<PAGE>
As filed with the Securities and Exchange Commission on December 19, 1997
Registration No. 333-
================================================================================
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)
300 CRESCENT COURT, SUITE 1200
DALLAS, TEXAS 75201
(214) 981-1000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DELAWARE 75-2623341
(State of incorporation) (I.R.S. Employer
Identification Number)
STERLING SOFTWARE, INC. EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
DON J. MCDERMETT, JR., ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
STERLING SOFTWARE, INC.
300 CRESCENT COURT, SUITE 1200
DALLAS, TEXAS 75201
(214) 981-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH A COPY TO:
JAMES E. O'BANNON, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-3939
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered (1) Share Price Fee (2)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.10 per share . . . . . . . 1,750,000 $ 39.28125 $ 68,742,188 $ 20,279
======================================================================================================================
</TABLE>
(1) Represents shares issuable under the Sterling Software, Inc. Employee
Stock Purchase Plan (the "Plan"). Pursuant to Rule 416, there are registered
hereunder such indeterminate number of additional shares as may become
issuable under the Plan as a result of the antidilution provisions contained
therein.
(2) Computed in accordance with Rule 457(h).
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
EXPLANATORY NOTE
The information called for by Part I of this Registration Statement on Form
S-8 (the "Registration Statement") is included in the description of the
Sterling Software, Inc. Employee Stock Purchase Plan (the "Plan") to be
delivered to persons eligible to participate in the Plan. Pursuant to the Note
to Part I of Form S-8, this information is not being filed with or included in
this Registration Statement. However, included herein is a Prospectus to be
used in connection with certain reoffers and resales of shares of common stock,
par value $0.10 per share, of Sterling Software, Inc. acquired pursuant to the
Plan. Such Prospectus has been prepared in accordance with the requirements of
Form S-3 pursuant to General Instruction C of Form S-8.
<PAGE>
REOFFER PROSPECTUS
1,750,000 SHARES
STERLING SOFTWARE, INC.
COMMON STOCK
This Prospectus relates to the offer and sale by certain stockholders
("Selling Stockholders") of Sterling Software, Inc. (the "Company") of up to
1,750,000 shares (the "Shares") of Common Stock, par value $0.10 per share, of
the Company (the "Common Stock"), issued to the Selling Stockholders pursuant to
the Sterling Software, Inc. Employee Stock Purchase Plan (the "Plan").
Sales by the Selling Stockholders may be made on one or more exchanges,
including the New York Stock Exchange (the "NYSE"), or in the over-the-counter
market or in negotiated transactions, in each case at prices and at terms then
prevailing or at prices related to the then current market price or at
negotiated prices and terms. Upon any sale of the Shares offered hereby, the
Selling Stockholders and participating agents, brokers or dealers may be deemed
to be underwriters as that term is defined in the Securities Act of 1933, as
amended (the "Securities Act"), and commissions or discounts or any profit
realized on the resale of such securities may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of Distribution".
The Common Stock is listed for trading on the NYSE under the symbol "SSW".
On December 17, 1997, the closing price of the Common Stock on the NYSE was $40
5/8. The Company will pay all expenses in connection with the offering
contemplated by this Prospectus, other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any counsel to the
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
THIS PROSPECTUS. ANY REPRESENTATION TO THE
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is December 19, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission and that is
located at http://www.sec.gov. Documents filed by the Company may also be
inspected at the office of the NYSE, 20 Broad Street, New York, New York 10005,
on which exchange the Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act relating to the Shares
issuable pursuant to the Plan. This Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Shares offered hereby. Any
statements contained herein concerning the provisions of any document are not
necessarily complete, and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
Company's Annual Report on Form 10-K for the year ended September 30, 1997.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to: Sterling Software, Inc., 300 Crescent Court, Suite 1200,
Dallas, Texas 75201, Attention: Don J. McDermett, Jr., Senior Vice President
and General Counsel (telephone: (214) 981-1000).
-2-
<PAGE>
THE COMPANY
The Company is a recognized worldwide supplier of software products and
services within the enterprise systems management and applications management
software markets and also provides specialized information technology services
to certain sectors of the federal government. The Company's principal executive
offices are located at 300 Crescent Court, Suite 1200, Dallas, Texas 75201, and
the Company's telephone number at such address is (214) 981-1000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of Shares by
the Selling Stockholders.
SELLING STOCKHOLDERS
This Prospectus relates to the offer and sale by the Selling Stockholders
of up to 1,750,000 Shares issued under the Plan to the Selling Stockholders.
This Prospectus also relates to such indeterminate number of additional shares
of Common Stock that may be acquired by the Selling Stockholders as a result of
the antidilution provisions of the Plan. Information regarding the identity of
the Selling Stockholders and certain other information relating to the Selling
Stockholders will be provided by supplement to this Prospectus.
PLAN OF DISTRIBUTION
The Shares may be sold or otherwise disposed of from time to time by any of
the Selling Stockholders in one or more transactions through any one or more of
the following: (i) to purchasers directly, (ii) in ordinary brokerage
transactions and transactions in which the broker solicits purchasers, (iii)
through underwriters or dealers who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
or from the purchasers of the Shares for whom they may act as agent, (iv) the
writing of options on the Shares, (v) the pledge of the Shares as security for
any loan or obligation, including pledges to brokers or dealers who may, from
time to time, themselves effect distributions of the Shares or interests
therein, (vi) purchases by a broker or dealer as principal and resale by such
broker or dealer for its own account pursuant to this Prospectus, (vii) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction and (viii) an exchange distribution in accordance
with the rules of such exchange, including the NYSE, or in transactions in the
over-the-counter market. Such sales may be made at prices and at terms then
prevailing or at prices related to the then current market price or at
negotiated prices and terms. In effecting sales, brokers or dealers may arrange
for other brokers or dealers to participate. The Selling Stockholders or such
successors in interest, and any underwriters, brokers, dealers or agents that
participate in the distribution of the Shares, may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the Shares by them and any discounts, commissions or concessions
received by any such underwriters, brokers, dealers or agents may be deemed to
be underwriting commissions or discounts under the Securities Act. In addition,
any of the Shares covered by this Prospectus that qualify for sale pursuant to
Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Company will pay all of the expenses in connection with the offering
contemplated by this Prospectus, other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any counsel to the
Selling Stockholders.
-3-
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon for the Company by Jones, Day, Reavis &
Pogue, Dallas, Texas. Michael C. French, a consultant to Jones, Day, Reavis &
Pogue, is a director and an employee of the Company.
EXPERTS
The consolidated financial statements and financial statement schedule
appearing in the Company's Annual Report on Form 10-K for the year ended
September 30, 1997 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and financial statement
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
FORWARD-LOOKING INFORMATION
This Prospectus (including the documents incorporated herein by reference)
contains or may contain certain forward-looking statements and information that
are based on beliefs of, and information currently available to, the Company's
management as well as estimates and assumptions made by the Company's
management. When used in this Prospectus, words such as "anticipate,"
"believe," "estimate," "expect," "future," "intend," "plan" and similar
expressions as they relate to the Company or the Company's management, identify
forward-looking statements. Such statements reflect the current views of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions relating to the Company's operations and results
of operations, competitive factors and pricing pressures, shifts in market
demand, the performance and needs of the industries served by the Company, the
costs of product development and other risks and uncertainties including, in
addition to any uncertainties specifically identified in the text surrounding
such statements, uncertainties with respect to changes or developments in
social, economic, business, industry, market, legal and regulatory circumstances
and conditions and actions taken or omitted to be taken by third parties,
including the Company's stockholders, customers, suppliers, business partners,
competitors, and legislative, regulatory, judicial and other governmental
authorities and officials. Should one or more of these risks or uncertainties
materialize, or should the underlying estimates or assumptions prove incorrect,
actual results or outcomes may vary significantly from those anticipated,
believed, estimated, expected, intended or planned.
-4-
<PAGE>
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES TO ANY PERSON
OR BY ANYONE IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
Available Information.................................... 2
Incorporation of Certain
Documents by Reference.................................. 2
The Company.............................................. 3
Use of Proceeds.......................................... 3
Selling Stockholders..................................... 3
Plan of Distribution..................................... 3
Legal Matters............................................ 4
Experts.................................................. 4
Forward-Looking Information.............................. 4
1,750,000 SHARES
STERLING SOFTWARE, INC.
COMMON STOCK
--------------
PROSPECTUS
--------------
DECEMBER 19, 1997
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Registration
Statement the Company's Annual Report on Form 10-K for the year ended September
30, 1997.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the termination of the offering made hereby,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part of this Registration Statement from the date of the filing of
such reports.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable (securities to be offered are registered under Section
12 of the Exchange Act).
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the validity of the Common
Stock, par value $0.10 per share, of the Company registered hereby will be
passed upon for the Company by Jones, Day, Reavis & Pogue, Dallas, Texas.
Michael C. French, a consultant to Jones, Day, Reavis & Pogue, is a director and
an employee of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation provides that the personal
liability of directors of the Company to the Company is eliminated to the
maximum extent permitted by Delaware law. The Company's Certificate of
Incorporation and Bylaws provide for the indemnification of the directors,
officers, employees and agents of the Company and its subsidiaries to the
fullest extent that may be permitted by Delaware law from time to time, and the
Bylaws provide for various procedures relating thereto. Certain provisions of
the Company's Certificate of Incorporation protect the Company's directors
against personal liability for monetary damages resulting from breaches of their
fiduciary duty of care, except as set forth below. Under Delaware law, absent
these provisions, directors could be held liable for gross negligence in the
performance of their duty of care, but not for simple negligence. The Company's
Certificate of Incorporation absolves directors of liability for negligence in
the performance of their duties, including gross negligence. However, the
Company's directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit. The
Company's Certificate of Incorporation also does not absolve directors of
liability under Section 174 of the Delaware General Corporation Law, which makes
directors personally liable for unlawful dividends or unlawful stock repurchases
or redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees and other
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation -- a
"derivative action") if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no
II-1
<PAGE>
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of a derivative action, except that
indemnification only extends to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such an action and Delaware law
requires court approval before there can be any indemnification of expenses
where the person seeking indemnification has been found liable to the Company.
As authorized by the Company's Certificate of Incorporation, the Company
has entered into indemnification agreements with each of its directors and
officers. These indemnification agreements provide for, among other things, (i)
the indemnification by the Company of the indemnitees thereunder to the extent
described above, (ii) the advancement of attorneys' fees and other expenses, and
(iii) the establishment, upon approval by the Board, of trusts or other funding
mechanisms to fund the Company's indemnification obligations thereunder.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
5.1 Opinion of Jones, Day, Reavis & Pogue.
10.1 Sterling Software, Inc. Employee Stock Purchase Plan.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney.
ITEM 9. UNDERTAKINGS
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement;
and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
-------- -------
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the
II-2
<PAGE>
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
---------
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
----
fide offering thereof.
- ----
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-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 December 18, 1997.
STERLING SOFTWARE, INC.
By: /s/ DON J. MCDERMETT, JR.
---------------------------------------
Don J. McDermett, Jr.
Senior Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on December 18, 1997.
Signatures Title
---------- -----
Sterling L. Williams* Chief Executive Officer and President; Director
- ------------------------ (Principal Executive Officer)
Sterling L. Williams
R. Logan Wray* Senior Vice President and Chief Financial Officer
- ------------------------ (Principal Financial and Accounting Officer)
R. Logan Wray
Sam Wyly* Chairman of the Board; Director
- ------------------------
Sam Wyly
Charles J. Wyly, Jr.* Vice Chairman of the Board; Director
- ------------------------
Charles J. Wyly, Jr.
Evan A. Wyly* Director
- ------------------------
Evan A. Wyly
Phillip A. Moore* Director
- ------------------------
Phillip A. Moore
Michael C. French* Director
- ------------------------
Michael C. French
Donald R. Miller* Director
- ------------------------
Donald R. Miller
Robert J. Donachie* Director
- ------------------------
Robert J. Donachie
Alan W. Steelman* Director
- ------------------------
Alan W. Steelman
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed on behalf of
the above-named officers and directors and filed herewith.
/s/ DON J. McDERMETT, JR.
-----------------------------------
Don J. McDermett, Jr.
Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Jones, Day, Reavis & Pogue.
10.1 Sterling Software, Inc. Employee Stock Purchase Plan.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney.
<PAGE>
Exhibit 5.1
-----------
[Letterhead of Jones, Day, Reavis & Pogue]
December 15, 1997
Sterling Software, Inc.
300 Crescent Court
Suite 1200
Dallas, Texas 75201
Re: Registration Statement on Form S-8 relating to up to 1,750,000 shares
of Common Stock, par value $0.10 per share, of Sterling Software, Inc.
----------------------------------------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Sterling Software, Inc., a Delaware corporation
(the "Company"), in connection with the registration of up to 1,750,000 shares
(the "Shares") of Common Stock, par value $0.10 per share, of the Company
("Common Stock") pursuant to the Company's Registration Statement on Form S-8
(the "Registration Statement").
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion. Based on such examination and on
the assumptions set forth below, we are of the opinion that the Shares, when
issued and delivered in accordance with the provisions of the Sterling Software,
Inc. Employee Stock Purchase Plan (the "Plan") against payment of the
consideration therefor as provided in the Plan and having a value not less than
the par value thereof, will be duly authorized, validly issued, fully paid, and
nonassessable.
In rendering the foregoing opinion, we have relied as to certain factual
matters upon certificates of officers of the Company and public officials, and
we have not independently checked or verified the accuracy of the statements
contained therein. In addition, our examination of matters of law has been
limited to the General Corporation Law of the State of Delaware and the federal
laws of the United States of America, in each case as in effect on the date
hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement with respect to the Common Stock.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 10.1
------------
STERLING SOFTWARE, INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Sterling Software, Inc. and certain of its subsidiaries by providing eligible
employees with the opportunity to acquire a proprietary interest in the Company
through participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Plan Administrator shall administer the Plan and shall have
full authority and discretion to interpret and construe any provision of the
Plan and to adopt such rules and regulations for administering the Plan as it
may deem necessary, and to take any action it may deem necessary in order to
comply with the requirements of Section 423 of the Code. Decisions of the Plan
Administrator and the Administrative Committee described in paragraph B. below
shall be final and binding on all parties having an interest in the Plan. The
Plan Administrator shall have full authority and discretion to retain and engage
such third party firms (including, without limitation, brokerage and record
keeping firms) as it shall from time to time deem advisable or appropriate.
B. The Administrative Committee for the Plan shall have the full
authority and discretion to designate Corporate Affiliates (other than domestic
subsidiaries of the Company) as Participating Companies from time to time and to
terminate any such designation; to decide any questions relating to the
administration of the Plan that are referred to the Administrative Committee by
the Plan Administrator; and to amend the Plan as provided in Section X.
III STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued Common Stock or shares of Common Stock held in the
Company's treasury. The maximum number of shares of Common Stock which may be
issued over the term of the Plan shall not exceed 1,750,000 shares.
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Company's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and class of securities issuable under the Plan,
(ii) the maximum number and class of securities purchasable per Participant on
any one Purchase Date and (iii) the number and class of securities and the price
per share in effect under each outstanding purchase right in order to prevent
the dilution or enlargement of benefits thereunder.
IV. PURCHASE PERIODS
Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive Purchase Periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the Effective Date
shall be eligible to participate in the Plan on the first day of any Purchase
Period under the Plan, provided such individual remains an Eligible Employee on
such day. Until the Administrative Committee designates one or more foreign
subsidiaries of
<PAGE>
the Company as a Participating Company, eligibility to participate in the Plan
shall be limited to Eligible Employees employed by the Company or by a U.S.
subsidiary of the Company.
B. Each individual who becomes an Eligible Employee after the
Effective Date shall be eligible to participate in the Plan on the first day of
any Purchase Period commencing thereafter, provided such individual remains an
Eligible Employee on such day.
C. To participate in the Plan for a particular Purchase Period, an
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator and file such forms with the Plan Administrator (or its designee)
before the first day of such Purchase Period. An Eligible Employee's enrollment
in the Plan for a Purchase Period will remain in effect for all subsequent
Purchase Periods until modified or terminated by the Eligible Employee or until
he or she no longer qualifies as an Eligible Employee.
VI. PAYROLL DEDUCTIONS; ADDITIONAL CONTRIBUTIONS; SHORTFALL CONTRIBUTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock under the Plan may be any whole multiple of
one percent (1%) of the Eligible Compensation paid to the Participant during
each Purchase Period, up to a maximum of twenty-five percent (25%). The
deduction rate so authorized shall continue in effect for the entire Purchase
Period. The Participant may not increase his or her rate of payroll deduction
during a Purchase Period. However, the Participant may, at any time prior to
the tenth (10th) Business Day immediately preceding the Purchase Date for the
Purchase Period, reduce his or her rate of payroll deduction to any whole
percentage or to zero, such reduction to become effective prospectively as soon
as administratively feasible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one (1) such
reduction per Purchase Period. If a Participant reduces his or her payroll
deductions to zero, the Participant's previous payroll deductions for the
Purchase Period will still be applied to the purchase of shares of Common Stock
on the Purchase Date, unless the Participant elects to terminate his or her
purchase rights for the Purchase Period in accordance with Section VII.E.
B. Payroll deductions shall begin on the first pay day of each
Purchase Period and shall (unless sooner terminated) continue through the pay
day ending on or immediately prior to the last day of the Purchase Period. The
amounts so collected shall be credited to the Participant's Account under the
Plan. Except as otherwise provided in paragraph D below, Interest shall accrue
and be credited on each pay day in the Purchase Period on the amount of the
Participant's Account balance that has been credited to the Participant's
Account during the entire pay period ending on such pay day. No Interest will
accrue or be credited on any amount that is credited to the Participant's
Account for any period that is less than a full pay period. Payroll deduction
amounts, Additional Contribution amounts and credited Interest need not be held
in any segregated account or trust fund and may be commingled with the general
assets of the Company and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. In addition to payroll deductions, a Participant may make one
Additional Contribution to the Plan during each Purchase Period. An Additional
Contribution may be made in cash, by personal check or in any other form
permitted from time to time by the Plan Administrator. All Additional
Contributions will be credited to the Participant's Account and will be credited
with Interest. Such Interest will accrue and be credited to the Participant's
Account in the same manner as Interest is accrued and credited to the
Participant's Account under paragraph B of this Section. An Eligible Employee
who has not authorized payroll deductions, or who has terminated payroll
deductions, for a Purchase Period may not thereafter make an Additional
Contribution to the Plan for such Purchase Period.
E. A Participant whose net pay after all deductions therefrom on any
given pay day is not sufficient to fund the payroll deduction authorized by the
Participant for a Purchase Period shall be permitted to fund any such shortfall
by contributing the amount thereof to the Plan in cash, by personal check or in
any other form permitted from time to time by the Plan Administrator ("Shortfall
Contributions"). Shortfall Contributions must be
<PAGE>
contributed to the Plan before the tenth (10th) Business Day immediately
preceding the Purchase Date for the Purchase Period. Interest will accrue and be
credited in respect of Shortfall Contributions in the same manner as for
Additional Contributions. All references in this Plan to payroll deductions also
shall be deemed to refer to and include Shortfall Contributions, except where
the context clearly requires otherwise.
VII PURCHASE RIGHTS
A. A Participant shall be granted a separate purchase right on the
first day of each Purchase Period in which he or she participates. The purchase
right shall provide the Participant with the right to purchase shares of Common
Stock on the Purchase Date upon the terms set forth below. Under no
circumstances shall purchase rights be granted under the Plan to any Eligible
Employee if such individual would, immediately after the grant, own (within the
meaning of Section 424(d) of the Code) or hold outstanding options or other
rights to purchase, stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any
Corporate Affiliate.
B. Each purchase right shall be automatically exercised on the
Purchase Date, and shares of Common Stock shall accordingly be purchased on such
date on behalf of each Participant participating in the related Purchase Period
(other than any Participant whose payroll deductions have previously been
refunded in accordance with paragraph E below). The purchase shall be effected
by applying the Participant's Account balance as of the last day of the Purchase
Period (including Interest credited through such day) to the purchase of shares
of Common Stock (subject to the limitation on the maximum number of shares
purchasable per Participant) at the Purchase Price in effect for that Purchase
Period.
C. The number of shares of Common Stock purchasable by a Participant
on each Purchase Date shall be the number of whole shares obtained by dividing
the Participant's Account balance on the last day of the Purchase Period by the
Purchase Price in effect for that Purchase Date. However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed 3,000 shares.
D. Any portion of the Participant's Account balance that is not
applied to the purchase of shares of Common Stock on any Purchase Date because
such portion is not sufficient to purchase a whole share of Common Stock shall
be held for the purchase of Common Stock on the next Purchase Date, unless the
Participant has elected not to participate during the next Purchase Period, in
which case the Participant's entire remaining Account balance shall be refunded
to the Participant as soon as administratively feasible. Any portion of the
Participant's Account balance that is not applied to the purchase of Common
Stock by reason of the limitation on the maximum number of shares purchasable by
the Participant on the Purchase Date shall be refunded as soon as
administratively feasible.
E. The following provisions shall govern the termination of
outstanding purchase rights:
(i) A Participant may, at any time prior to the tenth
(10th) Business Day immediately preceding the Purchase Date for the Purchase
Period, terminate his or her outstanding purchase right by filing the
appropriate form with the Plan Administrator (or its designee), and no further
payroll deductions or Additional Contributions shall be collected from or made
by the Participant with respect to such terminated purchase right. The
Participant's entire Account balance as of the effective date of such
termination shall be refunded as soon as administratively feasible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the Purchase Period
for which the terminated purchase right was granted. In order to resume
participation in any subsequent Purchase Period, such individual must re-enroll
in the Plan (by making a timely filing of the prescribed enrollment forms)
before the first day of the new Purchase Period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in employment
status) while his or her purchase right remains outstanding, then that purchase
right shall immediately terminate, and the Participant's entire Account balance
shall be refunded as soon as administratively feasible. However, should the
Participant cease to remain in active service by reason of an approved unpaid
leave of absence, then the Participant shall have the right, exercisable up
until the tenth (10th)
<PAGE>
Business Day immediately preceding the Purchase Date for the Purchase Period in
which such leave commences, to withdraw his or her entire Account balance. If a
Participant on such an unpaid leave does not exercise this right, such
Participant's Account balance shall be held for the purchase of shares at the
next Purchase Date. In no event, however, shall any Additional Contributions or
any further payroll deductions be collected on the Participant's behalf during
any such unpaid leave. Upon the return to active service of any Participant
previously on unpaid leave, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began, unless
the Participant elected to withdraw his or her Account balance for the Purchase
Period in which the leave commenced.
(iv) Notwithstanding any other provision of the Plan to the
contrary, a Participant's purchase rights with respect to a Purchase Period
shall terminate, and his or her Account balance shall be refunded as soon as
administratively feasible, if the Participant's employment with the
Participating Companies terminates for any reason on or before the Purchase Date
for such Purchase Period.
F. Each outstanding purchase right shall automatically be exercised,
immediately prior to the date any Corporate Transaction is consummated, by
applying the Participant's Account balance to the purchase of whole shares of
Common Stock at a purchase price per share equal to eighty-five percent (85%) of
the lower of (i) the Fair Market Value per share of Common Stock on the first
-----
day of the Purchase Period in which such Corporate Transaction occurs or (ii)
the Fair Market Value per share of Common Stock immediately prior to the date
such Corporate Transaction is consummated. However, the applicable limitation on
the number of shares of Common Stock purchasable per Participant shall continue
to apply to any such purchase. Any portion of the Participant's Account balance
that is not applied to the purchase of shares of Common Stock because such
portion is not sufficient to purchase a whole share of Common Stock shall be
refunded to the Participant as soon as administratively feasible. The Company
shall use reasonable efforts to provide prior written notice of the occurrence
of any Corporate Transaction, and Participants shall, following the receipt of
such notice, have the right to terminate their outstanding purchase rights prior
to the effective date of the Corporate Transaction.
G. Should the total number of shares of Common Stock which are to be
purchased pursuant to outstanding purchase rights on any particular date exceed
the number of shares then available for issuance under the Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a
uniform and nondiscriminatory basis, and the Account balance of each
Participant, to the extent in excess of the aggregate Purchase Price payable for
the Common Stock pro-rated to such individual, shall be refunded as soon as
administratively feasible.
H. The purchase right shall be exercisable only by the Participant
and shall not be assignable or transferable by the Participant.
I. A Participant shall have no stockholder rights with respect to
the shares subject to his or her outstanding purchase right until the shares are
purchased on the Participant's behalf in accordance with the provisions of the
Plan and the Participant has become the owner of the purchased shares.
VII ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such rights, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Section 423 of the Code) of the Company or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000) worth of stock of the Company and of any Corporate
Affiliate (determined on the basis of the Fair Market Value of such stock on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding, subject to the following:
(i) The right to acquire Common Stock under each
outstanding purchase right shall accrue on the Purchase Date in effect for the
Purchase Period for which such right is granted.
<PAGE>
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already accrued in
the same calendar year the right to acquire Common Stock under one (1) or more
other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000)
worth of Common Stock (determined on the basis of the Fair Market Value per
share on the date or dates of grant) for each calendar year such rights were at
any time outstanding.
B. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Period, then the
Participant's Account balance with respect to such purchase right shall be
refunded as soon as administratively feasible.
C. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on December 3, 1997 and shall
become effective on the Effective Date, provided no purchase rights granted
--------
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Company by majority vote of the shares represented in person or proxy at a
meeting of the stockholders of the Company at which a quorum shall be present
and (ii) the Company shall have complied with all applicable requirements of the
1933 Act (including the registration of the shares of Common Stock issuable
under the Plan on a Form S-8 registration statement filed with the Securities
and Exchange Commission), all applicable listing requirements of any stock
exchange on which the Common Stock is listed for trading and all other
applicable requirements established by law or regulation. In the event such
stockholder approval is not obtained, or such compliance is not effected, within
six (6) months after the date on which the Plan is adopted by the Board, the
Plan shall terminate and have no further force or effect and the Participants'
Account balances shall be refunded as soon as administratively feasible.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest to occur of (i) the last Business Day in December 2007, (ii)
--------
the date on which all shares available for issuance under the Plan shall have
been sold to Participants pursuant to purchase rights exercised under the Plan
or (iii) the date on which all purchase rights are exercised in connection with
a Corporate Transaction. Following such termination, no further purchase rights
shall be granted or exercised, and no further payroll deductions or Additional
Contributions shall be collected, under the Plan.
X. AMENDMENT OF THE PLAN
A. The Plan may be amended from time to time by the Board or any
duly authorized committee thereof, or by the Administrative Committee, and all
purchase rights outstanding at the effective date of any such amendment will be
subject to such amendment. In the event any law, or any rule or regulation
issued or promulgated by the Internal Revenue Service, the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc., any
stock exchange upon which the Common Stock is listed for trading, or any other
governmental or quasi-governmental agency having jurisdiction over the Company,
the Common Stock or the Plan, requires the Plan to be amended, or in the event
any of the rules under Section 16 of the 1934 Act are amended or supplemented
(e.g., by addition of alternative rules), in either event to require or permit
- ----
the Company to add, remove or lessen any restrictions on or with respect to
purchase rights under the Plan, the Administrative Committee and the Board each
reserves the right to amend the Plan to the extent of any such requirement,
amendment or supplement, and all purchase rights then outstanding will be
subject to such amendment.
B. The Plan may be terminated at any time by action of the Board;
provided, however, that the termination of the Plan shall not adversely affect
the terms of any outstanding purchase rights.
C. Notwithstanding the foregoing, the Board may not, without the
approval of the Company's stockholders, increase the number of shares of Common
Stock issuable under the Plan, except to the extent permitted under Section
III.B.
<PAGE>
D. With respect to any Participating Corporation which employs
Eligible Employees who reside outside of the United States, and notwithstanding
anything herein to the contrary, the Administrative Committee may in its sole
discretion amend the terms of the Plan, or any purchase right granted under the
Plan, in order to comply with the requirements of local law, and may, where
appropriate, establish one or more sub-plans to reflect such amended provisions
applicable to such Eligible Employees.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.
B. Nothing in the Plan shall confer upon any Participant any right
to continue in the employ of the Company or any Corporate Affiliate for any
period of specific duration, or interfere with or otherwise restrict in any way
the rights of the Company (or any Corporate Affiliate employing such person) or
of the Participant, which rights are hereby expressly reserved by each, to
terminate such Participant's employment at any time for any reason, with or
without cause.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. ACCOUNT shall mean the account established by the Plan
-------
Administrator to record a Participant's payroll deductions, credited Interest
and Additional Contributions (if any) as of any given date.
B. ADDITIONAL CONTRIBUTION shall mean a Participant's contribution
-----------------------
(other than by payroll deductions) for a Purchase Period in an amount that does
not exceed $2,000 and which is made before the tenth (10/th/) Business Day
immediately preceding the Purchase Date for the Purchase Period.
C. ADMINISTRATIVE COMMITTEE shall mean a committee consisting of one
------------------------
or more persons appointed by the Board from time to time to act as the
administrative committee of the Plan.
D. BOARD shall mean the Company's Board of Directors or the
-----
Executive Committee thereof.
E. BUSINESS DAY shall mean a day on which the New York Stock
------------
Exchange is open for trading.
F. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
G. COMMON STOCK shall mean the Company's common stock, par value
------------
$0.10 per share.
H. COMPANY shall mean Sterling Software, Inc., a Delaware
-------
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Sterling Software, Inc. which shall by appropriate
action adopt the Plan.
I. CORPORATE AFFILIATE shall mean any parent or subsidiary
-------------------
corporation of the Company (as determined in accordance with Section 424 of the
Code), whether now existing or subsequently established.
J. CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Company is a party:
(i) a merger, consolidation or reorganization of the
Company into or with another corporation or legal person as a result of which
securities possessing less than fifty percent (50%) of the total combined voting
power of the then-outstanding voting securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
the voting securities of the Company immediately prior to such transaction, or
(ii) a sale or other transfer of all or substantially all of
the assets of the Company to another corporation or other legal person as a
result of which securities possessing less than fifty percent (50%) of the total
combined voting power of the then-outstanding voting securities of such
corporation or person immediately after such sale or transfer are held in the
aggregate by the holders of the voting securities of the Company immediately
prior to such sale or transfer.
K. EFFECTIVE DATE shall mean February 1, 1998.
--------------
L. ELIGIBLE COMPENSATION means the following items of remuneration
---------------------
paid to a Participant by one or more Participating Companies during each
Purchase Period: base salary, overtime pay, commissions and cash incentive
compensation, computed before giving effect to the Participant's salary
reduction elections under Section 125 or Section 401(k) of the Code or the
Participant's deferral elections under any nonqualified deferred compensation
plan of the Company or any Corporate Affiliate.
M. ELIGIBLE EMPLOYEE shall mean an Employee who is employed by a
-----------------
Participating Company on a basis under which he or she is regularly expected to
render at least twenty (20) hours of service per week for more
<PAGE>
than five (5) months per calendar year for earnings considered wages.
Notwithstanding the foregoing, a person who is an independent contractor
performing services for a Participating Company shall not be eligible to
participate in the Plan.
N. EMPLOYEE shall mean an individual who is a common law employee of
--------
the Company or any Corporate Affiliate.
O. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be the closing selling price per share of Common Stock on the date in
question on the stock exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such
quotation exists.
P. INTEREST shall mean an additional amount of compensation
--------
calculated at the annual rate of interest of six month Treasury bills as quoted
in The Wall Street Journal published on the last Business Day of the month
-----------------------
immediately preceding the applicable Purchase Period during which such
compensation is credited, prorated for periods of less than one year.
Q. 1933 ACT shall mean the Securities Act of 1933, as amended.
--------
R. 1934 ACT shall mean the Securities Exchange Act of 1934, as
--------
amended.
S. PARTICIPANT shall mean any Eligible Employee of a Participating
-----------
Company who is actively participating in the Plan.
T. PARTICIPATING COMPANY shall mean the Company, each Corporate
---------------------
Affiliate that is a direct or indirect domestic subsidiary of the Company and
each other Corporate Affiliate that is authorized from time to time by the
Administrative Committee to extend the benefits of the Plan to its Eligible
Employees. For purposes of the foregoing, the term "subsidiary" has the meaning
set forth in Section 424(f) of the Code.
U. PLAN shall mean the Company's Employee Stock Purchase Plan, as
----
set forth in this document.
V. PLAN ADMINISTRATOR shall mean the person or persons appointed by
------------------
the Board from time to time as the plan administrator of the Plan.
W. PURCHASE DATE shall mean the last Business Day of each Purchase
-------------
Period or, with respect to a Corporate Transaction, the date specified for the
purchase in Section VII.F.
X. PURCHASE PERIOD shall mean a period of six (6) months extending
---------------
from January 1 to June 30 and from July 1 to December 31 of each year; provided,
however, that the first Purchase Period shall begin on February 1, 1998, and
shall end on June 30, 1998.
Y. PURCHASE PRICE shall mean the purchase price per share at which
--------------
Common Stock will be purchased on the Participant's behalf on each Purchase Date
and shall be equal to eighty-five percent (85%) of the lower of (i) the Fair
Market Value per share of Common Stock on the first day of the Purchase Period
in which the Purchase Date occurs or (ii) the Fair Market Value per share of
Common Stock on that Purchase Date.
Z. SERVICE shall mean the performance of services to the Company or
-------
any Corporate Affiliate by a person in the capacity of an Employee.
AA. SHORTFALL CONTRIBUTIONS shall have the meaning ascribed to such
-----------------------
term in Section VI.E. of the Plan.
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
incorporation by reference in the Registration Statement (Form S-8) of Sterling
Software, Inc. (the "Company"), pertaining to the Sterling Software, Inc.
Employee Stock Purchase Plan of our report dated November 7, 1997, with respect
to the consolidated financial statements and schedule of the Company included in
its Annual Report (Form 10-K) for the year ended September 30, 1997, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
December 15, 1997
<PAGE>
Exhibit 24.1
------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, on behalf of Sterling
Software, Inc., a Delaware corporation (the "Corporation"), hereby constitutes
and appoints each of Mark H. Kleinman, Robert L. Estep, James E. O'Bannon and
Sina R. Hekmat the true and lawful attorney-in-fact, with full power of
substitution and resubstitution, for the Corporation to sign on the
Corporation's behalf one or more Registration Statements on Form S-8 or any
other appropriate form (the "Registration Statement"), for the purpose of
registering 1,750,000 shares of Common Stock, par value $0.10 per share, of the
Corporation pursuant to the Securities Act of 1933, as amended, issuable
pursuant to the Sterling Software, Inc. Employee Stock Purchase Plan and to sign
any or all amendments and any or all post-effective amendments to the
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney or attorneys-in-fact, each of them with
or without the others, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as it might or could do in person, hereby
ratifying and confirming all that said attorney or attorneys-in-fact or any of
them or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
STERLING SOFTWARE, INC.
By: /s/ Sterling L. Williams
-------------------------
Sterling L. Williams,
President and Chief Executive Officer
Dated: December 3, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints each of Don J. McDermett, Jr., Mark H. Kleinman, Robert L. Estep, James
E. O'Bannon and Sina R. Hekmat the true and lawful attorney-in-fact, with full
power of substitution and resubstitution, for him and in his name, place and
stead, to sign on his behalf, as a director or officer, or both, as the case may
be, of Sterling Software, Inc., a Delaware corporation (the "Corporation"), one
or more Registration Statements on Form S-8 or any other appropriate form (the
"Registration Statement"), for the purpose of registering 1,750,000 shares of
Common Stock, par value $0.10 per share, of the Corporation pursuant to the
Securities Act of 1933, as amended, issuable pursuant to the Sterling Software,
Inc. Employee Stock Purchase Plan and to sign any or all amendments and any or
all post-effective amendments to the Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney or
attorneys-in-fact, each of them with or without the others, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney or attorneys-in-fact or any of them or their substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Dated: December 3, 1997
/s/ Sterling L. Williams /s/ R. Logan Wray
- --------------------------------- ---------------------------------
Sterling L. Williams R. Logan Wray
/s/ Sam Wyly /s/ Michael C. French
- --------------------------------- ---------------------------------
Sam Wyly Michael C. French
/s/ Charles J. Wyly, Jr. /s/ Phillip A. Moore
- --------------------------------- ---------------------------------
Charles J. Wyly, Jr. Phillip A. Moore
/s/ Evan A. Wyly /s/ Donald R. Miller
- --------------------------------- ---------------------------------
Evan A. Wyly Donald R. Miller
/s/ Robert J. Donachie /s/ Alan W. Steelman
- --------------------------------- ---------------------------------
Robert J. Donachie Alan W. Steelman
