<PAGE>
Registration Statement No. 33-59107
Filed Pursuant to Rules 424(b)(3) and 424(c)
STERLING SOFTWARE, INC.
SUPPLEMENT TO PROSPECTUS DATED
MAY 25, 1995
With respect to the Prospectus covering 3,873,203 shares of Common Stock of
Sterling Software, Inc. (the "Company") filed with the Form S-3 Registration
Statement No. 33-59107:
The section entitled "Selling Stockholders" is hereby amended in its
entirety to include the following information:
SELLING STOCKHOLDERS
This Prospectus covers the purchase from the Company of up to 3,873,203
Shares in the aggregate, by the holders of the Options upon the exercise thereof
in accordance with their terms and the subsequent offer and resale of Shares by
certain stockholders who hold Shares acquired upon the exercise of Options upon
the exercise thereof.
Subject to the provisions of the Plan, a Stock Option Committee (the
"Committee") appointed by the Board of Directors of the Company will determine
from time to time the individuals from among the Company's key employees and
advisors, including officers and directors (other than non-employee directors)
of the Company, to whom Options will be granted and the number of shares of
Common Stock to be covered by each Option. The purchase price of Common Stock
subject to any Option granted pursuant to the Plan may not be less than the fair
market value of the Common Stock on the date of grant. Unless the Committee
exercises its discretionary powers set forth below, Options will not be
transferable other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order, as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder. With respect to any participant who is a
director or executive officer of the Company (an "Insider"), other than a non-
employee director, the Committee has the power, in its sole discretion, to
include in (or amend to include in) such participant's Option agreement a
provision permitting the Option to be transferred by the participant to members
of the participant's immediate family, trusts for the benefit of such immediate
family members and partnerships in which such immediate family members are the
only partners, provided that there cannot be any consideration for the transfer.
With respect to any participant who is not an Insider, the Committee has the
power to include in (or amend to include in) such participant's Option
agreement, such provisions regarding transferability of the Option as the
Committee, in its sole discretion, deems to be appropriate. The Committee also
has the power to include in each Option agreement such provisions regarding
exercisability following termination of a participant's employment or service as
a director (other than a non-employee director) or advisor for any reason
(including termination due to death or disability)
<PAGE>
as the Committee, in is sole discretion, deems to be appropriate. Unless sooner
terminated by action of the Board, the Plan will terminate on December 31, 2011,
and no Options may be granted pursuant to the Plan after such date.
The table below sets forth information concerning the Common Stock owned by
the following Selling Stockholders, none of whom has, or within the past three
years has had, any position, office or other material relationship with the
Company, except as noted herein:
<TABLE>
<CAPTION>
COMMON STOCK AMOUNT
OFFERED FOR AND
OWNERSHIP OF SELLING PERCENTAGE
COMMON STOCK STOCKHOLDERS' OF CLASS OF
POSITION WITH PRIOR TO ACCOUNT UPON AFTER
NAME THE COMPANY OFFERING (1) EXERCISE OFFERING (2)
- ---------------------- -------------------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Warner C. Blow Executive Vice President 257,600 256,250 1,350*
Richard Connelly Vice President and 30,688(3) 20,000 10,688(3)*
Controller
Robert J. Donachie Director 61,100 61,000 100*
George H. Ellis Executive Vice President 296,250(4) 223,250 73,000(4)*
and Chief Financial
Officer
Werner L. Frank Executive Vice President, 303,187(5) 302,000 1,187(5)*
Business Development
Michael C. French Director 95,800(6) 65,000 30,800(6)
M. Gene Konopik Executive Vice President 148,024(7) 108,000 40,024(7)*
Jeannette P. Meier Executive Vice President, 225,525(8) 171,150 54,375(8)*
Secretary and General
Counsel
Donald R. Miller, Jr. Director 70,000(9) 30,000 40,000(9)*
Phillip A. Moore Executive Vice President, 189,399(10) 144,250 45,149(10)*
Chief Technology Officer
and Director
A. Maria Smith Executive Vice President 225,000(11) 165,000 60,000(11)*
Clive A. Smith Executive Vice President 207,076(12) 168,100 38,976(12)*
Geno P. Tolari Executive Vice President 195,313(13) 95,313 100,000(13)*
Anne Vahala Vice President, Investor 65,876(14) 41,000 24,876(14)*
Relations
Sterling L. Williams President, Chief 1,154,000(15) 200,000 954,000(15)
Executive (3.8%)
Officer and Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK AMOUNT
OFFERED FOR AND
OWNERSHIP OF SELLING PERCENTAGE
COMMON STOCK STOCKHOLDERS' OF CLASS OF
POSITION WITH PRIOR TO ACCOUNT UPON AFTER
NAME THE COMPANY OFFERING (1) EXERCISE OFFERING (2)
- ---------------------- -------------------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Evan A. Wyly Vice President and 152,754(16) 40,000 112,754(16)*
Director
</TABLE>
- ------------------
* Indicates shares held are less than 1% of class.
(1) Based on ownership as of June 30, 1995. Includes shares to be acquired
upon exercise of Options granted under the Plan, some of which are not
exercisable within 60 days of the date of this Prospectus Supplement.
(2) Assumes the exercise of all Options granted under the Plan and the sale of
the Common Stock acquired thereby.
(3) Includes 10,688 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(4) Includes 73,000 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(5) Includes 90 shares held in escrow in connection with the Company's
acquisition of KnowledgeWare, Inc.
(6) Includes 30,000 shares purchasable pursuant to options not granted under
the Plan, none of which are exercisable within 60 days of the date of this
Prospectus Supplement.
(7) Includes 34,900 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement, and 1,324 shares held in escrow in connection
with the Company's acquisition of KnowledgeWare, Inc.
(8) Includes 49,600 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(9) Includes 40,000 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(10) Includes 150 shares directly held by Mr. Moore's son and 13,000 shares
purchasable pursuant to options not granted under the Plan, none of which
are exercisable within 60 days of the date of this Prospectus Supplement.
(11) Includes 60,000 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(12) Includes 38,976 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(13) Includes 100,000 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(14) Includes 24,876 shares purchasable pursuant to options not granted under
the Plan, some of which are not exercisable within 60 days of the date of
this Prospectus Supplement.
(15) Includes 950,000 shares purchasable pursuant to options not granted under
the Plan, all of which are immediately exercisable.
(16) Includes 60,000 shares purchasable pursuant to options not granted under
the Plan, none of which are exercisable within 60 days of this Prospectus
Supplement.
The date of this Prospectus Supplement is July 14, 1995
