STERLING SOFTWARE INC
424B3, 1995-02-09
PREPACKAGED SOFTWARE
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<PAGE>
 
                                            Registration Statement No. 33-53833,
                                    Filed Pursuant to Rules 424(b)(3) and 424(c)

                            STERLING SOFTWARE, INC.
                     SUPPLEMENT TO RESALE PROSPECTUS DATED
                                  MAY 26, 1994

          With respect to the resale prospectus covering 4,374,725 shares of
Common Stock of Sterling Software, Inc. filed with the Form S-8 Registration
Statement No. 33-53833:

          The table on pages 3 and 4 of such prospectus is hereby amended in its
entirety with the following disclosure, reflecting information as of January 31,
1995 as follows:

<TABLE>
<CAPTION>
                                                                       Common Stock
                                                                        Offered for       Amount
                                                       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         320,100            318,750      1,350*

Richard Connelly         Vice President and                30,688 (3)         27,000      3,688 (3)*
                         Controller

Robert J. Donachie       Director                          41,100             41,000        100*

George H. Ellis          Executive Vice President         332,500 (4)        272,500     60,000 (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                          65,800             65,000        800*

Albert K. Hoover         Vice President, Assistant         27,176 (6)         10,926     16,250 (6)*
                         Secretary and Assistant
                         General Counsel

James E. Jenkins, Jr.    Vice President, Tax and           27,650 (7)         14,775     12,875 (7)*
                         Assistant Secretary

M. Gene Konopik          Executive Vice President         160,012 (8)        108,000     52,012 (8)*

Jeannette P. Meier       Executive Vice President,        262,725 (9)        214,150     48,575 (9)*
                         Secretary and General
                         Counsel

Phillip A. Moore         Executive Vice President,        189,399 (10)       157,250     32,149 (10)*
                         Technology and Director

A. Maria Smith           Executive Vice President         225,000 (11)       165,000     60,000 (11)*

Clive A. Smith           Executive Vice President         224,963 (12)       171,850     53,113 (12)*

Geno P. Tolari           Executive Vice President         250,000 (13)       150,000    100,000 (13)*

Anne Vahala              Vice President, Investor          65,876 (14)        41,000     24,876 (14)*
                         Relations

Sterling L. Williams     President, Chief Executive     1,454,000 (15)       500,000    954,000 (15)
                         Officer and Director                                               (4.1%)
</TABLE> 
<PAGE>
 
<TABLE>
<CAPTION>
                                                                       Common Stock
                                                                        Offered for       Amount
                                                       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                92,754             40,000     52,754*
                         Director
</TABLE> 
 
- -------------
 
*  Indicates shares held are less than 1% of class.
 
(1)  Includes shares to be acquired upon exercise of options granted under the
     Plans, 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 Plans and the sale of
     the Common Stock acquired thereby.
(3)  Includes 3,688 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan, none of which are
     exercisable within 60 days of the date of this Prospectus Supplement.
(4)  Includes 60,000 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan, none of which are
     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 16,250 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan, some of which are not
     exercisable within 60 days of the date of this Prospectus Supplement.
(7)  Includes 12,875 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan, some of which are not
     exercisable within 60 days of the date of this Prospectus Supplement.
(8)  Includes 38,150 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option 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.
(9)  Includes 43,800 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option 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.
(11) Includes 60,000 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan, some of which are not
     exercisable within 60 days of the date of this Prospectus Supplement.
(12) Includes 53,113 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option 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 granted under the
     Company's 1992 Non-Statutory Stock Option 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 granted under the
     Company's 1992 Non-Statutory Stock Option Plan, some of which are not
     exercisable within 60 days of the date of this Prospectus Supplement.
(15) Includes 625,000 shares purchasable pursuant to options granted under the
     Company's 1992 Non-Statutory Stock Option Plan and 325,000 shares
     purchasable pursuant to options granted under the Company's 1994 Non-
     Statutory Stock Option Plan, all of which are exercisable within 60 days of
     the date of this Prospectus Supplement.

          The date of this Prospectus Supplement is February 9, 1995.

                                      -2-


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