<PAGE>
As filed with the Securities and Exchange Commission on August 23, 1995.
Registration No. 33-__________
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
_____________________
STERLING SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1873956
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
8080 North Central Expressway
Suite 1100 75206-1895
Dallas, Texas (Zip Code)
(Address of principal executive offices)
_____________________
STERLING SOFTWARE, INC. INCENTIVE STOCK OPTION PLAN
STERLING SOFTWARE, INC. NON-STATUTORY STOCK OPTION PLAN
(Full title of each Plan)
Jeannette P. Meier, Esq.
Executive Vice President,
Secretary and General Counsel
8080 North Central Expressway
Suite 1100
Dallas, Texas 75206-1895
(Name and address of agent for service)
(214) 891-8600
(Telephone number, including
area code, of agent for service)
_____________________
COPIES TO:
Charles D. Maguire, Jr.
Jackson & Walker, L.L.P.
901 Main Street, Suite 6000
Dallas, Texas 75202
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES
PURSUANT TO THE PLANS:
From time to time after this Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Title of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered Share(1) Price (1) Registration Fee
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.10 par value 1,125,000 shares $45.8750 $51,609,375.00 $17,796.34
--------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rules 457(c) and 457(h), the offering price and registration
fee are computed on the basis of the average of the high and low prices of
the Common Stock, as reported by the New York Stock Exchange, on
August 17, 1995.
Pursuant to General Instruction E of Form S-8, this Registration Statement
incorporates by reference the contents of the Registrant's Registration
Statement No. 33-53833 on Form S-8.
<PAGE>
PROSPECTUS
1,125,000 Shares
STERLING SOFTWARE, INC.
Common Stock
This Prospectus has been prepared by Sterling Software, Inc., a Delaware
corporation (the "Company"), for use upon resale by certain officers and
directors of the Company (the "Selling Stockholders") of up to 1,125,000 shares
(the "Shares") of Common Stock, par value $0.10 per share (the "Common Stock"),
of the Company. The Selling Stockholders have acquired and/or may in the future
acquire Shares from the Company pursuant to the exercise of outstanding options
heretofore granted and options to be hereafter granted to the Selling
Stockholders pursuant to the provisions of the Company's Incentive Stock Option
Plan (as amended, the "Incentive Plan") and/or the Company's Non-Statutory Stock
Option Plan (as amended, the "Non-Statutory Plan"). Of the 1,125,000 shares of
Common Stock covered by this Prospectus, 250,000 shares are subject to the
Incentive Plan and 875,000 of such shares are subject to the Non-Statutory Plan.
The Incentive Plan and the Non-Statutory Plan are sometimes collectively
referred to herein as the "Plans."
The Shares may be sold from time to time by the Selling Stockholder or by
permitted transferrees. Such sales 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 Stockholder or permitted transferrees 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 "SSW."
On August 22, 1995, the closing price of the Common Stock on the NYSE was
$46.50. The Company will not receive any of the proceeds from the sales by
Selling Stockholders.
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 THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 23, 1995.
<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., Room 1024, Washington, D.C. 20549, and at the regional offices of
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 from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C., 20549, at
prescribed rates. The Common Stock is listed on the NYSE. Reports, proxy
statements and other information concerning the Company can also be inspected at
the offices of the NYSE at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-8 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the offer and sale of the
Common Stock to be issued pursuant to the Plans. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain of the information
contained in the Registration Statement. Copies of the Registration Statement
are available from the Public Reference Section of the Commission at prescribed
rates. Statements contained herein concerning the provisions of documents filed
with the Registration Statement are necessarily summaries of such documents, and
each such statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.
The Company's principal executive offices are located at 8080 N. Central
Expressway, Suite 1100, Dallas, Texas 75206, and the Company's telephone number
at such address is (214) 891-8600.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission by the
Company, are incorporated herein by reference and made a part hereof:
(i) Annual Report on Form 10-K (File No. 1-8465) for the year ended
September 30, 1994, as amended by Form 10-K/A Amendment No. 1;
(ii) Quarterly Report on Form 10-Q for the quarter ended December 31,
1994;
(iii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
(iv) Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1995;
-2-
<PAGE>
(v) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995;
(vi) Current Report on Form 8-K (File No. 1-8465) dated November 3,
1994;
(vii) Current Report on Form 8-K (File No. 1-8465) dated November 14,
1994;
(viii) Current Report on Form 8-K (File No. 1-8465) dated November 30,
1994;
(ix) Current Report on Form 8-K (File No. 1-8465) dated February 28,
1995; and
(x) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 0-108465), filed
March 7, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of Common Stock to be made hereunder
shall be deemed to be incorporated herein by reference and made a part hereof
from the date of filing of such documents. 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 all purposes of this Prospectus to
the extent that a statement contained herein or therein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person,
a copy of any or all of the documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Written or telephonic requests for copies should be directed to
the Company's principal office: Sterling Software, Inc., 8080 N. Central
Expressway, Suite 1100, Dallas, Texas 75206, Attention: Jeannette P. Meier,
Executive Vice President, Secretary and General Counsel (telephone: (214) 891-
8600).
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby.
-3-
<PAGE>
SELLING STOCKHOLDERS
The following officers and directors of the Company are eligible to receive
shares of the Company's Common Stock upon exercise of options granted under the
Plans:
<TABLE>
<CAPTION>
COMMON STOCK
OFFERED FOR
OWNERSHIP OF SELLING AMOUNT AND
COMMON STOCK STOCKHOLDERS' PERCENTAGE
POSITION WITH PRIOR TO ACCOUNT UPON OF CLASS AFTER
NAME THE COMPANY OFFERING (1) EXERCISE OFFERING (2)
---- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
Warner C. Blow Executive Vice President 257,600 256,250 1,350 *
Richard Connelly Vice President and 18,844 (3) 17,000 1,844 (3)*
Controller
Robert J. Donachie Director 61,100 61,000 100 *
George H. Ellis Executive Vice President 150,000 (4) 150,000 0
and Chief Financial
Officer
Werner L. Frank Executive Vice President, 264,687 (4) 263,500 1,187 (4)*
Business Development
Michael C. French Director 95,800 (5) 65,000 30,800 (5)*
Albert K. Hoover Vice President, Assistant 20,340 (6) 7,800 12,540 (6)*
Secretary and Assistant
General Counsel
James E. Jenkins, Jr. Vice President, Tax and 19,495 (7) 12,526 6,969 (7)*
Assistant Secretary
M. Gene Konopik Executive Vice President 137,474 (8) 108,000 29,474 (8)*
Jeannette P. Meier Executive Vice President, 183,225 (9) 154,050 29,175 (9)*
Secretary and General
Counsel
Donald R. Miller, Jr. Director 70,000(10) 30,000 40,000(10)*
Phillip A. Moore Executive Vice President, 161,024(11) 128,875 32,149(11)*
Technology and Director
A. Maria Smith Executive Vice President 225,000(12) 165,000 60,000(12)*
Clive A. Smith Executive Vice President 192,938(13) 168,100 24,838(13)*
Geno P. Tolari Executive Vice President 195,313(14) 95,313 100,000(14)*
Anne Vahala Vice President, Investor 53,438(15) 41,000 12,438(15)*
Relations
Sterling L. Williams President, Chief 1,154,000(16) 200,000 954,000(16)
Executive (4.368%)
Officer and Director
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
OFFERED FOR
OWNERSHIP OF SELLING AMOUNT AND
COMMON STOCK STOCKHOLDERS' PERCENTAGE
POSITION WITH PRIOR TO ACCOUNT UPON OF CLASS AFTER
NAME THE COMPANY OFFERING (1) EXERCISE OFFERING (2)
---- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
Evan A. Wyly Vice President and 186,440(17) 40,000 146,440(17)*
Director
</TABLE>
__________________
* Indicates shares held are less than 1% of class.
(1) Includes shares to be acquired upon exercise of options granted under the
Plans, some of which are not exercisable within 60 days of the date of this
Prospectus.
(2) Assumes the exercise of all options granted under the Plans and the sale of
the Common Stock acquired thereby.
(3) Includes 1,844 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(4) Includes 90 shares held in escrow in connection with the Company's
acquisition of KnowledgeWare, Inc.
(5) Includes 30,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(6) Includes 12,540 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(7) Includes 6,969 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(8) Includes 24,350 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus, and 1,324 shares
held in escrow in connection with the Company's acquisition of
KnowledgeWare, Inc.
(9) Includes 24,400 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(10) Includes 40,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, none of which are
exercisable within 60 days of the date of this Prospectus.
(11) Includes 150 shares directly held by Mr. Moore's son.
(12) Includes 60,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(13) Includes 24,838 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
-5-
<PAGE>
(14) Includes 100,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(15) Includes 12,438 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, none of which are
exercisable within 60 days of the date of this Prospectus.
(16) Includes 625,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan and 325,000 shares
purchasable pursuant to options granted under the Company's 1994 Non-
Statutory Stock Option Plan, all of which are exercisable within 60 days of
the date of this Prospectus.
(17) Includes 33,686 shares purchasable pursuant to warrants that will become
fully exercisable within 60 days of the date of this Prospectus. Also
includes 60,000 shares purchasable pursuant to options granted under the
Company's 1992 Non-Statutory Stock Option Plan, none of which are
exercisable within 60 days of the date of this Prospectus.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholder or permitted transferees. The Shares may be disposed of from time
to time 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 purchaser, (iii) through underwriters
or dealers who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholder or permitted transferees
and/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 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 Stockholder or
permitted transferees, 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 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
Stockholder related thereto.
In the event of a material change in the plan of distribution disclosed in
this Prospectus, the Selling Stockholder will not be able to effect transactions
in the Shares pursuant to this
-6-
<PAGE>
Prospectus until such time as a post-effective amendment to the Registration
Statement is filed with, and declared effective by, the Commission.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon for the Company by Jackson & Walker,
L.L.P., Dallas, Texas. Michael C. French, a partner in Jackson & Walker,
L.L.P., is a director of the Company.
EXPERTS
The consolidated financial statements and financial statement schedules
appearing in Sterling's Annual Report on Form 10-K for the year ended September
30, 1994, have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated by reference
herein, which as to the year ended September 30, 1992, is based in part on the
report of Arthur Andersen LLP, independent public accountants. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.
The consolidated financial statements of KnowledgeWare, Inc. and
subsidiaries as of June 30, 1994 and 1993 and for each of the three years in the
period ending June 30, 1994 incorporated by reference in this Prospectus have
been incorporated herein in reliance on the report, which includes an
explanatory paragraph about KnowledgeWare, Inc.'s ability to continue as a going
concern, of Coopers & Lybrand L.L.P., independent certified public accountants,
given upon authority of that firm as experts in accounting and auditing.
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers or former directors or officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under a corporation's
certificate of incorporation, bylaws, any agreement or otherwise.
Article IX of the Company's Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Article IX of the Company's
Restated Bylaws provides for indemnification of officers and directors. In
addition, the Company has entered into Indemnity Agreements with each of its
officers and directors
-7-
<PAGE>
pursuant to which such officers and directors may be indemnified against losses
arising from certain claims, including claims under the Securities Act, which
may be made by reason of their being officers or directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company 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.
-8-
<PAGE>
No person has been authorized in
connection with the offering made
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 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
Use of Proceeds............... 3
Selling Stockholders.......... 4
Plan of Distribution.......... 6
Legal Matters................. 7
Experts....................... 7
Indemnification............... 7
</TABLE>
1,125,000 SHARES
STERLING SOFTWARE,
INC.
COMMON STOCK
---------------
PROSPECTUS
---------------
August 23, 1995
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The following documents, which have been filed with the Commission by
the Company, are incorporated herein by reference and made a part hereof:
(i) Annual Report on Form 10-K (File No. 1-8465) for the year ended
September 30, 1994, as amended by Form 10-K/A Amendment No. 1;
(ii) Quarterly Report on Form 10-Q for the quarter ended December 31,
1994;
(iii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
(iv) Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1995;
(v) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995;
(vi) Current Report on Form 8-K (File No. 1-8465) dated November 3,
1994;
(vii) Current Report on Form 8-K (File No. 1-8465) dated November 14,
1994;
(viii) Current Report on Form 8-K (File No. 1-8465) dated November 30,
1994;
(ix) Current Report on Form 8-K (File No. 1-8465) dated February 28,
1995; and
(x) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 0-108465), filed
March 7, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to a post-effective amendment that indicate that all of the
Common Stock offered hereunder has been sold or that deregisters all of such
Common Stock then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing thereof. 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 all purposes of this Registration Statement to the extent that a statement
contained herein or therein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not
II-1
<PAGE>
be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
Certain legal matters in connection with the validity of the securities
offered hereby have been passed upon for the Company by Jackson & Walker,
L.L.P., Dallas, Texas. Michael C. French, a partner in Jackson & Walker,
L.L.P., is a director of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers or former directors and officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under a corporation's
certificate of incorporation, bylaws, any agreement or otherwise.
Article IX of the Company's Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Article IX of the Company's
Restated Bylaws provides for indemnification of officers and directors. In
addition, the Company has entered into Indemnity Agreements with each of its
officers and directors, pursuant to which such officers and directors may be
indemnified against losses arising from certain claims, including claims under
the Securities Act, which may be made by reason of their being officers or
directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company 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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not applicable.
II-2
<PAGE>
ITEM 8. EXHIBITS.
--------
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-8, including those incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
-------- ----------------------
<S> <C>
4.1 Certificate of Incorporation of the Registrant.(1)
4.2 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.3 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.4 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.5 Restated Bylaws of the Registrant.(2)
4.6 Form of Common Stock Certificate.(3)
5 Opinion of Jackson & Walker, L.L.P.(4)
15 None.
23.1 Consent of Ernst & Young LLP.(4)
23.2 Consent of Arthur Andersen LLP.(4)
23.3 Consent of Coopers & Lybrand L.L.P.(4)
23.4 Consent of Jackson & Walker, L.L.P. (included in its opinion filed as
Exhibit 5 to this Registration Statement).(4)
24 Power of Attorney (appearing on page II-6 of this Registration
Statement).(4)
28 None.
99.1 Incentive Stock Option Plan of the Registrant (as amended through
April 26, 1995).(4)
99.2 Non-Statutory Stock Option Plan of the Registrant (as amended through
June 15, 1995).(4)
</TABLE>
II-3
<PAGE>
---------------------------------
(1) Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-59107 Pre-Effective Amendment No. 1 to From S-3 and incorporated
herein by reference.
(2) Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-47131 on Form S-8 and incorporated herein by reference.
(3) Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-86825 on Form S-1 and incorporated herein by reference.
(4) Filed herewith.
ITEM 9. 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) ((S)
230.424 (b) of this chapter) 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;
(iii) 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
II-4
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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 undersigned 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 the 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-5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below authorizes Sterling L. Williams,
George H. Ellis and Jeannette P. Meier, and each of them, each of whom may act
without joinder of the others, to execute in the name of each such person who is
then an officer or director of the Registrant and to file any amendments to this
Registration Statement necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in respect thereof, in
connection with the registration of the securities which are the subject of this
Registration Statement, which amendments may make such changes in the
Registration Statement as such attorney may deem appropriate.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 23rd day of August,
1995.
STERLING SOFTWARE, INC.
By: /s/ Jeannette P. Meier
--------------------------------------
Name: Jeannette P. Meier
----------------------------
Title: Executive Vice President
---------------------------
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
President, Chief
Executive Officer
/s/ Sterling L. Williams and Director 8/23/95
--------------------------------- (Principal Executive Officer)
Sterling L. Williams
Executive Vice President
and Chief
/s/ George H. Ellis Financial Officer 8/23/95
--------------------------------- (Principal Financial and
George H. Ellis Accounting Officer)
/s/ Sam Wyly Chairman of the 8/23/95
---------------------------------
Sam Wyly Board of Directors
/s/ Charles J. Wyly, Jr. Vice Chairman of the 8/23/95
---------------------------------
Charles J. Wyly, Jr. Board of Directors
/s/ Evan A. Wyly Director 8/23/95
---------------------------------
Evan A. Wyly
/s/ Michael C. French Director 8/23/95
---------------------------------
Michael C. French
/s/ Robert J. Donachie Chairman of the Audit 8/23/95
---------------------------------
Robert J. Donachie Committee and Director
/s/ Phillip A. Moore Executive Vice President, 8/23/95
---------------------------------
Phillip A. Moore Technology and Director
/s/ Robert E. Cook Director 8/23/95
---------------------------------
Robert E. Cook
/s/ Donald R. Miller, Jr. Director 8/23/95
---------------------------------
Donald R. Miller, Jr.
Director
/s/ Francis A. Tarkenton 8/23/95
---------------------------------
Francis A. Tarkenton
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
4.1 Certificate of Incorporation of the Registrant.(1)
4.2 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.3 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.4 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(1)
4.5 Restated Bylaws of the Registrant.(2)
4.6 Form of Common Stock Certificate.(3)
5 Opinion of Jackson & Walker, L.L.P.(4)
15 None.
23.1 Consent of Ernst & Young LLP.(4)
23.2 Consent of Arthur Andersen LLP.(4)
23.3 Consent of Coopers & Lybrand L.L.P.(4)
23.4 Consent of Jackson & Walker, L.L.P. (included in its opinion filed as
Exhibit 5 to this Registration Statement).(4)
24 Power of Attorney (appearing on page II-6 of this Registration
Statement).(4)
28 None.
99.1 Incentive Stock Option Plan of the Registrant (as amended through
April 26, 1995).(4)
99.2 Non-Statutory Stock Option Plan of the Registrant (as amended through
June 15, 1995).(4)
</TABLE>
________________________________
(1) Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-59107 Pre-Effective Amendment No. 1 to From S-3 and incorporated
herein by reference.
(2) Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-47131 on Form S-8 and incorporated herein by reference.
(3) Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-86825 on Form S-1 and incorporated herein by reference.
(4) Filed herewith.
II-8
<PAGE>
EXHIBIT 5
[LETTERHEAD OF JACKSON & WALKER, L.L.P. APPEARS HERE]
August 23, 1995
Sterling Software, Inc.
8080 N. Central Expressway
Suite 1100
Dallas, Texas 75206
Re: Registration Statement on Form S-8 of Sterling Software, Inc.
Gentlemen:
We are acting as counsel for Sterling Software, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of up
to 1,125,000 shares of the Company's Common Stock, par value $0.10 per share
(the "Shares"), of which 875,000 Shares are issuable upon the exercise of
options granted or to be granted from time to time under the Company's Non-
Statutory Stock Option Plan and 250,000 Shares are issuable upon the exercise of
options granted or to be granted from time to time under the Company's Incentive
Stock Option Plan (both plans collectively referred to herein as the "Plans"). A
Registration Statement on Form S-8 covering the offering and sale of the Shares
(the "Registration Statement") is expected to be filed with the Securities and
Exchange Commission (the "Commission") on or about the date hereof.
In reaching the conclusions expressed in this opinion, we have examined and
relied upon the originals or certified copies of all documents, certificates and
instruments as we have deemed necessary to the opinions expressed herein,
including the Certificate of Incorporation, as amended, and the Restated Bylaws
of the Company and copies of the Plans. In making the foregoing examinations,
we have assumed the genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all copies submitted to us.
<PAGE>
Sterling Software, Inc.
August 23, 1995
Page 2
Based solely upon the foregoing, subject to the comments hereinafter
stated, and limited in all respects to the laws of the State of Texas, the
General Corporation Law of the State of Delaware and the federal laws of the
Untied States of America, it is our opinion that the Shares, when sold in
accordance with the terms of the Plans, will be validly issued, fully paid and
nonassessable.
You should be aware that we are not admitted to the practice of law in the
State of Delaware. Accordingly, any opinion herein as to the laws of the State
of Delaware is based solely upon the latest generally available compilation of
the statutes and case law of such state.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
Jackson & Walker, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Sterling Software, Inc., related to registration of shares for the
Incentive Stock Option Plan and Non-Statutory Stock Option Plan, of our reports
dated December 1, 1994, with respect to the consolidated financial statements
and schedules of Sterling Software, Inc. included in its Annual Report (Form
10-K) for the year ended September 30, 1994, filed with the Securities and
Exchange Commission.
Ernst & Young LLP
Dallas, Texas
August 22, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 18, 1993
(except with respect to the matter discussed in Note 19 as to which the date is
July 1, 1993) included in Sterling Software, Inc.'s Form 10-K for the year ended
September 30, 1994 and to all references to our Firm included in this
registration statement.
Arthur Andersen LLP
Washington, DC
August 22, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report, which includes an explanatory paragraph about
KnowledgeWare, Inc.'s ability to continue as a going concern, dated August 31,
1994, on our audit of the financial statements of KnowledgeWare, Inc. and
Subsidiaries. We also consent to the reference to our firm under the caption
"Experts".
Coopers & Lybrand L.L.P.
Atlanta, Georgia
August 18, 1995
<PAGE>
STERLING SOFTWARE, INC.
INCENTIVE STOCK OPTION PLAN
(AS AMENDED, THROUGH APRIL 26, 1995)
1. Purpose. The purpose of the Incentive Stock Option Plan of Sterling
Software, Inc. (the "Plan") is to provide key employees with a proprietary
interest in Sterling Software, Inc., a Delaware corporation, and its
subsidiaries (the "Company") through the granting of options ("Option" or
"Options") to purchase shares of the Company's authorized Common Stock, par
value $0.10 per share ("Common Stock"), in order to:
a. Increase the interest in the Company's welfare of those key
employees who share primary responsibility for the management, growth and
protection of the business of the Company;
b. Furnish an incentive to such employees to continue their
services for the Company; and
c. Provide a means through which the Company may attract able
persons to enter its employment.
It is intended that Options issued pursuant to this Plan shall constitute
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986.
With respect to persons subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent that any provision of the Plan
or action of the Committee (as defined in Section 2) fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
2. Administration. With respect to Participants who are directors or
executive officers of the Company ("Insiders"), the Plan shall be administered
in accordance with the requirements of Rule 16b-3 of the Exchange Act by a
committee (the "16b-3 Committee") consisting of such number of directors as are
appointed by the Board of Directors of the Company (the "Board of Directors" or
"Board") from time to time in accordance with the requirements of Rule 16b-3.
With respect to all other Participants, the Plan shall be administered by the
Board or by a committee (the "Stock Option Committee") consisting of not less
than two directors of the Company appointed by the Board. As used herein,
"Committee" shall mean (i) with respect to decisions relating to Insiders, the
16b-3 Committee, and (ii) with respect to decisions relating to all other
Participants, the Stock Option Committee. Except as otherwise provided by the
terms of this Plan or by the Board, the Committee shall have all the power and
authority of the Board hereunder.
The Committee shall have full and final authority in its discretion, but
subject to the provisions of the Plan, to determine from time to time the
individuals to whom Options shall be granted and the number of shares to be
covered by each Option; to determine the time or times at which Options shall be
granted; to interpret the Plan and the instruments by which Options will be
evidenced; to make, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the instruments by which Options
shall be evidenced; with the consent of the Participant (as defined in Section
3), to modify or amend any Option agreement or waive any conditions or
restrictions applicable to any Option or the exercise thereof; and to make all
other determinations necessary or advisable for the administration of the Plan.
3. Eligibility. The Committee may, from time to time, select particular
employees from among those key employees of the Company and any subsidiary of
the Company to whom Options are to be granted, and upon the grant of such
Options, the selected employees shall become Participants in the Plan. As used
herein the term "Participant" means an eligible employee as described in this
Section who accepts an Option, or the estate, personal representative or
beneficiary thereof having the right to exercise an Option pursuant to its
terms. Employees are eligible hereunder if they are employed by the Company or
any of its subsidiaries on a full-time basis and are compensated for such
employment by a regular salary. There shall be included as eligible employees
members of the Board who are also salaried officers or employees of the Company.
<PAGE>
4. Number of Shares Available for Options. The shares of Common Stock
subject to Options granted pursuant to the Plan shall be either shares of
authorized but unissued Common Stock or shares of Common Stock reacquired by the
Company. Shares that by reason of the expiration of an Option, or for any other
reason, are no longer subject to purchase pursuant to an Option granted under
the Plan, and shares from time to time rendered in payment of the exercise price
of Options, may be made subject to additional Options granted pursuant to the
Plan. The maximum aggregate number of shares of Common Stock that may be issued
from time to time pursuant to the exercise of Options granted pursuant to the
Plan shall be 2,000,000; provided that the Committee may adjust the number of
shares available for Options, the number of shares subject to and the exercise
price of Options granted hereunder to effect a change in capitalization of the
Company, such as a stock dividend, stock split, share combination, exchange of
shares, merger, consolidation, reorganization, liquidation, or the like, of or
by the Company.
5. The Grant of Options. Options granted hereunder shall be evidenced
by written stock option agreements containing such terms and provisions as are
recommended and approved from time to time by the Committee, but subject to and
not more favorable than the terms of the Plan. The Committee may from time to
time require additional terms which the Committee deems necessary or advisable.
The Company shall execute stock option agreements upon instruction from the
Committee.
6. Maximum Amount of Stock Subject to Options. The maximum aggregate
fair market value (determined as of the time the Option is granted) of the
Common Stock with respect to which Options are exercisable for the first time by
any employee during any calendar year (under all incentive stock option plans of
the Company and its subsidiaries) shall not exceed $100,000. This limitation
shall apply to all Options granted under the Plan after December 31, 1986.
7. Option Exercise Price. The purchase price of Common Stock subject to
an Option granted pursuant to the Plan shall be determined by the Committee on
the date of the grant. The price shall not be less than 100% of the fair market
value of the Common Stock on the date of the grant of the Option; provided,
however, that if the Participant owns more than 10% combined voting power of all
of the outstanding capital stock of the Company on the date of the grant, the
exercise price shall not be less than 110% of the fair market value of the
Common Stock on the date of grant. The Committee shall determine the fair
market value of the Common Stock on the date of the grant, and shall set forth
the determination in its minutes.
8. Exercise of Option.
a. Options granted under the Plan may not be exercisable while
there is outstanding any incentive stock option previously granted to the
Participant. An Option will be considered outstanding until such Option is
exercised in full or expires by reason of lapse of time. This Section 8.a.
shall not apply to any Option granted to any employee pursuant to the Plan
after December 31, 1986.
b. An Option may not be exercised, nor may Common Stock be issued
pursuant to the exercise of an Option, if any requisite action, approval or
consent of any governmental authority of any kind having jurisdiction over
the exercise of the Option shall not have been taken or secured. The term
of each Option shall not be more than ten years from the date of grant;
provided, however, that in the case of a Participant who owns greater than
10% of the Common Stock of the Company at the time the Option is granted,
the term of the Option shall not be more than five years from the date of
grant.
9. Payment. Full payment for Common Stock purchased upon the exercise
of the Option shall be made at the time of exercise. No Common Stock shall be
issued until full payment has been made and a Participant shall have none of the
rights of a stockholder until shares of Common Stock are issued to him. Any
federal, state or local taxes required to be paid or withheld at the time of
exercise shall also be paid or withheld in full prior to any delivery of shares
of Common Stock upon exercise. Payment may be made in cash, in shares of Common
Stock then owned by the Participant, or in any other form of valid
consideration, or a combination of any of the foregoing, as required by the
Committee in its discretion. Shares of Common Stock tendered in payment of the
exercise price of any Options may be reissued to the Participant who tendered
the shares of Common Stock as part
<PAGE>
of the shares of Common Stock issuable upon exercise of other Options granted
from time to time pursuant to the Plan.
10. Time of Granting of Option. The grant of an Option pursuant to the
Plan shall be deemed to have occurred when the Stock Option Committee shall have
adopted a resolution approving such grant. Such Option shall not be effective
unless granted on or before December 31, 2003.
11. Non-Transferability of Options. Options granted under the Plan shall
not be transferable otherwise than by will or the laws of descent and
distribution and may only be exercised during the lifetime of the Participant by
such Participant.
12. Rights in Event of Death or Disability of Participant. The Committee
shall have discretion to include in each Option agreement such provisions
regarding exercisability of the Options following the death or disability of the
Participant as it, in its sole discretion, deems to be appropriate.
13. Notice Upon Disposition. Participants shall immediately notify the
Company upon sale of any Common Stock acquired pursuant to the exercise of an
Option granted under the Plan if such sale occurs within two years from the date
of the grant of the Option, or one year from the date of the exercise of the
Option.
14. Stock Purchased for Investment. At the discretion of the Committee,
any Option agreement may provide that the Option holder shall, by accepting an
Option, represent and agree on behalf of himself and his transferees by will or
the laws of descent and distribution that all shares of Common Stock purchased
upon the exercise of the Option will be acquired for investment and not for
resale or distribution, and that upon each exercise of any portion of an Option,
the person entitled to exercise the same shall furnish evidence satisfactory to
the Company (including a written and signed representation) to the effect that
the shares of Common Stock are being acquired in good faith and for investment
and not for resale or distribution.
15. Termination of Option Rights and Awards. The Committee may provide in
each Option agreement for the circumstances under which Options granted
hereunder may terminate for any reason that the Committee, in its sole
discretion, deems appropriate.
16. Amendment or Discontinuation. The Plan may be amended, altered or
discontinued by the Board or, if the Board has specifically delegated this
authority to the Committee, by the Committee, without approval of the
stockholders; provided that the Board or the Committee shall not have the power
or authority, without approval of the stockholders, to change the employees or
class of employees who are eligible to participate or the aggregate number of
shares which may be issued pursuant to the exercise of the Options. In the
event any law, or any rule or regulation issued or promulgated by the Internal
Revenue Service, Securities and Exchange Commission, National Association of
Security Dealers, Inc., any stock exchange upon which the Common Stock is listed
for trading or other governmental or quasi-governmental agency having
jurisdiction over the Company, its Common Stock or the Plan requires the Plan to
be amended, the Plan will be amended at that time and all Options then
outstanding will be subject to such amendment.
17. Employment. This Plan and any Option granted under this Plan do not
confer upon the Participant any right to be employed or to continue in the
employ of the Company, nor does it in any way interfere with the right of the
Company to terminate the employment of the Participant at any time.
18. No Obligation to Exercise Option. The granting of an Option pursuant
to the Plan shall not impose any obligation upon the Participant to exercise
such Option.
19. Termination. Unless sooner terminated by action of the Board, or, if
the Board has specifically delegated its authority to terminate the Plan to the
Committee, by the Committee, the Plan shall terminate on December 31, 2003, and
no Options may be granted pursuant to the Plan after such date.
<PAGE>
20. Use of Proceeds. The proceeds derived from the sale of stock
pursuant to Options granted under the Plan shall constitute general funds of the
Company.
21. Effective Date of the Plan. The Plan shall become effective and
shall be deemed to have been adopted on December 19, 1994.
STERLING SOFTWARE, INC.
By: /s/ Sterling L. Williams
----------------------------------------
Sterling L. Williams
President and Chief Executive Officer
<PAGE>
EXHIBIT 99.2
STERLING SOFTWARE, INC.
NON-STATUTORY STOCK OPTION PLAN
(AS AMENDED, THROUGH JUNE 15, 1995)
1. Purpose. The purpose of the Non-Statutory Stock Option Plan of
Sterling Software, Inc. (the "Plan") is to provide key employees and advisors
with a proprietary interest in Sterling Software, Inc., a Delaware corporation,
and its subsidiaries (the "Company") through the granting of options ("Option"
or "Options") to purchase shares of the Company's authorized Common Stock, par
value $0.10 per share ("Common Stock"), in order to:
a. Increase the interest in the Company's welfare of those key
employees and advisors who share primary responsibility for the management,
growth and protection of the business of the Company;
b. Recognize the contributions made by certain key employees and
advisors to the Company's growth during its development stage;
c. Furnish an incentive to such key employees and advisors to
continue their services for the Company; and
d. Provide a means through which the Company may attract able
persons to engage as key employees and advisors.
With respect to persons subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent that any provision of the Plan
or action by the Committee (as defined in Section 2) fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
2. Administration. With respect to Participants who are directors or
executive officers of the Company ("Insiders"), the Plan shall be administered
in accordance with the requirements of Rule 16b-3 of the Exchange Act by a
committee (the "16b-3 Committee") consisting of such number of directors as are
appointed by the Board of Directors of the Company (the "Board of Directors" or
"Board") from time to time in accordance with the requirements of Rule 16b-3.
With respect to all other Participants, the Plan shall be administered by the
Board or by a committee (the "Stock Option Committee") consisting of not less
than two directors of the Company appointed by the Board. As used herein,
"Committee" shall mean (i) with respect to decisions relating to Insiders, the
16b-3 Committee, and (ii) with respect to decisions relating to all other
Participants, the Stock Option Committee. Except as otherwise provided by the
terms of this Plan or by the Board, the Committee shall have all the power and
authority of the Board hereunder.
The Committee shall have full and final authority in its discretion, but
subject to the provisions of the Plan, to determine from time to time the
individuals to whom Options shall be granted and the number of shares to be
covered by each Option; to determine the time or times at which Options shall be
granted; to interpret the Plan and the instruments by which Options will be
evidenced; to make, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the instruments by which Options
shall be evidenced; with the consent of the Participant (as defined in Section
3), to modify or amend any Option agreement or waive any conditions or
restrictions applicable to any Option or the exercise thereof; and to make all
other determinations necessary or advisable for the administration of the Plan.
Non-employee members of the Board ("non-employee directors") shall not be
eligible to receive Options under the Plan except as expressly provided in
Section 21.
3. Participants. The Committee may, from time to time, select
particular key employees and advisors of the Company, or of any subsidiary of
the Company, to whom Options are to be granted, and upon the grant of such
Options, the selected key employees and advisors shall become Participants in
the Plan. As used herein, the term "Participant" means a key employee or advisor
who accepts an Option, or the estate, personal representative or beneficiary
thereof having the right to exercise an Option pursuant to its terms.
<PAGE>
4. Shares Subject to the Plan. The shares of Common Stock subject to
Options granted pursuant to the Plan shall be either shares of authorized but
unissued Common Stock or shares of Common Stock reacquired by the Company.
Shares that by reason of the expiration of an Option, or for any other reason,
are no longer subject to purchase pursuant to an Option granted under the Plan,
and shares from time to time rendered in payment of the exercise price of
Options, may be made subject to additional Options granted pursuant to the Plan.
The maximum aggregate number of shares of Common Stock that may be issued from
time to time pursuant to the Plan shall be 4,875,000; provided that the
Committee may adjust the number of shares available for Options, the number of
shares subject to and the exercise price of Options granted hereunder to effect
a change in capitalization of the Company, such as a stock dividend, stock
split, reverse stock split, share combination, exchange of shares, merger,
consolidation, reorganization, liquidation, or the like, of or by the Company.
5. Grant of Options. Options granted hereunder shall be evidenced by
written stock option agreements containing such terms and provisions as are
recommended and approved from time to time by the Committee, but subject to and
not more favorable than the terms of the Plan. The Committee may from time to
time require additional terms which the Committee deems necessary or advisable.
The Company shall execute stock option agreements upon instruction from the
Committee.
6. Maximum Amount of Stock Subject to Options. Subject to Section 21,
the maximum aggregate fair market value (determined as of the time the Option is
granted) of the Common Stock for which any Participant may be granted Options in
any calendar year shall be determined by the Committee in its discretion.
7. Option Exercise Price. The purchase price of Common Stock subject to
an Option granted pursuant to the Plan shall be no less than the fair market
value of the Common Stock on the date of grant.
8. Restrictions. The Committee may, but need not, at the time of
granting of an Option or at any subsequent time impose such restrictions, if
any, on issuance, voluntary disposition and release from escrow of any Options
including, without limitation, permitting exercise of Options only in
installments over a period of years.
9. Payment. Full payment for Common Stock purchased upon the exercise
of an Option shall be made at the time of exercise. No Common Stock shall be
issued until full payment has been made and a Participant shall have none of the
rights of a shareholder until shares of Common Stock are issued to him. Any
federal, state or local taxes required to be paid or withheld at the time of
exercise shall also be paid or withheld in full prior to any delivery of shares
of Common Stock upon exercise. Payment may be made in cash, in shares of Common
Stock then owned by the Participant, or in any other form of valid
consideration, or a combination of any of the foregoing, as required by the
Committee in its discretion. Shares of Common Stock tendered in payment of the
exercise price of any Options may be reissued to the Participant who tendered
the shares of Common Stock as part of the shares of Common Stock issuable upon
exercise of other Options granted from time to time pursuant to the Plan.
10. Transferability of Options. Except as may be agreed upon by the
Committee in accordance with the following two paragraphs, Options granted under
the Plan shall not be transferable other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order, as defined by
the Internal Revenue Code of 1986, as amended (the "Code"), or Title I of the
Employee Retirement Income Security Act ("ERISA"), or the rules thereunder. The
designation by the holder of an Option of a beneficiary shall not constitute a
transfer of the Option.
The Committee shall have the discretion to include in (or amend to include
in) any Option agreement held by a Participant who is not an Insider such
provisions regarding transferability of the Options as the Committee, in its
sole discretion, deems to be appropriate.
The Committee shall have the discretion to include in (or amend to include
in) any Option agreement held by a Participant who is an Insider (other than a
non-employee director) a provision permitting such Participant's
<PAGE>
Option to be transferred by the Participant to members of the Participant's
immediate family, trusts for the benefit of such immediate family members and
partnerships in which such immediate family members are the only partners,
provided that there cannot be any consideration for the transfer.
11. Time of Granting of an Option. The grant of an Option pursuant to
the Plan shall be deemed to have occurred when the Stock Option Committee shall
have adopted a resolution approving such grant.
12. Rights in Event of Death or Disability of Participant. The Committee
shall have discretion to include in each Option agreement such provisions
regarding exercisability of the Options following the death or disability of the
Participant as it, in its sole discretion, deems to be appropriate.
13. Termination of Option Rights and Awards. The Committee may provide in
each Option agreement for the circumstances under which Options granted
hereunder may terminate for any reason that the Committee, in its sole
discretion, deems appropriate.
14. Stock Purchased for Investment. At the discretion of the Committee,
any Option agreement may provide that the Option holder shall, by accepting an
Option, represent and agree on behalf of himself and his transferees by will or
the laws of descent and distribution that all shares of Common Stock purchased
upon the exercise of the Option will be acquired for investment and not for
resale or distribution, and that upon each exercise of any portion of an Option,
the person entitled to exercise the same shall furnish evidence satisfactory to
the Company (including a written and signed representation) to the effect that
the shares of Common Stock are being acquired in good faith and for investment
and not for resale or distribution.
15. Amendment or Discontinuation. The Plan may be amended, altered or
discontinued by the Board or, if the Board has specifically delegated this
authority to the Committee, by the Committee, without approval of the
stockholders. In the event any law, or any rule or regulation issued or
promulgated by the Internal Revenue Service, Securities and Exchange Commission,
National Association of Securities Dealers, Inc., any stock exchange upon which
the Common Stock is listed for trading or other governmental or quasi-
governmental agency having jurisdiction over the Company, its Common Stock or
the Plan requires the Plan to be amended, the Plan will be amended at that time
and all Options then outstanding will be subject to such amendment.
16. Employment. This Plan and any Option granted under this Plan do not
confer upon the Participant any right to be employed or to continue employment
with the Company.
17. No Obligation to Exercise Option. The granting of an Option pursuant
to the Plan shall not impose any obligation upon the Participant to exercise
such Option.
18. Termination. Unless sooner terminated by action of the Board or, if
the Board has specifically delegated its authority to terminate the Plan to the
Committee, by the Committee, the Plan shall terminate on December 31, 2011, and
no Options may be granted pursuant to the Plan after such date.
19. Use of Proceeds. The proceeds derived from the sale of stock
pursuant to Options granted under the Plan shall constitute general funds of the
Company.
20. Effective Date of the Plan. The Plan shall be effective, as amended,
on June 15, 1995.
21. Automatic Grants to Non-Employee Directors. Grants to non-employee
directors on or after the date hereof shall be solely pursuant to the following
formula: each non-employee director elected or appointed to the Board will
receive, at the time of his or her initial election or appointment, an automatic
grant of Options to purchase 40,000 shares of Common Stock. In addition, during
the term of this Plan, each non-employee director will receive an additional
automatic grant of Options to purchase 40,000 shares of Common Stock every five
years on the anniversary date of his or her initial election or appointment to
the Board, beginning on the fifth anniversary
<PAGE>
of his or her initial election or appointment to the Board; provided that such
non-employee director has served continuously as a director of the Company since
the date of his or her initial election or appointment to the Board. The
exercise price of each such Option will be equal to the fair market value of the
Common Stock on the date of grant. Each such Option will become exercisable in
cumulative annual installments of one-fourth of the shares covered by the grant,
commencing one year after the date of grant, and will expire five years from the
date of grant; provided that each such Option will become immediately
exercisable with respect to 100% of the shares covered by the grant in the event
of a change of control. A change of control is deemed to occur (i) when any
person, other than Sam Wyly or Charles J. Wyly, Jr., or an affiliate of either
of them, becomes the beneficial owner of securities of the Company representing
20% or more of the combined voting power of the Company's outstanding
securities, (ii) if, during any three consecutive years, individuals who
constitute the Board of Directors at the beginning of such period cease to
constitute a majority of the Board of Directors or (iii) upon the occurrence of
any event that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act. This section
shall not be amended more than once in any six-month period, other than to
comport with changes in the Code or ERISA, or the rules thereunder.
STERLING SOFTWARE, INC.
By: /s/ Sterling L. Williams
-------------------------------------
Sterling L. Williams
President and Chief Executive Officer
