<PAGE>
REGISTRATION NO. 333-60473
As filed with the Securities and Exchange Commission on August 12, 1998
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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STERLING SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
300 Crescent Court, Suite 1200
Dallas, Texas 75201
(214) 981-1000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Delaware 75-1873956
(State of incorporation) (I.R.S. Employer
Identification Number)
-------------------------
Don J. McDermett, Jr., Esq.
Senior Vice President and General Counsel
Sterling Software, Inc.
300 Crescent Court, Suite 1200
Dallas, Texas 75201
(214) 981-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Mark E. Betzen, Esq.
Jones, Day, Reavis & Pogue
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
(214) 220-3939
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: The
securities being registered hereby are to be offered and sold by certain selling
stockholders from time to time after the effective date of this Registration
Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
---------------
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
----------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<PAGE>
PROSPECTUS
STERLING SOFTWARE, INC.
Common Stock
This Prospectus relates to up to 2,603,040 shares (the "Shares") of Common
Stock, par value $0.10 per share ("Common Stock"), of Sterling Software, Inc., a
Delaware corporation ("Sterling Software"), which may be offered by the selling
stockholders named herein (the "Selling Stockholders") from time to time. The
Shares were issued to the Selling Stockholders by Sterling Software pursuant to
the merger of Synon Corporation, a Delaware corporation ("Synon"), with a wholly
owned subsidiary of Sterling Software as described herein under the caption
"Recent Developments." In connection with such merger, Sterling Software agreed
to register the Shares for resale under the Securities Act of 1933, as amended
(the "Securities Act"). Sterling Software will receive no part of the proceeds
from sales of the Shares.
The Shares are listed on the New York Stock Exchange (the "NYSE") under the
trading symbol "SSW."
The Shares will be sold either directly by the Selling Stockholders or through
underwriters, brokers, dealers or agents. At the time any particular offer of
Shares is made, if and to the extent required, the specific number of Shares
offered, the name of the Selling Stockholder making the offer, the offering
price and the other terms of the offering, including the names of any
underwriters, brokers, dealers or agents involved in the offering and the
compensation, if any, of such underwriters, brokers, dealers or agents, will be
set forth in a supplement to this Prospectus (a "Prospectus Supplement"). Any
statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in any Prospectus Supplement
delivered herewith.
Unless this Prospectus is accompanied by a Prospectus Supplement stating
otherwise, offers and sales may be made pursuant to this Prospectus only in
ordinary broker's transactions made on the NYSE in transactions involving
ordinary and customary brokerage commissions.
The Selling Stockholders will pay any underwriting discounts and commissions,
transfer taxes and fees and disbursements of their own legal counsel in
connection with offers and sales of the Shares pursuant to this Prospectus.
Sterling Software will bear all other expenses incurred in connection therewith.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
SHARES.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
THE DATE OF THIS PROSPECTUS IS AUGUST 12, 1998.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED HEREIN OR AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY,
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF STERLING SOFTWARE SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
AVAILABLE INFORMATION
Sterling Software is subject to the information and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information may be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, 7 World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. The Commission also maintains a Website,
located at http://www.sec.gov, that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
Copies of such reports, proxy statements and other information also can be
obtained by mail from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports, proxy
statements and other information relating to Sterling Software may also be
inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
As permitted under the Securities Act and the Exchange Act, this Prospectus
does not contain all the information set forth in the Registration Statement on
Form S-3, of which this Prospectus constitutes a part, filed with the Commission
under the Securities Act. Such additional information can be inspected and
copied or obtained from the Commission in the manner described above.
Statements contained in this Prospectus as to the contents of any other document
referred to herein are not necessarily complete, and each such statement is
qualified in all respects by reference to the copy of such other document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by Sterling Software with the
Commission are hereby incorporated by reference in this Prospectus: (i) Annual
Report on Form 10-K for the fiscal year ended September 30, 1997; (ii) Quarterly
Reports on Form 10-Q for the fiscal quarters ended December 31, 1997, March 31,
1998 and June 30, 1998; (iii) Current Report on Form 8-K dated June 21, 1998;
(iv) Proxy Statement on Schedule 14A for the Annual Meeting of Stockholders of
Sterling Software held on March 11, 1998; and (v) Registration Statement on Form
8-A/A, filed with the Commission on May 27, 1998.
All documents and reports filed by Sterling Software pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Shares pursuant hereto are
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the dates of filing of such documents or reports. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein is deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
This Prospectus incorporates by reference documents that are not presented
herein or delivered herewith. These documents, other than exhibits to such
documents, are available, without charge, to any person to whom this Prospectus
is delivered, on written or oral request, to: Sterling Software, Inc., 300
Crescent Court, Suite 1200, Dallas, Texas 75201, Attention: Investor Relations,
(214) 981-1000.
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<PAGE>
NOTE REGARDING FORWARD-LOOKING INFORMATION
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE BASED
UPON THE BELIEFS AND ASSUMPTIONS OF, AND ON INFORMATION AVAILABLE TO, THE
MANAGEMENT OF STERLING SOFTWARE. THE FOLLOWING STATEMENTS ARE OR MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995: (I) STATEMENTS PRECEDED BY, FOLLOWED BY OR THAT
INCLUDE THE WORDS "MAY," "WILL," "COULD," "SHOULD," "BELIEVE," "EXPECT,"
"FUTURE," "POTENTIAL," "ANTICIPATE," "INTEND," "PLAN," "ESTIMATE" OR "CONTINUE"
OR THE NEGATIVE OR OTHER VARIATIONS THEREOF AND (II) OTHER STATEMENTS REGARDING
MATTERS THAT ARE NOT HISTORICAL FACTS. SUCH FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING (I) RISKS AND
UNCERTAINTIES RELATING TO THE POSSIBLE INVALIDITY OF THE UNDERLYING BELIEFS AND
ASSUMPTIONS, (II) POSSIBLE CHANGES OR DEVELOPMENTS IN SOCIAL, ECONOMIC,
BUSINESS, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES AND CONDITIONS,
AND (III) ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING
CUSTOMERS, SUPPLIERS, BUSINESS PARTNERS, COMPETITORS AND LEGISLATIVE,
REGULATORY, JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES AND OFFICIALS. IN
ADDITION TO ANY RISKS AND UNCERTAINTIES SPECIFICALLY IDENTIFIED IN THE TEXT
SURROUNDING SUCH FORWARD-LOOKING STATEMENTS, THE STATEMENTS IN THE IMMEDIATELY
PRECEDING SENTENCE AND THE STATEMENTS IN "RISK FACTORS" BEGINNING ON PAGE 4 OF
THIS PROSPECTUS OR IN THE REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
REFERRED TO IN "AVAILABLE INFORMATION" CONSTITUTE CAUTIONARY STATEMENTS
IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE ACTUAL AMOUNTS, RESULTS, EVENTS
AND CIRCUMSTANCES TO DIFFER MATERIALLY FROM THOSE REFLECTED IN SUCH
FORWARD-LOOKING STATEMENTS.
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<PAGE>
RISK FACTORS
An investment in the Shares is subject to a number of material risks,
including those enumerated below. Investors should carefully consider the risk
factors enumerated below together with all the information set forth or
incorporated by reference in this Prospectus in determining whether to purchase
any of the Shares. See also "Note Regarding Forward-Looking Information."
MARKET RISKS; FACTORS AFFECTING QUARTERLY FINANCIAL RESULTS
The market price of the Common Stock is subject to fluctuation, and there can
be no assurance that the price of the Common Stock will not decline below
current levels. Sterling Software believes factors such as actual or
anticipated fluctuations in quarterly financial results, changes in earnings
estimates by securities analysts and announcements of material events by
Sterling Software, its major customers or its competitors, as well as general
industry or global or regional economic conditions, may cause the market price
of the Common Stock to fluctuate, perhaps substantially.
Fluctuations in Sterling Software's quarterly financial results could result
from a variety of factors, including changes in the levels of revenue derived
from sales of software products and services, market acceptance of new and
enhanced versions of the products and services of Sterling Software or its
competitors, the size and timing of significant orders, changes in operating
expenses, changes in Sterling Software's strategy, the effect of acquisitions
and general industry and global or regional economic factors. Sterling Software
has limited or no control over many of these factors.
COMPETITION
The computer software and services industry is highly competitive. Sterling
Software competes with both large companies with substantially greater resources
and small specialized companies that compete in a particular geographic region
or market niche. Sterling Software also competes with internal programming
staffs of corporations and with hardware manufacturers.
Sterling Software generally expects competition to remain intense in the
future from both existing competitors and other companies that may enter
Sterling Software's existing or future markets. Sterling Software believes that
its ability to compete successfully in the software products and services
markets depends on numerous factors, including product performance,
functionality and reliability, price and customer service and support. There
can be no assurance that new or established competitors will not offer products
and services that are superior to and/or lower in price than those of Sterling
Software.
TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW AND ENHANCED PRODUCTS
The computer software and services industry is characterized by rapid
technological change, frequent new product and service introductions and
evolving industry standards. Sterling Software's future success will depend in
significant part on its ability to anticipate industry standards, continue to
apply advances in software product and service technologies, enhance existing
software products and services and introduce and acquire new software products
and services on a timely basis to keep pace with technological developments.
There can be no assurance that Sterling Software will be successful in
developing, acquiring or marketing new or enhanced products or services that
respond to technological change or evolving industry standards, that Sterling
Software will not experience difficulties that could delay or prevent the
successful development, acquisition or marketing of such products or services or
that its new or enhanced products and services will adequately meet the
requirements of the marketplace or achieve market acceptance.
GROWTH THROUGH ACQUISITIONS
Sterling Software's growth has been significantly enhanced through
acquisitions of other businesses, products and licenses. If Sterling Software
is unable to continue to make appropriate acquisitions on attractive terms, it
may be more difficult for Sterling Software to achieve growth levels consistent
with those historically achieved. There can be no assurance as to Sterling
Software's ability to make attractive acquisitions, the timing thereof or the
ultimate benefits therefrom to Sterling Software.
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<PAGE>
The integration of operations following any significant acquisition requires
the dedication of management resources, and may be complicated by the necessity
of integrating personnel with disparate business backgrounds and corporate
cultures. In addition, the retention of key employees of any business acquired
by Sterling Software may be critical to ensure continued advancement,
development and support of the acquired business' technology, as well as on-
going sales and marketing efforts. Consequently, there can be no assurance that
Sterling Software's ability to increase or maintain revenue will not be
diminished by management distractions, loss of personnel or other factors
resulting from any significant acquisition.
ABILITY TO ATTRACT QUALIFIED PERSONNEL
Sterling Software's business is dependent upon its ability to attract and
retain highly qualified managerial, technical and sales personnel. Competition
for such personnel is intense. There can be no assurance that Sterling Software
can retain its key managerial, technical and sales personnel or that it can
attract, assimilate or retain such personnel in the future.
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
Revenue from Sterling Software's international operations represented 38%, 38%
and 37% of Sterling Software's fiscal 1995, 1996 and 1997 revenue, respectively.
Sterling Software's ability to successfully maintain and expand its software
products and services business internationally will depend upon, among other
things, its ability to attract and retain both talented and qualified
managerial, technical and sales personnel and software product and services
customers outside the United States and its ability to continue to effectively
manage its domestic operations while also focusing on international operations
and expansion.
International operations are subject to certain inherent risks, including
unexpected changes in regulatory requirements and tariffs, longer payment
cycles, increased difficulties in collecting accounts receivable and potentially
adverse tax consequences. To the extent international sales are denominated in
foreign currencies, gains and losses on the conversion to U.S. dollars of
accounts receivable and accounts payable arising from international operations
may contribute to fluctuations in Sterling Software's results of operations. In
the past, Sterling Software has entered into, and may in the future enter into,
hedging transactions in an effort to reduce its exposure to currency exchange
risks.
RISKS ASSOCIATED WITH GOVERNMENT CONTRACTS; BACKLOG
Federal government contracts historically have been a significant part of
Sterling Software's business, representing 25% of Sterling Software's revenue
during fiscal 1997 and 26% of Sterling Software's revenue during both fiscal
1995 and 1996. A large portion of Sterling Software's federal government
contracts is funded for one year or less and is subject to contract award,
extension or expiration at different times during the year, and all of Sterling
Software's federal government contracts are subject to termination by the
government for convenience or failure to obtain funding. Based upon past
practices, Sterling Software believes that the contract renewal options included
in existing contracts will be exercised for the full period designated in such
contracts, but no assurance can be given that such contracts will be renewed.
Sterling Software's backlog relates principally to the uncompleted portion of
multi-year professional services contracts with agencies of the federal
government, including renewal options with government agencies, a portion of
which are restricted by law to a term ending on the last day of the government
agencies' then current fiscal year. Determination of Sterling Software's
backlog involves estimation, particularly with respect to customer requirements
contracts and multi-year contracts of a cost-reimbursement or incentive nature.
CERTAIN ANTITAKEOVER PROVISIONS
Certain provisions of the Delaware General Corporation Law (the "Delaware
Act"), Sterling Software's Certificate of Incorporation (the "Certificate of
Incorporation") and Bylaws (the "Bylaws") and certain agreements to which
Sterling Software is a party (including the Rights Agreement, dated December 18,
1996, between Sterling Software and BankBoston, N.A., as amended) may have the
effect of delaying, deterring or preventing a change in control of Sterling
Software. In addition, the Certificate of Incorporation authorizes the issuance
of up to 125,000,000 shares of Common Stock and 10,000,000 shares of Preferred
Stock, par value $.10 per share ("Preferred Stock"), of Sterling Software. The
Board of Directors of Sterling Software (the "Board") has the power to determine
the price and terms under which any such additional capital stock may be issued
and to fix the terms of such Preferred Stock, and existing stockholders of
Sterling Software will not have preemptive rights with respect thereto.
-5-
<PAGE>
STERLING SOFTWARE
Sterling Software was founded in 1981 and became a publicly owned corporation
in 1983. Sterling Software is a recognized worldwide supplier of software
products and services within three major markets: systems management,
applications management and federal systems. The mailing address of Sterling
Software's principal executive offices is 300 Crescent Court, Suite 1200,
Dallas, Texas 75201, and its telephone number is (214) 981-1000. See "Available
Information" and "Incorporation of Certain Documents by Reference."
RECENT DEVELOPMENTS
On July 9, 1998, Sterling Software acquired all of the equity interest in
Mystech Associates, Inc. ("Mystech"), a supplier of information technology
services within the federal systems market, pursuant to a merger of Mystech with
a wholly owned subsidiary of Sterling Software. At the effective time of such
merger, each outstanding share of capital stock of Mystech was converted into a
specified number of shares of Common Stock. The aggregate consideration for the
acquisition of Mystech consisted of 942,813 shares of Common Stock (inclusive of
shares of Common Stock issuable upon the exercise of certain options that were
previously exercisable to acquire shares of common stock of Mystech). On the
closing date for this acquisition, the aggregate fair market value of such
shares (based on the closing price reported on the NYSE Composite Transaction
List) was $28,343,315. It is anticipated that the acquisition of Mystech will
be treated as a tax-free reorganization for federal income tax purposes and as a
pooling of interests for accounting purposes.
On July 31, 1998, Sterling Software acquired all of the equity interest in
Synon, a provider of enterprise application development software tools and
related professional services, pursuant to a merger of Synon with a wholly owned
subsidiary of Sterling Software. At the effective time of such merger, each
outstanding share of capital stock of Synon was converted into a specified
number of shares of Common Stock. The aggregate consideration for the
acquisition of Synon consisted of 2,978,367 shares of Common Stock (inclusive of
shares of Common Stock issuable upon the exercise of certain options that were
previously exercisable to acquire shares of common stock of Synon). On the
closing date for this acquisition, the aggregate fair market value of such
shares (based on the closing price reported on the NYSE Composite Transaction
List) was $77,623,689. It is anticipated that the acquisition of Synon will be
treated as a tax-free reorganization for federal income tax purposes and as a
pooling of interests for accounting purposes.
SELLING STOCKHOLDERS
The following table sets forth certain information as of the date of this
Prospectus with respect to the shares of Common Stock owned by the Selling
Stockholders which are covered by this Prospectus.
<TABLE>
<CAPTION>
Common Stock
Ownership Prior to Offering
---------------------------
Number of Shares
Number of Percent of of Common Stock
Name of Selling Stockholder Shares Class Offered Hereby
- --------------------------- ------------ ------------- ----------------
<S> <C> <C> <C>
Advent Atlantic & Pacific Limited Partnership................................. 19,589 * 19,589
Advent Industrial II, L.P..................................................... 9,667 * 9,667
Advent VI, L.P................................................................ 90,314 * 90,314
Fritz Aldrine................................................................. 1,292 * 1,292
Brian Almashie................................................................ 107 * 107
Steven Bailey................................................................. 143 * 143
Mary Paul Barnaby............................................................. 143 * 143
Donald Beach.................................................................. 7,435 * 7,435
Ken Berridge.................................................................. 2,248 * 2,248
Bost & Co. (as nominee of Chestnut III Limited Partnership)................... 10,176 * 10,176
Kenneth Bozzini............................................................... 509 * 509
Jerry Chappell................................................................ 43 * 43
Ruth Dawson................................................................... 143 * 143
Michael De Vries.............................................................. 287 * 287
Kenneth Delatorre............................................................. 179 * 179
Patricia Gallery.............................................................. 4,631 * 4,631
Frank Gantley................................................................. 118 * 118
GAP Coinvestment Partners..................................................... 7,248 * 7,248
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C>
GAP-Synon Partners, L.P......................................................... 54,296 * 54,296
General Atlantic Partners II L.P................................................ 1,414,535 1.75 1,414,535
Andrew Goldberg................................................................. 1,435 * 1,435
Lauren Goldberg................................................................. 1,435 * 1,435
Richard H. Goldberg and Beverly P. Goldberg,
Trustees for Goldberg Family Trust UTD 2/21/96................................ 5,742 * 5,742
Douglas S. Grabe................................................................ 717 * 717
Joan H. Grabe................................................................... 1,435 * 1,435
Lisa S. Grabe................................................................... 717 * 717
William Grabe................................................................... 5,742 * 5,742
Caryn Grabe Robinson............................................................ 717 * 717
Laura S. Grabe.................................................................. 717 * 717
Simon Haigh..................................................................... 65,367 * 65,367
Timber Trustees (CI) Limited, Peter Edmund Milner and Nigel Timothy Bentley,
Trustees for S. Haigh Trust................................................... 46,691 * 46,691
Lindsay Harris.................................................................. 323 * 323
Christopher J. Herron........................................................... 4,262 * 4,262
Dennis G. Holligan.............................................................. 1,596 * 1,596
Melinda Horton.................................................................. 65,367 * 65,367
Timber Trustees (CI) Limited, Peter Edmund Milner and Nigel Timothy Bentley,
Trustees for M. Horton PB..................................................... 37,352 * 37,352
Maryann Shicheng Hu............................................................. 95 * 95
International Business Machines Corporation..................................... 239,283 * 239,283
Christopher Jewell.............................................................. 157 * 157
Amy Johnson..................................................................... 71 * 71
Sameer P. Khandekar............................................................. 86 * 86
Catharine Alison Jane Knowles................................................... 3,589 * 3,589
Mark O. Knowles................................................................. 1,277 * 1,277
Nicholas Knowles................................................................ 123,578 * 123,578
Kathy Kopozynski................................................................ 358 * 358
Nancy Larsen Heckmann........................................................... 383 * 383
Larry R. Lipner................................................................. 12,917 * 12,917
Eric R. Loos.................................................................... 3,454 * 3,454
Duncan Moore.................................................................... 1,435 * 1,435
Okebourne Ltd................................................................... 15,331 * 15,331
Michael Palmer.................................................................. 5,419 * 5,419
Terri L. Paul................................................................... 57 * 57
James Peeler.................................................................... 574 * 574
Saturn & Co. (as nominee of DESIFTA Limited).................................... 4,202 * 4,202
Madeline C. Selig............................................................... 1,457 * 1,457
Timber Trustees (CI) Limited, Peter Edmund Milner and Nigel Timothy Bentley,
Trustees for M. Sheridan Trust................................................ 15,563 * 15,563
Michael Shive................................................................... 287 * 287
Kenneth Slaunwhite.............................................................. 2,555 * 2,555
Gary Stewart.................................................................... 114 * 114
William Stuek................................................................... 3,589 * 3,589
T.A. Venture Investors Limited Partnership...................................... 1,526 * 1,526
Edward R. Vawter................................................................ 100 * 100
Martin Wallis................................................................... 287 * 287
Paul Wilde...................................................................... 1,435 * 1,435
Simon Williams.................................................................. 285,749 * 285,749
Gerard S. Wolf.................................................................. 13,397 * 13,397
Delaware Charter Guarantee & Trust, TR Self Directed IRA for Gerard S. Wolf..... 1,596 * 1,596
Mark Zavrel..................................................................... 413 * 413
--------- ---------
TOTAL 2,603,040 2,603,040
========= =========
</TABLE>
* Less than 1%
Because each of the Selling Stockholders may sell pursuant to this Prospectus
all or only a portion of the Shares owned by such Selling Stockholder, no
estimate can be given as to the number of shares of Common Stock that will be
owned by the Selling Stockholders upon termination of this offering.
PLAN OF DISTRIBUTION
Offers and sales of Shares pursuant to this Prospectus (as supplemented by an
accompanying Prospectus Supplement in the case of any offers and sales effected
otherwise than in ordinary broker's transactions made on the NYSE in
transactions involving ordinary and customary brokerage commissions) may be
effected by each of the Selling Stockholders from time to time in one or more
transactions, directly by such Selling Stockholder or through underwriters,
brokers, dealers or agents to be designated from time to time, at prices and on
terms then prevailing in the market or in privately negotiated transactions.
-7-
<PAGE>
Such offers or sales may be effected in any legally available manner, including
without limitation (i) directly in privately negotiated transactions, (ii)
through purchases by a broker-dealer as principal and resale by such broker-
dealer for its account pursuant to this Prospectus, (iii) through block trades
in which a broker-dealer will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, (iv) through transactions on the NYSE in accordance with the rules
of such exchange, (v) through ordinary broker's transactions and transactions in
which the broker solicits the purchasers, and (vi) through any combination of
two or more of the foregoing. In effecting sales, broker-dealers engaged by the
Selling Stockholders may arrange for other broker-dealers to participate. In
addition to the foregoing, any or all of General Atlantic Partners II, L.P.,
GAP-Synon Partners, L.P., GAP Coinvestment Partners, L.P., Advent Atlantic &
Pacific Limited Partnership, Advent Industrial II, L.P., Advent VI, L.P.,
Chestnut III Limited Partnership, DESIFTA Limited and TA Venture Investors
Limited Partnership may distribute Shares to their partners in accordance with
the terms of their respective partnership agreements. UNLESS THIS PROSPECTUS IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT STATING OTHERWISE, OFFERS AND SALES MAY
BE MADE PURSUANT TO THIS PROSPECTUS ONLY IN ORDINARY BROKER'S TRANSACTIONS MADE
ON THE NYSE IN TRANSACTIONS INVOLVING ORDINARY AND CUSTOMARY BROKERAGE
COMMISSIONS.
In connection with the sale of the Shares, underwriters, brokers, dealers and
agents may receive compensation from the Selling Stockholders or from purchasers
of the Shares in the form of discounts, concessions or commissions.
Underwriters, brokers, dealers and agents who participate in the distribution of
the Shares may be deemed to be underwriters, and any discounts or commissions
received by them from the Selling Stockholders and any profit on the resale of
Shares by them may be deemed to be underwriting discounts and commissions under
the Securities Act. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
At the time a particular offer of Shares is made, if and to the extent
required, this Prospectus will be accompanied by a Prospectus Supplement setting
forth the specific number of Shares offered, the name of the Selling Stockholder
making the offer, the offering price and the other terms of the offering,
including the names of any underwriters, agents, dealers and brokers involved
and the compensation, if any, of such underwriters, agents, dealers or brokers.
Under agreements which may be entered into by the Selling Stockholders (to
which Sterling Software may be a party), underwriters, brokers, dealers and
agents who participate in the distribution of the Shares may be entitled to
indemnification by the Selling Stockholders and/or Sterling Software against
certain liabilities, including under the Securities Act, or contribution from
the Selling Stockholders and/or Sterling Software to payments which the
underwriters, brokers, dealers or agents may be required to make in respect
thereof. The underwriters, brokers, dealers and agents may engage in
transactions with, or perform services for, the Selling Stockholders and
Sterling Software in the ordinary course of business.
EXPERTS
The consolidated financial statements of Sterling Software at September 30,
1997 and 1996, and for each of the years in the three-year period ended
September 30, 1997 appearing in Sterling Software's Annual Report on Form 10-K
for the year ended September 30, 1997 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Shares has been passed upon for Sterling Software by
Jones, Day, Reavis & Pogue. Michael C. French, a consultant to Jones, Day,
Reavis & Pogue, is a director of Sterling Software.
-8-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be borne by Sterling Software in connection with the issuance
and distribution of the securities being registered are estimated as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission
registration fee........................... $21,213
NYSE listing fee............................ 9,111
Legal fees and expenses..................... 15,000
Accounting fees and expenses................ 5,000
Printing expenses........................... 5,000
Miscellaneous expenses...................... 5,000
Total....................................... $60,324
=======
</TABLE>
The expenses to be borne by the Selling Stockholders in connection with the
issuance and distribution of the securities being registered (other than any
underwriting discounts and commissions, which will be described in an applicable
Prospectus Supplement to the extent required) are expected to consist solely of
the fees and expenses of their respective legal counsel and other incidental
expenses which Sterling Software is unable to estimate.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation provides that the personal liability of
directors of Sterling Software to Sterling Software is eliminated to the maximum
extent permitted by Delaware law. The Bylaws provide for the indemnification of
the directors, officers, employees and agents of Sterling Software and its
subsidiaries to the fullest extent that may be permitted by Delaware law from
time to time, and the Bylaws provide for various procedures relating thereto.
Although the Certificate of Incorporation generally absolves Sterling
Software's directors from personal liability for monetary damages resulting from
breaches of their fiduciary duty of care, Sterling Software's directors remain
liable for breaches of their duty of loyalty to Sterling Software and its
stockholders, as well as for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law and transactions
from which a director derives improper personal benefit. In addition, the
Certificate of Incorporation does not absolve directors of liability under
Section 174 of the Delaware Act, which makes directors personally liable for
unlawful dividends or unlawful stock repurchases or redemptions in certain
circumstances and expressly sets forth a negligence standard with respect to
such liability.
Under Delaware law, directors, officers, employees and other individuals may
be indemnified against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation -- a "derivative action")
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard of conduct is applicable in the case of a
derivative action, but indemnification extends only to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such an
action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the corporation.
As authorized by the Certificate of Incorporation, Sterling Software has
entered into indemnification agreements with each of its directors and officers.
These indemnification agreements provide for, among other things, (i) the
indemnification by Sterling Software of the indemnitees thereunder to the extent
described above, (ii) the advancement of attorneys' fees and other expenses, and
(iii) the establishment, upon approval by the Board, of trusts or other funding
mechanisms to fund Sterling Software's indemnification obligations thereunder.
ITEM 16. EXHIBITS
4.1 Certificate of Incorporation (previously filed as an exhibit to
Sterling Software's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference)
II-1
<PAGE>
4.2 Bylaws (previously filed as an exhibit to Sterling Software's
Registration Statement on Form 8-A/A filed on May 27, 1998 and
incorporated herein by reference)
4.3 Form of Common Stock Certificate (previously filed as an exhibit to
Sterling Software's Registration Statement No. 2-86825 and
incorporated herein by reference)
4.4 Rights Agreement, dated December 18, 1996, between Sterling Software
and BankBoston, N.A., as Rights Agent (previously filed as an exhibit
to Sterling Software's Current Report on Form 8-K dated December 18,
1996 and incorporated herein by reference)
4.5 First Amendment to Rights Agreement, dated as of March 12, 1998,
between Sterling Software and BankBoston, N.A., as Rights Agent
(previously filed as an exhibit to Sterling Software's Registration
Statement on Form 8-A/A filed April 3, 1998 and incorporated herein by
reference)
5.1 Opinion of Jones, Day, Reavis & Pogue (previously filed)
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (previously filed)
ITEM 17. UNDERTAKINGS
A. The 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;
(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; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
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 Exchange Act that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, 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; and
(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 Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this 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.
C. Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by
II-2
<PAGE>
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
Securities Act and will be governed by the final adjudication of such issue.
II-3
<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-3 and has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Dallas, State of Texas, on August 12, 1998.
STERLING SOFTWARE, INC.
By: /s/ Don J. McDermett, Jr.
-------------------------------------
Don J. McDermett, Jr.
Senior Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 has been signed below by the following persons in the
capacities indicated on August 12, 1998.
<TABLE>
<CAPTION>
Signatures Title
---------- -----
<S> <C>
* Chief Executive Officer and President; Director
- ---------------------- (Principal Executive Officer)
Sterling L. Williams
* Senior Vice President and Chief Financial Officer
- ---------------------- (Principal Financial and Accounting Officer)
R. Logan Wray
* Chairman of the Board; Director
- ----------------------
Sam Wyly
* Vice Chairman of the Board; Director
- ----------------------
Charles J. Wyly, Jr.
* Director
- ----------------------
Evan A. Wyly
* Director
- ----------------------
Phillip A. Moore
* Director
- ----------------------
Michael C. French
* Director
- ----------------------
Donald R. Miller
* Director
- ----------------------
Robert J. Donachie
* Director
- ----------------------
Alan W. Steelman
</TABLE>
* The undersigned, by signing his name hereto, does sign and execute this
Amendment No. 1 pursuant to the Power of Attorney executed on behalf of
the above-named officers and directors and filed as Exhibit 24.1 to this
Registration Statement.
/s/ Don J. McDermett, Jr.
--------------------------------
Don J. McDermett, Jr.
Attorney-in-Fact
II-4
<PAGE>
EXHIBITS
4.1 Certificate of Incorporation (previously filed as an exhibit to
Sterling Software's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference)
4.2 Bylaws (previously filed as an exhibit to Sterling Software's
Registration Statement on Form 8-A/A filed on May 27, 1998 and
incorporated herein by reference)
4.3 Form of Common Stock Certificate (previously filed as an exhibit to
Sterling Software's Registration Statement No. 2-86825 and
incorporated herein by reference)
4.4 Rights Agreement, dated December 18, 1996, between Sterling Software
and BankBoston, N.A., as Rights Agent (previously filed as an exhibit
to Sterling Software's Current Report on Form 8-K dated December 18,
1996 and incorporated herein by reference)
4.5 First Amendment to Rights Agreement, dated as of March 12, 1998,
between Sterling Software and BankBoston, N.A., as Rights Agent
(previously filed as an exhibit to Sterling Software's Registration
Statement on Form 8-A/A filed April 3, 1998 and incorporated herein by
reference)
5.1 Opinion of Jones, Day, Reavis & Pogue (previously filed)
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (previously filed)
II-5
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Sterling Software, Inc. for the registration of 2,603,040 shares of its
common stock and to the incorporation by reference therein of our report dated
November 7, 1997, with respect to the consolidated financial statements and
schedule of Sterling Software, Inc. included in its Annual Report (Form 10-K)
for the year ended September 30, 1997, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Dallas, Texas
August 11, 1998
