SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Pursuant to Section 240.14a-12
COMPUTER ASSOCIATES INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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EXPLANATORY NOTE
Computer Associates International, Inc., a Delaware corporation ("Computer
Associates", "CA" or the "Company"), is filing the materials contained in this
Schedule 14A with the Securities and Exchange Commission on July 19, 2001 in
connection with the solicitation of proxies for electing the board of directors
of Computer Associates at the 2001 annual meeting of Computer Associates'
stockholders.
A SERIES OF THREE (3) POSTERS, EACH FEATURING ONE OF THE FOLLOWING SLOGANS, WAS
HUNG IN VARIOUS LOCATIONS AT CA HEADQUARTERS IN ISLANDIA, NY, ON JULY 18, 2001,
WITH THE FOLLOWING "IMPORTANT INFORMATION" LEGEND PLACED SEPARATELY BENEATH EACH
POSTER:
1. GIS QA Supports CA!
2. 25 years of experience means a lot to me. Support CA Management.
3. Stay the course...
new business model
3x6 strategy
new branding
award winning technology
We're making things happen. Stay with the CA team...
IMPORTANT INFORMATION
Computer Associates filed a definitive proxy statement with the Securities and
Exchange Commission on July 18, 2001 relating to Computer Associates'
solicitation of proxies from the stockholders of Computer Associates with
respect to the Computer Associates 2001 annual meeting of stockholders. Computer
Associates' definitive proxy statement and other relevant documents are publicly
available, and may be obtained for free, at WWW.SEC.GOV. Computer Associates
expects to disseminate the definitive proxy statement to stockholders on or
about July 19, 2001. Detailed information regarding the names, affiliation and
interests of individuals who may be deemed participants in the solicitation of
proxies of Computer Associates' shareholders are set forth in the proxy
statement. COMPUTER ASSOCIATES ADVISES SECURITY HOLDERS TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. You may also
obtain a free copy of Computer Associates' definitive proxy statement, when it
becomes available, by writing to Computer Associates at One Computer Associates
Plaza, Islandia, New York 11749, by contacting MacKenzie Partners, Inc., toll
free at 1-800-322-2885, or D.F. King & Co., Inc., toll free at 1-800-431-9642,
or at CA.COM. To the extent that individual customers, independent industry
researchers, financial analysts, or Company commissioned research, are quoted in
these proxy materials, it is the Company's policy to use reasonable efforts to
verify the source and accuracy of the quote. The Company has not, however,
sought or obtained the consent of the quoted source to the use of such quote as
proxy soliciting material. This document may contain
expressions of opinion and belief. Except as otherwise expressly attributed to
another individual or entity, these opinions and beliefs are the opinions and
beliefs of Computer Associates.
###
THE FOLLOWING NEWS RELEASE, CONTAINING A LETTER SEPARATELY SENT TO CA
STOCKHOLDERS ON JULY 19, 2001, WAS ISSUED OVER PR NEWSWIRE ON JULY 19, 2001:
COMPUTER ASSOCIATES SENDS LETTER TO SHAREHOLDERS
ISLANDIA, N.Y., July 19, 2001 - Computer Associates International, Inc.
(NYSE: CA) announced that it sent the following letter to shareholders today:
Dear Computer Associates Shareholder:
We are enclosing CA's proxy statement and writing to ask for your support as we
prepare for CA's annual meeting of shareholders on Wednesday, August 29, 2001.
YOUR VOTE IS IMPORTANT -- PROTECT YOUR INVESTMENT
PLEASE SIGN AND RETURN THE ENCLOSED WHITE PROXY CARD
As has been widely reported in the press, Texas financier Sam Wyly has launched
a campaign to get himself elected as chairman of your company and install
himself and nine of his associates on CA's board. His plan? Frankly, we believe
it's vague but he has said he wants to break up CA into four separate business
units. Why? Well, that's not entirely clear either, although he did tell our
largest investor in a letter:
"IT'S NOT THAT I HAVE A BIG INVESTMENT POSITION...OF COURSE, I'M MOTIVATED
TO INCREASE MY WEALTH, BUT THAT'S NOT THE ONLY SCORECARD AND THERE
ARE OTHER WAYS I CAN HAVE FUN."
--SAM WYLY, (JUNE 1, 2001)
We believe very strongly that Mr. Wyly's ill-conceived plan for CA is a bad idea
for CA's shareholders, customers and employees. DON'T LET HIM "HAVE FUN" at your
expense.
CA'S CURRENT MANAGEMENT AND BOARD HAVE PERFORMED FOR SHAREHOLDERS
Consider the following facts:
o CA's existing management team has grown CA to the fourth-largest
software firm with a market capitalization of over $18 billion.
o Since CA's IPO on December 11, 1981, CA's stock price has
outperformed Apple, Hewlett-Packard, IBM and Intel. *
o Over the last year, CA's stock price has outperformed Apple, Cisco,
Compaq, Dell, EMC, Hewlett-Packard, IBM, Intel, and Microsoft, and
our stock price is up over 75% year-to-date.**
o In the last three years alone, CA has returned over $1.5 billion to
shareholders in the form of dividends and share repurchases, while
generating over $4.0 billion in cash from operations.
o From FY 1982-FY 2001, CA's revenues grew at a 30% CAGR.
* BASED ON STOCK PRICE APPRECIATION FROM 12/11/81-- 7/13/01: CA (13,274%),
APPLE (430%), HEWLETT-PACKARD (1,282%), IBM (698%), AND INTEL (11,379%).
FIGURES FROM FACTSET.
** BASED ON STOCK PRICE APPRECIATION FROM 7/13/00 -- 7/13/01: CA (19%), APPLE
(-56%), CISCO (-71%), COMPAQ (-44%), DELL (-47%), EMC (-71%),
HEWLETT-PACKARD (-59%), IBM (5%), INTEL (-58%) AND MICROSOFT (-11%).
BETWEEN 12/29/00 AND 7/17/01, CA'S STOCK PRICE ROSE 78%. FIGURES FROM
FACTSET.
Have we had some challenges? Yes, and like many software and technology
companies, we had a disappointing quarter last year. But that can't erase our
track record, and it shouldn't obscure the tremendous platform we have built for
the future.
WE BELIEVE CA'S NEW BUSINESS MODEL IS CREATING SHAREHOLDER
VALUE AND SUSTAINABLE COMPETITIVE ADVANTAGE
Last October, we introduced a new business model that offers CA's many thousands
of customers a wide range of innovative purchasing and payment options to help
ensure greater payoff from software investments and achieve a simpler, more
flexible and more cost-effective way for them to implement new CA products.
Here's what just some customers have to say about our new model and their
satisfaction with CA*:
"DOING BUSINESS WITH CA HAS NEVER BEEN EASIER. WORKING CLOSELY TOGETHER,
WE WERE ABLE TO CRAFT AN AGREEMENT THAT PROVIDES WORLDSPAN WITH
FLEXIBILITY AND PREDICTABLE SOFTWARE COSTS TIED TO THE GROWTH OF OUR
BUSINESS. UNDER THIS NEW TRANSACTION FEE AGREEMENT, CA
HAS ALIGNED THEIR SUCCESS WITH THE SUCCESS OF WORLDSPAN. THIS IS A GREAT
EXAMPLE OF A TRUE PARTNERSHIP."
-- David Lauderdale, Senior Vice President, Worldwide
Technical Operations, Worldspan, May 22, 2001
"THE FLEXIBILITY OF CA'S NEW BUSINESS MODEL REPRESENTS AN IMPORTANT CHANGE
FOR SOFTWARE CUSTOMERS. IT ALLOWS US TO FOCUS MORE ON OUR TECHNOLOGY NEEDS
RATHER THAN ON FINANCIAL TRANSACTIONS. I WISH OTHER SOFTWARE VENDORS WOULD
FOLLOW SUIT. WE'VE FELT THAT CA HAS TREATED US AS A PARTNER SO WE HAVE
TRIED TO TREAT CA AS A PARTNER IN RETURN AND WE ARE VERY HAPPY WITH OUR
RELATIONSHIP WITH COMPUTER ASSOCIATES."
-- Greg Clancy, Executive VP & CIO, Sallie Mae/USA Group,
Inc., March 20, 2001
"CA'S NEW BUSINESS MODEL PROVIDES CFI WITH MORE THAN GREAT TECHNOLOGY.
UNDER THE FLEXIBLE NEW LICENSING TERMS, LIKE THE MONTH-TO-MONTH OPTION, WE
ARE ENJOYING THE BENEFITS OF CA'S EBUSINESS MANAGEMENT SOLUTIONS WITHOUT
THE RISKS OF THE LONGER-TERM CONVENTIONAL LICENSING ARRANGEMENTS. IN AN
EVER-EVOLVING BUSINESS WORLD, WE WELCOME A TECHNOLOGY PARTNER THAT GIVES
US CHOICE AND FLEXIBILITY."
-- Andy Crowder, CIO, CFI/Westgate Resort, March 19, 2001
WALL STREET AGREES THAT CA'S NEW MODEL REPRESENTS A STRONG
PLATFORM FOR CONTINUED GROWTH
Consider these comments*:
"...TO THE EXTENT THIS NEW MODEL IS CREATING COMPETITIVE ADVANTAGE FOR CA
BY VIRTUE OF ITS RELATED IMPACT ON THE COMPANY'S SALES FORCE AND
CUSTOMERS, THERE IS EVEN MORE REASON TO BELIEVE THIS NEW BUSINESS MODEL IS
PAYING DIVIDENDS FASTER THAN WE OTHERWISE WOULD HAVE ANTICIPATED. WE
BELIEVE THE TOUGHER MARKET ENVIRONMENT WE ARE NOW ENTERING IS LIKELY TO BE
AN IMMEDIATE PROVING GROUND FOR CA'S NEW BUSINESS MODEL AND HAS THE
POTENTIAL TO MAKE CA AN EVEN STRONGER COMPANY AS THIS ENVIRONMENT PUNISHES
THE WEAK INTO SUBMISSION."
-- Wendell Laidley, Credit Suisse First Boston, April 17,
2001
"WE THINK THAT CA'S SHIFT TO A RATABLE REVENUE RECOGNITION MODEL IS
AFFORDING MANAGEMENT WITH PERHAPS THE HIGHEST LEVELS OF VISIBILITY IN THE
COMPANY'S HISTORY."
-- John McPeake, Prudential Securities, April 17, 2001
"THE OUTLOOK REVISION REFLECTS THE CUSTOMER RECEPTIVITY OF THE COMPANY'S
NEW BUSINESS MODEL AND THE ABSENCE OF ANY MEANINGFUL DISRUPTION IN
PERFORMANCE AS A RESULT OF LAUNCHING THE MODEL."
-- Standard & Poor's, April 18, 2001
"... MOODY'S EXPECTATION [IS] THAT [CA] WILL EXTEND ITS LONG HISTORY OF
PROFITABLE GROWTH AND STRONG CASH-FLOW GENERATION..."
-- Moody's Investors Service, June 26, 2001
"... WE BELIEVE CA'S UNIQUE ADVANTAGE INCLUDES ITS BROAD TECHNOLOGY
OFFERING AND LARGE ENTERPRISE INSTALLED BASE, WHICH TOGETHER ADD UP TO
LOTS OF CROSS-SELLING OPPORTUNITIES. WE BELIEVE THE NEW MODEL WILL
FACILITATE POSITIVE CUSTOMER RELATIONS BY OFFERING THE FLEXIBILITY OF MORE
MANAGEABLE PAYMENT TERMS AND ELIMINATE WHAT SOME VIEWED AS ANNOYING BUT
TYPICAL QUARTER-END PUSHES FOR SALES."
-- Sarah Mattson, Dain Rauscher Wessels, June 5, 2001
"WE DON'T VIEW [WYLY'S ACTION] AS ANYTHING MORE THAN WHAT IT IS--AN
ATTEMPT TO TAKEOVER THE COMPANY AT A LOW PRICE." "... THE NEW MODEL SHOULD
STRENGTHEN CA'S FUNDAMENTAL AND COMPETITIVE POSITION BY GIVING CUSTOMERS
MORE FLEXIBILITY IN HOW THEY LICENSE AND USE CA'S SOFTWARE."
-- Drew Brosseau/Peter Kuper, SG Cowen, June 21, 2001 /
June 5, 2001
WE BELIEVE SAM WYLY'S ILL-FOUNDED PROPOSAL SIMPLY DOESN'T MAKE SENSE
We think breaking CA into four separate business units will hurt customers,
increase costs and reduce innovation and synergies. We believe Wyly's plan
would:
o CRIPPLE CUSTOMER SERVICE AND REDUCE CA'S ABILITY TO PROVIDE
INTEGRATED SOLUTIONS. Two-thirds of our customers use products
across our focus areas and enjoy a one-stop shop for all their
business operation needs. Under Wyly's plan, our customers would
have to deal with up to four different sales people and four
different organizations--which is clearly not what our customers
want.
o REDUCE DEVELOPMENT SYNERGIES AND CROSS-SELLING OPPORTUNITIES.
Dividing CA's development efforts across four separate businesses
would eliminate the sharing of technology that in our view gives CA
a competitive advantage and has helped us reach the point where over
99% of Fortune 500 companies use our products and
renewal rates exceed 80%. In addition, our sales force would lose
the ability to cross-sell our products.
o INCREASE ADMINISTRATIVE DUPLICATIONS AND INCREASE EXPENSES. The
creation of four separate businesses would generate multiple
duplications in organizational structure, necessitating four CEOs,
four heads of marketing, etc. We think this is an inefficient way of
doing business and could result in drastically increased
administrative expenses and overhead costs.
HERE'S WHAT SOME CUSTOMERS AND OTHERS HAVE TO SAY ABOUT SAM WYLY'S PLAN*:
"IF CA IS BROKEN UP INTO FOUR COMPANIES THERE WILL BE NO SYNERGY BETWEEN
DIFFERENT GROUPS. IT'S VERY DIFFICULT TO SAY YOU ARE GOING TO MOVE
UNICENTER INTO ONE AREA. SYSTEMS MANAGEMENT HAS IMPLICATIONS IN SECURITY
AS WELL AS STORAGE MANAGEMENT. THIS IS NOT A COUNTRY YOU ARE SEPARATING.
IT'S JUST NOT THAT EASY. THE WHOLE TAKEOVER THING IS VERY FLAWED IF YOU
ASK ME."
-- Niten Ved, President NetCom Systems, July 3, 2001
"IF CA WERE DIVIDED INTO FOUR INDEPENDENT BUSINESSES, WE WOULD BE FORCED
TO DEAL WITH MULTIPLE POINTS OF CONTACT FOR OUR VARIOUS SOFTWARE NEEDS.
THIS SORT OF ORGANIZATION WOULD DECREASE ACCOUNTABILITY, AS WELL AS CA'S
ABILITY TO OFFER FULLY INTEGRATED SOLUTIONS. I SEE NO UPSIDE FOR CA
CUSTOMERS UNDER WYLY'S PLAN."
-- Allan Horn, Vice President, Data Center Operations,
Sallie Mae, July 2, 2001
"WYLY'S PLAN SOUNDS LIKE A "SMALL IS BEAUTIFUL' FANTASY. CUSTOMERS ARE
LOOKING FOR SOLUTIONS TO COMPREHENSIVE BUSINESS PROBLEMS, NOT A BUNCH OF
INDEPENDENT TOOLS THEY HAVE TO ASSEMBLE INTO A SOLUTION."
-- Rick Ptak, Hurwitz Group, July 9, 2001
"THE PROPOSED PLAN SHOWS [MR. WYLY] HAS A PROFOUND LACK OF KNOWLEDGE ABOUT
WHAT THE COMPANY HAS TO OFFER ITS USERS. CA HAS BEEN IMPROVING, IMPROVING,
IMPROVING. TO ME, HE SEEMS LIKE A SMART MAN WHO GOT HIS $4 BILLION FROM
CA--WHO WANTS TO HAVE HIS CAKE AND YOURS, TOO."
-- Valerie O'Connell, Aberdeen Group, July 9, 2001
SAM WYLY'S CAMPAIGN, IN OUR VIEW, IS BASED ON SELF-SERVING
CUSTOMER SATISFACTION RESEARCH AND MISLEADING PUBLICITY
DON'T LET HIM "HAVE FUN" AT YOUR EXPENSE
This has been a tough time for our industry as a whole, but our initiatives are
bearing fruit and investors and customers agree. WE BELIEVE MR. WYLY'S COMMENTS
ABOUT OUR TREATMENT OF EMPLOYEES ARE UNTRUE AND THAT HE INSULTS THE INTELLIGENCE
OF OUR CUSTOMERS. Over 93% of respondents to a CA customer survey conducted by
GuideStar in January and February of 2001 said that CA's software was
"important" to "mission-critical" to the successful operation of their business.
In addition, about 75% said they had a positive working relationship with our
company. GUIDESTAR'S RESEARCH SHOWS THAT OUR CUSTOMER SATISFACTION RATINGS
INCREASED SIGNIFICANTLY IN 2000, AND WE EXPECT THEY WILL CONTINUE TO RISE AS
CUSTOMERS ENJOY THE FLEXIBILITY PROVIDED BY OUR NEW BUSINESS MODEL.
We know we have to earn your support every day and we intend to stay focused on
continuing to build and improve CA.
YOUR VOTE IS IMPORTANT! Enclosed you will find a WHITE proxy card with which to
vote. Only the WHITE proxy card allows you to vote for the current Board of
Directors. We urge you to vote FOR all of the items on the WHITE proxy and to
mail back ONLY the WHITE proxy in the enclosed postage-paid envelope. We urge
you to ignore and throw away any cards that may be sent to you by Wyly or Ranger
Governance. The prompt return of your WHITE proxy will ensure that your vote is
counted.
Very truly yours,
Charles B. Wang Sanjay Kumar
Chairman President & Chief Executive Officer
For additional information, please call MACKENZIE PARTNERS, INC. TOLL-FREE
at 800-322-2885, or call D.F. KING & CO., INC. TOLL-FREE at 800-431-9642.
* To the extent that individual customers, independent industry
researchers, financial analysts, or Company commissioned research, are quoted in
these proxy materials, it is the Company's policy to use reasonable efforts to
verify the source and accuracy of the quote. The Company has not, however,
sought or obtained the consent of the quoted source to the use of such quote as
proxy soliciting material.
# # #
(C)2001 Computer Associates International, Inc. One Computer Associates Plaza,
Islandia, N.Y. 11749. All trademarks, trade names, service marks, and logos
referenced herein belong to their respective companies.
IMPORTANT INFORMATION
Computer Associates filed a definitive proxy statement with the Securities and
Exchange Commission on July 18, 2001 relating to Computer Associates'
solicitation of proxies from the stockholders of Computer Associates with
respect to the Computer Associates 2001 annual meeting of stockholders. Computer
Associates' definitive proxy statement and other relevant documents are publicly
available, and may be obtained for free, at www.sec.gov. Computer Associates
expects to disseminate the definitive proxy statement to stockholders on or
about July 19, 2001. Detailed information regarding the names, affiliation and
interests of individuals who may be deemed participants in the solicitation of
proxies of Computer Associates' shareholders are set forth in the proxy
statement. COMPUTER ASSOCIATES ADVISES SECURITY HOLDERS TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. You may also
obtain a free copy of Computer Associates' definitive proxy statement, when it
becomes available, by writing to Computer Associates at One Computer Associates
Plaza, Islandia, New York 11749, by contacting MacKenzie Partners, Inc., toll
free at 1-800-322-2885, or D.F. King & Co., Inc., toll free at 1-800-431-9642,
or at ca.com. To the extent that individual customers, independent industry
researchers, financial analysts, or Company commissioned research, are quoted in
these proxy materials, it is the Company's policy to use reasonable efforts to
verify the source and accuracy of the quote. The Company has not, however,
sought or obtained the consent of the quoted source to the use of such quote as
proxy soliciting material. This document may contain expressions of opinion and
belief. Except as otherwise expressly attributed to another individual or
entity, these opinions and beliefs are the opinions and beliefs of Computer
Associates.