Option Committee will make grants to Plan participants who are executive
officers of the Company and/or members of the Board, and that the Stock Option
Committee will make grants to all other Plan participants.
The Stock Option Committee, the Special Stock Option Committee and the Board
have the full authority and discretion to administer the Plan and to take any
action that is necessary or advisable in connection with the administration of
the Plan, including without limitation the authority and discretion to interpret
and construe any provision of the Plan or of any agreement, notification or
document evidencing the grant of an Option. The interpretation and construction
by the Stock Option Committee, the Special Stock Option Committee or the Board,
as applicable, of any such provision and any determination by the Stock Option
Committee, the Special Stock Option Committee or the Board, as applicable,
pursuant to any provision of the Plan or of any such agreement, notification or
document will be final and conclusive; provided that in the event the Stock
Option Committee and the Special Stock Option Committee disagree (or either
disagrees or both disagree with the Board) with respect to such interpretation,
construction or determination, the Board's determination will be final and
conclusive except as described above with respect to Options intended to comply
with Section 162(m) of the Code.
Eligibility
Executive officers, key employees, advisors and consultants of the Company
and its subsidiaries and directors of the Company are eligible to receive grants
of Options.
Transferability
Each Option granted pursuant to the Plan may be subject to such transfer
restrictions, if any, as the Stock Option Committee, the Special Stock Option
Committee or the Board, as applicable, may determine.
Adjustments
The Stock Option Committee, the Special Stock Option Committee or the Board
may make or provide for such adjustments in the maximum number of shares
available under the Plan, in the number of shares of Common Stock covered by
outstanding Options, in the purchase price per share of Common Stock covered by
Options, and/or in the kind of shares covered thereby (including shares of
another issuer), as such committee or the Board, as applicable, in its sole
discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Plan participants that
otherwise would result from any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, merger, consolidation, spin-off, reorganization, liquidation, issuance
of rights or warrants to purchase securities or any other corporate transaction
or event having an effect similar to any of the foregoing.
Vesting of Certain Options upon a Change in Control
The stock option agreement evidencing any Option may provide for the earlier
exercise of such Option in the event of a change in control of the Company (as
defined in such stock option agreement or in any agreement referenced in such
stock option agreement) or in the event of any other similar transaction or
event.
Nonqualified and Unfunded
The Plan is unfunded and does not give participants any rights that are
superior to those of the Company's general creditors. The Plan is not subject
to the provisions of ERISA and is not qualified under Section 401(a) of the
Code.
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<PAGE>
Continuation and Termination of Employment or Consulting Relationship
The Plan does not confer upon any Plan participant any rights with respect to
continuation of employment or other service with the Company or any of its
subsidiaries and does not interfere in any way with any right that the Company
or any of its subsidiaries would otherwise have to terminate a Plan
participant's employment or other service at any time.
Termination and Amendment
The Plan may be terminated at any time by action of the Board. The
termination of the Plan will not adversely affect the terms of any outstanding
Options. The Plan may be amended from time to time by the Board or any duly
authorized committee thereof. In the event any law, or any rule or regulation
issued or promulgated by the Internal Revenue Service, the Commission, the
National Association of Securities Dealers, Inc., any stock exchange upon which
the Common Stock is listed for trading, or any other governmental or quasi-
governmental agency having jurisdiction over the Company, the Common Stock or
the Plan requires the Plan to be amended, or in the event Rule 16b-3 or any
other rule under Section 16 of the Exchange Act is amended or supplemented, in
either event to permit the Company to remove or lessen any restrictions with
respect to Options, the Stock Option Committee, the Special Stock Option
Committee or the Board may amend the Plan to the extent of any such requirement,
amendment or supplement, and all Options then outstanding will be subject to
such amendment.
Description of Awards
The Plan does not specify a maximum term for Options granted thereunder. A
grant of Options may provide for the deferred payment of the exercise price from
the proceeds of sales through a bank or broker on the exercise date of some or
all of the shares of Common Stock to which such exercise relates. The exercise
price of the Options may not be less than the fair market value per share of
Common Stock on the grant date. The Stock Option Committee, the Special Stock
Option Committee or the Board, as applicable, may, without the consent of the
holder of an Option, amend the terms of such Option in various respects,
including acceleration of the time at which the Option may be exercised,
extension of the expiration date, reduction of the exercise price and waiver of
other conditions or restrictions.
Each grant of Options will specify whether the exercise price is payable in
cash, by the actual or constructive transfer to the Company of nonforfeitable,
unrestricted shares of Common Stock already owned by the participant having an
actual or constructive value as of the time of exercise equal to the total
exercise price, by any other legal consideration authorized by the Stock Option
Committee, the Special Stock Option Committee or the Board, as the case may be,
or by a combination of such methods of payment. The Plan does not require that
a participant hold shares received upon the exercise of Options for a specified
period and permits immediate sequential exercises of Options with the exercise
price therefor being paid in shares of Common Stock, including shares acquired
as a result of prior exercises of Options.
Pursuant to the Plan as originally adopted, each member of the Special Stock
Option Committee was automatically awarded Options to purchase 100,000 shares of
Common Stock upon his or her initial election to the Board and would have
received such a formula award of 100,000 shares of Common Stock every five years
thereafter on the anniversary of such election. As amended, the Plan does not
provide for future formula awards to the members of the Special Stock Option
Committee.
Federal Income Tax Consequences
The following summary of certain federal income tax consequences of the grant
or award of Options under the Plan is based on the Code, as amended to date,
applicable proposed and final Treasury Regulations, judicial authority and
current administrative rulings and practice, all of which are subject to change.
This summary does not attempt to describe all of the possible tax consequences
that could result from the
-8-
<PAGE>
acquisition, holding, exercise or disposition of an Option or the shares of
Common Stock purchasable thereunder.
Options granted under the Plan are intended to be nonqualified stock options.
Nonqualified stock options generally will not result in any taxable income to
the optionee at the time of the grant, but the holder thereof will realize
ordinary income at the time of exercise of the Options if the shares are not
subject to any substantial risk of forfeiture (as defined in Section 83 of the
Code). Under such circumstances, the amount of ordinary income is measured by
the excess of the fair market value of the optioned shares at the time of
exercise over the exercise price. An optionee's tax basis in shares acquired
upon the exercise of nonqualified stock options is generally equal to the
exercise price plus any amount treated as ordinary income. If the exercise
price of a nonqualified stock option is paid for, in whole or in part, by the
delivery of shares of Common Stock previously owned by the optionee ("Previously
Acquired Shares"), no gain or loss will be recognized on the exchange of the
Previously Acquired Shares for a like number of shares of Common Stock. The
optionee's basis in the number of optioned shares received equal to the number
of Previously Acquired Shares surrendered would be the same as the optionee's
basis in the Previously Acquired Shares. However, the optionee would be treated
as receiving ordinary income equal to the fair market value (at the time of
exercise) of the number of shares of Common Stock received in excess of the
number of Previously Acquired Shares surrendered, and the optionee's basis in
such excess shares would be equal to their fair market value at the time of
exercise.
Special Rules Applicable to Insiders. In limited circumstances where the
sale of shares of Common Stock that are received as the result of the exercise
of an Option could subject an officer or director to suit under Section 16(b) of
the Exchange Act, the tax consequences to the officer or director may differ
from the tax consequences described above. In these circumstances, unless a
special election has been made, the principal difference usually will be to
postpone valuation and taxation of the shares of Common Stock received so long
as the sale of the shares received could subject the officer or director to suit
under Section 16(b) of the Exchange Act, but not longer than six months.
General Matters Applicable to the Company. To the extent that an optionee
recognizes ordinary income in the circumstances described above, the Company or
a subsidiary, as the case may be, would be entitled to a corresponding
deduction, provided in general that (i) the amount is an ordinary and necessary
business expense and such income meets the test of reasonableness; (ii) the
deduction is not disallowed pursuant to the annual compensation limit set forth
in Section 162(m) of the Code and (iii) certain statutory provisions relating to
so-called "excess parachute payments" do not apply. Awards granted under the
Plan may be subject to acceleration in the event of a change in control of the
Company. In the event of a change in control of the Company, it is possible
that this feature may affect whether amounts realized upon the receipt or
exercise of the Options will be deductible by the Company under the "excess
parachute payments" provisions of the Code.
Because the tax consequences to a Plan participant may vary depending on his
or her individual circumstances, each Plan participant should consult his or her
personal tax advisor regarding the federal and any state, local or foreign tax
consequences to him or her.
-9-
<PAGE>
PLAN OF DISTRIBUTION
The Shares may be issued to the Selling Stockholders from time to time by the
Company upon exercise of Options. The Shares may be sold or otherwise disposed
of from time to time by any of the Selling Stockholders in one or more
transactions through any one or more of the following: (i) to purchasers
directly, (ii) in ordinary brokerage transactions and transactions in which the
broker solicits purchasers, (iii) through underwriters or dealers who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders or from the purchasers of the Shares
for whom they may act as agent, (iv) the writing of options on the Shares, (v)
the pledge of the Shares as security for any loan or obligation, including
pledges to brokers or dealers who may, from time to time, themselves effect
distributions of the Shares or interests therein, (vi) purchases by a broker or
dealer as principal and resale by such broker or dealer for its own account
pursuant to this Prospectus, (vii) a block trade in which the broker or dealer
so engaged will attempt to sell the Shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction and (viii) an
exchange distribution in accordance with the rules of such exchange, including
the NYSE, or in transactions in the over-the-counter market. Such sales may be
made at prices and at terms then prevailing or at prices related to the then
current market price or at negotiated prices and terms. In effecting sales,
brokers or dealers may arrange for other brokers or dealers to participate. The
Selling Stockholders or such successors in interest, and any underwriters,
brokers, dealers or agents that participate in the distribution of the Shares,
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any profit on the sale of the Shares by them and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents may be
deemed to be underwriting commissions or discounts under the Securities Act.
The Company will pay all of the expenses incident to the offering hereby and
sale of the Shares to the public other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any counsel to the
Selling Stockholders related thereto.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon for the Company by Jones, Day, Reavis &
Pogue, Dallas, Texas.
EXPERTS
The consolidated financial statements and financial statement schedule
appearing in the Company's Registration Statement on Form S-1 (Registration No.
33-80595) have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon included therein and incorporated by reference
herein. Such consolidated financial statements and financial statement schedule
are incorporated herein by reference in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
-10-
<PAGE>
FORWARD-LOOKING INFORMATION
This Prospectus (including the documents incorporated herein by reference)
contains certain forward-looking statements and information relating to the
Company that are based on the beliefs of the Company's management as well as
assumptions made by and information currently available to the Company's
management. When used in this Prospectus, words such as "anticipate,"
"believe," "estimate," "expect," "intend" and similar expressions, as they
relate to the Company or the Company's management, identify forward-looking
statements. Such statements reflect the current views of the Company with
respect to future events and are subject to certain risks, uncertainties and
assumptions, relating to the operations and results of operations of the
Company, competitive factors and pricing pressures, shifts in market demand, the
performance and needs of the industries served by the Company, the costs of
product development, general economic conditions and acts by third parties, as
well as the other factors described in this Prospectus. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results or outcomes may vary materially from those described
herein as anticipated, believed, estimated, expected or intended.
-11-
<PAGE>
No person has been authorized in connection with the offering hereby to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities to any person
or by anyone in any jurisdiction where such offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that the information
contained herein is correct as of any date subsequent to the date hereof.
----------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
Available Information .............................................. 2
Incorporation of Certain Documents by Reference .................... 2
The Company ........................................................ 3
Use of Proceeds .................................................... 3
Selling Stockholders ............................................... 3
1996 Stock Option Plan ............................................. 6
Plan of Distribution .............................................. 10
Legal Matters ..................................................... 10
Experts ........................................................... 10
Forward-Looking Information ....................................... 11
17,450,400 SHARES
STERLING COMMERCE,
INC.
COMMON STOCK
--------------------------------
PROSPECTUS
--------------------------------
November , 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses to be incurred in connection with the issuance
and distribution of the Common Stock covered by this Registration Statement, all
of which have been or will be paid by the Company, are as follows:
Securities and Exchange Commission filing fee.. $157,979
NYSE listing fee............................... 8,577
Printing expenses.............................. 3,000
Accounting fees and expenses................... 5,000
Legal fees and expenses........................ 6,000
Miscellaneous.................................. 1,444
--------
Total.......................................... $182,000
========
Item 15. Indemnification of Directors and Officers
The Company's Certificate of Incorporation provides that the personal
liability of directors of the Company to the Company is eliminated to the
maximum extent permitted by Delaware law. The Company's Certificate of
Incorporation and Bylaws provide for the indemnification of the directors,
officers, employees and agents of the Company and its subsidiaries to the
fullest extent that may be permitted by Delaware law from time to time, and the
Bylaws provide for various procedures relating thereto. Certain provisions of
the Company's Certificate of Incorporation protect the Company's directors
against personal liability for monetary damages resulting from breaches of their
fiduciary duty of care, except as set forth below. Under Delaware law, absent
these provisions, directors could be held liable for gross negligence in the
performance of their duty of care, but not for simple negligence. The Company's
Certificate of Incorporation absolves directors of liability for negligence in
the performance of their duties, including gross negligence. However, the
Company's directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit. The
Company's Certificate of Incorporation also does not absolve directors of
liability under Section 174 of the Delaware General Corporation Law, which makes
directors personally liable for unlawful dividends or unlawful stock repurchases
or redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
suits or proceedings, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation - a "derivative
action") if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of care is applicable in the case of a
derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the Company.
As authorized by the Company's Certificate of Incorporation, the Company has
entered into indemnification agreements with each of its directors and officers.
These indemnification agreements provide for, among other things, (i) the
indemnification by the Company of the indemnitees thereunder to the extent
described above, (ii) the advancement of attorneys' fees and other expenses, and
(iii) the establishment, upon approval by the Board, of trusts or other funding
mechanisms to fund the Company's indemnification obligations thereunder.
II-1
<PAGE>
Item 16. Exhibits
4.1 Third Amended and Restated Certificate of Incorporation of the
Company (previously filed as Exhibit 3.1 to the Company's
Registration Statement (Registration No. 33-80595) incorporated
herein by reference).
4.2 Amended and Restated Bylaws of the Company (previously filed
Exhibit 3.2 to the Company's Registration Statement (Registration
No. 33-80595) incorporated herein by reference).
4.3 Specimen Common Stock Certificate (previously filed as Exhibit 4.1
to the Company's Registration Statement (Registration No. 33-80595)
incorporated herein by reference).
5.1 Opinion of Jones, Day, Reavis & Pogue (previously filed).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney of the Company (previously filed).
24.2 Powers of Attorney of certain officers and directors of the Company
(previously filed).
24.3 Power of Attorney of Warner C. Blow (filed herewith).
99.1 Sterling Commerce, Inc. Amended and Restated 1996 Stock Option Plan
(previously filed).
II-2
<PAGE>
Item 17. Undertakings
A. The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-effective
Amendment No. 1 to the Registration Statement (Commission File No. 333-13955) to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Dallas, State of Texas, on October 31, 1996.
STERLING COMMERCE, INC.
By: /s/ WARNER C. BLOW
-------------------------------
Warner C. Blow
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Pre-
effective Amendment No. 1 to the Registration Statement (Commission File No.
333-13955) has been signed below by the following persons in the capacities
indicated on October 31, 1996.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
/s/ Warner C. Blow President and Chief Executive Officer;
- --------------------------- Director (Principal Executive Officer)
Warner C. Blow
Jeannette P. Meier * Executive Vice President, Chief Financial Officer,
- --------------------------- General Counsel and Secretary
Jeannette P. Meier (Principal Financial and Accounting Officer)
STERLING L. WILLIAMS * Chairman of the Board; Director
- ---------------------------
Sterling L. Williams
Sam Wyly * Director
- ---------------------------
Sam Wyly
Charles J. Wyly, Jr. * Director
- ---------------------------
Charles J. Wyly, Jr.
Evan A. Wyly * Director
- ---------------------------
Evan A. Wyly
Robert E. Cook * Director
- ---------------------------
Robert E. Cook
Honor R. Hill * Director
- ---------------------------
Honor R. Hill
</TABLE>
*The undersigned, by signing his name hereto, does sign and execute this
Pre-effective Amendment No. 1 to the Registration Statement (Commission File
No. 333-13955) pursuant to the Powers of Attorney executed on behalf of the
above-named officers and directors and filed herewith.
/s/ ALBERT K. HOOVER
---------------------
Albert K. Hoover
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Third Amended and Restated Certificate of Incorporation of the Company
(previously filed as Exhibit 3.1 to the Company's Registration
Statement (Registration No. 33-80595) incorporated herein by
reference).
4.2 Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to the Company's Registration Statement (Registration No.
33-80595) incorporated herein by reference).
4.3 Specimen Common Stock certificate (previously filed as Exhibit 4.1 to
the Company's Registration Statement (Registration No. 33-80595)
incorporated herein by reference).
5.1 Opinion of Jones, Day, Reavis & Pogue (previously filed).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney of the Company (previously filed).
24.2 Powers of Attorney of certain officers and directors of the Company
(previously filed).
24.3 Power of Attorney of Warner C. Blow (filed herewith)
99.1 Sterling Commerce, Inc. Amended and Restated 1996 Stock Option Plan
(previously filed).
II-5
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in
the Registration Statement of Sterling Commerce, Inc., related to registration
of 17,450,400 shares of common stock issuable under the Amended and Restated
1996 Stock Option Plan and to the incorporation by reference therein of our
reports dated March 4, 1996, with respect to the consolidated financial
statements and schedule of Sterling Commerce, Inc. included in its Registration
Statement on Form S-1 (Registration No. 33-80595).
/s/ Ernst & Young LLP
Dallas, Texas
October 31, 1996
<PAGE>
Exhibit 24.3
------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Jeannette P. Meier, Steven P. Shiflett, Albert K. Hoover, Robert L.
Estep, James E. O'Bannon and Michael C. Gibbs the true and lawful attorney-in-
fact, with full power of substitution and resubstitution, for him and in his
name, place and stead, to sign on his behalf, as a director or officer, or both,
as the case may be, of Sterling Commerce, Inc., a Delaware corporation (the
"Corporation"), one or more Registration Statements on Form S-3 or any other
appropriate form (collectively, the "Registration Statement"), for the purpose
of registering, pursuant to the Securities Act of 1933, as amended, shares of
Common Stock, par value $0.01 per share, of the Corporation issuable upon the
exercise of options granted or available for grant under the Sterling Commerce,
Inc. Amended and Restated 1996 Stock Option Plan and the resale of such shares,
and to sign any or all amendments and any or all post-effective amendments to
the Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney or attorneys-in-fact, each of them with
or without the others, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney or attorneys-in-fact or any of
them or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Dated: October 14, 1996
/s/ Warner C. Blow
- ---------------------------------------------------
Warner C. Blow
