<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) SEPTEMBER 23, 1996
STERLING SOFTWARE, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-8465 75-1873956
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
8080 NORTH CENTRAL EXPRESSWAY, SUITE 1100, DALLAS, TEXAS 75206
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (214) 891-8600
================================================================================
<PAGE>
ITEM 5. OTHER EVENTS
As previously reported by Sterling Software, Inc. ("Sterling Software") in
its Quarterly Report on Form 10-Q for the period ended June 30, 1996, Sterling
Software presently intends to distribute pro rata to its stockholders as a
special dividend all of its remaining shares of common stock, par value $.01 per
share ("Commerce Stock"), of Sterling Commerce, Inc. on a tax-free basis (the
"Special Dividend"). The stockholders of Sterling Software approved the Special
Dividend at the annual meeting of stockholders of Sterling Software held on May
29, 1996.
A condition to the declaration of the Special Dividend by Sterling
Software's Board of Directors (the "Sterling Software Board") was the receipt of
a favorable ruling from the Internal Revenue Service (the "IRS") as to the tax-
free nature of the Special Dividend. On September 23, 1996, Sterling Software
received a favorable ruling from the IRS to the effect that the Special Dividend
will qualify as a tax-free distribution under Section 355 of the Internal
Revenue Code of 1986, as amended.
On September 23, 1996, the Sterling Software Board declared the Special
Dividend, payable pro rata to the holders of record of Sterling Software's
common stock, par value $.10 per share ("Software Stock"), as of the close of
business on September 30, 1996 (the "Dividend Record Date").
The number of shares of Commerce Stock to be distributed with respect to
each outstanding share of Software Stock will depend upon the number of shares
of Software Stock outstanding at the close of business on the Dividend Record
Date. As of September 20, 1996, approximately 37,853,800 shares of Software
Stock were outstanding and exercisable stock options and warrants evidencing the
right to purchase approximately 646,400 shares of Software Stock were
outstanding. Assuming all presently outstanding and exercisable stock options
and warrants to purchase Software Stock are exercised prior to the Dividend
Record Date, approximately 1.58960 shares of Commerce Stock would be distributed
for every one share of Software Stock. Sterling Software cannot predict the
number of stock options that will remain unexercised at the close of business on
the Dividend Record Date. Sterling Software will issue a press release as
promptly as practicable after the Dividend Record Date announcing the definitive
distribution ratio.
Under the terms of Sterling Software's stock option plans, any outstanding
stock options that are not exercised prior to the close of business on the
Dividend Record Date will be adjusted to preserve the economic value of such
options. The adjustment will be made pursuant to a formula that will both
increase the number of shares subject to options and decrease the exercise price
thereof. The magnitude of the adjustment is not presently determinable because
it will be determined based on the market price of the Software Stock prior to
and following the time when the Software Stock first begins trading on an "ex-
dividend" basis.
-2-
<PAGE>
No fractional shares of Commerce Stock will be distributed in connection
with the Special Dividend and instead a cash payment will be made to
stockholders of Sterling Software who otherwise would be entitled to receive
fractional shares. Certificates representing whole shares of Commerce Stock are
expected to be mailed on or about October 7, 1996 to record holders of Software
Stock as of the close of business on the Dividend Record Date. Checks
representing cash payments to record holders who would otherwise be entitled to
receive fractional shares of Commerce Stock will be mailed as promptly as
practicable thereafter. The First National Bank of Boston will act as disbursing
agent for the cash payments.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
STERLING SOFTWARE, INC.
By /s/ JEANNETTE P. MEIER
----------------------------------------
Jeannette P. Meier
Executive Vice President, Chief Financial
Officer, General Counsel and Secretary
Date: September 23, 1996
-4-
