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<p align="center"><font size="3"><strong>UNITED STATES</br>
SECURITIES AND EXCHANGE COMMISSION</br>
Washington, D.C. 20549</strong></font></p>

<br>
<HR WIDTH="25%">
<p align="center"><font size="3"><strong>FORM 8-K</strong></font></p>
<HR WIDTH="25%">
<br>

<p align="center"><font size="3"><strong>
   CURRENT REPORT
</strong></font></p>

<p align="center"><font size="3"><strong>
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
</strong></font></p>
<p align="center"><font size="3"><strong>
<U>January 22, 2003</U>
</strong></font></p>

<p align="center"><font size="2">
             Date of Report (Date of earliest event reported)
</font></p>

<p align="center"><font size="5" color="#0000FF"><strong>
                 <u> SIEBEL SYSTEMS, INC.</u>
</strong></font></br>
<font size="2">
             (Exact name of Registrant as specified in its charter)
</font></p>

<P>&nbsp;
<TABLE COLS=3 WIDTH="100%" >
<TR>
<TD>
<font size="3"><strong>
<CENTER><u>Delaware</u></CENTER>
</font></strong>
</TD>
<TD>
<font size="3"><strong>
<CENTER><u>0-20725</u></CENTER>
</font></strong>
</TD>
<TD>
<font size="3"><strong>
<CENTER><u>94-3187233</u></CENTER>
</font></strong>
</TD>
</TR>
<TR>
<TD>
<font size="2">
<CENTER>&nbsp; (State or other jurisdiction of incorporation or organization)&nbsp;</CENTER>
</font>
</TD>
<TD>
<font size="2">
<CENTER>(Commission File Number)</CENTER>
</font>
</TD>
<TD>
<font size="2">
<CENTER>(IRS Employer Identification Number)</CENTER>
</font>
</TD>
</TR>
</TABLE>
<BR>


<p align="center"><font size="3"><strong>
                            2207 Bridgepointe Parkway<br>
                            <u>San Mateo, CA &nbsp; 94404
</strong></font></u><br>

<font size="2">
                   (Address of principal executive offices, including zip code)
</font></p>

<p align="center"><font size="3"><strong><u>
                                 (650) 477-5000
</strong></font></u><br>

<font size="2">
             (Registrant's telephone number, including area code)
</font></p>

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<br>
<br>

<B><P ALIGN="JUSTIFY">Item 5.&#9;  Other Events.</P></B>

<FONT SIZE=2><P ALIGN="JUSTIFY">Siebel Systems, Inc. is a leading provider of
eBusiness software applications that enable organizations to better manage their
relationships with customers, partners and employees.  We believe in broad
employee stock ownership, and stock options have been a significant component of
our compensation to our employees.  In light of the economic decline in the
information technology industry in the last few years, we have significantly
realigned our business and restructured our equity and other compensation
programs to serve the best interests of our stockholders.  These actions
included:</P>

<UL>
<P ALIGN="JUSTIFY"><LI>Adjustment of our compensation structure to significantly
reduce the number of stock options issued to new and existing
employees.</LI></P></UL>

<UL>
<P ALIGN="JUSTIFY"><LI>Completion of a stock option exchange program under which
approximately 28 million shares underlying employee stock options were cancelled
and participating employees received stock or cash in exchange (the
&quot;Exchange Program&quot;).  As a result of the Exchange Program, <A
NAME="OLE_LINK1">stock options representing approximately 5% of net potential
dilution to stockholders were cancelled.</A>  Net potential dilution is
calculated as the stock options cancelled, less shares of common stock issued in
exchange for the stock options, divided by the number of shares of common stock
outstanding on December 31, 2001.</LI></P></UL>

<P ALIGN="JUSTIFY">In June 2002, Mr. Siebel notified the Board of Directors of
his intent to cancel certain of his outstanding stock options in order to
further reduce net dilution to stockholders.  Specifically, Mr. Siebel requested
cancellation of all stock options that had been granted to him during the past
four years, including all options granted to him from October 1998 through
October 2001 (the date of his last option grant), covering a total of 25,950,000
shares.  This request was approved by our compensation and audit committees in
2002, subject to the approval of the accounting staff of the Securities and
Exchange Commission (the &quot;Staff&quot;) that such cancellation would not
have an adverse accounting impact on the Company.  The Staff recently confirmed
that it would not object to our proposed accounting treatment for the
cancellation of Mr. Siebel's stock options.  The option cancellation was
finalized on January 21, 2003.</P>

<P ALIGN="JUSTIFY">The total fair value (using the Black-Scholes option
valuation model) of the 25,950,000 option shares cancelled by Mr. Siebel is
approximately $56.1 million.  Based on the number of shares of our common stock
outstanding as of December 31, 2002, Mr. Siebel's beneficial ownership of Siebel
Systems was reduced from approximately 13.5% to approximately 10.7% as a result
of the option cancellation.  </P>

<P ALIGN="JUSTIFY">As a result of the cancellation of Mr. Siebel's options, the
Exchange Program and the other actions described above and workforce reductions
and reduced levels of hiring in 2002, net potential dilution to existing
stockholders in 2002, calculated as if all actions had occurred in 2002, was
reduced by approximately 19%.  </P>

<P ALIGN="JUSTIFY">We disclose the pro forma effect on our earnings of stock
options, as if we had adopted SFAS 123, in the notes to our annual financial
statements.  This pro forma effect on earnings represents the amortization of
the deferred compensation that is computed using the Black-Scholes option
valuation model at the date of the stock option grant.  As the result of the
cancellation of Mr. Siebel's options, we must accelerate the amortization of the
remaining deferred compensation associated with the cancelled options.
Accordingly, our pro forma earnings disclosure for 2003 will include a charge of
approximately $250 million relating to this acceleration of deferred
compensation.  This amount will be in addition to the normal recurring pro forma
expense related to all of our outstanding stock options.  </P>

<P ALIGN="JUSTIFY">However, as the result of the cancellation of Mr. Siebel's
options, the notes to our annual financial statements for future periods will no
longer reflect pro forma amortization of compensation expense related to the
cancelled options.  Specifically, the pro forma compensation expense for the
years ended December 31, 2003, 2004 and 2005 will be reduced by approximately
$100 million, $95 million and $55 million, respectively.  </P>

<P ALIGN="JUSTIFY">We believe that these actions--and our ongoing efforts to
reduce the number of outstanding stock options relative to the total number of
outstanding shares--will continue to better align the interest of our employees
and management with the interests of our stockholders.</P></FONT>


<br>
<br>
<HR width="85%">
<br>
<br>

<B><P ALIGN="CENTER">SIGNATURES</P>
</B><P ALIGN="JUSTIFY"><Font size="2">Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the undersigned,
hereunto duly authorized.</P>

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    <TD>&nbsp;</TD>
    <TD align=left><FONT SIZE=2>
<B>                                   SIEBEL SYSTEMS, INC.</B>
</TD></TR></TABLE>

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    <TD>&nbsp;</TD>
    <TD align=left><FONT SIZE=2>
<I>(Registrant)</I>
</TD></TR></TABLE>


<FONT SIZE=2>
<p>Dated: January 22, 2003


<P>
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    <TD>&nbsp;</TD>
    <TD><FONT SIZE=2>By:&nbsp;</TD>
                                                                                                            <TD align=left><FONT SIZE=2>
/s/ Kenneth A. Goldman
</TD></TR></TABLE>


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      <HR align=left SIZE=1>
    </TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left><FONT SIZE=2>
Kenneth A. Goldman
</TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left><FONT SIZE=2><I>
                                    Senior Vice President,<br>
                                    Finance and Administration<br>
                                    and Chief Financial Officer
</I></TD></TR></TABLE></P>

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1.03 8K doc
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
January 22, 2003
Date of Report (Date of earliest event reported)
SIEBEL SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
0-20725
94-3187233
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(IRS Employer Identification Number)
2207 Bridgepointe Parkway
San Mateo, CA   94404
(Address of principal executive offices, including zip code)
(650) 477-5000
(Registrant's telephone number, including area code)
Item 5.	  Other Events.
Siebel Systems, Inc. is a leading provider of
eBusiness software applications that enable organizations to better manage their
relationships with customers, partners and employees.  We believe in broad
employee stock ownership, and stock options have been a significant component of
our compensation to our employees.  In light of the economic decline in the
information technology industry in the last few years, we have significantly
realigned our business and restructured our equity and other compensation
programs to serve the best interests of our stockholders.  These actions
included:
Adjustment of our compensation structure to significantly
reduce the number of stock options issued to new and existing
employees.
Completion of a stock option exchange program under which
approximately 28 million shares underlying employee stock options were cancelled
and participating employees received stock or cash in exchange (the
"Exchange Program").  As a result of the Exchange Program,
stock options representing approximately 5% of net potential
dilution to stockholders were cancelled.
Net potential dilution is
calculated as the stock options cancelled, less shares of common stock issued in
exchange for the stock options, divided by the number of shares of common stock
outstanding on December 31, 2001.
In June 2002, Mr. Siebel notified the Board of Directors of
his intent to cancel certain of his outstanding stock options in order to
further reduce net dilution to stockholders.  Specifically, Mr. Siebel requested
cancellation of all stock options that had been granted to him during the past
four years, including all options granted to him from October 1998 through
October 2001 (the date of his last option grant), covering a total of 25,950,000
shares.  This request was approved by our compensation and audit committees in
2002, subject to the approval of the accounting staff of the Securities and
Exchange Commission (the "Staff") that such cancellation would not
have an adverse accounting impact on the Company.  The Staff recently confirmed
that it would not object to our proposed accounting treatment for the
cancellation of Mr. Siebel's stock options.  The option cancellation was
finalized on January 21, 2003.
The total fair value (using the Black-Scholes option
valuation model) of the 25,950,000 option shares cancelled by Mr. Siebel is
approximately $56.1 million.  Based on the number of shares of our common stock
outstanding as of December 31, 2002, Mr. Siebel's beneficial ownership of Siebel
Systems was reduced from approximately 13.5% to approximately 10.7% as a result
of the option cancellation.
As a result of the cancellation of Mr. Siebel's options, the
Exchange Program and the other actions described above and workforce reductions
and reduced levels of hiring in 2002, net potential dilution to existing
stockholders in 2002, calculated as if all actions had occurred in 2002, was
reduced by approximately 19%.
We disclose the pro forma effect on our earnings of stock
options, as if we had adopted SFAS 123, in the notes to our annual financial
statements.  This pro forma effect on earnings represents the amortization of
the deferred compensation that is computed using the Black-Scholes option
valuation model at the date of the stock option grant.  As the result of the
cancellation of Mr. Siebel's options, we must accelerate the amortization of the
remaining deferred compensation associated with the cancelled options.
Accordingly, our pro forma earnings disclosure for 2003 will include a charge of
approximately $250 million relating to this acceleration of deferred
compensation.  This amount will be in addition to the normal recurring pro forma
expense related to all of our outstanding stock options.
However, as the result of the cancellation of Mr. Siebel's
options, the notes to our annual financial statements for future periods will no
longer reflect pro forma amortization of compensation expense related to the
cancelled options.  Specifically, the pro forma compensation expense for the
years ended December 31, 2003, 2004 and 2005 will be reduced by approximately
$100 million, $95 million and $55 million, respectively.
We believe that these actions--and our ongoing efforts to
reduce the number of outstanding stock options relative to the total number of
outstanding shares--will continue to better align the interest of our employees
and management with the interests of our stockholders.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the undersigned,
hereunto duly authorized.
SIEBEL SYSTEMS, INC.
(Registrant)
Dated: January 22, 2003
By:
/s/ Kenneth A. Goldman
Kenneth A. Goldman
Senior Vice President,
Finance and Administration
and Chief Financial Officer