<PAGE>
As filed with the Securities and Exchange Commission on October 11, 1996.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
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. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered (1) Share Price Fee (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share........... 17,450,400 $29.875 $521,330,700 $157,979
================================================================================
</TABLE>
(1) Represents shares issuable upon the exercise of options previously
granted under the Sterling Commerce, Inc. Amended and Restated 1996 Stock
Option Plan (the "Plan") and shares issuable in connection with the
exercise of options available for grant under the Plan. Pursuant to Rule
416, there are also registered hereunder such indeterminate number of
additional shares as may become subject to awards under the Plan as a
result of the antidilution provisions contained therein.
(2) The registration fee has been computed in accordance with Rule 457(h).
Pursuant to Rule 457(h)(3), the registration fee has been calculated on
the basis of a single fee with respect to shares issuable upon the
exercise of options previously granted under the Plan and shares issuable
in connection with the exercise of options available for grant under the
Plan and the resale of such shares.
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.
================================================================================
<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 October 11, 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 10, 1996, the closing price of the Common Stock on the NYSE was
$31.0. 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 October __, 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).
-2-
<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 September 30, 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) 16,000 * 16,000 0 0%
Controller
Warner C. Blow (4) 1,000,000 * 1,000,000 0 0
President and Chief
Operating Officer
Robert E. Cook (5) 100,000 * 100,000 0 0
Director
Honor R. Hill (6) 100,000 * 100,000 0 0
Director
Albert K. Hoover (7) 120,000 * 120,000 0 0
Vice President, Legal
James Hoyt (8) 51,500 * 50,000 1,500 *
Vice President,
Technology
William W. Hymes (9) 130,000 * 130,000 0 0
Senior Vice President and
Group President
Thomas A. Lutz (10) 102,000 * 100,000 2,000 *
Vice President and Group
President
Jeannette P. Meier (11) 500,000 * 500,000 0 0
Executive Vice President,
Chief Financial Officer,
General Counsel and
Secretary
150,000 * 150,000 0 0
Phillip A. Moore (12)
Executive Vice President
Paul L.H. Olson (13) 200,000 * 200,000 0 0
Senior Vice President and
Group President
Stephen R. Perkins (14) 180,000 * 180,000 0 0
Senior Vice President and
Group President
J. Brad Sharp (15) 162,000 * 160,000 2,000 *
Senior Vice President and
Group President
Stephen P. Shiflett (16) 130,000 * 130,000 0 0
Vice President, Finance
Dawn Wheeler (17) 50,000 * 50,000 0 0
Vice President, Investor
Relations
Sterling L. Williams (18) 3,000,000 3.8% 3,000,000 0 0
Chairman of the Board,
Chief Executive Officer
and Director
G. Clark Woodford (19) 120,000 * 120,000 0 0
Vice President, Business
Development
The Little Woody 1,600,000 2.1 1,600,000 0 0
International Trust (20)
The Scotty Trust (21) 200,000 * 200,000 0 0
The Crazy Horse Trust (22) 3,000,000 3.8 3,000,000 0 0
</TABLE>
________________________
* Less than 1% of class.
-4-
<PAGE>
(1) Based on ownership as of September 30, 1996.
(2) Based on 75,000,000 shares of Common Stock issued and outstanding as of
September 30, 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.
(4) 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.
(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.
(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 120,000 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.
(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.
(9) Includes 130,000 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.
(10) 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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.
(15) Includes 160,000 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.
(16) Includes 130,000 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.
(17) 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.
(18) 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.
(19) Includes 120,000 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.
(20) 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.
(21) 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.
(22) 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 September 30, 1996, the total number of shares of Common Stock
available for issuance under the Plan was 17,450,400 and Options exercisable for
12,252,000 of such shares had been granted, resulting in Options for 5,198,400
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
-6-
<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.
-7-
<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
--------------------------------
October , 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 (filed herewith).
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 (filed herewith).
24.2 Powers of Attorney of certain officers and directors of the Company
(filed herewith).
99.1 Sterling Commerce, Inc. Amended and Restated 1996 Stock Option Plan
(filed herewith).
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on October 11, 1996.
STERLING COMMERCE, INC.
By: /s/ STERLING L. WILLIAMS
-------------------------------
Sterling L. Williams
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on October 11, 1996.
Signatures Title
---------- -----
/s/ STERLING L. WILLIAMS Chairman of the Board and Chief Executive Officer;
- --------------------------- Director (Principal Executive Officer)
Sterling L. Williams
Jeannette P. Meier * Executive Vice President, Chief Financial Officer,
- --------------------------- General Counsel and Secretary
Jeannette P. Meier (Principal Financial and Accounting Officer)
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
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement 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 (filed herewith).
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 (filed herewith).
24.2 Powers of Attorney of certain officers and directors of the Company
(filed herewith).
99.1 Sterling Commerce, Inc. Amended and Restated 1996 Stock Option Plan
(filed herewith).
II-5
<PAGE>
Exhibit 5.1
-----------
[Letterhead of Jones, Day, Reavis & Pogue]
October 11, 1996
Sterling Commerce, Inc.
8080 North Central Expressway
Suite 1100
Dallas, Texas 75206
Re: Registration Statement on Form S-3 relating to 17,450,400 Shares of
Common Stock, par value $0.01 per share, of Sterling Commerce, Inc.
-------------------------------------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Sterling Commerce, Inc., a Delaware
corporation (the "Company"), in connection with the registration of 17,450,400
shares (the "Shares") of Common Stock, par value $0.01 per share, of the Company
pursuant to the Company's Registration Statement on Form S-3 (the "Registration
Statement").
We have examined such documents, records, and matters of law as we
have deemed necessary for purposes of this opinion. Based on such examination
and on the assumptions set forth below, we are of the opinion that the Shares
are duly authorized and, when issued and delivered in accordance with the
provisions of the Company's Amended and Restated 1996 Stock Option Plan (the
"Plan") against payment of the consideration therefor as provided in the Plan
and having a value not less than the par value thereof, will be validly issued,
fully paid, and nonassessable.
In rendering the foregoing opinion, we have relied as to certain
factual matters upon certificates of officers of the Company and public
officials, and we have not independently checked or verified the accuracy of the
statements contained therein. In addition, our examination of matters of law
has been limited to the General Corporation Law of the State of Delaware and the
federal laws of the United States of America, in each case as in effect on the
date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to us in the Prospectus under the
caption "Legal Matters."
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<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 9, 1996
<PAGE>
Exhibit 24.1
------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, on behalf of
Sterling Commerce, Inc., a Delaware corporation (the "Corporation"), hereby
constitutes and appoints 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 the Corporation to sign on the Corporation's behalf 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 it 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.
STERLING COMMERCE, INC.
By: /s/ Sterling L. Williams
-------------------------------------
Sterling L. Williams,
Chairman of the Board and Chief
Executive Officer
Dated: September 30, 1996
<PAGE>
Exhibit 24.2
------------
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 or her and in
his or her name, place and stead, to sign on his or her 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 or she 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: September 30, 1996
/s/ Sterling L. Williams /s/ Evan A. Wyly
- -------------------------------------- --------------------------------------
Sterling L. Williams Evan A. Wyly
/s/ Jeannette P. Meier /s/ Robert E. Cook
- -------------------------------------- --------------------------------------
Jeannette P. Meier Robert E. Cook
/s/ Sam Wyly /s/ Honor R. Hill
- -------------------------------------- --------------------------------------
Sam Wyly Honor R. Hill
/s/ Charles J. Wyly, Jr.
- --------------------------------------
Charles J. Wyly, Jr.
<PAGE>
Exhibit 99.1
------------
STERLING COMMERCE, INC.
AMENDED AND RESTATED
1996 STOCK OPTION PLAN
----------------------
Sterling Commerce, Inc., a Delaware corporation (the "Company"),
established the Sterling Commerce, Inc. 1996 Stock Option Plan (the "Plan"),
effective as of February 12, 1996. The Plan was amended and restated, effective
as of September 13, 1996.
1. Purpose. The purpose of the Plan is to attract and retain the best
-------
available talent and encourage the highest level of performance by executive
officers, key employees, directors, advisors and consultants, and to provide
them with incentives to put forth maximum efforts for the success of the
Company's business, in order to serve the best interests of the Company and its
stockholders. All options granted under the Plan are intended to be
nonstatutory stock options.
2. Definitions. The following terms, when used in the Plan with initial
-----------
capital letters, will have the following meanings:
(a) "Act" means the Securities Exchange Act of 1934, as in effect from
time to time.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time.
(d) "Common Stock" means the common stock, par value $.01 per share,
of the Company or any security into which such common stock may be changed
by reason of any transaction or event of the type described in Paragraph 6.
(e) "Date of Grant" means the date specified by the Stock Option
Committee, the Special Stock Option Committee or the Board, as applicable,
on which a grant of Stock Options will become effective (which date will
not be earlier than the date on which such committee or the Board takes
action with respect thereto).
(f) "Market Value per Share" means the fair market value per share of
the Common Stock on the Date of Grant as determined by the Stock Option
Committee, the Special Stock Option Committee or the Board, as applicable.
(g) "Option Price" means the purchase price per share payable on
exercise of a Stock Option.
(h) "Participant" means a person who is selected by the Stock Option
Committee, the Special Stock Option Committee or the Board, as applicable,
to receive Stock Options under Paragraph 5 of the Plan and who is at that
time (i) an executive officer or other key employee of the Company or any
Subsidiary, (ii) an advisor or consultant to the Company or any Subsidiary,
or (iii) a member of the Board.
(i) "Rule 16b-3" means Rule 16b-3 under Section 16 of the Act, as such
Rule is in effect from time to time.
<PAGE>
(j) "Special Stock Option Committee" means the 1996 Special Stock
Option Committee which is a committee of the Board whose members are
appointed by the Board from time to time. All of the members of the
Special Stock Option Committee, which may not be less than two, are
intended at all times to 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; provided, however, that the failure of a member of
-------- -------
such committee to so qualify shall not be deemed to invalidate any Stock
Option granted by such committee. Although the Special Stock Option
Committee has the authority under the Plan to make grants of Stock Options
to any Participant, it is anticipated that the Special Stock Option
Committee will make grants of Stock Options to those Participants who are
executive officers of the Company and/or members of the Board, and as a
result thereof are subject to Section 16 of the Act and the rules
promulgated thereunder.
(k) "Stock Option" means the right to purchase a share of Common Stock
upon exercise of an option granted pursuant to Paragraph 5.
(l) "Stock Option Committee" means the 1996 Stock Option Committee,
which is a committee of the Board whose members are appointed by the Board
from time to time. Although the Stock Option Committee has the authority
under the Plan to make grants of Stock Options to any Participant, it is
anticipated that the Stock Option Committee will make grants of Stock
Options to those Participants who are neither executive officers of the
Company nor members of the Board, and as a result thereof are not subject
to Section 16 of the Act and the rules promulgated thereunder.
(m) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns or controls, directly or indirectly,
not less than 50% of the total combined voting power or equity interests
represented by all classes of stock issued by such corporation,
partnership, joint venture or other entity.
3. Shares Available Under Plan. The shares of Common Stock which may be
---------------------------
issued under the Plan will not exceed in the aggregate 15,000,000 shares,
subject to adjustment as provided in this Paragraph 3. Such shares may be
shares of original issuance or treasury shares or a combination of the
foregoing.
(a) Any shares of Common Stock which are subject to Stock Options that
are terminated unexercised, forfeited or surrendered or that expire for any
reason will again be available for issuance under the Plan.
(b) If, as of the close of business on the last day of each fiscal
quarter of the Company following the initial public offering of the Common
Stock, the sum of (i) the total number of shares of Common Stock previously
issued upon the exercise of Stock Options, (ii) the total number of shares
of Common Stock then subject to outstanding Stock Options, and (iii) the
total number of shares of Common Stock then remaining available for future
Stock Option grants under the Plan (such sum being the "Plan Shares") is
less than 20% of the total number of shares of Common Stock then
outstanding computed on a fully diluted basis (such total number being the
"Outstanding Shares"), the number of shares of Common Stock available for
issuance under the Plan will be increased (but not decreased) so that the
number of Plan Shares will be equal to 20% of the number of Outstanding
Shares. For purposes of the foregoing adjustment, all outstanding Stock
Options will be treated as fully exercised in computing the number of
outstanding shares of Common Stock on a fully diluted basis, without regard
to whether the Stock Options are then fully exercisable.
(c) The shares available for issuance under the Plan also will be
subject to adjustment as provided in Paragraph 6.
4. Individual Limitation on Stock Options. The maximum aggregate number
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of shares of Common Stock with respect to which Stock Options may be granted to
any Participant during the term of the Plan will not exceed 10,000,000 shares.
<PAGE>
5. Grants of Stock Options. The Stock Option Committee, the Special
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Stock Option Committee or the Board may from time to time authorize grants to
any Participant of Stock Options upon such terms and conditions as such
committee or the Board, as applicable, may determine in accordance with the
provisions set forth below.
(a) Each grant will specify the number of shares of Common Stock to
which it pertains.
(b) Each grant will specify the Option Price, which will not be less
than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable
(i) in cash or by check acceptable to the Company, (ii) by the transfer to
the Company of shares of Common Stock owned by the Participant for at least
six months (or, with the consent of the Stock Option Committee, the Special
Stock Option Committee or the Board, as applicable, for less than six
months) having an aggregate fair market value per share at the date of
exercise equal to the aggregate Option Price, (iii) with the consent of the
Stock Option Committee, the Special Stock Option Committee or the Board, as
applicable, by authorizing the Company to withhold a number of shares of
Common Stock otherwise issuable to the Participant having an aggregate fair
market value per share on the date of exercise equal to the aggregate
Option Price or (iv) by a combination of such methods of payment; provided,
--------
however, that the payment methods described in clauses (ii) and (iii) will
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not be available at any time that the Company is prohibited from purchasing
or acquiring such shares of Common Stock. Any grant may provide for
deferred payment of the Option Price from the proceeds of sale through a
bank or broker of some or all of the shares to which such exercise relates.
(d) Successive grants may be made to the same Participant whether or
not any Stock Options previously granted to such Participant remain
unexercised.
(e) Each grant will specify the required period or periods (if any) of
continuous service by the Participant with the Company or any Subsidiary
and/or any other conditions to be satisfied before the Stock Options or
installments thereof will become exercisable, and any grant may provide, or
may be amended to provide, for the earlier exercise of the Stock Options in
the event of a change in control of the Company (as defined in the stock
option agreement evidencing such grant or in any agreement referred to in
such stock option agreement) or in the event of any other similar
transaction or event.
(f) Each Stock Option granted pursuant to this Paragraph 5 may be made
subject to such transfer restrictions as the Stock Option Committee, the
Special Stock Option Committee or the Board, as applicable, may determine.
(g) Each grant will be evidenced by a stock option agreement executed
on behalf of the Company by the Chief Executive Officer (or another officer
designated by the Stock Option Committee, the Special Stock Option
Committee or the Board, as applicable) and delivered to the Participant and
containing such further terms and provisions, consistent with the Plan, as
such committee or the Board, as applicable, may approve.
6. 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 specified in Paragraph 3, in the number of shares of Common
Stock covered by outstanding Stock Options granted hereunder, in the Option
Price applicable to any such Stock 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
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, partial or
complete 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. In the event the Stock Option Committee and the Special Stock Option
Committee shall disagree (or
<PAGE>
either or both shall disagree with the Board) with respect to the foregoing
adjustments, the Board's determination will be final and conclusive. Any
fractional shares resulting from the foregoing adjustments will be eliminated.
7. Withholding of Taxes. To the extent that the Company is required to
--------------------
withhold federal, state, local or foreign taxes in connection with any benefit
realized by an optionee under the Plan, or is requested by an optionee to
withhold additional amounts with respect to such taxes, and the amounts
available to the Company for such withholding are insufficient, it will be a
condition to the realization of such benefit that the optionee make arrangements
satisfactory to the Company for payment of the balance of such taxes required or
requested to be withheld. In addition, if permitted by the Stock Option
Committee, the Special Stock Option Committee or the Board, an optionee may
elect to have any withholding obligation of the Company satisfied with shares of
Common Stock that would otherwise be transferred to the optionee on exercise of
the Stock Option.
8. Administration of the Plan. (a) The Plan will be administered by the
--------------------------
Stock Option Committee, the Special Stock Option Committee and the Board. For
purposes of any action taken by the Stock Option Committee, the Special Stock
Option Committee or the Board, whichever is applicable, a majority of the
members will constitute a quorum, and the action of the members present at any
meeting at which a quorum is present, or acts unanimously approved in writing,
will be the acts of the Stock Option Committee, the Special Stock Option
Committee or the Board.
(b) 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 a Stock 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 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 shall
disagree (or either or both shall disagree with the Board) with respect to such
interpretation, construction or determination, the Board's determination will be
final and conclusive. No member of the Stock Option Committee, the Special
Stock Option Committee or the Board will be liable for any such action or
determination made in good faith.
(c) Notwithstanding any provision of the Plan to the contrary, the
Special Stock Option Committee will have the exclusive authority and discretion
to take any action required or permitted to be taken under the provisions of
Paragraph 6, Paragraph 8(a), Paragraph 8(b), Paragraph 9(a) and Paragraph 9(b)
with respect to Stock Options granted under the Plan that are intended to comply
with the requirements of Section 162(m) of the Code.
9. Amendments, Etc. (a) The Stock Option Committee, the Special Stock
----------------
Option Committee or the Board, as applicable, may, without the consent of the
optionee, amend any agreement evidencing a Stock Option granted under the Plan,
or otherwise take action, to accelerate the time or times at which the Stock
Option may be exercised, to extend the expiration date of the Stock Option, to
waive any other condition or restriction applicable to such Stock Option or to
the exercise of such Stock Option, to reduce the exercise price of such Stock
Option, to amend the definition of a change in control of the Company (if such a
definition is contained in such agreement) to expand the events that would
result in a change in control of the Company and to add a change in control
provision to such agreement (if such provision is not contained in such
agreement) and may amend any such agreement in any other respect with the
consent of the optionee.
(b) 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 Securities and
Exchange 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 is amended or supplemented (e.g., by addition of alternative rules)
----
or any of the rules
<PAGE>
under Section 16 of the Act are amended or supplemented, in either event to
permit the Company to remove or lessen any restrictions on or with respect to
Stock Options, the Stock Option Committee, the Special Stock Option Committee
and the Board each reserves the right to amend the Plan to the extent of any
such requirement, amendment or supplement, and all Stock Options then
outstanding will be subject to such amendment.
(c) 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 Stock Option.
(d) The Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate a Participant's employment or other
service at any time.
STERLING COMMERCE, INC.
By /s/ Sterling L. Williams
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Name: Sterling L. Williams
Title: Chairman and Chief Executive Officer
