<PAGE>
As filed with the Securities and Exchange Commission on November 21, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
STERLING COMMERCE, INC.
(Exact name of registrant as specified in its charter)
300 CRESCENT COURT, SUITE 1200
DALLAS, TEXAS 75201
(214) 981-1100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DELAWARE 75-2623341
(State of incorporation) (I.R.S. Employer
Identification Number)
STERLING COMMERCE, INC. EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
ALBERT K. HOOVER, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
STERLING COMMERCE, INC.
4600 LAKEHURST COURT
DUBLIN, OH 43016-2000
(614) 793-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH A COPY TO:
JAMES E. O'BANNON, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-3939
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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 . . . . . . . . 4,000,000 $33.65625 $134,625,000 $40,796
========================================================================================================================
</TABLE>
(1) Represents shares issuable under the Sterling Commerce, Inc. Employee
Stock Purchase Plan (the "Plan"). Pursuant to Rule 416, there are
registered hereunder such indeterminate number of additional shares as may
become issuable 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 under the Plan.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN PROSPECTUS
EXPLANATORY NOTE
The information called for by Part I of this Registration Statement on Form
S-8 (the "Registration Statement") is included in the description of the
Sterling Commerce, Inc. Employee Stock Purchase Plan (the "Plan") to be
delivered to persons eligible to participate in the Plan. Pursuant to the Note
to Part I of Form S-8, this information is not being filed with or included in
this Registration Statement. Included herein is a Prospectus to be used in
connection with reoffers and resales of shares of common stock, par value $0.01
per share, of Sterling Commerce, Inc. acquired pursuant to the Plan which has
been prepared in accordance with the requirements of Form S-3 pursuant to
General Instruction C of Form S-8 relating to such shares.
<PAGE>
REOFFER PROSPECTUS
4,000,000 SHARES
STERLING COMMERCE, INC.
Common Stock
This Prospectus relates to up to 4,000,000 shares (the "Shares") of Common
Stock, par value $0.01 per share (the "Common Stock"), of Sterling Commerce,
Inc., a Delaware corporation (the "Company"), issued pursuant to the Sterling
Commerce, Inc. Employee Stock Purchase Plan (the "Plan"). The terms and
conditions of this Prospectus are governed by the provisions of the Plan and the
agreements thereunder.
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 November 20, 1997, the closing price of the Common Stock on the NYSE was
$35 1/16.
----------------
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 21, 1997.
<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 office 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 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 the
Company's Annual Report on Form 10-K for the period ended September 30, 1997.
All documents subsequently filed by the Company pursuant to Sections 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 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, Senior Vice President and General
Counsel (telephone: (614) 793-7000).
-2-
<PAGE>
THE COMPANY
The Company 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 300 Crescent Court, Suite 1200,
Dallas, Texas 75201, and the Company's telephone number at such address is
(214) 981-1100.
USE OF PROCEEDS
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 Selling Stockholders of an
aggregate of up to 4,000,000 shares of Common Stock. Information regarding the
identity of the Selling Stockholders, the number of purchase rights granted and
certain information relating to the Selling Stockholders will be provided by
supplement to this Prospectus.
PLAN OF DISTRIBUTION
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. In addition,
any of the Shares covered by this Prospectus that qualify for sale pursuant to
Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Company will pay all of the expenses incident to the offering and sale
of the Shares to the public made pursuant to this Prospectus other than
underwriting discounts or commissions, brokers' fees and the fees and expenses
of any counsel to the Selling Stockholders related thereto.
-3-
<PAGE>
EXPERTS
The consolidated financial statements and financial statement schedule
appearing in the Company's Annual Report on Form 10-K for the year ended
September 30, 1997 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and financial statement
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
FORWARD-LOOKING INFORMATION
This Prospectus (including the documents incorporated herein by reference)
contains or may contain certain forward-looking statements and information that
are based on beliefs of, and information currently available to, the Company's
management as well as estimates and assumptions made by the Company's
management. When used in this Prospectus, words such as "anticipate,"
"believe," "estimate," "expect," "future," "intend," "plan" 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 Company's operations and results
of operations, 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 and other risks and uncertainties including, in
addition to any uncertainties specifically identified in the text surrounding
such statements, uncertainties with respect to changes or developments in
social, economic, business, industry, market, legal and regulatory circumstances
and conditions and actions taken or omitted to be taken by third parties,
including the Company's stockholders, customers, suppliers, business partners,
competitors, and legislative, regulatory, judicial and other governmental
authorities and officials. Should one or more of these risks or uncertainties
materialize, or should the underlying estimates or assumptions prove incorrect,
actual results or outcomes may vary significantly from those anticipated,
believed, estimated, expected, intended or planned.
-4-
<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
Plan of Distribution............. 3
Experts.......................... 4
Forward-Looking Information...... 4
4,000,000 SHARES
STERLING COMMERCE, INC.
COMMON STOCK
--------------------------------
PROSPECTUS
---------------------------------
NOVEMBER 21, 1997
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Registration
Statement the Company's Annual Report on Form 10-K for the period ended
September 30, 1997.
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 to be incorporated by reference in this
Registration Statement and to be a part of this Registration Statement 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 Registration Statement 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 Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable (securities to be offered are registered under Section 12 of
the Exchange Act).
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. 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
II-1
<PAGE>
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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 Sterling Commerce, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Jones, Day, Reavis & Pogue.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney.
ITEM 9. UNDERTAKINGS
A. The 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 of 1933, as amended (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 and of the
estimated maximum offering range may be reflected in the form of
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;
II-2
<PAGE>
(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-8 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 November 21, 1997.
STERLING COMMERCE, INC.
By: /s/ WARNER C. BLOW
----------------------------------------
Warner C. Blow
Chief Executive Officer and President
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 November 21, 1997.
Signatures Title
---------- -----
/s/ Warner C. Blow Chief Executive Officer and President; Director
- ----------------------- (Principal Executive Officer)
Warner C. Blow
Steven P. Shiflet* Senior Vice President and Chief Financial Officer
- ----------------------- (Principal Financial and Accounting Officer)
Steven P. Shiflet
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
Director
- -----------------------
Robert E. Cook
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 HOOVER
------------------------------------
Albert K. Hoover
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Sterling Commerce, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Jones, Day, Reavis & Pogue.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney.
<PAGE>
Exhibit 4.1
-----------
STERLING COMMERCE, INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests of
Sterling Commerce, Inc. by providing eligible employees with the opportunity to
acquire a proprietary interest in the Corporation through participation in an
employee stock purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority and discretion to
interpret and construe any provision of the Plan, to adopt such rules and
regulations for administering the Plan as it may deem necessary, and to take any
such actions as may be necessary in order to comply with the requirements of
Section 423 of the Code. Decisions of the Plan Administrator shall be final and
binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized but
unissued Common Stock, or shares of Common Stock held in the Corporation's
treasury. The maximum number of shares of Common Stock which may be issued over
the term of the Plan shall not exceed 4,000,000 shares.
B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per Participant on
any one Purchase Date and (iii) the number and class of securities and the price
per share in effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
IV. PURCHASE PERIODS
A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive purchase periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
<PAGE>
B. Each purchase period shall have a duration of six (6) months. Purchase
periods shall run from January 1 to June 30 and from July 1 to December 31 of
each year.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the Effective Date shall
be eligible to participate in the Plan on the start date of any purchase period
under the Plan, provided such individual remains an Eligible Employee on such
start date.
B. Each individual who becomes an Eligible Employee after the Effective
Date shall be eligible to participate in the Plan on the start date of any
purchase period commencing thereafter, provided such individual remains an
Eligible Employee on such start date.
C. To participate in the Plan for a particular purchase period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator and file such forms with the Plan Administrator (or its designee)
before the start date of the purchase period. An Eligible Employee's enrollment
in the Plan for a purchase period will remain in effect for all subsequent
purchase periods until modified or terminated by the Eligible Employee or until
he or she no longer qualifies as an Eligible Employee.
VI. PAYROLL DEDUCTIONS; CONTRIBUTIONS
A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock under the Plan may be any multiple of one
percent (1%) of the Compensation paid to the Participant during each purchase
period, up to a maximum of twenty-five percent (25%). The deduction rate so
authorized shall continue in effect for the entire purchase period. The
Participant may not increase his or her rate of payroll deduction during a
purchase period. However, the Participant may, at any time prior to the last
ten (10) Business Days of the purchase period, reduce his or her rate of payroll
deduction to any even percentage rate other than zero to become effective
prospectively as soon as administratively feasible after filing the appropriate
form with the Plan Administrator. The Participant may not, however, effect more
than one (1) such reduction per purchase period. In addition, a Participant may
prior to the last ten (10) Business Days of the purchase period reduce his or
her rate of payroll deductions to zero, notwithstanding a prior reduction. If a
Participant reduces his or her payroll deductions to zero, the Participant's
previous payroll deductions for the purchase period will be applied to the
purchase of shares of Common Stock on the next Purchase Date, unless the
Participant elects to terminate his or her purchase rights for the purchase
period in accordance with Section VII.E.
B. Payroll deductions shall begin on the first pay day of each purchase
period and shall (unless sooner terminated) continue through the pay day ending
with or immediately prior to the last day of the purchase period. The amounts
so collected shall be credited to the Participant's book account under the Plan,
and Interest shall accrue and be credited on each pay day in the purchase period
on the balance credited to the Participant's account existing throughout the pay
period ending on such pay day. No interest will accrue or be credited on any
amounts that are credited to the Participant's account for any period that is
less than a full pay period. The amounts collected from the Participant shall
not be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.
-2-
<PAGE>
C. Payroll deductions shall automatically cease upon the termination of
the Participant's purchase right in accordance with the provisions of the Plan.
D. In addition to payroll deductions, a Participant may make one
Contribution to the Plan during each purchase period. A Contribution may be
made in cash, by personal check or in any other form permitted from time to time
by the Plan Administrator. All Contributions will be credited to the
Participant's book account and will be credited with Interest for the purchase
period in which the Contribution is made. Such Interest will accrue and be
credited to the Participant's account in the same manner as Interest is accrued
and credited to the Participant's account under paragraph B of this Section. An
Eligible Employee who has not authorized payroll deductions, or who has
terminated payroll deductions, for a purchase period may not thereafter make a
Contribution to the Plan for such purchase period.
E. Subject to Section VIII, the Participant's acquisition of Common Stock
under the Plan on any Purchase Date shall neither limit nor require the
Participant's acquisition of Common Stock on any subsequent Purchase Date.
VII. PURCHASE RIGHTS
A. A Participant shall be granted a separate purchase right on the start
date of each purchase period in which he or she participates. The purchase
right shall provide the Participant with the right to purchase shares of Common
Stock on the Purchase Date upon the terms set forth below. Under no
circumstances shall purchase rights be granted under the Plan to any Eligible
Employee if such individual would, immediately after the grant, own (within the
meaning of Section 424(d) of the Code) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Corporation or any
Corporate Affiliate.
B. Each purchase right shall be automatically exercised on the Purchase
Date, and shares of Common Stock shall accordingly be purchased on behalf of
each Participant (other than any Participant whose payroll deductions have
previously been refunded in accordance with paragraph E below) on such date.
The purchase shall be effected by applying the Participant's Account Balance as
of the close of the purchase period for such Purchase Date to the purchase of
shares of Common Stock (subject to the limitations on the maximum number of
shares purchasable per Participant under this Section VII or Section VIII) at
the Purchase Price in effect for that purchase period.
C. The number of shares of Common Stock purchasable by a Participant on
each Purchase Date shall be the number of whole shares obtained by dividing the
Participant's Account Balance as of the close of the purchase period by the
Purchase Price in effect for that Purchase Date. However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed 3,000 shares.
D. Any portion of the Participant's Account Balance that is not applied to
the purchase of shares of Common Stock on any Purchase Date because such portion
is not sufficient to purchase a whole share of Common Stock shall be held for
the purchase of Common Stock on the next Purchase Date, unless the Participant
has elected not to participate during the next purchase period, in which case
the Participant's entire remaining Account Balance shall be refunded to the
Participant as soon
-3-
<PAGE>
as administratively feasible. In addition, any portion of the Participant's
Account Balance not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant on the
Purchase Date shall be refunded as soon as administratively feasible.
E. The following provisions shall govern the termination of outstanding
purchase rights:
(i) A Participant may, at any time prior to the tenth Business Day
immediately preceding the Purchase Date for the purchase period, terminate
his or her outstanding purchase right by filing the appropriate form with the
Plan Administrator (or its designee), and no further payroll deductions shall
be collected from the Participant and no subsequent Contribution may be made
by the Participant for the purchase period in which such termination occurs.
The Participant's entire Account Balance as of the date of such termination
shall be refunded as soon as administratively feasible.
(ii) The termination of such purchase right shall be irrevocable, and
the Participant may not subsequently rejoin the purchase period for which the
terminated purchase right was granted. In order to resume participation in
any subsequent purchase period, such individual must re-enroll in the Plan
(by making a timely filing of the prescribed enrollment forms) on or before
the start date of the new purchase period.
(iii) Should the Participant cease to remain an Eligible Employee for
any reason (including death, disability or change in status) while his or her
purchase right remains outstanding, then that purchase right shall
immediately terminate, and the Participant's entire Account Balance as of the
date such person is no longer an Eligible Employee shall be refunded as soon
as administratively feasible. However, should the Participant cease to
remain in active service by reason of an approved unpaid leave of absence,
then the Participant shall have the right, exercisable up until the tenth
Business Day immediately preceding the Purchase Date for the purchase period
in which such leave commences, to (a) withdraw his or her entire Account
Balance, or (b) have such Account Balance held for the purchase of shares at
the next scheduled Purchase Date. Upon the Participant's return to active
service, his or her payroll deductions under the Plan shall automatically
resume at the rate in effect at the time the leave began, unless the
Participant elected to withdraw his or her Account Balance for the purchase
period in which the leave commenced.
(iv) Notwithstanding any other provision of the Plan to the contrary, a
Participant's purchase rights with respect to a purchase period shall
terminate, and his or her Account Balance shall be refunded as soon as
administratively feasible, if the Participant's employment with the
Participating Corporations terminates for any reason on or before the
Purchase Date for such purchase period.
F. Each outstanding purchase right shall automatically be exercised,
immediately prior to the effective date of any Corporate Transaction, by
applying the Participant's Account Balance for such purchase period to the
purchase of shares of Common Stock at a Purchase Price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
-----
Common Stock on the start date of the purchase period in which such Corporate
Transaction occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Corporate
-4-
<PAGE>
Transaction. However, the applicable limitation on the number of shares of
Common Stock purchasable per Participant shall continue to apply to any such
purchase. The Corporation shall use reasonable efforts to provide prior written
notice of the occurrence of any Corporate Transaction, and Participants shall,
following the receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the effective date of the Corporate
Transaction.
G. Should the total number of shares of Common Stock which are to be
purchased pursuant to outstanding purchase rights on any particular date exceed
the number of shares then available for issuance under the Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a
uniform and nondiscriminatory basis, and the Account Balance of each
Participant, to the extent in excess of the aggregate Purchase Price payable for
the Common Stock pro-rated to such individual, shall be refunded.
H. The purchase right shall be exercisable only by the Participant and
shall not be assignable or transferable by the Participant.
I. A Participant shall have no stockholder rights with respect to the
shares subject to his or her outstanding purchase right until the shares are
purchased on the Participant's behalf in accordance with the provisions of the
Plan and the Participant has become a holder of record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such rights, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation of any Corporate Affiliate
(determined on the basis of the Fair Market Value of such stock on the date or
dates such rights are granted) for each calendar year such rights are at any
time outstanding.
B. For purposes of applying such accrual limitations, the following
provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding purchase
right shall accrue on the Purchase Date in effect for the purchase period for
which such right is granted.
(ii) No right to acquire Common Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued in the
same calendar year the right to acquire Common Stock under one (1) or more
other purchase rights in an amount equal to Twenty-Five Thousand Dollars
($25,000) worth of Common Stock (determined on the basis of the Fair Market
Value per share on the date or dates of grant) for each calendar year such
rights were at any time outstanding.
-5-
<PAGE>
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular purchase period, then the
Participant's Account Balance with respect to such purchase right shall be
refunded as soon as administratively feasible.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on November 7, 1997, and shall become
effective on the Effective Date, provided no purchase rights granted under the
--------
Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange on which the Common Stock is listed for trading and all other
applicable requirements established by law or regulation. In the event such
stockholder approval is not obtained, or such compliance is not effected, within
six (6) months after the date on which the Plan is adopted by the Board, the
Plan shall terminate and have no further force or effect and the Participants'
Account Balances for the initial purchase period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest to occur of (i) the last Business Day in December 2007, (ii) the
--------
date on which all shares available for issuance under the Plan shall have been
sold pursuant to purchase rights exercised under the Plan or (iii) the date on
which all purchase rights are exercised in connection with a Corporate
Transaction. No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan following such
termination.
X. AMENDMENT OF THE PLAN
A. 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
Corporation, the Common Stock or the Plan, requires the Plan to be amended, or
in the event Rule 16b-3 under Section 16 of the 1934 Act is amended or
supplemented (e.g., by addition of alternative rules) or any of the rules under
---
Section 16 of the 1934 Act are amended or supplemented, in either event to
require or permit the Corporation to add, remove or lessen any restrictions on
or with respect to purchase rights under the Plan, the Plan Administrator and
the Board each reserves the right to amend the Plan to the extent of any such
requirement, amendment or supplement, and all purchase rights then outstanding
will be subject to such amendment.
B. 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
purchase rights.
-6-
<PAGE>
C. Notwithstanding the foregoing, the Board may not, without the approval
of the Corporation's stockholders, increase the number of shares of Common Stock
issuable under the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan shall
be paid by the Corporation.
B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such
person), which rights are hereby expressly reserved by each, to terminate such
person's employment at any time for any reason, with or without cause.
-7-
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. ACCOUNT BALANCE shall mean the sum of a Participant's payroll
---------------
deductions, credited Interest, and Contribution (if any) as of any given date.
B. BOARD shall mean the Corporation's Board of Directors or any authorized
-----
committee thereof.
C. BUSINESS DAY shall mean each day on which the New York Stock Exchange
------------
is open for business.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
E. COMMON STOCK shall mean the Corporation's common stock, par value $0.01
------------
per share.
F. COMPENSATION means the following items of remuneration paid to a
------------
Participant by one or more Participating Corporations during each purchase
period: base salary, commissions and cash incentive compensation, computed
before giving effect to the Participant's election to defer compensation under
the Sterling Commerce, Inc. Deferred Compensation Plan or salary reduction
elections under Section 125 or Section 401(k) of the Code.
G. CONTRIBUTION shall mean a Participant's contribution for a purchase
------------
period in an amount that does not exceed $2,000 and which is made before the
tenth Business Day immediately preceding the Purchase Date for the purchase
period.
H. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation of
-------------------
the Corporation (as determined in accordance with Code Section 424, whether now
existing or subsequently established).
I. CORPORATE TRANSACTION shall mean either of the following stockholder-
---------------------
approved transactions to which the Corporation is a party:
(i) a merger, consolidation or other transaction in which securities
possessing more than fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately prior
to such transaction, or
(ii) the sale, transfer or other disposition of all or substantially all
of the assets of the Corporation in complete liquidation or dissolution of
the Corporation.
J. CORPORATION shall mean Sterling Commerce, Inc., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of Sterling Commerce, Inc. which shall by appropriate action adopt the
Plan.
<PAGE>
K. EFFECTIVE DATE shall mean January 1, 1998.
--------------
L. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly expected
to render at least twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
M. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation or any Corporate Affiliate.
N. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
-----------------
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National Market
or any successor system. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time listed on any stock exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the stock exchange determined by the
Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
O. INTEREST shall mean an additional amount of compensation calculated at
--------
the annual rate of interest of six month Treasury bills as in effect on the last
day of the month immediately preceding the applicable purchase period during
which such compensation is credited, prorated for periods of less than 365 days.
P. 1933 ACT shall mean the Securities Act of 1933, as amended.
--------
Q. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
--------
R. PARTICIPANT shall mean any Eligible Employee of a Participating
-----------
Corporation who is actively participating in the Plan.
S. PARTICIPATING CORPORATION shall mean the Corporation, each Corporate
-------------------------
Affiliate that is a direct or indirect domestic subsidiary of the Corporation
and each other Corporate Affiliate that is authorized from time to time by the
Board to extend the benefits of the Plan to its Eligible Employees. For purposes
of the foregoing, the term "subsidiary" has the meaning set forth in Section
424(f) of the Code.
A-2
<PAGE>
T. PLAN shall mean the Corporation's Employee Stock Purchase Plan, as set
----
forth in this document.
U. PLAN ADMINISTRATOR shall mean the person or persons appointed by the
------------------
Corporation from time to time as the plan administrator of the Corporation's
Savings and Security Plan.
V. PURCHASE DATE shall mean the last Business Day of each purchase period
-------------
or, with respect to a Corporate Transaction, the date specified for purchase in
Section VII.F.
W. PURCHASE PRICE shall mean the purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date and
shall be equal to eighty-five percent (85%) of the lower of (i) the Fair Market
Value per share of Common Stock on the start date of the purchase period in
which the Purchase Date occurs or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
X. SERVICE shall mean the performance of services to the Corporation or
-------
any Corporate Affiliate by a person in the capacity of an Employee.
A-3
<PAGE>
Exhibit 5.1
-----------
[Letterhead of Jones, Day, Reavis & Pogue]
November 21, 1997
Sterling Commerce, Inc.
300 Crescent Court
Suite 1200
Dallas, Texas 75201
Re: Registration Statement on Form S-8 relating to up to
4,000,000 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 up to 4,000,000 shares
(the "Shares") of Common Stock, par value $0.01 per share, of the Company
("Common Stock") pursuant to the Company's Registration Statement on Form S-8
(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, when issued and
delivered in accordance with the provisions of the Sterling Commerce, Inc.
Employee Stock Purchase 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, the Shares will be duly authorized, 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 with respect to the Common Stock.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference in the Registration Statement (Form S-8) of Sterling
Commerce, Inc. (the "Company"), in connection with the Sterling Commerce, Inc.
Employee Stock Purchase Plan of our report dated November 7, 1997, with respect
to the consolidated financial statements and schedule of the Company included in
its Annual Report (Form 10-K) for the year ended September 30, 1997 filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
November 21, 1997
<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 Albert K. Hoover, Dennis P. Byrnes, Robert L. Estep, James E.
O'Bannon and Sina R. Hekmat 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-8 or any
other appropriate form (the "Registration Statement"), pursuant to the
Securities Act of 1933, as amended, with respect to the Sterling Commerce, Inc.
Employee Stock Purchase Plan 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/ Warner C. Blow
-------------------------------------
Warner C. Blow,
Chief Executive Officer and President
Dated: November 21, 1997
