<PAGE>
                                                            Reg. No. 33- ______
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM S-8
                          REGISTRATION STATEMENT
                                Under The
                          SECURITIES ACT OF 1933

                       THE CONTINUUM COMPANY, INC.
          (Exact name of registrant as specified in its charter)

         DELAWARE                                           74-1609363
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

              9500 Arboretum Boulevard, Austin, Texas 78759-6399
              (Address of Principal Executive Offices)(Zip Code)

                          The Continuum Company, Inc.
                       1995 Directors' Stock Option Plan
                            (Full title of the plan)

                             John L. Westermann III
                     Vice President, Chief Financial Officer
                           The Continuum Company, Inc.
                            9500 Arboretum Boulevard
                            Austin, Texas 78759-6399
                                 (512) 345-5700
   (Name, address, and telephone number, including area code, of agent for
                                   service)

                                   Copy to:
                                Jack Dennison
                         Vice President, General Counsel
                           The Continuum Company, Inc.
                            9500 Arboretum Boulevard
                            Austin, Texas 78759-6399
<TABLE>
<CAPTION>
                                                CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<S>                          <C>                        <C>                          <C>                            <C>    
Title of                     Amount to be               Proposed maximum             Proposed maximum               Amount of
securities to be             registered (1)             offering price               aggregate offering             registration fee
registered                                              per share (2)                price (2)      
------------------------------------------------------------------------------------------------------------------------------------
Common Stock,
par value $0.10              100,000                    $35.625                      $3,562,500                     $1,229
per share
====================================================================================================================================
</TABLE>
(1)  The  number of  shares of Common  Stock  registered  herein is  subject  to
     adjustment to prevent dilution resulting from stock splits, stock dividends
     or similar transactions.

(2)  Estimated solely for purposes of calculating the registration fee, pursuant
     to Rule  457(h), based on the  market  price on August 4, 1995 of shares of
     Common Stock.
<PAGE>

                                   PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference:

     The  following  documents  filed  by  The  Continuum  Company,   Inc.  (the
"Company") with the Securities and Exchange  Commission (the  "Commission")  are
incorporated herein by reference:

     (a) the Company's  quarterly report on Form 10-Q for the quarter ended June
30, 1995 filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934; and

     (b) the  Company's  annual report on Form 10-K for the year ended March 31,
1995 filed  pursuant to Section 13 or 15(d) of the  Securities  Exchange  Act of
1934; and

     (c) the  Company's  Registration  Statement on Form 8-A filed under Section
12(b) of the Securities  Exchange Act of 1934 for the purpose of registering the
Common Stock of the Company on the New York Stock Exchange.

     All reports and other documents  subsequently filed by the Company pursuant
to Sections 13(a),  13(c),  14 and 15(d) of the Securities  Exchange Act of 1934
prior to the  filing of a  post-effective  amendment  which  indicates  that all
securities  offered  hereby have been sold or which  deregisters  all securities
remaining unsold,  shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports and documents.

Item 6.  Indemnification of Directors and Officers:

     Section 145 of the Delaware  General  Corporation Law permits a corporation
to grant  indemnification  to  directors,  officers  and  other  agents in terms
sufficiently  broad to permit  indemnification  under certain  circumstances for
liabilities,  including expenses,  arising in connection with the Securities Act
of 1933.  Pursuant to the  Certificate  of  Incorporation  and the Bylaws of the
Company,  directors  and  officers of the Company  are  indemnified  to the full
extent   permitted   by  law.  In   addition,   the  Company  has  entered  into
indemnification  agreements  with its officers and directors that indemnify such
officers and directors to the full extent  permitted by law against all expenses
(including attorneys' fees), judgements, fines or settlement amounts incurred or
paid by them in any action or  proceeding,  including any action by or on behalf
of the  Company,  on account of their  service as an officer or  director of the
Company.

Item 8.  Exhibits:

     4.1 The Continuum Company, Inc. 1995 Directors' Stock Option Plan

     4.2 Restated Certificate of Incorporation of the Company, as amended (filed
as an Exhibit to the  Company's  Annual Report on Form 10-K for the period ended
March 31, 1994, and incorporated herein by reference)


                                       2
<PAGE>

     4.3 Bylaws of the  Company  (filed as an Exhibit  to the  Company's  Annual
Report on Form 10-K for the fiscal year ended  March 31,  1989 and  incorporated
herein by  reference)  and amendment  thereto  adopted May 18, 1989 (filed as an
Exhibit to the  Company's  Annual  Report on Form 10-K for the fiscal year ended
March 31, 1989 and incorporated herein by reference)

     24.1 Consent of Ernst & Young LLP

     24.2 Consent of KPMG Peat Marwick LLP

     25.1 Powers of Attorney

Item 9.  Undertakings:

A.   The undersigned registrant hereby undertakes:

     (1) To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this registration statement:

     (i)  to  include  any  prospectus  required  by  Section  10(a)(3)  of  the
Securities Act of 1933;

     (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;

     (iii) to  include  any  material  information  with  respect to the plan of
distribution  not  previously  disclosed  in the  registration  statement or any
material change to such  information in the  registration  statement;  provided,
however,   that  paragraphs  (A)(1)(i)  and  (A)(1)(ii)  do  not  apply  if  the
information  required  to be  included in a  post-effective  amendment  by those
paragraphs is contained in periodic reports filed by the registrant  pursuant to
Section  13 or Section  15(d) of the  Securities  Exchange  Act of 1934 that are
incorporated by reference in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities
Act of 1933,  each  such  post-effective  amendment  shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (3) To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

B.   The  undersigned  registrant  hereby  undertakes  that,  for   purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of  1934  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.


                                       3
<PAGE>

C.   Insofar as  indemnification  for liabilities arising  under the  Securities
Act of 1933 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  Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.


                                       4
<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 Austin, Texas on this 9th day of August, 1995.

                          THE CONTINUUM COMPANY, INC.

                          JOHN L. WESTERMANN III
                          John L. Westermann III
                          Vice President and
                          Treasurer

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed by the following  persons in the capacities  indicated
on July 26, 1995.

       Signature                                           Title
       ---------                                           -----

   RONALD C. CARROLL                          Chairman of the Board of Directors


   LOWELL C. ANDERSON                         Director


   THOMAS G. BROWN                            Director


   W. MICHAEL LONG                            President, Chief Executive
                                              Officer and Director
                             
   THOMAS A. McDONNELL                        Director


   CARL S. QUINN                              Director


   EDWARD C. STANTON, III                     Director


   E. LEE WALKER                              Director


   JOHN L. WESTERMANN III                     Vice President and Treasurer
                                              (Principal Financial Officer)

   LOU ANNE GILMORE                           Vice President and Controller
                                              (Principal Accounting Officer)


                                        5
<PAGE>

                            INDEX TO EXHIBITS

Exhibit                                                                     Page
-------                                                                     ----

 4.1  The Continuum Company, Inc. 1995 Directors' Stock Option Plan            7


24.1  Consent of Independent Auditors                                         12


24.2  Consent of Independent Accountants                                      13


25.1  Powers of Attorney from Officers and Directors of the Company           14


                                        6



<PAGE>

<PAGE>   1
                          THE CONTINUUM COMPANY, INC.

                       1995 DIRECTORS' STOCK OPTION PLAN

                                       I.
                              PURPOSE OF THE PLAN

         The Continuum Company, Inc. 1995 Directors' Stock Option Plan (the
"Plan") is intended to promote the interests of The Continuum Company, Inc., a
Delaware corporation (the "Company"), and its shareholders by helping to
attract and retain highly-qualified independent directors, and allowing them
to develop a sense of proprietorship and personal involvement in the
development and financial success of the Company.  Accordingly, the Company
shall grant to directors of the Company who are not and who never have been
employees of the Company or of its subsidiaries ("Nonemployee Directors") the
option ("Option") to purchase shares of the common stock of the Company, par
value $0.10 ("Stock"), as hereinafter set forth.  Options granted under the
Plan shall be options which do not constitute incentive stock options within
the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").

                                      II.
                               OPTION AGREEMENTS

         Each Option shall be evidenced by a written agreement between the
Nonemployee Director and the Company which shall contain the terms provided in
the Plan.

                                      III.
                                GRANT OF OPTIONS

         Options may be granted only to individuals who are Nonemployee
Directors of the Company and only on the occasions described below.  For
purposes herein, an Advisory Director shall not be considered as being a
director of the Company.  Any Nonemployee Director receiving an automatic grant
hereunder may refuse such grant by giving the Secretary of the Company written
notice decling the grant within thirty (30) days of the event giving rise to
the automatic grant.

         (a)     Each Nonemployee Director who is elected or appointed to the
Board of Directors of the Company (the "Board") for the first time after the
effective date of the Plan shall receive, as of the date of his or her election
or appointment to the Board, and without the exercise of the discretion of any
person or persons, an Option exercisable for 10,000 shares of Stock (subject to
adjustment in the same manner as provided in Paragraph VII hereof with respect
to shares of Stock subject to Options then outstanding).

         (b)     Each Nonemployee Director shall receive, as of the fifth
anniversary of his or her continuous service as a director of the Company, and
without the exercise of the discretion of any person or persons, an Option
exercisable for 10,000 shares of Stock (subject to adjustment in the same
manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding).  However, each incumbent Nonemployee
Director who has served as a director of the Company for at least five
continuous years before the effective date of the Plan shall receive such
Option as of such effective date.

                                      IV.
                                TERMS OF OPTIONS

         (a)     The purchase price of Stock issued under each Option shall be
the fair market value of Stock subject to the Option on the date the Option is
granted.  For all purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the closing price of the Stock on
the New York Stock Exchange composite tape on that date, or if no prices are
reported on that date, on the last preceding date on which




                                       1

<PAGE>   2
such prices of the Stock are so reported.

         (b)     Except as set forth in this Paragraph IV, an Option shall
become exercisable for 2,000 shares of Stock on the first anniversary of the
date of grant and for an additional 2,000 shares on each subsequent anniversary
through and including the fifth anniversary of the grant date.

         (c)     An Option may be exercised only while the Nonemployee Director
remains a director of the Company and will terminate and cease to be
exercisable upon the termination or expiration of his or her services as a
director of the Company, except that:

                 (i)      If a Nonemployee Director's service as a director
         with the Company terminates by reason of disability (within the
         meaning of Section 22(e)(3) of the Code), any Option shall become
         exercisable as of the date of such termination for 10,000 shares (less
         the number of shares for which the Option has been exercised before
         such termination), and the Nonemployee Director (or the Nonemployee
         Director's estate or the person who acquires the Option by will or the
         laws of decent and distribution or otherwise by reason of the death of
         the Nonemployee Director) may exercise the Option for a period of one
         year after ceasing to be a director.

                 (ii)     If a Nonemployee Director dies while serving as a
         director of the Company, the Nonemployee Director's estate, or the
         person who acquires the Option by will or the laws of decent and
         distribution or otherwise by reason of the death for 10,000 shares
         (less the number of shares for which the Option has been exercised
         before death), and the Nonemployee Director's estate or the person who
         acquires the Option by will or the laws of descent and distribution or
         otherwise by reason of the death of the Nonemployee Director may
         exercise the Option for a period of one year after the Nonemployee's
         death.

                 (iii)    If a Nonemployee Director's service as a director of
         the Company is terminated after a "change in control" (as defined
         below) of the Company, the Option shall become exercisable as of the
         date of such termination for 10,000 shares (less the number of shares
         for which the Option has been exercised before such termination), and
         the Nonemployee Director (or the Nonemployee Director's estate or the
         person who acquires the Option by will or the laws of descent and
         distribution or otherwise by reason of the death of the Nonemployee
         Director) may exercise the Option for a period of one year after
         ceasing to be a director.  "Change in Control" shall mean and shall be
         deemed to have taken place if (A) any third person or entity including
         a "group" as contemplated by Section 13(d)(3) of the Securities
         Exchange Act of 1934 (together with all persons or entities
         controlling, controlled by or under common control with such person,
         entity or group) purchases or, as a result of a tender offer, exchange
         offer, merger, consolidation, or other transaction acquires,
         beneficial ownership or control (including, without limitation, the
         power to vote) of shares of capital stock of the Company having thirty
         percent (30%) or more of the number of votes that may be cast for the
         election of directors of the Company or (B) as a result of, or in
         connection with a contested election for directors, a number of
         directors equal to a majority of the Board of Directors of the Company
         before such election cease to be members of the Board of Directors of
         the Company.  In the case of DST Systems, Inc. a "Change of Control"
         shall be deemed to have taken place if DST Systems, Inc. (together
         with all persons or entities controlling, controlled by or under
         common control with DST Systems, Inc.) purchases or, as a result of a
         tender offer, exchange offer, merger, consolidation, or other
         transaction acquires, beneficial ownership or control (including,
         without limitation, the power to vote) of shares of capital stock of
         the Company having thirty-two percent (32%) or more of the number of
         votes that may be cast for the election of directors of the Company.
         For such purposes, the date of occurrence of a "Change of Control"
         shall mean the date of occurrence of the specified event constituting
         such "Change in Control".  If more than one event constituting a
         "Change of Control" occurs, the date of the "Change of Control" for
         purposes of the Plan shall be the first to occur of such events.

                 (iv)     If a Nonemployee Director's service as a director of
         the Company terminates for any reason other than as described in (i),
         (ii) or (iii) above, the Option may be exercised by the Nonemployee





                                       2
<PAGE>   3
         Director at any time during the period of three months following such
         termination, or by the Nonemployee Director's estate (or the person
         who acquires the Option by will or the laws of descent and
         distribution or otherwise by reason of the death of the Nonemployee
         Director) during a period of one year following the Nonemployee
         Director's death if the Nonemployee Director dies during such
         three-month period.

         (d)     In no event shall any Option be exercisable more than ten (10)
years after the date of grant.

         (e)     The purchase price of shares as to which an Option is
exercised shall be paid in full at the time of exercise in cash (including
check, bank draft or money order payable to the order of the Company).
Nonemployee Directors must exercise an Option as to whole shares of stock; no
fraction of a share of stock shall be issued by the Company upon exercise of an
Option.

                                       V.
                           SHARES SUBJECT TO THE PLAN

         The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 100,000 shares of Stock.  Such shares
may consist of authorized but unissued shares of Stock or previously issued
shares of Stock reacquired by the Company.  Any of such shares which remain
unissued and which are not subject to outstanding Options at the termination of
the Plan shall cease to be subject to the Plan but, until termination of the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan.  Should any Option hereunder
expire or terminate prior to its exercise in full, the shares theretofore
subject to such Option may again be subject to an Option granted under the
Plan.  The aggregate number of shares which may be issued under the Plan shall
be subject to adjustment in the same manner as provided in Paragraph VII hereof
with respect to shares of Stock subject to Options then outstanding.  Exercise
of an Option shall result in a decrease in the number of shares of Stock which
may thereafter be available, both for purposes of the Plan and for sale
pursuant to such Option, by the number of shares as to which the Option is
exercised.

                                      VI.
                                  TERM OF PLAN

         The Plan shall be effective upon approval by the shareholders of the
Company.  Except with respect to Options then outstanding, if not sooner
terminated as provided herein, the Plan shall terminate upon and no further
Options shall be granted after July 26, 2005.

         If, as of any date that the Plan is in effect, there are not
sufficient shares of Stock available under the Plan to allow for the grant to
each Nonemployee Director of an Option for the number of shares provided
herein, the Plan shall terminate.

                                      VII.
                       RECAPITALIZATION OR REORGANIZATION

         (a)     The existence of the Plan and the Options granted hereunder
shall not affect in any way the right or power of the Board or the shareholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

         (b)     The shares with respect to which Options may be granted are
shares of Stock as presently constituted, but if, and whenever prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Stock or the payment of a stock
dividend on Stock without receipt of





                                       3
<PAGE>   4
consideration by the Company, the number of shares of Stock with respect to
which such Option may thereafter be exercised (i) in the event of an increase
in the number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (ii) in the
event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased.

         (c)     Except as hereinbefore expressly provided, the issuance by the
Company of shares of Stock of any class or securities convertible into shares
of Stock of any class for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares of obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the
purchase price per share.

                                     VIII.
                      AMENDMENT OR TERMINATION OF THE PLAN

         The Board may amend, alter, suspend, discontinue, or terminate the
Plan, but no amendment, alteration, suspension, discontinuation, or termination
shall be made that would impair the rights of an optionee under an Option
theretofore granted, without the optionee's consent, or that without the
approval of the Company's stockholders would:

         (a)     except as is provided in Paragraph VII of the Plan, materially
                 increase the total number of shares of Stock available under
                 the Plan;
         (b)     materially increase benefits accruing to Nonemployee Directors
                 under the Plan;
         (c)     modify the requirements as to eligibility for participation 
                 in the Plan; or
         (d)     modify the provision of the Plan relating to the timing,
                 amount or exercise price of Options.

         In no event shall the provisions relating to the timing, amount or
exercise price of Options be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Securities Act of 1974, as amended, or the rules thereunder.

                                      IX.
                                SECURITIES LAWS

         The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the shares covered by such
Option have not been registered under the Securities Act of 1933 and such other
state and federal laws, rules or regulations as the Company deems applicable
and, in the opinion of legal counsel for the Company, there is no exemption
from the registration requirements of such laws, rules or regulations available
for the issuance and sale of such shares.

                                       X.
                                    GENERAL

         (a)     Administration.  The Plan shall be administered by the
Secretary of the Company who shall perform only ministerial functions and who
shall have no discretion regarding the exercise price, amount or timing of the
Options.

         (b)     Nonassignability.  No Option shall be assignable or
transferable by an Nonemployee Director otherwise than by will or by the laws
of descent and distribution; provided, however, that an Nonemployee Director
may, pursuant to a written designation of beneficiary filed with the Company
prior to his or her death, designate a beneficiary to exercise the rights of
the Nonemployee Director with respect to any Option upon the death of the





                                       4
<PAGE>   5
Nonemployee Director.  Each Option shall be exercisable during the lifetime of
the Nonemployee Director, only by the Nonemployee Director or, if permissible
under applicable law, by the guardian or legal representative of the
Nonemployee Director.

         (c)     Restrictions.  At least six (6) months must elapse from the
date of acquisition of an Option to the date of disposition of either the
Option or the underlying Stock.  In addition, all certificates for Stock
delivered under the Plan shall be subject to such other stock-transfer orders
and other restrictions required under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock are than listed, and any applicable federal or state securities
law, and a legend or legends may be placed on any such certificates to make
appropriate reference to such restrictions.

         (d)     Governing Law.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal laws.

         (e)     No Right to Position.  The grant of an Option shall not be
construed as giving an Nonemployee Director the right to continue as a director
of the Company or of any subsidiary.  The Company or a subsidiary may at any
time terminate an Nonemployee Director free from any liability or any claim
under the Plan, except rights of the director expressly stated in Option
Agreements with respect to Options previously granted, if any.

         (f)     No Trust of Fund Created.  Neither the Plan nor any Option
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company or any subsidiary and an
Nonemployee Director or any other person.  To the extent that any person
acquires a right to receive payments from the Company or any subsidiary
pursuant to an Option, such right shall be no greater than the right of any
unsecured general creditor of the Company or any subsidiary.

         (g)     No Fractional Shares.  No fractional shares of Stock shall be
issued or delivered pursuant to the Plan, and cash shall be paid in lieu of any
fractional shares of Stock.

         (h)     Headings.  Headings are given to the sections and subsections
of the Plan solely as a convenience to facilitate reference.  Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.





                                       5



<PAGE>

                                                                    Exhibit 24.1

                       CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the Registration  Statement
(Form S-8) of The Continuum Company, Inc. for the registration of 100,000 shares
of its common stock to be reserved for issuance under its 1995 Directors'  Stock
Option Plan of our report dated April 26, 1995, with respect to the consolidated
financial statements and schedule of The Continuum Company, Inc. included in its
Annual  Report  (Form  10-K) for the year  ended  March 31,  1995 filed with the
Securities and Exchange Commission.

                                                               ERNST & YOUNG LLP

Austin, Texas

August 9, 1995


                                      12


<PAGE>

                                                                    Exhibit 24.2

                       CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors
The Paxus Corporation Limited:

     We  consent  to  incorporation  by  reference  herein of our  report  dated
September  24, 1993,  relating to the  consolidated  statements  of  operations,
shareholders'  deficit,  and cash flows of Paxus Corporation  Limited (a company
incorporated in New South Wales,  Australia) and subsidiaries for the year ended
March 31, 1993 and all related schedules (presented in conformity with generally
accepted  accounting  principles  in the  United  States),  which  report is not
separately presented in the Annual Report on Form 10-K of The Continuum Company,
Inc. for the year ended March 31, 1995.

                                                           KPMG PEAT MARWICK LLP

Sydney, New South Wales, Australia

August 9, 1995



                                         13
<PAGE>

                               POWER OF ATTORNEY

     KNOW  ALL MEN BY  THESE  PRESENTS,  that the  undersigned  constitutes  and
appoints John L. Westermann III and Jack Dennison,  and each of them, any one of
whom may act without joinder of the other, as true and lawful  attorneys-in-fact
and agents, with full power of substitution and  resubstitution,  for him and in
his name, place and stead, in any and all capacities, to do any and all acts and
things and to execute any and all instruments which said attorneys and agents or
either of them may deem  necessary  or  advisable:  (1) to enable the Company to
comply with the Securities Act of 1933, as amended,  and any rules,  regulations
and  requirements of the Securities and Exchange  Commission in respect thereof,
in connection  with the  registration  under the said  Securities Act of 100,000
shares of Common  Stock of the  Company,  par value $0.10 per share (the "Common
Stock"), to be offered and sold by the Company from time to time pursuant to the
1995 Directors' Stock Option Plan, including specifically,  but without limiting
the  generality  of the  foregoing,  the power and  authority to sign for and on
behalf of the Company a Registration  Statement on Form S-8 or to any amendments
thereto (including any post-effective  amendments) filed with the Securities and
Exchange  Commission with respect to any such shares of Common Stock, and to any
instrument or document filed as part of, as an exhibit to, or in connection with
said Registration Statement or amendments;  and (ii) make application to the New
York Stock  Exchange  for the  listing  of shares to be  offered by the  Company
pursuant to the Registration  Statement, to execute on behalf of the Company any
such  application  and any  listing  agreements  or  documents  required by such
exchange in connection therewith,  and to make any changes in any of the same as
may be necessary to conform with the  requirements for listing and to appear (if
requested) before officials of said exchange;  and that each such person be, and
hereby is,  further  empowered and authorized to take any and all actions and to
do or cause to be done all other  things as may appear to him to be necessary or
advisable in order to effect the listing of such shares on such exchange.

IN WITNESS  WHEREOF,  the  undersigned  have  subscribed  these  presents,  this
Twenty-Fourth day of July, 1995.


RONALD C. CARROLL                      LOWELL C. ANDERSON


THOMAS G. BROWN                        W. MICHAEL LONG


THOMAS A. MCDONNELL                    CARL S. QUINN


EDWARD C. STANTON, III                 E. LEE WALKER


                                   14
[{"type": "S-8", "sequence": "1", "description": "FILING OF THE DIRECTORS' STOCK OPTION PLAN.", "secsgml_size_bytes": 36623}]
Reg. No. 33- ______
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM S-8
                          REGISTRATION STATEMENT
                                Under The
                          SECURITIES ACT OF 1933

                       THE CONTINUUM COMPANY, INC.
          (Exact name of registrant as specified in its charter)

         DELAWARE                                           74-1609363
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

              9500 Arboretum Boulevard, Austin, Texas 78759-6399
              (Address of Principal Executive Offices)(Zip Code)

                          The Continuum Company, Inc.
                       1995 Directors' Stock Option Plan
                            (Full title of the plan)

                             John L. Westermann III
                     Vice President, Chief Financial Officer
                           The Continuum Company, Inc.
                            9500 Arboretum Boulevard
                            Austin, Texas 78759-6399
                                 (512) 345-5700
   (Name, address, and telephone number, including area code, of agent for
                                   service)

                                   Copy to:
                                Jack Dennison
                         Vice President, General Counsel
                           The Continuum Company, Inc.
                            9500 Arboretum Boulevard
                            Austin, Texas 78759-6399
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of                     Amount to be               Proposed maximum             Proposed maximum               Amount of
securities to be             registered (1)             offering price               aggregate offering             registration fee
registered                                              per share (2)                price (2)      
------------------------------------------------------------------------------------------------------------------------------------
Common Stock,
par value $0.10              100,000                    $35.625                      $3,562,500                     $1,229
per share
====================================================================================================================================
(1)  The  number of  shares of Common  Stock  registered  herein is  subject  to
     adjustment to prevent dilution resulting from stock splits, stock dividends
     or similar transactions.

(2)  Estimated solely for purposes of calculating the registration fee, pursuant
     to Rule  457(h), based on the  market  price on August 4, 1995 of shares of
     Common Stock.
PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference:

     The  following  documents  filed  by  The  Continuum  Company,   Inc.  (the
"Company") with the Securities and Exchange  Commission (the  "Commission")  are
incorporated herein by reference:

     (a) the Company's  quarterly report on Form 10-Q for the quarter ended June
30, 1995 filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934; and

     (b) the  Company's  annual report on Form 10-K for the year ended March 31,
1995 filed  pursuant to Section 13 or 15(d) of the  Securities  Exchange  Act of
1934; and

     (c) the  Company's  Registration  Statement on Form 8-A filed under Section
12(b) of the Securities  Exchange Act of 1934 for the purpose of registering the
Common Stock of the Company on the New York Stock Exchange.

     All reports and other documents  subsequently filed by the Company pursuant
to Sections 13(a),  13(c),  14 and 15(d) of the Securities  Exchange Act of 1934
prior to the  filing of a  post-effective  amendment  which  indicates  that all
securities  offered  hereby have been sold or which  deregisters  all securities
remaining unsold,  shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing of such reports and documents.

Item 6.  Indemnification of Directors and Officers:

     Section 145 of the Delaware  General  Corporation Law permits a corporation
to grant  indemnification  to  directors,  officers  and  other  agents in terms
sufficiently  broad to permit  indemnification  under certain  circumstances for
liabilities,  including expenses,  arising in connection with the Securities Act
of 1933.  Pursuant to the  Certificate  of  Incorporation  and the Bylaws of the
Company,  directors  and  officers of the Company  are  indemnified  to the full
extent   permitted   by  law.  In   addition,   the  Company  has  entered  into
indemnification  agreements  with its officers and directors that indemnify such
officers and directors to the full extent  permitted by law against all expenses
(including attorneys' fees), judgements, fines or settlement amounts incurred or
paid by them in any action or  proceeding,  including any action by or on behalf
of the  Company,  on account of their  service as an officer or  director of the
Company.

Item 8.  Exhibits:

     4.1 The Continuum Company, Inc. 1995 Directors' Stock Option Plan

     4.2 Restated Certificate of Incorporation of the Company, as amended (filed
as an Exhibit to the  Company's  Annual Report on Form 10-K for the period ended
March 31, 1994, and incorporated herein by reference)

                                       2
4.3 Bylaws of the  Company  (filed as an Exhibit  to the  Company's  Annual
Report on Form 10-K for the fiscal year ended  March 31,  1989 and  incorporated
herein by  reference)  and amendment  thereto  adopted May 18, 1989 (filed as an
Exhibit to the  Company's  Annual  Report on Form 10-K for the fiscal year ended
March 31, 1989 and incorporated herein by reference)

     24.1 Consent of Ernst & Young LLP

     24.2 Consent of KPMG Peat Marwick LLP

     25.1 Powers of Attorney

Item 9.  Undertakings:

A.   The undersigned registrant hereby undertakes:

     (1) To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this registration statement:

     (i)  to  include  any  prospectus  required  by  Section  10(a)(3)  of  the
Securities Act of 1933;

     (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;

     (iii) to  include  any  material  information  with  respect to the plan of
distribution  not  previously  disclosed  in the  registration  statement or any
material change to such  information in the  registration  statement;  provided,
however,   that  paragraphs  (A)(1)(i)  and  (A)(1)(ii)  do  not  apply  if  the
information  required  to be  included in a  post-effective  amendment  by those
paragraphs is contained in periodic reports filed by the registrant  pursuant to
Section  13 or Section  15(d) of the  Securities  Exchange  Act of 1934 that are
incorporated by reference in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities
Act of 1933,  each  such  post-effective  amendment  shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (3) To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

B.   The  undersigned  registrant  hereby  undertakes  that,  for   purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of  1934  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

                                       3
C.   Insofar as  indemnification  for liabilities arising  under the  Securities
Act of 1933 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  Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of
such issue.

                                       4
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 Austin, Texas on this 9th day of August, 1995.

                          THE CONTINUUM COMPANY, INC.

                          JOHN L. WESTERMANN III
                          John L. Westermann III
                          Vice President and
                          Treasurer

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed by the following  persons in the capacities  indicated
on July 26, 1995.

       Signature                                           Title
       ---------                                           -----

   RONALD C. CARROLL                          Chairman of the Board of Directors

   LOWELL C. ANDERSON                         Director

   THOMAS G. BROWN                            Director

   W. MICHAEL LONG                            President, Chief Executive
                                              Officer and Director
                             
   THOMAS A. McDONNELL                        Director

   CARL S. QUINN                              Director

   EDWARD C. STANTON, III                     Director

   E. LEE WALKER                              Director

   JOHN L. WESTERMANN III                     Vice President and Treasurer
                                              (Principal Financial Officer)

   LOU ANNE GILMORE                           Vice President and Controller
                                              (Principal Accounting Officer)

                                        5
INDEX TO EXHIBITS

Exhibit                                                                     Page
-------                                                                     ----

 4.1  The Continuum Company, Inc. 1995 Directors' Stock Option Plan            7

24.1  Consent of Independent Auditors                                         12

24.2  Consent of Independent Accountants                                      13

25.1  Powers of Attorney from Officers and Directors of the Company           14

                                        6
1
                          THE CONTINUUM COMPANY, INC.

                       1995 DIRECTORS' STOCK OPTION PLAN

                                       I.
                              PURPOSE OF THE PLAN

         The Continuum Company, Inc. 1995 Directors' Stock Option Plan (the
"Plan") is intended to promote the interests of The Continuum Company, Inc., a
Delaware corporation (the "Company"), and its shareholders by helping to
attract and retain highly-qualified independent directors, and allowing them
to develop a sense of proprietorship and personal involvement in the
development and financial success of the Company.  Accordingly, the Company
shall grant to directors of the Company who are not and who never have been
employees of the Company or of its subsidiaries ("Nonemployee Directors") the
option ("Option") to purchase shares of the common stock of the Company, par
value $0.10 ("Stock"), as hereinafter set forth.  Options granted under the
Plan shall be options which do not constitute incentive stock options within
the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").

                                      II.
                               OPTION AGREEMENTS

         Each Option shall be evidenced by a written agreement between the
Nonemployee Director and the Company which shall contain the terms provided in
the Plan.

                                      III.
                                GRANT OF OPTIONS

         Options may be granted only to individuals who are Nonemployee
Directors of the Company and only on the occasions described below.  For
purposes herein, an Advisory Director shall not be considered as being a
director of the Company.  Any Nonemployee Director receiving an automatic grant
hereunder may refuse such grant by giving the Secretary of the Company written
notice decling the grant within thirty (30) days of the event giving rise to
the automatic grant.

         (a)     Each Nonemployee Director who is elected or appointed to the
Board of Directors of the Company (the "Board") for the first time after the
effective date of the Plan shall receive, as of the date of his or her election
or appointment to the Board, and without the exercise of the discretion of any
person or persons, an Option exercisable for 10,000 shares of Stock (subject to
adjustment in the same manner as provided in Paragraph VII hereof with respect
to shares of Stock subject to Options then outstanding).

         (b)     Each Nonemployee Director shall receive, as of the fifth
anniversary of his or her continuous service as a director of the Company, and
without the exercise of the discretion of any person or persons, an Option
exercisable for 10,000 shares of Stock (subject to adjustment in the same
manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding).  However, each incumbent Nonemployee
Director who has served as a director of the Company for at least five
continuous years before the effective date of the Plan shall receive such
Option as of such effective date.

                                      IV.
                                TERMS OF OPTIONS

         (a)     The purchase price of Stock issued under each Option shall be
the fair market value of Stock subject to the Option on the date the Option is
granted.  For all purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the closing price of the Stock on
the New York Stock Exchange composite tape on that date, or if no prices are
reported on that date, on the last preceding date on which

                                       1
2
such prices of the Stock are so reported.

         (b)     Except as set forth in this Paragraph IV, an Option shall
become exercisable for 2,000 shares of Stock on the first anniversary of the
date of grant and for an additional 2,000 shares on each subsequent anniversary
through and including the fifth anniversary of the grant date.

         (c)     An Option may be exercised only while the Nonemployee Director
remains a director of the Company and will terminate and cease to be
exercisable upon the termination or expiration of his or her services as a
director of the Company, except that:

                 (i)      If a Nonemployee Director's service as a director
         with the Company terminates by reason of disability (within the
         meaning of Section 22(e)(3) of the Code), any Option shall become
         exercisable as of the date of such termination for 10,000 shares (less
         the number of shares for which the Option has been exercised before
         such termination), and the Nonemployee Director (or the Nonemployee
         Director's estate or the person who acquires the Option by will or the
         laws of decent and distribution or otherwise by reason of the death of
         the Nonemployee Director) may exercise the Option for a period of one
         year after ceasing to be a director.

                 (ii)     If a Nonemployee Director dies while serving as a
         director of the Company, the Nonemployee Director's estate, or the
         person who acquires the Option by will or the laws of decent and
         distribution or otherwise by reason of the death for 10,000 shares
         (less the number of shares for which the Option has been exercised
         before death), and the Nonemployee Director's estate or the person who
         acquires the Option by will or the laws of descent and distribution or
         otherwise by reason of the death of the Nonemployee Director may
         exercise the Option for a period of one year after the Nonemployee's
         death.

                 (iii)    If a Nonemployee Director's service as a director of
         the Company is terminated after a "change in control" (as defined
         below) of the Company, the Option shall become exercisable as of the
         date of such termination for 10,000 shares (less the number of shares
         for which the Option has been exercised before such termination), and
         the Nonemployee Director (or the Nonemployee Director's estate or the
         person who acquires the Option by will or the laws of descent and
         distribution or otherwise by reason of the death of the Nonemployee
         Director) may exercise the Option for a period of one year after
         ceasing to be a director.  "Change in Control" shall mean and shall be
         deemed to have taken place if (A) any third person or entity including
         a "group" as contemplated by Section 13(d)(3) of the Securities
         Exchange Act of 1934 (together with all persons or entities
         controlling, controlled by or under common control with such person,
         entity or group) purchases or, as a result of a tender offer, exchange
         offer, merger, consolidation, or other transaction acquires,
         beneficial ownership or control (including, without limitation, the
         power to vote) of shares of capital stock of the Company having thirty
         percent (30%) or more of the number of votes that may be cast for the
         election of directors of the Company or (B) as a result of, or in
         connection with a contested election for directors, a number of
         directors equal to a majority of the Board of Directors of the Company
         before such election cease to be members of the Board of Directors of
         the Company.  In the case of DST Systems, Inc. a "Change of Control"
         shall be deemed to have taken place if DST Systems, Inc. (together
         with all persons or entities controlling, controlled by or under
         common control with DST Systems, Inc.) purchases or, as a result of a
         tender offer, exchange offer, merger, consolidation, or other
         transaction acquires, beneficial ownership or control (including,
         without limitation, the power to vote) of shares of capital stock of
         the Company having thirty-two percent (32%) or more of the number of
         votes that may be cast for the election of directors of the Company.
         For such purposes, the date of occurrence of a "Change of Control"
         shall mean the date of occurrence of the specified event constituting
         such "Change in Control".  If more than one event constituting a
         "Change of Control" occurs, the date of the "Change of Control" for
         purposes of the Plan shall be the first to occur of such events.

                 (iv)     If a Nonemployee Director's service as a director of
         the Company terminates for any reason other than as described in (i),
         (ii) or (iii) above, the Option may be exercised by the Nonemployee

                                       2
3
         Director at any time during the period of three months following such
         termination, or by the Nonemployee Director's estate (or the person
         who acquires the Option by will or the laws of descent and
         distribution or otherwise by reason of the death of the Nonemployee
         Director) during a period of one year following the Nonemployee
         Director's death if the Nonemployee Director dies during such
         three-month period.

         (d)     In no event shall any Option be exercisable more than ten (10)
years after the date of grant.

         (e)     The purchase price of shares as to which an Option is
exercised shall be paid in full at the time of exercise in cash (including
check, bank draft or money order payable to the order of the Company).
Nonemployee Directors must exercise an Option as to whole shares of stock; no
fraction of a share of stock shall be issued by the Company upon exercise of an
Option.

                                       V.
                           SHARES SUBJECT TO THE PLAN

         The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 100,000 shares of Stock.  Such shares
may consist of authorized but unissued shares of Stock or previously issued
shares of Stock reacquired by the Company.  Any of such shares which remain
unissued and which are not subject to outstanding Options at the termination of
the Plan shall cease to be subject to the Plan but, until termination of the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan.  Should any Option hereunder
expire or terminate prior to its exercise in full, the shares theretofore
subject to such Option may again be subject to an Option granted under the
Plan.  The aggregate number of shares which may be issued under the Plan shall
be subject to adjustment in the same manner as provided in Paragraph VII hereof
with respect to shares of Stock subject to Options then outstanding.  Exercise
of an Option shall result in a decrease in the number of shares of Stock which
may thereafter be available, both for purposes of the Plan and for sale
pursuant to such Option, by the number of shares as to which the Option is
exercised.

                                      VI.
                                  TERM OF PLAN

         The Plan shall be effective upon approval by the shareholders of the
Company.  Except with respect to Options then outstanding, if not sooner
terminated as provided herein, the Plan shall terminate upon and no further
Options shall be granted after July 26, 2005.

         If, as of any date that the Plan is in effect, there are not
sufficient shares of Stock available under the Plan to allow for the grant to
each Nonemployee Director of an Option for the number of shares provided
herein, the Plan shall terminate.

                                      VII.
                       RECAPITALIZATION OR REORGANIZATION

         (a)     The existence of the Plan and the Options granted hereunder
shall not affect in any way the right or power of the Board or the shareholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

         (b)     The shares with respect to which Options may be granted are
shares of Stock as presently constituted, but if, and whenever prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Stock or the payment of a stock
dividend on Stock without receipt of

                                       3
4
consideration by the Company, the number of shares of Stock with respect to
which such Option may thereafter be exercised (i) in the event of an increase
in the number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (ii) in the
event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased.

         (c)     Except as hereinbefore expressly provided, the issuance by the
Company of shares of Stock of any class or securities convertible into shares
of Stock of any class for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares of obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the
purchase price per share.

                                     VIII.
                      AMENDMENT OR TERMINATION OF THE PLAN

         The Board may amend, alter, suspend, discontinue, or terminate the
Plan, but no amendment, alteration, suspension, discontinuation, or termination
shall be made that would impair the rights of an optionee under an Option
theretofore granted, without the optionee's consent, or that without the
approval of the Company's stockholders would:

         (a)     except as is provided in Paragraph VII of the Plan, materially
                 increase the total number of shares of Stock available under
                 the Plan;
         (b)     materially increase benefits accruing to Nonemployee Directors
                 under the Plan;
         (c)     modify the requirements as to eligibility for participation 
                 in the Plan; or
         (d)     modify the provision of the Plan relating to the timing,
                 amount or exercise price of Options.

         In no event shall the provisions relating to the timing, amount or
exercise price of Options be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Securities Act of 1974, as amended, or the rules thereunder.

                                      IX.
                                SECURITIES LAWS

         The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the shares covered by such
Option have not been registered under the Securities Act of 1933 and such other
state and federal laws, rules or regulations as the Company deems applicable
and, in the opinion of legal counsel for the Company, there is no exemption
from the registration requirements of such laws, rules or regulations available
for the issuance and sale of such shares.

                                       X.
                                    GENERAL

         (a)     Administration.  The Plan shall be administered by the
Secretary of the Company who shall perform only ministerial functions and who
shall have no discretion regarding the exercise price, amount or timing of the
Options.

         (b)     Nonassignability.  No Option shall be assignable or
transferable by an Nonemployee Director otherwise than by will or by the laws
of descent and distribution; provided, however, that an Nonemployee Director
may, pursuant to a written designation of beneficiary filed with the Company
prior to his or her death, designate a beneficiary to exercise the rights of
the Nonemployee Director with respect to any Option upon the death of the

                                       4
5
Nonemployee Director.  Each Option shall be exercisable during the lifetime of
the Nonemployee Director, only by the Nonemployee Director or, if permissible
under applicable law, by the guardian or legal representative of the
Nonemployee Director.

         (c)     Restrictions.  At least six (6) months must elapse from the
date of acquisition of an Option to the date of disposition of either the
Option or the underlying Stock.  In addition, all certificates for Stock
delivered under the Plan shall be subject to such other stock-transfer orders
and other restrictions required under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock are than listed, and any applicable federal or state securities
law, and a legend or legends may be placed on any such certificates to make
appropriate reference to such restrictions.

         (d)     Governing Law.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal laws.

         (e)     No Right to Position.  The grant of an Option shall not be
construed as giving an Nonemployee Director the right to continue as a director
of the Company or of any subsidiary.  The Company or a subsidiary may at any
time terminate an Nonemployee Director free from any liability or any claim
under the Plan, except rights of the director expressly stated in Option
Agreements with respect to Options previously granted, if any.

         (f)     No Trust of Fund Created.  Neither the Plan nor any Option
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company or any subsidiary and an
Nonemployee Director or any other person.  To the extent that any person
acquires a right to receive payments from the Company or any subsidiary
pursuant to an Option, such right shall be no greater than the right of any
unsecured general creditor of the Company or any subsidiary.

         (g)     No Fractional Shares.  No fractional shares of Stock shall be
issued or delivered pursuant to the Plan, and cash shall be paid in lieu of any
fractional shares of Stock.

         (h)     Headings.  Headings are given to the sections and subsections
of the Plan solely as a convenience to facilitate reference.  Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.

                                       5
Exhibit 24.1

                       CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the Registration  Statement
(Form S-8) of The Continuum Company, Inc. for the registration of 100,000 shares
of its common stock to be reserved for issuance under its 1995 Directors'  Stock
Option Plan of our report dated April 26, 1995, with respect to the consolidated
financial statements and schedule of The Continuum Company, Inc. included in its
Annual  Report  (Form  10-K) for the year  ended  March 31,  1995 filed with the
Securities and Exchange Commission.

                                                               ERNST & YOUNG LLP

Austin, Texas

August 9, 1995

                                      12
Exhibit 24.2

                       CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors
The Paxus Corporation Limited:

     We  consent  to  incorporation  by  reference  herein of our  report  dated
September  24, 1993,  relating to the  consolidated  statements  of  operations,
shareholders'  deficit,  and cash flows of Paxus Corporation  Limited (a company
incorporated in New South Wales,  Australia) and subsidiaries for the year ended
March 31, 1993 and all related schedules (presented in conformity with generally
accepted  accounting  principles  in the  United  States),  which  report is not
separately presented in the Annual Report on Form 10-K of The Continuum Company,
Inc. for the year ended March 31, 1995.

                                                           KPMG PEAT MARWICK LLP

Sydney, New South Wales, Australia

August 9, 1995

                                         13
POWER OF ATTORNEY

     KNOW  ALL MEN BY  THESE  PRESENTS,  that the  undersigned  constitutes  and
appoints John L. Westermann III and Jack Dennison,  and each of them, any one of
whom may act without joinder of the other, as true and lawful  attorneys-in-fact
and agents, with full power of substitution and  resubstitution,  for him and in
his name, place and stead, in any and all capacities, to do any and all acts and
things and to execute any and all instruments which said attorneys and agents or
either of them may deem  necessary  or  advisable:  (1) to enable the Company to
comply with the Securities Act of 1933, as amended,  and any rules,  regulations
and  requirements of the Securities and Exchange  Commission in respect thereof,
in connection  with the  registration  under the said  Securities Act of 100,000
shares of Common  Stock of the  Company,  par value $0.10 per share (the "Common
Stock"), to be offered and sold by the Company from time to time pursuant to the
1995 Directors' Stock Option Plan, including specifically,  but without limiting
the  generality  of the  foregoing,  the power and  authority to sign for and on
behalf of the Company a Registration  Statement on Form S-8 or to any amendments
thereto (including any post-effective  amendments) filed with the Securities and
Exchange  Commission with respect to any such shares of Common Stock, and to any
instrument or document filed as part of, as an exhibit to, or in connection with
said Registration Statement or amendments;  and (ii) make application to the New
York Stock  Exchange  for the  listing  of shares to be  offered by the  Company
pursuant to the Registration  Statement, to execute on behalf of the Company any
such  application  and any  listing  agreements  or  documents  required by such
exchange in connection therewith,  and to make any changes in any of the same as
may be necessary to conform with the  requirements for listing and to appear (if
requested) before officials of said exchange;  and that each such person be, and
hereby is,  further  empowered and authorized to take any and all actions and to
do or cause to be done all other  things as may appear to him to be necessary or
advisable in order to effect the listing of such shares on such exchange.

IN WITNESS  WHEREOF,  the  undersigned  have  subscribed  these  presents,  this
Twenty-Fourth day of July, 1995.

RONALD C. CARROLL                      LOWELL C. ANDERSON

THOMAS G. BROWN                        W. MICHAEL LONG

THOMAS A. MCDONNELL                    CARL S. QUINN

EDWARD C. STANTON, III                 E. LEE WALKER

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