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FILED PURSUANT TO RULE 424(b)(3)
FILE NO. 333-42721
REOFFER PROSPECTUS
3,500,000 SHARES
STERLING SOFTWARE, INC.
COMMON STOCK
Certain stockholders who are also executive officers of the Company may
offer and sell up to 3,500,000 shares of Common Stock of the Company. The
stockholders acquired, or may in the future acquire, such shares of Common Stock
under the Sterling Software, Inc. Employee Stock Purchase Plan. The Company
will not receive any of the proceeds from any sale of these shares by the
stockholders.
The stockholders may sell their shares of Common Stock on one or more
exchanges, in the over-the-counter market or in negotiated transactions. The
price and other terms of these sales will be established at the time they occur.
The sales prices may be equal to or based upon then-current market prices or
determined through negotiation.
The stockholders and participating agents, brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933.
Commissions or discounts or any profit realized on any sale of the stockholders'
shares of Common Stock may be deemed to be underwriting commissions or
discounts.
The Common Stock is listed for trading on the New York Stock Exchange under
the symbol "SSW." On September 21, 1998, the closing price of the Common Stock
on the New York Stock Exchange was $22 1/8.
The Company will pay all expenses in connection with the offering
contemplated by this Prospectus, other than underwriting discounts and
commissions, brokers' fees and the fees and expenses of any legal counsel to the
stockholders.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is September 22, 1998.
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TABLE OF CONTENTS
Page
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Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 3
The Company.............................................................. 3
Recent Developments...................................................... 3
Selling Stockholders..................................................... 4
Plan of Distribution..................................................... 4
Legal Matters............................................................ 5
Experts.................................................................. 5
Forward-Looking Information.............................................. 5
Disclaimer............................................................... 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Thus, the Company files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). You may read and copy such reports, proxy
statements and other information at the public reference facilities maintained
by the Commission at the following addresses:
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<S> <C> <C>
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W., 500 West Madison Street Suite 1300
Washington, D. C. 20549 Suite 1400 New York, New York 10048
Chicago, Illinois 60661-2511
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You may also obtain copies of such reports, proxy statements and other
information from the Public Reference Room of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. (You may obtain
information regarding the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330.) The Commission maintains an Internet site,
located at http://www.sec.gov., that contains reports, proxy statements and
other information regarding registrants that file electronically with the
Commission. You may also read reports, proxy statements and other information
relating to the Company at the offices of the New York Stock Exchange (the
"NYSE") at 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the 3,500,000 shares (the "Shares") of Common
Stock of the Company (the "Common Stock") issued or issuable under the Sterling
Software, Inc. Employee Stock Purchase Plan (the "Plan"). This Prospectus and
the Registration Statement also relate to such indeterminate number of
additional shares of Common Stock that any person may acquire as a result of the
antidilution provisions of the Plan.
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This Prospectus omits certain of the information contained in the
Registration Statement, and reference is made to the Registration Statement
(including the exhibits thereto) for further information with respect to the
Company and the Shares offered hereby. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and in
each instance reference is made to the copy of such document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus (i) the
Company's Annual Report on Form 10-K for the year ended September 30, 1997, (ii)
the Company's Quarterly Reports on Form 10-Q for the quarters ended December 31,
1997, March 31, 1998 and June 30, 1998, (iii) the Company's Current Report on
Form 8-K dated June 21, 1998, (iv) the Company's Proxy Statement on Schedule 14A
for the Annual Meeting of Stockholders of the Company held on March 11, 1998,
and (v) the Company's Registration Statement on Form 8-A/A filed with the
Commission on May 27, 1998.
All documents and reports filed by the Company pursuant to Sections 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 made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of the filing of such documents and reports.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to: Sterling Software, Inc., 300 Crescent Court, Suite 1200,
Dallas, Texas 75201, Attention: Don J. McDermett, Jr., Senior Vice President
and General Counsel (telephone: (214) 981-1000).
THE COMPANY
The Company was founded in 1981 and became a publicly owned corporation in
1983. The Company is a recognized worldwide supplier of software products and
services within three major markets: applications management, systems management
and federal systems. The mailing address of the Company'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, the Company 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 the Company. 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
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price reported on the NYSE Composite Transaction List) was $28,343,315. 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, the Company acquired all of the equity interest in Synon
Corporation ("Synon"), a supplier of enterprise application development software
tools and related professional services, pursuant to a merger of Synon with a
wholly owned subsidiary of the Company. 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. 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.
Pursuant to an Agreement and Plan of Merger dated August 27, 1998, the
Company has agreed to acquire all of the equity interest in Cayenne Software,
Inc. ("Cayenne"), a supplier of a suite of workgroup-to-enterprise analysis and
design solutions for software developers. The purchase price payable by the
Company is approximately $11.4 million in cash (inclusive of any advances made
to Cayenne on the basis of credit enhancement provided by the Company but
exclusive of any other debt assumed by the Company). As of the date of this
Prospectus, the Company expects the acquisition of Cayenne to be consummated in
October 1998. The acquisition of Cayenne will be treated as a taxable
transaction for federal income tax purposes and as a purchase for accounting
purposes.
SELLING STOCKHOLDERS
The Shares are being offered by certain stockholders (the "Selling
Stockholders") of the Company, each of whom is also an executive officer of the
Company. The table attached to this Prospectus as Annex "A" sets forth certain
information as of August 31, 1998, regarding the identity of the Selling
Stockholders and certain other information relating thereto. The Company is
unaware of whether the Selling Stockholders presently intend to sell any of the
Shares that they now own or may hereafter acquire under the Plan. Subject to
certain limitations, the Selling Stockholders generally will have the ability to
acquire additional Shares under the Plan during successive six-month purchase
periods. The subsequent sale of any Shares thus acquired will be covered by
this Prospectus which, in such case, will be supplemented.
PLAN OF DISTRIBUTION
Any of the Selling Stockholders may sell or otherwise dispose of all or any
portion of his or her Shares from time to time: (i) to purchasers directly, (ii)
in ordinary brokerage transactions and transactions in which the broker solicits
purchasers, (iii) through underwriters or dealers who may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Selling Stockholders or from the purchasers of the Shares for whom they may act
as agent, (iv) through the writing of options on the Shares, (v) through the
pledge of the Shares as security for any loan or obligation, including pledges
to brokers or dealers who may, from time to time, themselves effect
distributions of the Shares or interests therein, (vi) through purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account pursuant to this Prospectus, (vii) through block trades in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, (viii) through exchange distributions in accordance with the rules
of the applicable exchange, including the NYSE, (ix) in transactions in the
over-the-counter market, (x) in any combination of one or more of the foregoing,
or (xi) in any other lawful manner. Such sales may be made at then-current
market prices, at prices related to then-current market prices or at negotiated
prices. In effecting sales, brokers or dealers may arrange for other brokers or
dealers to participate. The Selling Stockholders or such successors in
interest, and any underwriters, brokers, dealers or agents that participate in
the distribution of the Shares, may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the Shares by them
and any discounts, commissions or concessions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting commissions or
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discounts under the Securities Act. In addition, any of the Shares covered by
this Prospectus that qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Company will pay all of the expenses in connection with the offering
contemplated by this Prospectus, other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any legal counsel to the
Selling Stockholders.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon for the Company by Jones, Day, Reavis &
Pogue. Michael C. French, a consultant to Jones, Day, Reavis & Pogue, is a
director and an employee of the Company.
EXPERTS
The consolidated financial statements and financial statement schedule
appearing in the Company'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 thereon included therein and incorporated herein by
reference. Such consolidated financial statements and financial statement
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
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 the Company. The following statements are or may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995: (1) 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 (2) other statements regarding
matters that are not historical facts. Such forward-looking statements are
subject to various risks and uncertainties, including (a) risks and
uncertainties relating to the possible invalidity of the underlying beliefs and
assumptions, (b) possible changes or developments in social, economic, business,
industry, market, legal and regulatory circumstances and conditions, and (c)
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 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.
DISCLAIMER
EXCEPT FOR THE INFORMATION CONTAINED IN THIS PROSPECTUS, THE COMPANY HAS
NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
IN CONNECTION WITH THE OFFER OR SALE OF THESE SECURITIES. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
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3,500,000 SHARES
STERLING SOFTWARE, INC.
COMMON STOCK
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PROSPECTUS
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SEPTEMBER 22, 1998
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ANNEX "A"
SELLING STOCKHOLDER INFORMATION
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COMMON STOCK COMMON STOCK
OWNERSHIP NUMBER OF OWNERSHIP AFTER
PRIOR TO OFFERING (1) SHARES OF OFFERING
------------------------ COMMON STOCK ------------------------
Name and Position NUMBER PERCENTAGE(2) OFFERED HEREBY NUMBER PERCENTAGE(2)
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John R. Cook (3) 201,457 * 1,306 200,151 *
Senior Vice President
Werner L. Frank (4) 442,376 * 812 441,564 *
Executive Vice President
F. L. "Mike" Harvey (5) 326,011 * 870 325,141 *
Senior Vice President
M. Gene Konopik (6) 212,497 * 923 211,574 *
Executive Vice President
Don J. McDermett, Jr. (7) 166,950 * 637 166,313 *
Senior Vice President and
General Counsel
Jeannette P. Meier (8) 864,665 1.0% 1,306 863,359 1.0%
Executive Vice President
And Secretary
Gillian M. Parrillo (9) 301,991 * 1,002 300,989 *
Senior Vice President
Geno P. Tolari (10) 935,948 1.1% 1,306 934,642 1.1%
Executive Vice President
And Chief Operating Officer
R. Logan Wray (11) 251,248 * 1,194 250,054 *
Senior Vice President and
Chief Financial Officer
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* Less than 1% of class.
(1) Based on reported ownership as of August 31, 1998.
(2) Based on 82,226,740 shares of Common Stock issued and outstanding as of
August 31, 1998.
(3) Includes 1,306 Shares acquired under the Plan. Also includes 200,000 shares
that may be acquired upon exercise of options granted under the Sterling
Software. Inc. Amended and Restated 1996 Stock Option Plan (the "Option
Plan"), 20,000 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 151 shares of Common Stock held in the
Sterling Software, Inc. Savings and Security Plan (the "Savings Plan").
(4) Includes 812 Shares acquired under the Plan. Also includes 250,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 75,000 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 8,470 shares of Common Stock held in the
Savings Plan.
(5) Includes 870 Shares acquired under the Plan. Also includes 325,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 62,500 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 141 shares of Common Stock held in the
Savings Plan.
(6) Includes 923 Shares acquired under the Plan. Also includes 200,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 62,500 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 11,574 shares of Common Stock held in the
Savings Plan.
(7) Includes 637 Shares acquired under the Plan. Also includes 166,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 37,900 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 313 shares of Common Stock held in the
Savings Plan.
(8) Includes 1,306 Shares acquired under the Plan. Also includes 850,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 300,000 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 12,699 shares of Common Stock held in the
Savings Plan.
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(9) Includes 1,002 Shares acquired under the Plan. Also includes 300,000 shares
that may be acquired upon exercise of options granted under the Option
Plan, 92,800 of which are exercisable within 60 days of the date of this
Prospectus, and approximately 989 shares of Common Stock held in the
Savings Plan.
(10) Includes 1,306 Shares acquired under the Plan. Also includes 925,000
shares that may be acquired upon exercise of options granted under the
Option Plan, 300,000 of which are exercisable within 60 days of the date of
this Prospectus, and approximately 9,642 shares of Common Stock held in the
Savings Plan.
(11) Includes 1,194 Shares acquired under the Plan. Also includes 250,000
shares that may be acquired upon exercise of options granted under the
Option Plan, 62,500 of which are exercisable within 60 days of the date of
this Prospectus, and approximately 54 shares of Common Stock held in the
Savings Plan.
