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
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
COMPUTER ASSOCIATES INTERNATIONAL, INC.
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
One Computer Associates Plaza
[LOGO] Islandia, New York 11749
tel: +1 631 342 6000
fax: +1 631 342 6800
ca.com
July 19, 2001
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:
- CA's existing management team has grown CA to the fourth-largest software
firm with a market capitalization of over $18 billion.
- Since CA's IPO on December 11, 1981, CA's stock price has outperformed
Apple, Hewlett-Packard, IBM and Intel.*
- 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.**
- 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.
- 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:
- 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.
- 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.
- 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,
[LOGO] [LOGO]
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.