<PAGE>
As filed with the Securities and Exchange Commission on March 20, 1998.
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.)
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)
----------------
Albert K. Hoover With a copy to:
Senior Vice President and General Counsel
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. [X]
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.
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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================
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..... 4,023,797 $45.115 $181,531,561 $53,552
=================================================================================================
</TABLE>
(1) Represents shares issuable in connection with 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 in connection with
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
IN ACCORDANCE WITH RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
THE PROSPECTUS CONTAINED HEREIN ALSO RELATES TO 16,239,765 SHARES OF THE
REGISTRANT'S COMMON STOCK COVERED BY REGISTRATION STATEMENT NO. 333-13955, WHICH
SHARES HAVE NOT BEEN ISSUED OR ISSUED AND SOLD BY THE SELLING STOCKHOLDERS NAMED
IN THE PROSPECTUS CONTAINED HEREIN.
<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 March 20, 1998
PROSPECTUS
20,263,562 SHARES
STERLING COMMERCE, INC.
Common Stock
This Prospectus relates to the offer and sale by Sterling Commerce, Inc.
("Sterling Commerce" or the "Company") of certain 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"). This
Prospectus also relates to offers and sales from time to time of certain Shares
received by certain persons named herein ("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
March 19, 1998, the closing price of the Common Stock on the NYSE was $48 7/8.
The Company will pay all expenses in connection with this offering, which are
estimated to be approximately $300,000.
----------------
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 March __, 1998.
<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 Annual Report on Form 10-K for the fiscal year ended September 30,
1997, and (ii) the Company's Quarterly Report on Form 10-Q for the period ended
December 31, 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 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, Senior Vice President and General
Counsel (telephone: (614) 793-7000).
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 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.
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<PAGE>
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
20,263,562 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 February 28, 1998
with respect to Selling Stockholders, 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.
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<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
OWNERSHIP OWNERSHIP AFTER
PRIOR TO OFFERING (1) OFFERING
------------------------- COMMON STOCK -----------------------
NAME AND POSITION NUMBER PERCENTAGE (2) OFFERED HEREBY NUMBER PERCENTAGE (2)
- --------------------------- --------- -------------- -------------- ------- --------------
<S> <C> <C> <C> <C> <C>
Warner C. Blow (3) 1,805,157 2.0% 1,800,000 5,157 *
President and Chief
Executive Officer
Robert E. Cook (4) 104,592 * 100,000 4,592 *
Director
Honor R. Hill (5) 75,000 * 75,000 0 *
Director
Albert K. Hoover (6) 156,049 * 155,000 1,049 *
Senior Vice President
and General Counsel
Jeannette P. Meier (7) 751,246 * 747,000 4,246 *
Executive Vice
President and Secretary
Paul L.H. Olson (8) 294,952 * 290,000 4,952 *
Senior Vice President
and Group President
Stephen R. Perkins (9) 261,889 * 261,250 639 *
Senior Vice President
and Group President
J. Brad Sharp (10) 268,236 * 266,250 1,986 *
Senior Vice President
and Group President
Steven P. Shiflet (11) 155,392 * 152,500 2,892 *
Senior Vice President
and Chief Financial
Officer
Sterling L. Williams (12) 4,006,370 4.2% 4,000,000 6,370 *
Chairman of the Board
and Director
Charles J. Wyly, Jr. (13) 1,238,366 1.4% 500,000 738,366 *
Director
Sam Wyly (14) 1,612,080 1.8% 1,000,000 612,080 *
Director
</TABLE>
- ------------------------
* Less than 1% of class.
(1) Based on ownership as of February 28, 1998.
(2) Based on 90,782,621 shares of Common Stock issued and outstanding as of
February 28, 1998.
(3) Includes 1,800,000 Shares to be acquired upon exercise of Options granted
under the Plan, 550,000 of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 5,157 shares of Common Stock held pursuant to the Sterling
Commerce, Inc. Savings and Security Plan ("Savings Plan").
(4) Includes 100,000 Shares to be acquired upon exercise of Options granted
under the Plan, 50,000 of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 1,592 shares of Common Stock held by the REC Enterprises,
Inc. Defined Benefit Pension Trust of which Robert E. Cook and his spouse
are co-trustees and 3,000 shares of Common Stock held by an irrevocable
trust of which Mr. Cook's spouse is sole trustee.
(5) Includes 75,000 Shares to be acquired upon exercise of Options granted
under the Plan, 25,000 of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus.
-4-
<PAGE>
(6) Includes 155,000 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 1,049 shares of Common Stock held pursuant to the Savings
Plan.
(7) Includes 747,000 Shares to be acquired upon exercise of Options granted
under the Plan, 272,000 of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 47 shares of Common Stock held pursuant to the Savings Plan.
(8) Includes 290,000 Shares to be acquired upon exercise of Options granted
under the Plan, 15,000 of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 1,575 shares of Common Stock held pursuant to the Savings
Plan.
(9) Includes 261,250 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 639 shares of Common Stock held pursuant to the Savings Plan.
(10) Includes 266,250 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 1,986 shares of Common Stock held pursuant to the Savings
Plan.
(11) Includes 152,500 Shares to be acquired upon exercise of Options granted
under the Plan, none of which are either presently exercisable or
exercisable within 60 days of the date of this Prospectus. Also includes
approximately 2,892 shares of Common Stock held pursuant to the Savings
Plan.
(12) Includes 4,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable.
(13) Includes 500,000 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable. Also includes
503,447 shares of Common Stock directly owned by family trusts of which Mr.
Charles J. Wyly, Jr. is trustee and 234,919 shares of Common Stock held of
record by a limited partnership of which Mr. Charles J. Wyly, Jr. is a
general partner.
(14) Includes 1,000,000 Shares to be acquired upon exercise of Options granted
under the Plan, all of which are presently exercisable. Also includes
391,327 shares of Common Stock directly owned by family trusts of which Mr.
Sam Wyly is trustee and 220,753 shares of Common Stock held of record by a
limited partnership of which Mr. Sam Wyly is a general partner.
-5-
<PAGE>
AMENDED AND RESTATED 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 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.
SHARES COVERED
As of February 28, 1998, the total number of shares of Common Stock issued
upon exercise of Options granted under the Plan was 1,213,635, the total number
of shares of Common Stock available for issuance under the Plan was 20,260,562
and Options exercisable for 17,822,000 of such shares had been granted,
resulting in Options for 3,652,197 shares being available for grant as of such
date. Options to purchase 11,580,115 shares of Common Stock are either
presently exercisable or exercisable within 60 days of the date of this
Prospectus. 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 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
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<PAGE>
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, key prospective 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.
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
-7-
<PAGE>
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 in the form initially 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
were to receive an automatic award of 100,000 shares of Common Stock every five
years thereafter on the anniversary of such election. As amended, the Plan does
not currently provide for future automatic awards to the members of the Special
Stock Option Committee.
FEDERAL INCOME TAX CONSEQUENCES
General. 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 acquisition, holding, exercise, transfer
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 participant at the time of the grant, but the participant will
recognize ordinary compensation 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
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<PAGE>
exercise price. Such income is subject to withholding of income and FICA taxes.
Generally, participants may satisfy the withholding obligation by writing a
check to the Company or by another method permitted by the Company. A
participant'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 shares acquired upon exercise of an Option are later sold
or exchanged, the difference between the sales price and the participant's tax
basis for the shares will generally be taxable as a capital gain or loss (if the
stock is a capital asset of the participant). For individuals, the rate of
taxation of capital gains will depend on (i) the individual's holding period for
the shares at the time of the sale or other taxable disposition (with the lowest
rate available for shares held more than 18 months) and (ii) the individual's
marginal tax rate for ordinary income. The deductibility of capital losses is
subject to limitations.
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
participant ("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 participant's basis in the number of optioned shares received
equal to the number of Previously Acquired Shares surrendered would be the same
as the participant's basis in the Previously Acquired Shares. However, the
participant 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 participant's basis in such excess shares would be equal to their fair
market value at the time of exercise.
Federal Income Tax Consequences for Transferors. A participant who
transfers a transferable Option by way of gift (the "Transferor") will not
recognize income at the time of the transfer. Instead, at the time the
transferee of the transferable Option (the "Transferee)" exercises the
transferable Option, the Transferor will generally recognize ordinary
compensation income in an amount equal to the excess of the fair market value of
the Shares purchased by the Transferee over the exercise price, in the same
manner as if the participant had retained and exercised the Option. Prior to
making a transfer of a transferable Option, a participant should consult with
his or her personal tax advisor concerning the possible federal and state gift,
estate, inheritance, and generation skipping tax consequences of such a
transfer, as well as state and local income tax consequences which are not
addressed herein.
Federal Income Tax Consequences for Transferees. The Transferee will not
recognize income at the time of the transfer of the transferable Option. As
described in the preceding paragraph, the Transferor and not the Transferee will
generally recognize ordinary compensation income at the time the Transferee
exercises the Option. A Transferee who chooses to exercise a transferable Option
in whole or in part by delivery of other shares of Common Stock already owned by
the Transferee should consult with his or her own tax advisor concerning the tax
consequences of such a transaction. If Shares acquired upon exercise of a
transferable Option are later sold or exchanged, the difference between the
sales price and the Transferee's tax basis for the shares will generally be
taxable as a capital gain or loss (if the stock is a capital asset of the
Transferee). The tax basis for the Shares in the hands of the Transferee would
be the exercise price for the transferable Option plus the amount of the income
recognized by the Transferor 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 a
participant (including a Transferor) 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
-9-
<PAGE>
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.
PLAN OF DISTRIBUTION
The Shares may be issued 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
The validity of the Common Stock offered hereby has been passed upon for the
Company by Dennis P. Byrnes, Esq., Assistant General Counsel of the Company. As
of February 28, 1998, Mr. Byrnes beneficially owned 11,700 shares of Common
Stock, including Shares issuable upon exercise of Options.
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.
-10-
<PAGE>
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.
-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
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information................................................. 2
Incorporation of Certain
Documents by Reference............................................... 2
The Company........................................................... 2
Use of Proceeds....................................................... 3
Selling Stockholders.................................................. 3
Amended and Restated
1996 Stock Option Plan................................................ 6
Plan of Distribution.................................................. 10
Legal Matters......................................................... 10
Experts............................................................... 10
Forward-Looking Information........................................... 11
</TABLE>
20,263,562 SHARES
STERLING COMMERCE,
INC.
COMMON STOCK
--------------------------------
PROSPECTUS
---------------------------------
MARCH __, 1998
<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.. $ 53,552
NYSE listing fee............................... 44,477
Printing expenses.............................. 3,000
Accounting fees and expenses................... 5,000
Legal fees and expenses........................ 6,000
Miscellaneous.................................. 5,971
--------
Total.......................................... $118,000
========
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 Certificate of Incorporation of the Company, as amended (previously
filed as Exhibit 4.1 to the Company's Registration Statement
(Registration No. 333-20565) and 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) and incorporated herein by reference).
4.3 Rights Agreement, dated December 18, 1996, by and between the Company
and The First National Bank of Boston, as Rights Agent (previously
filed as Exhibit 1 to the Company's Current Report on Form 8-K dated
December 18, 1996 and incorporated herein by reference).
4.4 Specimen Common Stock Certificate (previously filed as Exhibit 4.1 to
the Company's Registration Statement (Registration No. 33-80595) and
incorporated herein by reference).
5.1 Opinion of Dennis P. Byrnes, Esq. (filed herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Dennis P. Byrnes, Esq. (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
(previously filed as Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1997 and incorporated herein
by reference).
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
II-2
<PAGE>
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 March 19, 1998.
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 March 19, 1998.
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 and Director
- ------------------------
Sterling L. Williams
Sam Wyly * Director
- ------------------------
Sam Wyly
Charles J. Wyly, Jr. * Director
- ------------------------
Charles J. Wyly, Jr.
Evan A. Wyly * Director
- ------------------------
Evan A. Wyly
Robert E. Cook * Director
- ------------------------
Robert E. Cook
Honor R. Hill * Director
- ------------------------
Honor R. Hill
*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 Certificate of Incorporation of the Company, as amended
(previously filed as Exhibit 4.1 to the Company's Registration
Statement (Registration No. 333-20565) and 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) and incorporated herein by reference).
4.3 Rights Agreement, dated December 18, 1996, by and between the
Company and The First National Bank of Boston, as Rights Agent
(previously filed as Exhibit 1 to the Company's Current Report on
Form 8-K dated December 18, 1996 and incorporated herein by
reference).
4.4 Specimen Common Stock Certificate (previously filed as Exhibit 4.1
to the Company's Registration Statement (Registration No.
33-80595) and incorporated herein by reference).
5.1 Opinion of Dennis P. Byrnes, Esq. (filed herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Dennis P. Byrnes, Esq. (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 (previously filed as Exhibit 10.2 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1997 and
incorporated herein by reference).
<PAGE>
Exhibit 5.1
-----------
[Letterhead of Sterling Commerce, Inc.]
March 20, 1998
Sterling Commerce, Inc.
300 Crescent Court
Suite 1200
Dallas, Texas 75201
Re: Registration Statement on Form S-3 relating to 4,023,797 Shares of
Common Stock, par value $0.01 per share, of Sterling Commerce, Inc.
-------------------------------------------------------------------
Ladies and Gentlemen:
I am Assistant General Counsel of Sterling Commerce, Inc., a Delaware
corporation (the "Company"). In such capacity, I have acted as counsel to the
Company in connection with the registration of 4,023,797 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").
I have examined such documents, records, and matters of law as I have
deemed necessary for purposes of this opinion. Based on such examination and on
the assumptions set forth below, I am 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 in an amount
not less than the par value thereof, will be validly issued, fully paid and
nonassessable.
In rendering the foregoing opinion, I have relied as to certain
factual matters upon certificates of officers of the Company and public
officials, and I have not independently checked or verified the accuracy of the
statements contained therein. In addition, my 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.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to me in the Prospectus under the
caption "Legal Matters."
Very truly yours,
/s/ Dennis P. Byrnes
Dennis P. Byrnes, Esq.
Assistant General Counsel
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Sterling Commerce,
Inc. (the "Company"), for the registration of 4,023,797 shares of its common
stock, and to the incorporation by reference therein 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.
/s/ Ernst & Young LLP
Dallas, Texas
March 20, 1998
<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 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-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/ Warner C. Blow
--------------------------------------
Warner C. Blow,
Chief Executive Officer and President
Dated: March 19, 1998
<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. Shiflet, Albert K. Hoover, 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 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: March 19, 1998
/s/ Warner C. Blow /s/ Charles J. Wyly, Jr.
- --------------------------------- -----------------------------------
Warner C. Blow Charles J. Wyly, Jr.
/s/ Steven P. Shiflet /s/ Evan A. Wyly
- --------------------------------- -----------------------------------
Steven P. Shiflet Evan A. Wyly
/s/ Sterling L. Williams /s/ Robert E. Cook
- --------------------------------- -----------------------------------
Sterling L. Williams Robert E. Cook
/s/ Sam Wyly /s/ Honor R. Hill
- --------------------------------- -----------------------------------
Sam Wyly Honor R. Hill
