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                                                                   Exhibit 10.16
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                     CHANGE IN CONTROL SEVERANCE AGREEMENT


  THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement"), dated as of
October 22, 1999, by and between Sterling Software, Inc., a Delaware corporation
(the "Company"), and Sterling L. Williams (the "Executive").

                                  WITNESSETH:

     WHEREAS, the Executive is a senior executive of the Company and is expected
to make major contributions to the profitability, growth and financial strength
of the Company;

     WHEREAS, the Company recognizes that, as is the case of most companies, the
possibility of a Change in Control (as hereinafter defined) exists;

     WHEREAS, the Company desires to assure itself of both present and future
continuity of management and desires to establish certain minimum severance
benefits for certain of its senior executives, including the Executive,
applicable in the event of a Change in Control; and

     WHEREAS, the Company desires to provide additional inducement for the
Executive to remain in the ongoing employ of the Company;

     NOW, THEREFORE, the Company and the Executive agree as follows:

     1.   Certain Defined Terms:  In addition to terms defined elsewhere herein,
          ---------------------
the following terms have the following meanings when used in this Agreement with
initial capital letters:

          (a)  "Base Pay" means the sum of (i) the Executive's annual fixed or
     base compensation, as may be determined from time to time by the Company,
     whether acting through its Board of Directors (the "Board") or a committee
     thereof, its President and CEO or otherwise, and (ii) the annual fees, if
     any, paid or payable to the Executive in respect of his service during any
     fiscal year of the Company as a member of the Board and any committee
     thereof.

          (b)  "Change in Control" means the occurrence during the Term of any
     of the following events:

                (i)   The Company is merged, consolidated or reorganized into or
          with another corporation or other legal person, and as a result of
          such merger, consolidation or reorganization less than two-thirds of
          the combined voting power of the then-outstanding securities entitled
          to vote generally in the election of directors ("Voting Stock") of
          such corporation or person immediately after such transaction are held
          in the aggregate by the holders of Voting Stock of the Company
          immediately prior to such transaction;

                (ii)  The Company sells or otherwise transfers all or
          substantially all of its assets to another corporation or other legal
          person, and less than two-thirds of the

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          combined voting power of the then-outstanding Voting Stock of such
          corporation or person is held in the aggregate by the holders of
          Voting Stock of the Company immediately prior to such sale or
          transfer;

               (iii)  There is a report filed on Schedule 13D or Schedule 14D-
          1 (or any successor schedule, form or report), each as promulgated
          pursuant to the Securities Exchange Act of 1934, as amended (the
          "Exchange Act"), disclosing that any person (as the term "person" is
          used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
          become the beneficial owner (as the term "beneficial owner" is defined
          under Rule 13d-3 or any successor rule or regulation promulgated under
          the Exchange Act) of securities representing 20% or more of the
          combined voting power of the then-outstanding Voting Stock of the
          Company;

               (iv)   The Company files a report or proxy statement with the
          Securities and Exchange Commission pursuant to the Exchange Act
          disclosing in response to Form 8-K or Schedule 14A (or any successor
          schedule, form or report or item therein) that a change in control of
          the Company has occurred or will occur in the future pursuant to any
          then-existing contract or transaction; or

               (v)    If, at any time during any period of two consecutive
          years, individuals who at the beginning of any such period constitute
          the Directors of the Company cease for any reason to constitute at
          least a majority thereof; provided, however, that for purposes of this
          clause (v) each Director (other than a Director whose initial
          assumption of office is in connection with an actual or threatened
          election contest) who is first elected, or first nominated for
          election by the Company's stockholders, by a vote of at least two-
          thirds of the Directors of the Company (or a committee thereof) then
          still in office who were Directors of the Company at the beginning of
          any such period will be deemed to have been a Director of the Company
          at the beginning of such period.

     Notwithstanding the foregoing provisions of Sections 1(b)(iii) or 1(b)(iv),
     unless otherwise determined in a specific case by majority vote of the
     Board, a "Change in Control" shall not be deemed to have occurred for
     purposes of Section 1(b)(iii) or 1(b)(iv) solely because (A) the Company,
     (B) an entity in which the Company directly or indirectly beneficially owns
     50% or more of the outstanding Voting Stock (a "Subsidiary"), or (C) any
     Company-sponsored employee stock ownership plan or any other employee
     benefit plan of the Company or any Subsidiary either files or becomes
     obligated to file a report or a proxy statement under or in response to
     Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
     schedule, form or report or item therein) under the Exchange Act disclosing
     beneficial ownership by it of shares of Voting Stock of the Company,
     whether in excess of 20% or otherwise, or because the Company reports that
     a change in control of the Company has occurred or will occur in the future
     by reason of such beneficial ownership or any increase or decrease thereof.

          (c)  "Employee Benefits" means the perquisites, benefits and service
     credit for perquisites or benefits as provided under any and all employee
     perquisite or benefit policies, plans, programs or arrangements in which
     the Executive is entitled to participate, including without limitation any
     stock option, stock purchase, stock appreciation, savings, pension,

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     401(k), employee stock ownership (ESOP), employee stock purchase (ESPP),
     supplemental executive retirement, or other retirement income or welfare
     benefit, deferred compensation, incentive compensation, group or other
     life, health, medical/hospital or other insurance (whether funded by actual
     insurance or self-insured by the Company), disability, salary continuation,
     expense reimbursement, executive automobile, tax and financial planning,
     club memberships, incentive travel, tax reimbursement and other employee
     benefit policies, plans, programs or arrangements that may now exist or any
     successor policies, plans, programs or arrangements that may be adopted
     hereafter by the Company.

          (d)  "Incentive Pay" means the aggregate annual bonus, incentive or
     other payments of cash compensation, in addition to Base Pay, made or
     authorized or contemplated to be made in regard to services rendered by the
     Executive in any fiscal year pursuant to any bonus, incentive compensation,
     profit-sharing, performance, discretionary pay or similar agreement,
     policy, plan, program or arrangement (whether or not funded) of the Company
     or any successor thereto.

          (e)  "Severance Period" means the period of time commencing on the
     date of the first occurrence of a Change in Control and continuing until
     the earliest of (i) the fifth anniversary of the occurrence of the Change
     in Control, or (ii) the Executive's death; provided, however, that
     commencing on each anniversary of the Change in Control, the Severance
     Period will automatically be extended for an additional year unless, not
     later than 90 calendar days prior to such anniversary date, either the
     Company or the Executive shall have given written notice to the other that
     the Severance Period is not to be so extended.

          (f)  "Term" means the period commencing as of the date first set forth
     above and expiring as of the later of (i) the close of business on December
     31, 2004, or (ii) the expiration of the Severance Period; provided,
     however, that (A) commencing on January 1, 2001 and each January 1
     thereafter, the Term of this Agreement will automatically be extended for
     an additional year unless, not later than September 30 of the immediately
     preceding year, the Company or the Executive shall have given written
     notice that it or the Executive, as the case may be, does not wish to have
     the Term extended and (B) subject to the last sentence of Section 8, if,
     prior to a Change in Control, the Executive ceases for any reason to be an
     employee of the Company or any Subsidiary, thereupon without further action
     the Term shall be deemed to have expired and this Agreement will
     immediately terminate and be of no further effect.

     2.   Operation of Agreement:  This Agreement will be effective and binding
          ----------------------
immediately upon its execution, but, anything in this Agreement to the contrary
notwithstanding, this Agreement will not be operative unless and until a Change
in Control occurs.  Upon the occurrence of a Change in Control at any time
during the Term, without further action, this Agreement shall become immediately
operative.

     3.   Termination Following a Change in Control:  (a) In the event of the
          -----------------------------------------
occurrence of a Change in Control, the Executive's employment may be terminated
by the Company during the Severance Period.  If, during the Severance Period,
the Executive's employment is terminated by the Company or any Subsidiary other
than as a result of the Executive's death, the Executive will be entitled to the
compensation and benefits provided by Section 4 hereof.

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          (b)      In the event of the occurrence of a Change in Control, the
Executive may terminate his or her employment with the Company during the
Severance Period, with the right to the compensation and benefits as provided in
Section 4, upon the occurrence of one or more of the following events
(regardless of whether any other reason for such termination exists or has
occurred, including without limitation, other employment):

            (i)    Failure to elect or reelect or otherwise to maintain the
     Executive in the office of the Company which the Executive held immediately
     prior to a Change in Control, or the removal of the Executive as a Director
     of the Company (or any successor thereto) if the Executive shall have been
     a Director of the Company immediately prior to the Change in Control;

            (ii)    (A) A significant adverse change in the nature or scope of
     the authorities, powers, functions, responsibilities or duties attached to
     the position which the Executive held immediately prior to the Change in
     Control, (B) a reduction in the aggregate amount of the Executive's Base
     Pay or Incentive Pay as in effect for the Executive immediately prior to
     the occurrence of a Change in Control or such higher amount of Base Pay or
     Incentive Pay as may thereafter be determined by the Company, whether
     acting through the Board or a committee thereof, its President and CEO or
     otherwise, or (C) the termination or denial of the Executive's rights to
     Employee Benefits or a reduction in the scope or value thereof, any of
     which is not remedied by the Company within 10 calendar days after receipt
     by the Company of written notice from the Executive of such change,
     reduction, termination or denial, as the case may be;

            (iii)   A determination by the Executive (which determination will
     be conclusive and binding upon the parties hereto provided it has been made
     in good faith and in all events will be presumed to have been made in good
     faith unless otherwise shown by the Company by clear and convincing
     evidence) that a change in circumstances has occurred following a Change in
     Control, including, without limitation, a change in the scope of the
     business or other activities for which the Executive was responsible
     immediately prior to the Change in Control, which has rendered the
     Executive substantially unable to carry out, has substantially hindered the
     Executive's performance of, or has caused the Executive to suffer a
     substantial reduction in, any of the authorities, powers, functions,
     responsibilities or duties attached to the position held by the Executive
     immediately prior to the Change in Control, which situation is not remedied
     within 10 calendar days after written notice to the Company from the
     Executive of such determination;

            (iv)    The liquidation, dissolution, merger, consolidation or
     reorganization of the Company or transfer of all or substantially all of
     its business and/or assets, unless the successor or successors (by
     liquidation, merger, consolidation, reorganization, transfer or otherwise)
     to which all or substantially all of its business and/or assets have been
     transferred (directly or by operation of law) assumed all duties and
     obligations of the Company under this Agreement pursuant to Section 10(a);

            (v)     The Company relocates its principal executive offices, or
     requires the Executive to have his principal location of work changed, to
     any location which is in excess of 25 miles from the location thereof
     immediately prior to the Change in Control, or requires the Executive to
     travel away from his office in the course of discharging his
     responsibilities

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     or duties hereunder at least 20% more (in terms of aggregate days in any
     calendar year or in any calendar quarter when annualized for purposes of
     comparison to any prior year) than was required of the Executive in any of
     the three full years immediately prior to the Change in Control without, in
     either case, his prior written consent; or

            (vi)    Without limiting the generality or effect of the foregoing,
     any material breach of this Agreement by the Company or any successor
     thereto.

          (c)       A termination by the Company pursuant to Section 3(a) or by
the Executive pursuant to Section 3(b) will not affect any rights which the
Executive may have pursuant to any agreement, policy, plan, program or
arrangement of the Company providing Employee Benefits, which rights shall be
governed by the terms thereof.

     4.   Severance Compensation and Benefits:  (a) If, following the occurrence
          -----------------------------------
of a Change in Control, the Company terminates the Executive's employment during
the Severance Period pursuant to Section 3(a) (other than as a result of the
Executive's death), or if the Executive terminates his employment during the
Severance Period pursuant to Section 3(b), the Company will:

            (i)     pay to the Executive, within five business days after the
     Termination Date (as defined below), a lump sum payment (the "Severance
     Payment") in an amount equal to five times the sum of (A) Base Pay (the
     aggregate amount and the components of which shall be determined based on
     the highest rate in effect for any period prior to the Termination Date),
     plus (B) Incentive Pay in an amount equal to the higher of (i) the highest
     annual amount of Incentive Pay paid to or earned by the Executive with
     respect to any fiscal year during the three fiscal years immediately
     preceding the fiscal year in which the Termination Date occurs, and (ii)
     100% of the Incentive Pay amount payable upon the attainment of 100% of the
     objective(s) and 100% of the targeted or planned amount(s) specified in or
     pursuant to the applicable agreement, policy, plan, program or arrangement,
     whether or not attained as of such Termination Date, for such Executive for
     the fiscal year in which the Termination Date occurs.  For purposes of this
     Agreement, the term "Termination Date" means the effective date of the
     termination of Executive's employment with the Company if the termination
     is pursuant to Section 3(a) hereof or such other date as may be specified
     by the Executive if the termination is pursuant to Section 3(b) hereof.

            (ii)    (A) for 60 months following the Termination Date (the
     "Continuation Period"), arrange at its sole expense, to provide the
     Executive with Employee Benefits that are substantially similar to the
     better of (when considered in the aggregate) (X) those Employee Benefits
     which the Executive was receiving or entitled to receive immediately prior
     to the Change in Control, or (Y) those Employee Benefits which the
     Executive was receiving or entitled to receive immediately prior to the
     Termination Date, and (B) such Continuation Period will be considered
     service with the Company for the purpose of determining service credits
     under or in respect of any Employee Benefits applicable to the Executive,
     his dependents or his beneficiaries; provided that for purposes of this
     Section 4(a)(ii), Employee Benefits shall not include any Incentive Pay and
     nothing in this Section 4(a) shall be construed to require the Company to
     make any new grants of stock options to the Executive.  If and to the
     extent that any Employee Benefit described in subsection (A) or

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     (B) of this Section 4(a)(ii) is not or cannot be paid or provided under any
     applicable law or regulation or under any policy, plan, program or
     arrangement of the Company, then the Company will take all action necessary
     to ensure that such Employee Benefit is provided through other means to the
     Executive, his dependents and beneficiaries, as applicable, or the Company
     shall timely pay to the Executive an amount in cash equal to the fair
     market value of such foregone Employee Benefit.

          (b)  Without limiting the rights of the Executive at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a timely basis, the Company will pay interest on
the amount  or value thereof at an annualized rate of interest equal to the so-
called composite "prime rate" as quoted from time to time during the relevant
period in the Southwest Edition of The Wall Street Journal.  Such interest will
                                   -----------------------
be payable as it accrues on demand.  Any change in such prime rate will be
effective on and as of the date of such change.

          (c)  Notwithstanding any other provision of this Agreement to the
contrary, the parties' respective rights and obligations under this Section 4
and under Sections 5 and 7 will survive any termination or expiration of this
Agreement or the termination of the Executive's employment following a Change in
Control for any reason whatsoever.

     5.   Certain Additional Payments by the Company:  (a) Anything in this
          ------------------------------------------
Agreement to the contrary notwithstanding, in the event that this Agreement
shall become operative and it shall be determined (as hereafter provided) that
all or any portion of any payment or distribution by the Company or any of its
affiliates to or for the benefit of the Executive pursuant to the terms of this
Agreement or otherwise, including under any stock option or other agreement,
plan, policy, program or arrangement (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any successor provision thereto), by reason of being
considered "contingent on a change in ownership or control" of the Company,
within the meaning of Section 280G of the Code (or any successor provision
thereto), or to any similar tax imposed by state or local law, or any interest
or penalties with respect to such tax (such tax or  taxes, together with any
such interest and penalties, being hereafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment or payments (collectively, a "Gross-Up Payment"); provided, however,
that no Gross-Up Payment shall be made with respect to the Excise Tax, if any,
attributable to (i) any incentive stock option, as defined by Section 422 of the
Code ("ISO") granted prior to the execution of this Agreement, or (ii) any stock
appreciation or similar right, whether or not limited, granted in tandem with an
ISO described in clause (i).  The Gross-Up Payment shall be in an amount such
that, after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payment.

          (b)  Subject to the provisions of Section 5(f), all determinations
required to be made under this Section 5, including whether an Excise Tax is
payable by the Executive and the amount of such Excise Tax and whether a Gross-
Up Payment is required to be paid by the Company to the Executive and the amount
of such Gross-Up Payment, if any, shall be made by a nationally recognized
accounting firm (the "Accounting Firm") selected by the Executive in his sole
discretion.  The Executive shall direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the Company and the
Executive within 30 calendar days after the

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Termination Date, if applicable, and any such other time or times as may be
requested by the Company or the Executive. If the Accounting Firm determines
that any Excise Tax is payable by the Executive, the Company shall pay the
required Gross-Up Payment to the Executive within five business days after
receipt of such determination and calculations with respect to any Gross-Up
Payment to the Executive. If the Accounting Firm determines that no Excise Tax
is payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Company and the Executive a written opinion to the
effect that the Executive has substantial authority not to report any Excise Tax
on his federal, state or local income or other tax return. As a result of the
uncertainty in the application of Section 4999 of the Code (or any successor
provision thereto) and the possibility of similar uncertainty regarding
applicable state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Section
5(f) and the Executive thereafter is required to make a payment of any Excise
Tax, the Executive shall direct the Accounting Firm to determine the amount of
the Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and the Executive as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the Executive within five business days after receipt of such
determination and calculations.

          (c)  The Company and the Executive shall each provide the Accounting
Firm access to and copies of any books, records and documents in the possession
of the Company or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determinations and calculations
contemplated by this Section 5.  Any determination by the Accounting Firm as to
the amount of any Gross-Up Payment or Underpayment shall be binding upon the
Company and the Executive.

          (d)  The federal, state and local income or other tax returns filed by
the Executive shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive.  The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax returns,
if relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment.  If
prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.

          (e)  The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by this Section
5 shall be borne by the Company.  If such fees and expenses are initially paid
by the Executive, the Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after receipt from the
Executive of a statement therefor and reasonable evidence of his payment
thereof.

          (f)  The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service or any other taxing authority that, if successful,
would require the

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payment by the Company of a Gross-Up Payment. Such notification shall be given
as promptly as practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the Executive shall further
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid (in each case, to the extent known by the Executive).
The Executive shall not pay such claim prior to the earlier of (i) the
expiration of the 30-calendar-day period following the date on which he gives
such notice to the Company and (ii) the date that any payment of amount with
respect to such claim is due. If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such claim,
the Executive, subject to the provisions of Section 5(h) of this Agreement,
shall:

            (i)     provide the Company with any written records or documents in
     his possession relating to such claim reasonably requested by the Company;

            (ii)    take such action in connection with contesting such claim as
     the Company shall reasonably request in writing from time to time,
     including without limitation accepting legal representation with respect to
     such claim by an attorney competent in respect of the subject matter and
     reasonably selected by the Company;

            (iii)   cooperate with the Company in good faith in order
     effectively to contest such claim; and

            (iv)    permit the Company to participate in any proceedings
     relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses.  Without limiting the foregoing provisions of
this Section 5(f), the Company shall control all proceedings taken in connection
with the contest of any claim contemplated by this Section 5(f) and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
(provided, however, that the Executive may participate therein at his own cost
and expense) and may, at its option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income or other tax, including interest
or penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which the contested amount is claimed to be due is limited solely to such
contested amount.  Furthermore, the Company's control of any such contested
claim shall be limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and the Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

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          (g)  If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 5(f), the Executive receives any refund with
respect to such claim, the Executive shall (subject to the Company's complying
with the requirements of Section 5(f)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after any taxes
applicable thereto).  If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 5(f), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial or refund prior to the expiration of 30 calendar days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of any such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid by the Company to
the Executive pursuant to this Section 5.

          (h)  Any information provided by Executive to the Company under this
Section 5 shall be treated confidentially by the Company and will not be
provided by the Company to any other person than the Company's professional
advisors without the Executive's prior written consent except as required by
law.

     6.   No Mitigation Obligation:  The Company hereby acknowledges that it
          ------------------------
will be difficult and may be impossible for the Executive to find reasonably
comparable employment within a reasonable time period following the Termination
Date.  In addition, the Company acknowledges that its severance pay plans and
policies applicable in general to its salaried employees typically do not
provide for mitigation, offset or reduction of any severance payments received
thereunder.  Accordingly, the payment of the severance compensation by the
Company to the Executive in accordance with the terms of this Agreement is
hereby acknowledged by the Company to be reasonable, and the Executive will not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise, nor will any profits, income, earnings
or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or
otherwise.

     7.   Legal Fees and Expenses:  It is the intent of the Company that the
          -----------------------
Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of the Executive's
rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder.  Accordingly, if it should appear to the
Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or proceeding designed to deny, or
to recover from, the Executive the benefits provided or intended to be provided
to the Executive hereunder, the Company irrevocably authorizes the Executive
from time to time to retain counsel of the Executive's choice, at the expense of
the Company as hereafter provided, to advise and represent the Executive in
connection with any such interpretation, enforcement or defense, including
without limitation the initiation or defense of any litigation or other legal
action, whether by or against the Company or any Director, officer, stockholder
or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the Executive's
entering into an attorney-client relationship with such counsel and irrevocably
waives any related conflict of interest on the part of such counsel, and in that
connection the Company and the Executive agree that a confidential relationship
shall exist between the Executive and such counsel.  Without respect to

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whether the Executive prevails, in whole or in part, in connection with any of
the foregoing, the Company will pay and be solely financially responsible for
any and all attorneys' and related fees and expenses incurred by the Executive
in connection with any of the foregoing.

     8.   Employment Rights:  Nothing expressed or implied in this Agreement
          -----------------
will create any right or duty on the part of the Company or the Executive to
have the Executive remain in the employment of the Company or any Subsidiary
prior to or following any Change in Control. Any event or occurrence described
in Section 3(b)(i), (ii), (v) or (vi) hereof following the commencement of a
discussion with a third person that ultimately results in a Change in Control
shall be deemed to have occurred after a Change in Control for the purposes of
this Agreement.

     9.   Withholding of Taxes:  The Company may withhold from any amounts
          --------------------
payable under this Agreement all federal, state, city or other taxes as the
Company is required to withhold pursuant to any law or government regulation or
ruling.

     10.  Successors and Binding Agreement:  (a) The Company will require any
          --------------------------------
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform if no
such succession had taken place.  This Agreement will be binding upon and inure
to the benefit of the Company and any successor to the Company, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase,
merger, consolidation, reorganization or otherwise (and such  successor shall
thereafter be deemed the "Company" for the purposes of this Agreement), but will
not otherwise be assignable, transferable or delegable by the Company.

          (b)  This Agreement will inure to the benefit of and be enforceable by
the Executive and the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.

          (c)  This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Sections 10(a) and 10(b).  Without limiting the generality or effect
of the foregoing, the Executive's right to receive payments hereunder will not
be assignable, transferable or delegable, whether by pledge, creation of a
security interest, or otherwise, other than by a transfer by the Executive's
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 10(c), the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

     11.  Notices:  For all purposes of this Agreement (except as otherwise
          -------
expressly provided in this Agreement with respect to notice periods), all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or
ten business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or five business days
after having been sent by a nationally recognized overnight courier

                                       10
<PAGE>

service such as Federal Express, UPS, or Purolator, addressed to the Company at
300 Crescent Court, Suite 1200, Dallas, Texas 75201 (to the attention of the
President of the Company) and to the Executive at the Company's address, with a
copy to the Executive at his or her principal residence, or to such other
address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

     12.  Governing Law:  The validity, interpretation, construction and
          -------------
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State.

     13.  Validity:  If any provision of this Agreement or the application of
          --------
any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances will not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal will be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid or legal.

     14.  Miscellaneous:  No provision of this Agreement may be modified, waived
          -------------
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company.  No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.  No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.  References to Sections are to references to Sections of this
Agreement.

     15.  Counterparts:  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.

     16.  Termination of Prior Agreements.  The Change in Control Severance
          -------------------------------
Agreement between the Executive and the Company, dated February 12, 1996, as
amended to the date hereof (the "Prior Agreement"), shall terminate
automatically upon the execution and delivery of this Agreement by the parties
hereto and shall thereafter be of no further force or effect; provided, however,
that if this Agreement is held by a court of competent jurisdiction to be wholly
invalid, unenforceable or otherwise illegal, the preceding clause shall have no
effect and the Prior Agreement shall be deemed to have continued at all times in
full force and effect.  Subject to the immediately preceding proviso, this
Agreement supersedes all prior agreements, arrangements and understandings with
respect to the subject matter hereof.  Executive and the Company agree that all
references to the Prior Agreement made in that certain CEO Agreement dated
February 12, 1996 between Executive and the Company shall henceforth be deemed
to be references to this Agreement.

                                       11
<PAGE>

  IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date first above written.


                                    STERLING SOFTWARE, INC.



                                    By:
                                        -----------------------------------
                                        Don J. McDermett
                                        Senior Vice President &
                                        General Counsel





                                    ---------------------------------------
                                    Sterling L. Williams

                                       12