<PAGE>
As filed with the Securities and Exchange Commission on January 22, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SOFTWARE AG SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1167173
--------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11190 Sunrise Valley Drive
Reston, VA 20191
------------------------
(Address, including zip code, of principal executive offices)
Software AG Systems, Inc. 1997 Stock Option Plan
----------------------------------------------------------
(Full title of the plan)
James H. Daly
Vice President, Secretary and General Counsel
11190 Sunrise Valley Drive
Reston, VA 20191
(703) 860-5050
(Name, address, including zip code, and telephone number including area code,
of agent for service)
Copy to:
Robert B. Ott, Esq.
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004
(202) 942-5008
---------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Proposed Proposed Amount
Amount Maximum Maximum of
Title of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit(1)(2) Offering Price(2) Fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value per share 6,875,000 $13.0625 $89,804,687.50 $26,493
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated on the basis of the average of the high and low sale prices of
the Registrant's Common Stock as reported on January 20, 1998 on the New
York Stock Exchange, which date is within 5 business days prior to the date
of the filing of this Registration Statement.
(2) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(h).
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by Software AG Systems, Inc. (the
"Registrant" or "Company") (File No. 333-36567) with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
(a) The latest Company prospectus filed on November 19, 1997 pursuant to
Commission Rule 424(b).
(b) The description of the common stock of the Company, par value $.01 per
share (the "Common Stock"), contained in a registration statement on
Form 8-A filed by the Registrant on November 14, 1997, and any
amendments or reports filed for the purpose of updating such
description.
All documents filed by the Registrant after the date of this Registration
Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all the
Common Stock offered hereby has been sold or which deregisters such Common Stock
then remaining unsold, shall be deemed to be incorporated in this Registration
Statement by reference and shall be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference in this Registration Statement 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 other subsequently filed
document which also is or is deemed to be incorporated by reference in this
Registration Statement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or so superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Arnold & Porter has delivered its legal opinion to the effect that the
issuance and sale of the Common Stock offered hereby have been duly authorized
by the Company and
II-2
<PAGE>
that, when issued in accordance with the terms of the 1997 Stock Option Plan,
such Common Stock will be validly issued, fully paid and nonassessable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 145 of the Delaware General Corporation Law ("DGCL"), permits,
under certain circumstances, the indemnification of any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving in a similar capacity for another
enterprise at the request of the corporation. To the extent that a director or
officer of the corporation has been successful in defending any such proceeding,
the DGCL provides that he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
With respect to a proceeding by or in the right of the corporation, such
person may be indemnified against expenses (including attorneys' fees), actually
and reasonably incurred, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation. The
DGCL provides, however, that indemnification shall not be permitted in such a
proceeding if such person is adjudged liable to the corporation unless, and only
to the extent that, the court, upon application, determines, that he is entitled
to indemnification under the circumstances. With respect to proceedings other
than those brought by or in the right of the corporation, notwithstanding the
outcome of such a proceeding, such person may be indemnified against judgments,
fines, and amounts paid in settlement, as well as expenses (including attorneys'
fees), if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action, had no reasonable cause to believe his conduct was unlawful.
Except with respect to mandatory indemnification of expenses to successful
defendants as described in the preceding paragraph or pursuant to a court order,
the indemnification described in this paragraph may be made only upon a
determination in each specific case that indemnification is proper as determined
by (1) majority vote of the directors that are not parties to the proceeding,
even though less than a quorum, or (2) a committee of such directors designated
by majority vote of such directors, even though less than a quorum, or (3) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (4) by the stockholders.
The DGCL permits a corporation to advance expenses incurred by a proposed
indemnitee in advance of final disposition of the proceeding, provided that the
indemnitee undertakes to repay such advanced expenses if it is ultimately
determined that he is not entitled to indemnification. Also, a corporation may
purchase insurance on behalf of an indemnitee against any liability asserted
against him in his designated capacity, whether or not the corporation itself
would be empowered to indemnify him against such liability.
II-3
<PAGE>
The Company's Second Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation") and its Second Amended and Restated Bylaws
(the "Bylaws") provide for indemnification of its officers and directors to the
fullest extent permitted under the DGCL.
As authorized by the DGCL, the Company's Certificate of Incorporation
limits the liability of directors of the Corporation for monetary damages. The
effect of this provision in the Certificate of Incorporation is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in certain
limited situations. This provision does not limit or eliminate the rights of
the Company or any stockholder to seek non-monetary relief such as an injunction
or rescission in the event of a breach of a director's duty of care. This
provision of the Certificate of Incorporation applies to an officer of the
Company only if he or she is a director of the Company and is acting in his or
her capacity as a director, and does not apply to officers of the Company who
are not directors. This provision will not alter the liability of directors
under federal securities laws.
The Company has purchased an insurance policy which purports to insure the
officers and directors of the Corporation against certain liabilities incurred
by them in the discharge of their functions as such officers and directors,
except for liabilities resulting from their own malfeasance.
The foregoing descriptions are general summaries only. Reference is made
to the full text of the Company's Certificate of Incorporation and its Bylaws,
both filed with the Commission on September 26, 1997 as part of the Registration
Statement on Form S-1 (File No. 333-36567), which are incorporated herein by
reference.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
The exhibits listed on the Exhibit Index on page II-8 of this Registration
Statement are filed herewith or are incorporated herein by reference to other
filings.
II-4
<PAGE>
Item 9. Undertakings
------------
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act").
(b) 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 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.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that the undertakings set forth in paragraphs 1(a) and
1(b) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
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.
4. That, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such new securities at that time shall be deemed to be the initial
bona fide offering thereof.
5. 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
Securities and Exchange 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-6
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act, 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 Reston, State of Virginia, on January 22, 1998.
Software AG Systems, Inc.
By: /s/ Daniel F. Gillis
--------------------------------------
Daniel F. Gillis
Director, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on January 22, 1998.
By: /s/ Daniel F. Gillis
--------------------------------------
Daniel F. Gillis
Director, President and Chief
Executive Officer
(Principal Executive Officer)
By: /s/ Harry K. McCreery
--------------------------------------
Harry K. McCreery
Vice President, Treasurer, and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
By: *
--------------------------------------
Carl J. Rickertsen
Chairman of the Board of Directors
By: *
--------------------------------------
Dr. Erwin Koenigs
Director
By: *
--------------------------------------
Edward E. Lucente
Director
By: *
--------------------------------------
Dr. Paul G. Stern
Director
* By: /s/ Harry K. McCreery
--------------------------------------
Harry K. McCreery
Attorney-In-Fact
II-7
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit 4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant (incorporated herein by reference to Exhibit 3.1 of
the Registrant's Registration Statement on Form S-1 (File No.
333-36567) filed on September 26, 1997).
Exhibit 4.2 Second Amended and Restated Bylaws of the Registrant
(incorporated herein by reference to Exhibit 3.2 of the
Registrant's Registration Statement on Form S-1 (File No. 333-
36567) filed on September 26, 1997).
Exhibit 4.3 Software AG Systems, Inc. 1997 Stock Option Plan, as amended,
filed herewith.
Exhibit 5 Opinion of Arnold & Porter, filed herewith.
Exhibit 23.1 Consent of Arnold & Porter (included in its opinion filed as
Exhibit 5).
Exhibit 23.2 Consent of KPMG Peat Marwick LLP, filed herewith.
Exhibit 24 Powers of Attorney, filed herewith.
II-8
<PAGE>
EXHIBIT 4.3
SOFTWARE AG SYSTEMS, INC.
1997 STOCK OPTION PLAN
1. Definitions
-----------
In this Plan, except where the context otherwise indicates, the following
definitions apply:
1.1. "Affiliate" means parent or subsidiary corporations of the
Company, as defined in Sections 424(e) and (f) of the Code (but substituting
"the Company" for "employer corporation"), including parents or subsidiaries of
the Company which become such after adoption of the Plan.
1.2. "Agreement" means a written agreement granting an Option that is
executed by the Company and the Optionee.
1.3. "Board" means the Board of Directors of the Company.
1.4. "Code" means the Internal Revenue Code of 1986, as amended.
1.5. "Committee" means the committee of the Board appointed by the
Board to administer the Plan. Unless otherwise determined by the Board, the
Compensation Committee of the Board shall be the Committee.
1.6. "Common Stock" means the common stock, par value $.01 per share,
of the Company.
1.7. "Company" means Software AG Systems, Inc., a Delaware corporation.
1.8. "Date of Exercise" means the date on which the Company receives
notice of the exercise of an Option in accordance with the terms of Article 7.
1.9. "Date of Grant" means the date on which an Option is granted under
the Plan.
1.10. "Director" means a member of the Board of Directors of the Company
or any Affiliate.
1.11. "Eligible Individual" means (i) any Employee or Director or (ii)
any consultant or advisor to the Company or an Affiliate who renders bona fide
<PAGE>
-2-
services to the Company or an Affiliate other than services in connection with
the offer or sale of securities in a capital raising transaction.
1.12. "Employee" means any employee of the Company or an Affiliate or
any person who has been hired to be an employee of the Company or an Affiliate.
1.13. "Fair Market Value" means the fair market value of a Share as
determined by the Committee pursuant to a reasonable method adopted in good
faith for such purpose.
1.14. "Incentive Stock Option" means an Option granted under the Plan
that qualifies as an incentive stock option under Section 422 of the Code and
that the Company designates as such in the Agreement granting the Option.
1.15. "Nonstatutory Stock Option" means an Option granted under the Plan
that is not an Incentive Stock Option.
1.16. "Option" means an option to purchase Shares granted under the
Plan.
1.17. "Option Period" means the period during which an Option may be
exercised.
1.18. "Option Price" means the price per Share at which an Option may be
exercised. The Option Price shall be determined by the Committee, provided,
however, that, in the case of Incentive Stock Options the Option Price shall not
be less than the Fair Market Value as of the Date of Grant. Notwithstanding the
foregoing, in the case of an Incentive Stock Option granted to an Optionee who
(applying the rules of Section 424(d) of the Code) owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Company or an Affiliate (a "Ten-Percent Stockholder"), the Option Price
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value on the Date of Grant. The Option Price of any Option shall be subject to
adjustment to the extent provided in Article 9 hereof.
1.19. "Optionee" means an Eligible Individual to whom an Option has been
granted.
1.20. "Plan" means the Software AG Systems, Inc. 1997 Stock Option Plan.
<PAGE>
-3-
1.21. "Share" means a share of Common Stock.
2. Purpose
-------
The Plan is intended to assist the Company and its Affiliates in
attracting and retaining Eligible Individuals of outstanding ability and to
promote the identification of their interests with those of the stockholders of
the Company.
3. Administration
--------------
The Committee shall administer the Plan and shall have plenary authority,
in its discretion, to award Options to Eligible Individuals, subject to the
provisions of the Plan. The Committee shall have plenary authority and
discretion, subject to the provisions of the Plan, to determine the terms (which
terms need not be identical) of all Options including, but not limited to, which
Eligible Individuals shall be granted Options, the time or times at which
Options are granted, the Option Price, the number of Shares subject to an
Option, whether an Option shall be an Incentive Stock Option or a Nonstatutory
Stock Option, any provisions relating to vesting, any circumstances in which
Options terminate or Shares may be repurchased by the Company, the period during
which Options may be exercised and any other restrictions on Options. In making
these determinations, the Committee may take into account the nature of the
services rendered by the Optionees, their present and potential contributions to
the success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the provisions of
the Plan, the Committee shall have plenary authority to construe and interpret
the Plan and the Agreements, to prescribe, amend and rescind rules and
regulations relating to the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan, including, but not
limited to, any determination to accelerate the vesting of outstanding Options.
The determinations of the Committee on the matters referred to in this Article 3
shall be binding and final.
<PAGE>
-4-
4. Eligibility
-----------
Options may be granted only to Eligible Individuals, provided, however,
that only Employees shall be eligible to receive Incentive Stock Options.
5. Stock Subject to the Plan
-------------------------
5.1. Subject to adjustment as provided in Article 9, the maximum number
of Shares that may be issued under the Plan is 6,875,000(1) Shares.
5.2. If an Option expires or terminates for any reason without having
been fully exercised, the unissued Shares which had been subject to such Option
shall become available for the grant of additional Options.
6. Options
-------
6.1. Options granted under the Plan shall be either Incentive Stock
Options or Nonstatutory Stock Options, as designated by the Committee. Each
Option granted under the Plan shall be clearly identified either as an Incentive
Stock Option or a Nonstatutory Stock Option and shall be evidenced by an
Agreement that specifies the terms and conditions of the grant. Options granted
to Eligible Individuals shall be subject to the terms and conditions set forth
in this Article 6 and such other terms and conditions not inconsistent with this
Plan as the Committee may specify. All Incentive Stock Options shall comply
with the provisions of the Code governing incentive stock options and with all
other applicable rules and regulations.
6.2. The Option Period for Options granted to Eligible Individuals shall
be determined by the Committee and specifically set forth in the Agreement,
provided, however, that an Option shall not be exercisable after ten years (five
years in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder) from its Date of Grant.
7. Exercise of Options
-------------------
7.1. An Option may, subject to the terms of the applicable Agreement
under which it is granted, be exercised in whole or in part by the delivery to
the Company of written notice of the exercise, in such form
- ---------------
(1) As adjusted by the Compensation Committee to reflect a 275-for-1 stock
split effected as a stock dividend on November 17, 1997.
<PAGE>
-5-
as the Committee may prescribe, accompanied by full payment of the Option Price
for the Shares with respect to which the Option is exercised as provided in
Section 7.2 hereof.
7.2. Payment of the aggregate Option Price for the Shares with respect
to which an Option is being exercised shall be made in cash; provided, however,
that the Committee, in its sole discretion, may provide in an Agreement that
part or all of such payment may be made by the Optionee in one or more of the
following manners: (a) by delivery (including constructive delivery) to the
Company of Shares valued at Fair Market Value on Date of Exercise; (b) by
delivery on a form prescribed by the Committee of a properly executed exercise
notice and irrevocable instructions to a registered securities broker approved
by the Committee to sell Shares and promptly deliver cash to the Company; (c) by
delivery of a promissory note as provided in Section 7.3 hereof; or (d) by
surrender to the Company of an Option (or a portion thereof) that has become
exercisable and the receipt from the Company upon such surrender, without any
payment to the Company (other than required tax withholding amounts), of (x)
that number of Shares (equal to the highest whole number of Shares) having an
aggregate Fair Market Value as of the date of surrender equal to that number of
Shares subject to the Option (or portion thereof) being surrendered multiplied
by an amount equal to the excess of (i) the Fair Market Value on the date of
surrender over (ii) the Option Price, plus (y) an amount of cash equal to the
Fair Market Value of any fractional Share to which the Optionee would be
entitled but for the parenthetical in clause (x) above relating to whole number
of Shares.
7.3. To the extent provided in an Option Agreement and permitted by
applicable law, the Committee may accept as payment of the Option Price a
promissory note executed by the Optionee evidencing his or her obligation to
make future cash payment thereof; provided, however, that in no event may the
Committee accept a promissory note for an amount in excess of the difference
between the aggregate Option Price and the par value of the Shares. Promissory
notes made pursuant to this Section 7.3 shall be payable upon such terms as may
be determined by the Committee, shall be secured by a pledge of the Shares
received upon exercise of the Option and shall bear interest at a rate fixed by
the Committee.
<PAGE>
-6-
8. Restrictions on Transfer
------------------------
Except as set forth in an Agreement, Options shall not be transferable
other than by will or the laws of descent and distribution, and an Option may be
exercised during the Optionee's lifetime only by the Optionee or, in the event
of his or her legal disability, by his or her legal representative. The Shares
acquired pursuant to the Plan shall be subject to such restrictions and
agreements regarding sale, assignment, encumbrances, or other transfers or
dispositions thereof (i) as are in effect among the stockholders of the Company
at the time such Shares are acquired, (ii) as the Committee shall deem
appropriate and (iii) as are required by applicable law.
9. Capital Adjustments
-------------------
In the event of any change in the outstanding Common Stock by reason of
any stock dividend, split-up (or reverse stock split), recapitalization,
reclassification, reorganization, reincorporation, combination or exchange of
shares, merger, consolidation, liquidation or similar change in corporate
structure, the Committee may, in its discretion, provide for a substitution for
or adjustment in (i) the number and class of Shares subject to outstanding
Options, (ii) the Option Price of outstanding Options, and (iii) the aggregate
number and class of Shares that may be issued under the Plan.
10. Termination or Amendment
------------------------
The Board may amend, alter, suspend or terminate the Plan in any respect
at any time; provided, however, that after the Plan has been approved by the
stockholders of the Company, no amendment, alteration, suspension or termination
of the Plan shall be made by the Board without approval of (i) the Company's
stockholders to the extent stockholder approval is required by applicable law or
regulations and (ii) each affected Optionee if such amendment, alteration,
suspension or termination would adversely affect his or her rights or
obligations under any Option granted prior to the date of such amendment,
alteration, suspension or termination. No Option may be granted nor any Shares
issued under the Plan during any suspension or after termination of the Plan.
<PAGE>
-7-
11. Modification, Extension and Renewal of Options; Substituted Options
-------------------------------------------------------------------
11.1. Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew the terms of any outstanding Options, or accept the
surrender of outstanding Options granted under the Plan or options and stock
appreciation rights granted under any other plan of the Company or an Affiliate
(to the extent not theretofore exercised) and authorize the granting of new
Options in substitution therefor (to the extent not theretofore exercised). Any
such substituted Options may specify a lower exercise price than the surrendered
options and stock appreciation rights, a longer term than the surrendered
options and stock appreciation rights, or have any other provisions that are
authorized by the Plan. Notwithstanding the foregoing, however, no modification
of an Option shall, without the consent of the Optionee, alter or impair any of
the Optionee's rights or obligations under such Option.
11.2. Anything contained herein to the contrary notwithstanding, Options
may, at the discretion of the Committee, be granted under the Plan in
substitution for stock appreciation rights and options to purchase shares of
capital stock of another corporation which is merged into, consolidated with, or
all or a substantial portion of the property or stock of which is acquired by,
the Company or one of its Affiliates. The terms and conditions of the
substitute Options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Committee may deem appropriate in order to
conform, in whole or part, to the provisions of the options and stock
appreciation rights in substitution for which they are granted.
12. Effectiveness of the Plan
-------------------------
The Plan and any amendment thereto shall be effective on the date on
which it is adopted by the Board, provided that any such adoption requiring
stockholder approval is subject to approval by vote of the stockholders of the
Company within 12 months after such adoption by the Board. Options may be
granted prior to stockholder approval of the Plan, and the date on which any
such Option is granted shall be the Date of Grant for all purposes provided that
(a) each such Option shall be subject to stockholder approval of the Plan, (b)
no Option may be exercised prior to such
<PAGE>
-8-
stockholder approval, and (c) any such Option shall be void ab initio if such
stockholder approval is not obtained.
13. Withholding
-----------
The Company's obligation to deliver Shares or pay any amount pursuant to
the terms of any Option shall be subject to the satisfaction of applicable
federal, state and local tax withholding requirements. To the extent provided
in the applicable Agreement and in accordance with rules prescribed by the
Committee, an Optionee may satisfy any such withholding tax obligation by any of
the following means or by a combination of such means: (i) tendering a cash
payment, (ii) authorizing the Company to withhold Shares otherwise issuable to
the Optionee, or (iii) delivering to the Company already owned and unencumbered
Shares.
14. Term of the Plan
----------------
Unless sooner terminated by the Board pursuant to Section 10, the Plan
shall terminate on April 11, 2007, and no Options may be granted after such
date. The termination of the Plan shall not affect the validity of any Option
outstanding on the date of termination.
15. Indemnification of Committee
----------------------------
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted hereunder, and
against all amounts reasonably paid by them in settlement thereof or paid by
them in satisfaction of a judgment in any such action, suit or proceeding, if
such members acted in good faith and in a manner which they believed to be in,
and not opposed to, the best interests of the Company.
<PAGE>
-9-
16. General Provisions
------------------
16.1. The establishment of the Plan shall not confer upon any Eligible
Individual any legal or equitable right against the Company, any Affiliate or
the Committee, except as expressly provided in the Plan.
16.2. The Plan does not constitute inducement or consideration for the
employment or service of any Eligible Individual, nor is it a contract between
the Company or any Affiliate and any Eligible Individual. Participation in the
Plan shall not give an Eligible Individual any right to be retained in the
service of the Company or any Affiliate.
16.3. Neither the adoption of this Plan nor its submission to the
stockholders, shall be taken to impose any limitations on the powers of the
Company or its Affiliates to issue, grant, or assume options, warrants, rights,
or restricted stock, otherwise than under this Plan, or to adopt other stock
option or restricted stock plans or to impose any requirement of stockholder
approval upon the same.
16.4. The interests of any Eligible Individual under the Plan are not
subject to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered except as provided in an Agreement.
16.5. The Plan shall be governed, construed and administered in
accordance with the laws of the State of Delaware and it is the intention of the
Company that Incentive Stock Options granted under the Plan qualify as such
under Section 422 of the Code.
16.6. The Committee may require each person acquiring Shares pursuant to
Options hereunder to represent to and agree with the Company in writing that
such person is acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All certificates for Shares
issued pursuant to the Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange or interdealer quotation system upon which the Common Stock
is then listed or quoted, and any applicable federal or state securities laws.
The Committee may
<PAGE>
-10-
place a legend or legends on any such certificates to make appropriate reference
to such restrictions. The certificates for Shares acquired pursuant to an Option
may also include any legend which the Committee deems appropriate to reflect
restrictions contained in this Plan or in the applicable Agreement or to comply
with the Delaware General Corporation Law.
16.7. The Company shall not be required to issue any certificate or
certificates for Shares upon the exercise of Options, or record any person as a
holder of record of such Shares, without obtaining, to the complete satisfaction
of the Committee, the approval of all regulatory bodies deemed necessary by the
Committee, and without complying to the Committee's complete satisfaction, with
all rules and regulations, under federal, state or local law deemed applicable
by the Committee.
<PAGE>
EXHIBIT 5
[ARNOLD & PORTER LETTERHEAD]
January 22, 1998
Board of Directors
Software AG Systems, Inc.
11190 Sunrise Valley Drive
Reston, VA 20191
Re: Registration Statement on Form S-8
File No. 333-
Gentlemen:
We have acted as counsel to Software AG Systems, Inc., a Delaware
corporation (the "Company") in connection with the preparation of a registration
statement on Form S-8 (the "Registration Statement") relating to the Company's
1997 Stock Option Plan (the "Plan") filed by you with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"1933 Act"), covering 6,875,000 shares (the "Shares") of common stock, $.01 par
value per share, issuable pursuant to the Plan. This opinion is furnished to you
at your request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. (S) 229.601(b)(5), in connection with the Registration
Statement.
For purposes of this opinion, we have examined such corporate records of
the Company, including the Company's Second Amended and Restated Certificate of
Incorporation, its Second Amended and Restated Bylaws, and resolutions of the
Company's Board of Directors, and such other documents as we deem necessary for
rendering the opinion hereinafter expressed.
This opinion is subject to the following qualifications, which are in
addition to any other qualifications contained herein:
A. We have assumed without verification the genuineness of all signatures
on all documents, the legal capacity of all natural persons, the authority of
the parties (other than the Company) executing such documents, the accuracy and
completeness of all documents submitted to us, the authenticity of all original
documents and the conformity to authentic original documents of all documents
submitted to us as copies (including telecopies). We also have assumed the
accuracy, completeness and authenticity of statements of fact on which we are
relying and have made no independent investigations thereof.
<PAGE>
B. We have assumed without verification that, with respect to the minutes
of any meetings of the Company's Board of Directors or any committees thereof
that we have examined, due notice of the meetings was given or duly waived, the
minutes accurately and completely reflect all actions taken at the meetings and
a quorum was present and acting throughout the meetings.
C. We have assumed without verification the accuracy and completeness of
all corporate records made available to us by the Company.
D. This opinion is based on existing laws, ordinances, rules, regulations,
court and administrative decisions as they presently have been interpreted and
we can give no assurances that our opinion would not be different after any
change in any of the foregoing occurring after the date hereof.
This opinion is based as to matters of law solely on the General
Corporation Law of the State of Delaware. As to matters governed by such law,
we have relied exclusively on the latest standard compilation of such statute as
reproduced in commonly accepted unofficial publications available to us.
Based upon, subject to and limited by the foregoing, we are of the opinion
that the Shares, when issued and delivered in the manner and on the terms
described in the Plan, will be validly issued, fully paid and nonassessable
under the General Corporation Law of the State of Delaware.
This letter does not address any matters other than those expressly
addressed herein. This letter is given for your sole benefit and use. No one
else is entitled to rely hereupon. This letter speaks only as of the date
hereof. We assume no obligation to update or supplement it after such date or
to advise you of any changes in the foregoing subsequent to the delivery of this
opinion.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, we do not hereby admit that we
are an "expert" within the meaning of the 1933 Act.
Sincerely yours,
/s/ Arnold & Porter
Arnold & Porter
<PAGE>
EXHIBIT 23.2
ACCOUNTANT'S CONSENT
We consent to the use of our reports incorporated herein by reference,
which reports are included in the prospectus filed by the Company with the
Commission on November 19, 1997 pursuant to Rule 424(b).
/s/ KPMG Peat Marwick LLP
McLean, Virginia
January 22, 1998
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of Software AG Systems, Inc., a corporation organized under the laws of
the state of Delaware (the "Corporation"), hereby constitutes and appoints
Daniel F. Gillis, Harry K. McCreery, James H. Daly, Robert B. Ott and Joseph
Turitz, and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents for him and on his behalf and in
his name, place and stead, in all cases with full power of substitution and
resubstitution, in any and all capacities, to sign, execute and affix his seal
to and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration Statement on Form S-8 or
any other appropriate form and all amendments or supplements (including any
post-effective amendments) thereto with all exhibits and any and all documents
required to be filed with respect thereto, relating to the registration under
the Securities Act of 1933, as amended, of shares of the Corporation's common
stock, par value $.01 per share, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully and to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned director and/or officer has hereunto
set his hand and seal, as of the date specified.
DATED: 1/21/98 /s/ Daniel F. Gillis
------------ -----------------------------------
Signature
Daniel F. Gillis
-----------------------------------
Name
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of Software AG Systems, Inc., a corporation organized under the laws of
the state of Delaware (the "Corporation"), hereby constitutes and appoints
Daniel F. Gillis, Harry K. McCreery, James H. Daly, Robert B. Ott and Joseph
Turitz, and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents for him and on his behalf and in
his name, place and stead, in all cases with full power of substitution and
resubstitution, in any and all capacities, to sign, execute and affix his seal
to and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration Statement on Form S-8 or
any other appropriate form and all amendments or supplements (including any
post-effective amendments) thereto with all exhibits and any and all documents
required to be filed with respect thereto, relating to the registration under
the Securities Act of 1933, as amended, of shares of the Corporation's common
stock, par value $.01 per share, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully and to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned director and/or officer has hereunto
set his hand and seal, as of the date specified.
DATED: 1/15/98 /s/ Carl J. Rickertsen
----------- --------------------------------------
Signature
Carl J. Rickertsen
--------------------------------------
Name
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of Software AG Systems, Inc., a corporation organized under the laws of
the state of Delaware (the "Corporation"), hereby constitutes and appoints
Daniel F. Gillis, Harry K. McCreery, James H. Daly, Robert B. Ott and Joseph
Turitz, and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents for him and on his behalf and in
his name, place and stead, in all cases with full power of substitution and
resubstitution, in any and all capacities, to sign, execute and affix his seal
to and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration Statement on Form S-8 or
any other appropriate form and all amendments or supplements (including any
post-effective amendments) thereto with all exhibits and any and all documents
required to be filed with respect thereto, relating to the registration under
the Securities Act of 1933, as amended, of shares of the Corporation's common
stock, par value $.01 per share, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully and to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned director and/or officer has hereunto
set his hand and seal, as of the date specified.
DATED: January 14, 1998 /s/ Dr. Erwin Koenigs
---------------- ----------------------------------------
Signature
Dr. Erwin Koenigs
----------------------------------------
Name
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of Software AG Systems, Inc., a corporation organized under the laws of
the state of Delaware (the "Corporation"), hereby constitutes and appoints
Daniel F. Gillis, Harry K. McCreery, James H. Daly, Robert B. Ott and Joseph
Turitz, and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents for him and on his behalf and in
his name, place and stead, in all cases with full power of substitution and
resubstitution, in any and all capacities, to sign, execute and affix his seal
to and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration Statement on Form S-8 or
any other appropriate form and all amendments or supplements (including any
post-effective amendments) thereto with all exhibits and any and all documents
required to be filed with respect thereto, relating to the registration under
the Securities Act of 1933, as amended, of shares of the Corporation's common
stock, par value $.01 per share, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully and to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned director and/or officer has hereunto
set his hand and seal, as of the date specified.
DATED: 1/15/98 /s/ Paul G. Stern
----------- ----------------------------------------
Signature
Paul G. Stern
----------------------------------------
Name
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
officer of Software AG Systems, Inc., a corporation organized under the laws of
the state of Delaware (the "Corporation"), hereby constitutes and appoints
Daniel F. Gillis, Harry K. McCreery, James H. Daly, Robert B. Ott and Joseph
Turitz, and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents for him and on his behalf and in
his name, place and stead, in all cases with full power of substitution and
resubstitution, in any and all capacities, to sign, execute and affix his seal
to and file with the Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration Statement on Form S-8 or
any other appropriate form and all amendments or supplements (including any
post-effective amendments) thereto with all exhibits and any and all documents
required to be filed with respect thereto, relating to the registration under
the Securities Act of 1933, as amended, of shares of the Corporation's common
stock, par value $.01 per share, and grants to each of them full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully and to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned director and/or officer has hereunto
set his hand and seal, as of the date specified.
DATED: 1/14/98 /s/ Edward E. Lucente
-------------------- ----------------------------------------
Signature
Edward E. Lucente
----------------------------------------
Name
