As filed with the Securities and Exchange Commission on June 27, 2002
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
COMPUTER ASSOCIATES INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)
RANGER GOVERNANCE, LTD.
(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:
PRELIMINARY COPY, SUBJECT TO COMPLETION
PROXY STATEMENT OF
RANGER GOVERNANCE, LTD.
IN OPPOSITION TO THE BOARD OF
DIRECTORS OF COMPUTER ASSOCIATES INTERNATIONAL, INC.
------------------------
ANNUAL MEETING OF STOCKHOLDERS
OF
COMPUTER ASSOCIATES INTERNATIONAL, INC.
TO BE HELD ON AUGUST 28, 2002
------------------------
This Proxy Statement and the enclosed WHITE proxy card are being
furnished by Ranger Governance, Ltd. ("Ranger") to holders of shares of
common stock, par value $0.10 per share (the "Shares" or the "Common
Stock"), of Computer Associates International, Inc., a Delaware corporation
("Computer Associates" or the "Company"), in connection with Ranger's
solicitation of proxies to elect its five nominees to the board of
directors of Computer Associates (the "Board of Directors") at Computer
Associates' 2002 Annual Meeting of Stockholders, and at any and all
adjournments, postponements, continuations or reschedulings thereof (the
"2002 Annual Meeting").
Ranger is a Texas limited partnership, and Ranger GP Governance,
L.L.C., a Texas limited liability company ("Ranger Governance"), is the
general partner of Ranger. Ranger was formed in June 2001 to solicit
proxies in opposition to the Board of Directors for the election of
directors at Computer Associates' 2001 Annual Meeting of Stockholders (the
"2001 Annual Meeting"), and to promote what it believed to be more
responsible corporate governance at Computer Associates. Further
information concerning Ranger, Ranger Governance, Ranger's nominees
standing for election to the Company's Board of Directors at the 2002
Annual Meeting and other persons who are participants in Ranger's
solicitation of proxies, including Sam Wyly, a limited partner of Ranger
and manager of Ranger Governance, is provided in this Proxy Statement under
the headings "ELECTION OF DIRECTORS" and "THE RANGER NOMINEES," and in
Annex A.
This Proxy Statement and the enclosed WHITE proxy card are first
being sent or given by Ranger to stockholders of Computer Associates on or
about July __, 2002.
THIS SOLICITATION IS BEING MADE BY RANGER, AND NOT BY OR ON BEHALF
OF THE BOARD OF DIRECTORS OF COMPUTER ASSOCIATES.
According to the preliminary proxy statement filed by Computer
Associates (the "Management Preliminary Proxy Statement") with the
Securities and Exchange Commission on ______ __, 2002, the 2002 Annual
Meeting will be held on August 28, 2002 at _______ a.m., local time, at
______________________, and the record date for determining stockholders
entitled to notice of and to vote at the 2002 Annual Meeting is July 3,
2002 (the "Record Date"). As of the Record Date, Ranger was the holder of
record and beneficial owner of 100 Shares. Ranger also is the owner of
currently exercisable options to purchase an aggregate of 1,478,925 Shares,
with 1,309,905 of such options having an exercise price of $25.08 per Share
and 169,020 of such options having an exercise price of $24.19 per Share.
Ranger is deemed to be the beneficial owner of the Shares issuable upon
exercise of such options. The exercise prices of such options are
substantially in excess of the current market price of the Common Stock,
the closing price of which was $16.00 on June 26, 2002. Sam Wyly may be
considered the beneficial owner of the Shares and options to purchase
Common Stock held by Ranger by virtue of his interest in Ranger.
According to the Management Preliminary Proxy Statement, at the
2002 Annual Meeting all eleven members of the Board of Directors will be
elected for one-year terms expiring at Computer Associates' 2003 Annual
Meeting of Stockholders. In opposition to the solicitation of proxies by
the Board of Directors, Ranger is proposing, and soliciting proxies in
support of, a slate of five nominees (the "Ranger Nominees") to stand for
election to the Board of Directors. The Ranger Nominees are Richard J.
Agnich, Max D. Hopper, Stephen R. Perkins, Ronald J. Robinson and Cece
Smith, and they will be standing for election in opposition to five
nominees of the Board of Directors, namely Russell M. Artzt, Alfonse M.
D'Amato, Willem F. P. De Vogel, Sanjay Kumar and Charles B. Wang. Ranger is
not opposing the election of the six other nominees of the Board of
Directors. If elected, the Ranger Nominees will constitute five of the
eleven members of the Board of Directors.
RANGER URGES COMPUTER ASSOCIATES STOCKHOLDERS TO VOTE "FOR" THE
RANGER NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
As discussed in more detail under the heading "QUORUM AND VOTING"
in this Proxy Statement, stockholders who vote on the WHITE proxy card
furnished by Ranger will be able to vote for the election of the five
Ranger Nominees and, in addition, will be able to vote for the election of
six persons nominated by the Computer Associates Board of Directors,
constituting a full slate of eleven director candidates. The Ranger
Nominees, if elected, will constitute a minority of the members of the
Board of Directors and, accordingly, if the full Board of Directors is
present at a meeting, the Ranger Nominees, by themselves, will not be able
to cause any action to be taken or not be taken by the Board of Directors.
There is no assurance that any of the nominees of the Board of Directors
will serve as directors of Computer Associates if any of the Ranger
Nominees are elected.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS VERY IMPORTANT, NO
MATTER HOW MANY OR HOW FEW SHARES YOU OWN. PLEASE SIGN AND DATE THE
ENCLOSED WHITE PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE PROMPTLY. PROPERLY VOTING THE ENCLOSED WHITE PROXY CARD WILL
REVOKE ANY PROXY PREVIOUSLY SIGNED BY YOU.
PLEASE DO NOT RETURN ANY [COLOR] PROXY CARD SENT TO YOU BY
COMPUTER ASSOCIATES. Even if you may have voted on Computer Associates'
[COLOR] proxy card, you can easily change your vote and revoke that proxy
by signing, dating and returning the enclosed WHITE proxy card. ONLY YOUR
LATEST DATED PROXY WILL COUNT AT THE 2002 ANNUAL MEETING.
If you have any questions or need any assistance in voting your
Shares, please call the firm assisting Ranger in its solicitation of
proxies:
MORROW & CO., INC.
445 Park Avenue
New York, New York 10022
Banks and Brokers Call Collect: (212) 754-8000
All Others Call Toll-Free: (800) 607-0088
BACKGROUND; REASONS FOR THE SOLICITATION
Ranger solicited proxies in connection with Computer Associates'
2001 Annual Meeting held on August 29, 2001, in an effort to elect Ranger's
nominees to the Computer Associates Board of Directors (the "2001 Proxy
Contest"). Initially, Ranger's slate of nominees consisted of ten persons
who, if elected, would have constituted the entire membership of the Board
of Directors. On August 16, 2001, Ranger reduced its slate of nominees from
ten persons to four persons and such four nominees, if elected, would have
constituted a minority of the membership of the Board of Directors. At the
2001 Annual Meeting, the ten nominees of Computer Associates' Board of
Directors were elected for a term of one year; none of Ranger's four
nominees were elected as directors of Computer Associates.
Following the 2001 Annual Meeting, Ranger continued to monitor the
financial and stock market performance of Computer Associates, as well as
its adherence to the various corporate governance principles advocated by
Ranger during the course of the 2001 Proxy Contest. Between September 2001
and March 2002, Ranger grew increasingly concerned as Computer Associates'
financial performance and stock price continued to deteriorate. It is
Ranger's belief that Computer Associates' senior management and Board of
Directors have failed to adequately address the financial and governance
issues raised during the 2001 Proxy Contest. As a result, Ranger has no
confidence in the willingness or ability of Computer Associates' current
senior management and Board of Directors to implement changes that Ranger
believes are necessary to improve Computer Associates' financial
performance and increase stockholder value.
On March 25, 2002, Ranger sent a letter to the directors of
Computer Associates. The letter stated that Ranger believes Computer
Associates needs a new senior management team and requested that the Board
of Directors replace Chairman Charles B. Wang, President and Chief
Executive Officer Sanjay Kumar and Chief Financial Officer Ira H. Zar. The
letter also stated Ranger's belief that a change in Computer Associates'
corporate culture would be beneficial and that Computer Associates would
thrive under a new, highly qualified and well-respected Chief Executive
Officer.
Ranger's letter further cited its belief that while Computer
Associates had made certain changes in its corporate governance following
the 2001 Proxy Contest, much remains to be done. For example, Ranger noted,
while Computer Associates had revised its "poison pill" in certain
respects, it had not eliminated the "poison pill." The letter concluded
with a request that Computer Associates' independent directors meet with
Ranger to discuss Ranger's view that Messrs. Wang, Kumar and Zar be removed
from their respective offices by the Board of Directors.
On April 11, 2002, Computer Associates' independent directors sent
a letter to Ranger which, among other things, rejected Ranger's request for
a meeting to discuss the removal of Messrs. Wang, Kumar and Zar, and stated
that "those officers continue to enjoy our full confidence ..."
On June 27, 2002, Ranger publicly announced its intention to
commence a proxy solicitation to elect the Ranger Nominees to the Board of
Directors at the 2002 Annual Meeting, and on the same date Ranger furnished
a written notice to the Company of its intention to nominate the Ranger
Nominees in accordance with certain provisions of Computer Associates'
by-laws, as amended (the "By-laws").
It is Ranger's strongly held belief that directors must be held
accountable for poor performance by corporate management, and Ranger
believes that Computer Associates' management has performed poorly. Ranger
believes that one of the most important responsibilities of a board of
directors of a public company is to select a well-qualified senior
management team. In failing to replace Messrs. Wang, Kumar and Zar, Ranger
believes that the Board of Directors has not lived up to that responsibility.
Ranger believes that the election of the Ranger Nominees to the
Board of Directors will add individuals with significant software-specific
industry and corporate governance experience. Ranger also believes the
Ranger Nominees have the skills and conviction to evaluate management
performance and would be capable of assisting with the selection of highly
qualified senior executives to replace Messrs. Wang, Kumar and Zar if the
Board of Directors determines to replace them. Ranger believes the
replacement of the Company's senior management is necessary in order to
begin implementing specific programs designed to stem the downward trend of
Computer Associates' stock price.
Ranger believes that prompt and decisive action is needed to
increase investor confidence in Computer Associates and that the quickest
and surest way to increase investor confidence is to bring in a new,
well-qualified and highly-respected senior management team. As evidence of
what it believes to be an increasing lack of confidence in the current
senior management team, Ranger cites the following:
o Since August 29, 2001, the date of the 2001 Annual Meeting,
Computer Associates' stock price has dropped from $32.00 on
that date to $16.00 on June 26, 2002 - a decrease of 50% in
ten months. During the same period of time, the S&P 500 Index
decreased by only 15%.
o Since January 26, 2000, the date when the stock closed at a
high of $74.56, the price has fallen to $16.00 as of June 26,
2002 - a decrease of 78% in two and one-half years.
o Revenues have eroded, decreasing from $6.09 billion in fiscal
2000, to $4.19 billion in fiscal 2001, to $2.96 billion in
the recently completed fiscal 2002 - a decrease of $3.13
billion or more than 51% in two years.
o Basic earnings (loss) per Share worsened during the same
two-year period from earnings of $1.29 in fiscal 2000, to a
loss of ($1.02) in fiscal 2001, to an even greater loss of
($1.91) in fiscal 2002.
o In March 2002, Computer Associates debt rating was downgraded
by Moody's to two notches above "junk" bond status, and in
February 2002, Standard & Poor's revised its rating outlook
on the Company from stable to negative.
As discussed above, the Ranger Nominees, if elected, would
constitute a minority of the directors serving on the Board of Directors
and, by themselves, would not be able to cause any action to be taken or
not be taken by the Board of Directors.
In addition to the removal of the senior officers of Computer
Associates identified above, the Ranger Nominees, if elected, intend to
urge the Board of Directors to implement the following actions:
o Review all Computer Associates' accounting procedures and
policies in order to ensure the highest degree of credibility
and transparency.
o Review internal financial reporting systems, with the Chief
Financial Officer meeting regularly with, and being directly
accountable to, the independent Audit Committee of the Board
of Directors.
o Redeem the Company's "poison pill" in order to remove what
Ranger believes to be unnecessary impediments to third
parties who may wish to make an offer to acquire the Company.
o Form a strategic technical committee composed of research and
development and strategic managers for each of the Company's
business units (which are referred to by Computer Associates
as "brand units"), which would be chaired by the Chief
Technology Officer. This committee's focus would be to ensure
coordination among the business units, eliminate redundant
activity, review the development of strategic products and
the prospects for Company acquisitions, address issues of
integration and interoperability among products and
platforms, and monitor the Company's customer base for the
technology they need.
o Overhaul and improve customer support activities so that the
Company's support service for all customers is both
simplified and more comprehensive. There would be a single
point of contact for customers, and mechanisms for customers
to voice complaints would be strengthened. There would be
broader management contact directly with customers, with a
focus on customer needs and relationship building. Directors
would be urged to visit periodically with customers and
attend annual user conferences.
o Increase emphasis on sales objectives and rewards to enhance
product-line specialization and the leveraging of sales in
existing data centers, with the goal of returning the Company
to profitability by targeting selling opportunities to
customers where Computer Associates already has established
relationships with such customers.
o Reduce the Company's $3.8 billion of outstanding debt (as of
the end of its most recent fiscal year) in order to
strengthen its balance sheet and improve its liquidity.
RANGER URGES ALL COMPUTER ASSOCIATES STOCKHOLDERS TO VOTE "FOR" THE RANGER
NOMINEES BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD.
GENERAL
Proxy Information
As of the Record Date, Ranger was the holder of record and
beneficial owner of 100 Shares. In addition, Ranger is the owner of
currently exercisable options to purchase an aggregate of 1,478,925 Shares,
with 1,309,905 of such options having an exercise price of $25.08 per Share
and 169,020 of such options having an exercise price of $24.19 per Share.
Ranger is deemed to be the beneficial owner of the Shares issuable upon the
exercise of such options. The exercise prices of such options are
substantially in excess of the current market price of the Common Stock,
the closing price of which was $16.00 on June 26, 2002. The shares
beneficially owned by Ranger represent less than 1% of the Shares
outstanding and entitled to vote on the Record Date. Sam Wyly, through his
interest in Ranger, may be considered the beneficial owner of the Shares
and options to purchase Common Stock held by Ranger.
The shares of Common Stock represented by each WHITE proxy card
which is properly executed and returned to Ranger will be voted at the 2002
Annual Meeting in accordance with the instructions marked thereon. Executed
but unmarked WHITE proxy cards will be voted FOR the election of the five
Ranger Nominees (together with six nominees of the Computer Associates
Board of Directors), and will ABSTAIN with respect to the ratification of
KPMG LLP as the independent accountants of Computer Associates for the
fiscal year ending March 31, 2003. If any other matter properly comes
before the 2002 Annual Meeting, the named proxies will vote all proxies
granted to them in their sole discretion.
Proxy Revocation
Whether or not you plan to attend the 2002 Annual Meeting, Ranger
urges you to vote FOR the election of the Ranger Nominees by signing,
dating and returning the WHITE proxy card in the enclosed envelope. You can
do this even if you may have voted on the [COLOR] proxy card solicited by
the Board of Directors. It is only the latest dated proxy that counts.
Execution of a WHITE proxy card will not affect your right to
attend the 2002 Annual Meeting and to vote in person. Any stockholder
granting a proxy (including a proxy given to Computer Associates) may
revoke it at any time before it is voted by (i) submitting a duly executed
new proxy bearing a later date, (ii) attending and voting at the 2002
Annual Meeting in person, or (iii) at any time before a previously executed
proxy is voted, giving written notice of revocation either to Ranger c/o
Morrow & Co, Inc., 445 Park Avenue, New York, New York 10022, or to
Computer Associates International, Inc., One Computer Associates Plaza,
Islandia, New York 11749, Attention: Corporate Secretary. Merely attending
the 2002 Annual Meeting without voting at the 2002 Annual Meeting will not
revoke any previous proxy which has been duly executed by you.
QUORUM AND VOTING
Computer Associates will furnish stockholders with a definitive
proxy statement (the "Management Proxy Statement") in connection with the
Board of Directors' solicitation of proxies at the 2002 Annual Meeting.
Information concerning the number of shares of Common Stock outstanding and
entitled to vote on the Record Date is required to be set forth in the
Management Proxy Statement and, in accordance with Rule 14a-5 (c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), reference
is made to the Management Proxy Statement for such information. Only
stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote on matters that come before the 2002
Annual Meeting.
According to the By-laws, the presence in person or by proxy of
the holders of a majority of the outstanding shares of Common Stock
entitled to vote at the 2002 Annual Meeting is necessary to constitute a
quorum at the 2002 Annual Meeting.
According to the Management Preliminary Proxy Statement, directors
will be elected by a plurality of votes cast by stockholders at the 2002
Annual Meeting. Votes not cast at the 2002 Annual Meeting because of broker
non-votes will be included for purposes of determining the presence of a
quorum, but will not be considered in connection with determining the
outcome of the election of directors. Computer Associates does not provide
for cumulative voting in the election of directors.
There are five Ranger Nominees standing for election to the Board
of Directors. According to the Management Preliminary Proxy Statement,
eleven directors will be elected at the 2002 Annual Meeting, and the Board
of Directors has designated eleven nominees to stand for election (the
"Computer Associates Nominees").
Accordingly, there will be sixteen nominees (five Ranger Nominees
and eleven Computer Associates Nominees) for eleven director positions on
the Board of Directors. Under Computer Associates' plurality voting
provisions, the eleven nominees who receive the greatest number of votes
will be elected. Stockholders who vote on the WHITE proxy card furnished by
Ranger will be able to vote for the five Ranger Nominees and, as discussed
below, also will be able to vote for six Computer Associates Nominees,
constituting a full slate of eleven persons. There is no assurance that any
of the Computer Associates Nominees will serve on the Board of Directors if
any of the Ranger Nominees are elected. Stockholders who use Computer
Associates' [COLOR] proxy card will not be able to vote for any of the
Ranger Nominees. Accordingly, any stockholder who wishes to vote for the
Ranger Nominees should vote on Ranger's WHITE proxy card.
The eleven Computer Associates Nominees are identified in the
Management Proxy Statement. The five Computer Associates Nominees with
respect to whom Ranger is not seeking authority to vote and who may not be
voted for on Ranger's WHITE proxy card are Russell M. Artzt, Alfonse M.
D'Amato, Willem F.P. de Vogel, Sanjay Kumar and Charles B. Wang. Any
stockholder who wishes to vote for one or more of the Ranger Nominees and
for one or more of Messrs. Artzt, D'Amato, de Vogel, Kumar and Wang will be
unable to do so on either Ranger's WHITE proxy card or Computer Associates'
[COLOR] proxy card, and may only do so by voting by ballot at the 2002
Annual Meeting. Stockholders should refer to the Management Proxy Statement
for information concerning the Computer Associates Nominees.
In addition to the five Computer Associates Nominees identified
above, there are six other Computer Associates Nominees. Ranger is not
opposing the election of such six other Computer Associates Nominees and
intends to use the WHITE proxy card to vote for their election.
Stockholders who use the WHITE proxy card may withhold authority to vote
for any of the five Ranger Nominees or any of the six Computer Associates
Nominees that Ranger will vote for by writing the name of that nominee in
the indicated space on the WHITE proxy card.
Required information concerning the necessary vote to approve the
other matters being voted upon at the 2002 Annual Meeting and the effects,
if any, of abstentions and broker non-votes on such other matters, will be
set forth in the Management Proxy Statement and, in accordance with Rule
14a-5 (c) under the Exchange Act, reference is made to the Management Proxy
Statement for such information.
ELECTION OF DIRECTORS
Ranger is soliciting proxies in support of the election to the
Board of Directors of the following five Ranger Nominees for a one-year
term expiring at the 2003 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualify: Richard J. Agnich, Max
D. Hopper, Stephen R. Perkins, Ronald J. Robinson and Cece Smith.
The By-laws provide that there shall be three or more directors,
with the number of directors to be fixed from time to time by resolution of
the Board of Directors. The Board of Directors is currently comprised of
eleven directors, and eleven directors will be elected at the 2002 Annual
Meeting. In accordance with the By-laws, Ranger has provided written notice
to Computer Associates of its intent to nominate the Ranger Nominees for
election as directors at the 2002 Annual Meeting. Ranger has nominated the
Ranger Nominees to fill five of the eleven available seats on the Board of
Directors.
Each of the Ranger Nominees has consented to serve as a Ranger
Nominee and to serve as a director of Computer Associates, if elected. If
any Ranger Nominee is unable to serve or otherwise unavailable to stand for
election as a director at the 2002 Annual Meeting, Ranger intends to
nominate a replacement nominee for election. Should one or more replacement
nominees be required, the named proxies will exercise their discretionary
authority to vote for any replacement nominee selected by Ranger.
If the Ranger Nominees are elected to the Board of Directors, the
Ranger Nominees would constitute only five of the eleven members serving on
the Board of Directors. Since the By-laws provide that action by the Board
of Directors requires a majority vote of the directors present at a meeting
at which a quorum is present, the five Ranger Nominees, by themselves,
ordinarily would not be able to cause any action to be taken or not taken
by the Board of Directors (unless fewer than ten directors are present at a
meeting of the Board of Directors, and the Ranger Nominees present at such
meeting constitute a majority of all directors present at such meeting).
Nevertheless, the five Ranger Nominees may, because of their different
backgrounds and expertise, be able to inform and persuade other directors
sufficiently to cause the Board of Directors to take or not take various
actions.
THE RANGER NOMINEES
Set forth below are the names and addresses of, and certain
biographical information relating to, the five Ranger Nominees:
Employment History or Present
Name, Business Principal Occupation and
Address and Age Five-Year Employment History
--------------- ----------------------------
Richard J. Agnich...............58 Since April 2000, Mr. Agnich has managed personal investments through
8525 Ferndale Road the Agnich Partners, Ltd. Family Limited Partnership. From 1988 until
Dallas, TX 75238 2000, he served as Senior Vice President, Secretary and
General Counsel of Texas Instruments, Incorporated. Mr. Agnich
advised the Texas Instruments' Board on governance issues, and
in 2000 the Texas Instruments' Board was the winner of the
CalPERS award for dedication to shareowner interests,
advancement of good corporate governance practices and
corporate financial performance. During his career at Texas
Instruments, Mr. Agnich was responsible for Texas Instruments'
intellectual property and licensing programs as well as
general legal matters important to a global technology firm.
Mr. Agnich also had responsibility for Security and Human
Resources and served on Texas Instruments' Strategy Leadership
Team. He currently serves as a member of the Board of Trustees
of Austin College and on the Board of Directors of ST Assembly
and Test Services, Ltd. He is also currently an advisor to
start-up companies in Texas and California and Chairman of the
Entrepreneurs Foundation of North Texas.
Max D. Hopper...................67 Mr. Hopper is currently President of Max D. Hopper Associates Inc., a
1950 Stemmons Freeway Dallas-based consulting firm specializing in strategic uses for
Suite 5001 advanced information technologies, which he founded in January 1995.
Dallas, TX 75206 Mr. Hopper served as Chairman of The SABRE Group Holdings, Inc. from
1993 to 1995, which was subsequently spun off from AMR Corp. From
1985 to 1993, Mr. Hopper was the Senior Vice President of Information
Systems at American Airlines, Inc. and was responsible for the
formation of The SABRE Group. He currently serves on the Boards of
Directors of the Gartner Group, Accrue Software, Inc., Metrocall,
Inc., United Stationers, Inc. and Exodus Communications, Inc.
Stephen R. Perkins..............58 Mr. Perkins has been a Managing Director of Ranger since June 2001 and
Ranger Governance, Ltd. was appointed President of Ranger and President of Ranger Governance
300 Crescent Court in June 2002. He also has been the Chief Executive Officer of
Suite 1000 Transfinity Corp. since November 2001 and has done consulting work
Dallas, TX 75201 since March 2001. Until March 2001, Mr. Perkins was Executive Vice
President and Communications Software Group President of Sterling
Commerce Inc., an industry leader in business-to-business
e-commerce and a unit of SBC Communications. During his
seven-year tenure at Sterling Commerce, he grew a division from
revenues of $35 million and 150 domestic employees to one with
revenues of $200 million and 1,000 employees worldwide and
transitioned that division through a spin-off from Sterling
Software and a subsequent acquisition. He also spent 16 years at
University Computing Company, where he was part of a team that
created the first system software package ever commercially sold
to the information technology industry.
Ronald J. Robinson.........,,...56 Since November 2001, Dr. Robinson has been Professor and Department
Texas A&M University Head of the Harold Vance Department of Petroleum Engineering at Texas
College of Engineering A&M University and holder of the Albert B. Stevens Endowed Chair in
301 Wisenbaker Petroleum Engineering. Prior to this appointment, Dr. Robinson held a
College Station, TX 77843 number of positions at Texaco until his retirement in October 2001,
including General Manager, Exploration and Production Technology
Department and President of Texaco's Technology Division from 1996
until his retirement. Dr. Robinson also has been President and CEO of
UniPure Corporation since September 2001 and President and CEO of
RealTime Learning, LLC since 1999. Dr. Robinson currently serves on
the Boards of Directors of Ensyn Inc., Global Petroleum Research
Institute, Network of Excellence in Training (NExT), ProSavvy.com,
RealTime Learning, LLC, UniPure Corporation and is Chairman of the
Board of Directors of Verdisys Inc. Dr. Robinson has been
distinguished as a NASA Fellow and has earned numerous professional
awards.
Cece Smith......................57 Since 1986, Ms. Smith has been a general partner of Phillips-Smith-Machens
Phillips-Smith-Machens Venture Partners, a venture capital investment firm that specializes
Venture Partners in retail and consumer investments. She currently serves as a director
5080 Spectrum Drive of Brinker International, Inc. and Beautyco, Inc. She previously served
Suite 805 West as a director of A Pea in the Pod, Inc., BizMart, Inc., Cheap Tickets, Inc.
Addison, TX 75001 and Hot Topic, Inc. Prior to starting Phillips-Smith, Ms. Smith
was Executive Vice President - Finance and Administration of
Pearle Health Services, Inc., a retail optical chain. Ms. Smith
served as a director from 1992 to 1997 and as Chairman from 1994
to 1996 of the Federal Reserve Bank of Dallas. She is also a CPA.
Except for Mr. Perkins who is a joint, beneficial owner of 1,000
Shares with his wife, none of the Ranger Nominees own any Shares (except
insofar as any Ranger Nominee may be deemed to have beneficial ownership of
the Shares beneficially owned by Ranger pursuant to the letter agreements
described below). As discussed below, each Ranger Nominee has an economic
interest in 20,000 options to purchase shares of Common Stock.
Each Ranger Nominee has entered into a letter agreement with
Ranger that provides that Ranger will indemnify and hold harmless the
Ranger Nominee from any and all liabilities, losses, claims, damages and
out-of-pocket expenses (including reasonable attorneys' fees and expenses)
(collectively, "Losses") based upon or arising out of the solicitation of
proxies by Ranger from Computer Associates' stockholders and the
willingness of the Ranger Nominee to stand for election as a director of
Computer Associates, except to the extent that any such Losses (i) may
arise out of inaccurate written information supplied by the Ranger Nominee
in connection with Ranger's solicitation of proxies or (ii) are found in a
final judgment by a court, not subject to further appeal, to have resulted
from bad faith, willful misconduct or gross negligence on the part of the
Ranger Nominee.
Each letter agreement also provides that Ranger will grant to each
Ranger Nominee an economic interest in 20,000 options to purchase Computer
Associates Common Stock presently held by Ranger (the "Options"). The
Options expire on October 6, 2006 and have an exercise price of $25.08 per
Share. Ranger will pay each Ranger Nominee, whether or not the Ranger
Nominee is elected to the Board of Directors, an amount equal to the
excess, if any, of the market price of the Common Stock over the exercise
price of the Options, as determined on the earlier of (i) October 6, 2006
and (ii) the date Ranger has exercised an aggregate of at least 140,000
Options after the date of such letter agreements. The $25.08 exercise price
of the Options is substantially in excess of the current market price of
Common Stock, the closing price of which was $16.00 on June 26, 2002, and
there will be no economic value in the Option interests granted by Ranger
to the Ranger Nominees unless the market value of the Common Stock exceeds
the exercise price on the payment date described above. In addition, each
letter agreement provides that Ranger shall pay to each Ranger Nominee,
whether or not the Ranger Nominee is elected to the Board of Directors, the
sum of $20,000 for serving as a Ranger Nominee.
Each of the Ranger Nominees, if elected, will be entitled to
receive compensation customarily paid by Computer Associates to its
independent directors, which is described in the Management Proxy
Statement.
Ranger reserves the right to nominate substitute persons as Ranger
Nominees if Computer Associates makes or announces any changes to the
By-laws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying any of the Ranger Nominees. In
addition, if Computer Associates causes any additional directorships to be
voted upon at the 2002 Annual Meeting, Ranger reserves the right to
nominate additional persons to fill the added positions. Shares represented
by Ranger's WHITE proxy cards will be voted for any such substitute or
additional nominees of Ranger.
OTHER MATTERS TO BE VOTED UPON
In addition to electing directors, stockholders will be asked at
the 2002 Annual Meeting to vote upon ratifying KPMG LLP as Computer
Associates' independent auditors for the fiscal year ending March 31, 2003.
Ranger does not make any recommendations regarding this matter. If
stockholders provide instructions regarding this matter on the enclosed
WHITE proxy card, Ranger will vote the Shares as directed; if no such
instructions are given, Shares represented by Ranger's WHITE proxy card
will abstain on this matter. Submitting a WHITE proxy card will entitle the
named proxies to vote your Shares in accordance with their sole discretion
on matters not described in this Proxy Statement that may arise at the 2002
Annual Meeting.
SOLICITATION OF PROXIES; EXPENSES
The total cost of this proxy solicitation (including fees of
attorneys, financial advisors, proxy solicitors and printing and mailing
expenses) will be borne by Ranger, and is estimated to be approximately
$________. Approximately $________ of such costs have been incurred to
date. Ranger will not seek reimbursement from Computer Associates for the
costs of this proxy solicitation.
Proxies may be solicited by mail, telephone, telefax, telegraph,
Internet, e-mail and in person. Officers and certain employees of Ranger
and its affiliates and the other participants listed on Annex A hereto, may
assist in the solicitation of proxies without any additional remuneration.
Ranger has retained Morrow & Co., Inc. ("Morrow") for solicitation
and advisory services in connection with the solicitation of proxies
relating to the 2002 Annual Meeting, for which Morrow will receive a fee of
up to $_____, plus reimbursement of reasonable out-of-pocket expenses.
Morrow will utilize approximately ___ people to solicit proxies from
Computer Associates stockholders.
CERTAIN INFORMATION ABOUT THE PARTICIPANTS
Ranger, Ranger Governance, the Ranger Nominees, Sam Wyly, a
limited partner of Ranger and manager of Ranger Governance, and certain
other persons identified in Annex A are participants (collectively, the
"Participants," and each, a "Participant") in Ranger's solicitation of
proxies for the 2002 Annual Meeting within the meaning of the federal
securities laws. Information in this Proxy Statement and in Annex A about
each Participant was provided by that Participant.
OTHER INFORMATION
Except for the election of directors to the Board of Directors and
the ratification of the selection of KPMG LLP as the independent
accountants for the fiscal year ending March 31, 2003, Ranger is not aware
of any other matter to be presented for consideration at the 2002 Annual
Meeting. However, if any other matter properly comes before the 2002 Annual
Meeting, the persons named as proxies by Ranger will exercise their
discretionary authority to vote on such matters in accordance with their
best judgment.
The Management Proxy Statement is required to set forth
information regarding (a) the beneficial ownership of Shares by (i) any
person known to Computer Associates to beneficially own more than 5% of any
class of voting securities of Computer Associates, (ii) each director and
nominee, and certain executive officers of Computer Associates, and (iii)
all directors and executive officers of Computer Associates as a group, (b)
information concerning Computer Associates' directors and management,
including information relating to management compensation and (c)
information concerning the procedures for submitting stockholder proposals
for consideration at Computer Associates' 2003 Annual Meeting of
Stockholders. Reference is hereby made to such information which, to the
extent it may be deemed required, is incorporated herein pursuant to Rule
14a-5 (c) under the Exchange Act
Dated: July __, 2002
If you have any questions or need any assistance in voting your
Shares, please contact Morrow & Co., Inc., the firm assisting Ranger in its
solicitation of proxies:
MORROW & CO., INC.,
445 Park Avenue
New York, New York 10022
Banks and Brokers Call Collect: (212) 754-8000
All Others Call Toll-Free: (800) 607-0088
Annex A
INFORMATION CONCERNING PERSONS WHO MAY BE PARTICIPANTS
IN RANGER'S SOLICITATION OF PROXIES
The following sets forth the name and the present principal
occupation or employment, and the name and principal business address of
any corporation or other organization in which such employment is carried
on, of persons who may be deemed to be Participants on behalf of Ranger in
the solicitation of proxies from stockholders of Computer Associates.
Nominees of Ranger for Election to the Board of Directors of Computer Associates
The business address and present principal occupation or employment
of each of the Ranger Nominees listed below is set forth in the Proxy
Statement under the heading "THE RANGER NOMINEES."
Name
----
o Richard J. Agnich
o Max D. Hopper
o Stephen R. Perkins
o Ronald J. Robinson
o Cece Smith
Ranger
Ranger is a Texas limited partnership that originally was formed to
conduct the 2001 Proxy Contest and other activities related to good corporate
governance. Ranger's principal place of business is: 300 Crescent Court,
Suite 1000, Dallas, Texas 75201. The sole officer of Ranger is identified
below. His business address is: Ranger Governance, Ltd., 300 Crescent Court,
Suite 1000, Dallas, Texas 75201.
Name Position
---- --------
Stephen R. Perkins...................... Managing Director and President
Ranger Governance
Ranger Governance is the general partner of Ranger. Ranger
Governance's principal place of business is: Ranger GP Governance, L.L.C.,
300 Crescent Court, Suite 1000, Dallas, Texas 75201. The officers of Ranger
Governance are identified below. Their business address is: Ranger GP
Governance, L.L.C., 300 Crescent Court, Suite 1000, Dallas, Texas 75201.
Name Position
---- --------
Stephen R. Perkins...................... President
Sam Wyly................................ Manager
Sam Wyly
Sam Wyly's principal occupation is manager of Ranger Governance. Mr.
Wyly's business address is: Ranger GP Governance, L.L.C., 300 Crescent Court,
Suite 1000, Dallas, Texas 75201.
Charles I. Frumberg
Ranger is retaining Charles I. Frumberg as an advisor in connection
with Ranger's solicitation of proxies at a fee of $30,000 per month. Mr.
Frumberg's principal occupation is private investing. His business address
is: c/o Ranger GP Governance, L.L.C., 300 Crescent Court, Suite 1000, Dallas,
Texas 75201.
Shares Held by Participants
The Participants and their associates may be deemed to have
beneficial ownership of Common Stock as set forth below:
Amount of Beneficial Ownership Percent of
Name Through Options and Otherwise Class
--------------------- ------------------------------ ------------
Ranger 1,479,025 (1) *
Ranger Governance 1,479,025 (2) *
Richard J. Agnich 20,000 (3) *
Charles I. Frumberg 0 -
Max D. Hopper 20,000 (3) *
Stephen R. Perkins 21,000 (3)(4) *
Ronald J. Robinson 20,000 (3) *
Cece Smith 20,000 (3) *
Sam Wyly 1,479,025 (5) *
________________
(*) Represents less than 1% of the outstanding shares of Common Stock.
(1) Ranger is the record and beneficial owner of 100 Shares. Ranger also
holds options to purchase 169,020 Shares having an exercise price of $24.19
per Share and options to purchase 1,309,905 Shares having an exercise price
of $25.08 per Share. Ranger has sole, direct beneficial ownership of such
Shares and options. It exercises sole voting and investment power with
respect to such Shares and exercises sole investment power with respect to
such options. If such options are exercised, Ranger would have sole voting
power with respect to the Shares purchased upon exercise of such options.
(2) Ranger Governance, as the sole general partner of Ranger, has
indirect beneficial ownership of the shares of Common Stock beneficially
owned by Ranger and exercises the same voting and investment powers as
Ranger.
(3) Each of the Ranger Nominees has an economic interest in 20,000 of
the options owned by Ranger resulting from the letter agreement entered
into between Ranger and each of the Ranger Nominees. The letter agreement
is described in the Proxy Statement under the heading "THE RANGER
NOMINEES."
(4) Includes 1,000 Shares owned jointly by Stephen R. Perkins and his wife.
(5) Represents Shares beneficially owned by Ranger. Ranger's sole
general partner is Ranger Governance, of which Sam Wyly is the sole member
and the manager. As a result, Sam Wyly has indirect beneficial ownership of
the shares of Common Stock beneficially owned by Ranger and exercises the
same voting and investment powers as Ranger.
Transactions in Computer Associates Securities Involving Participants
Other than the transactions described below, no Participant has
purchased or sold any securities of Computer Associates in the past two years.
Transactions in Computer Associates Common Stock by Ranger
Number of Shares of Computer
Date of Transaction Nature of Transaction Associates Common Stock
------------------- --------------------- ---------------------------
June 15, 2001 Purchase 100 (1)
June 20, 2001 Capital Contribution 507,060 (2)
June 20, 2001 Capital Contribution 971,865 (3)
_______________
(1) In June 2002, such 100 Shares were transferred from a brokerage
account to Ranger as the record holder.
(2) Represents the contribution on June 20, 2001 to Ranger by Stargate,
Ltd., a limited partnership, of vested options to purchase shares of Common
Stock. The Charles J. Wyly, Jr. and Caroline D. Wyly Revocable Trust is the
general partner of Stargate, Ltd. Charles J. Wyly, who is the brother of Sam
Wyly, is a co-trustee of The Charles J. Wyly, Jr. and Caroline D. Wyly
Revocable Trust.
(3) Represents the contribution on June 20, 2001 to Ranger by Sam Wyly
of vested options to purchase shares of Common Stock.
Transactions in Computer Associates Common Stock by Stephen R. Perkins
Nature Number of Shares of Computer
Date of Transaction of Transaction Associates Common Stock
------------------- --------------- -------------------------------
February 28, 2002 Purchase 1,000 (1)
________________
(1) Represents Shares purchased and held jointly by Stephen R. Perkins
and his wife.
Transactions in Computer Associates Common Stock by Sam Wyly
Nature Number of Shares of Computer
Date of Transaction of Transaction Associates Common Stock
------------------- ---------------------- ----------------------------
June 20, 2001 Capital Contribution 971,865 (1)
_______________
(1) Represents the contribution on June 20, 2001 to Ranger by Sam Wyly
of vested options to purchase shares of Common Stock.
Miscellaneous Information Concerning the Participants
Tallulah, Ltd. ("Tallulah"), of which Sam Wyly is the general
partner and holds 97% of the limited partnership interests, entered into a
sublease with Computer Associates on April 1, 2000, pursuant to which
Tallulah agreed to lease office space from Computer Associates for $572,052
per year. The agreement was amended on October 8, 2000 to add additional
office space, increasing the rent to $1,004,414 per year. The lease expires
on July 30, 2006.
Except as described in this Annex A or in the Proxy Statement, no
Participant nor any of their respective associates or affiliates (together,
the "Participant Affiliates"), is either a party to any transaction or
series of transactions since April 1, 2001, or has knowledge of any
currently proposed transaction or series of proposed transactions, (i) to
which Computer Associates or any of its subsidiaries was or is to be a
party, (ii) in which the amount involved exceeds $60,000, and (iii) in
which any Participant or Participant Affiliate had, or will have, a direct
or indirect material interest. Furthermore, except as described in this
Annex A or in the Proxy Statement, no Participant or Participant Affiliate
(i) directly or indirectly beneficially owns any securities of Computer
Associates or any securities of any subsidiary of Computer Associates, or
(ii) has had any relationship with Computer Associates in any capacity
other than as a stockholder.
Except as described in this Annex A or in the Proxy Statement, no
Participant or Participant Affiliate has entered into any agreement or
understanding with any person respecting any future employment by Computer
Associates or any of its affiliates or any future transactions to which
Computer Associates or any of its affiliates will or may be a party. Except
as described in this Annex A or in the Proxy Statement, there are no
contracts, arrangements or understandings by any Participant or Participant
Affiliate within the past year with any person with respect to any
securities of Computer Associates.
WHITE PROXY CARD
SOLICITED BY RANGER GOVERNANCE, LTD. IN OPPOSITION
TO THE BOARD OF DIRECTORS OF
COMPUTER ASSOCIATES INTERNATIONAL, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
AUGUST 28, 2002 AT _____ A.M.
The undersigned stockholder of Computer Associates International,
Inc. (the "Company") hereby appoints Stephen R. Perkins and _____________,
and each of them, as attorneys and proxies, each with full power of
substitution and revocation, to represent the undersigned at the Annual
Meeting of Stockholders of Computer Associates International, Inc. to be
held on August 28, 2002, and at any adjournment, postponement, continuation
or rescheduling thereof, with authority to vote all shares of common stock,
par value $.10 per share, of the Company held or owned by the undersigned
in accordance with the directions indicated herein.
This Proxy will be voted as directed, but if no direction is
indicated, it will be voted FOR the election of the nominees listed in Item
1a and FOR the election of the Company's nominees whose names are not
listed in Item 1b, and will abstain on Item 2. If any other matter properly
comes before the meeting or any adjournments, postponements, continuations
or reschedulings thereof, the named proxy holders will vote this proxy in
their discretion on such matter.
RANGER GOVERNANCE, LTD. RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED
BELOW.
1. Election of Directors
a. Ranger Nominees:
[ ] FOR All nominees listed below: [ ] WITHHOLD AUTHORITY to vote
for all nominees listed
below:
Richard J. Agnich, Max D. Hopper,
Stephen R. Perkins, Ronald J. Robinson
and Cece Smith
To withhold authority to vote for any individual nominee identified above,
check the "FOR" box and write that nominee's name on the line provided
below:
________________________________
b. Company Nominees:
The Company is nominating eleven people to serve as directors. Ranger
Governance, Ltd. intends to use this proxy to vote FOR six of the
individuals nominated by the Company and not for the other five nominees of
the Company whose names are listed below. You may withhold authority to
vote for the six nominees of the Company not listed on this proxy, by
writing the name of such nominee below. You should refer to the Company's
Proxy Statement for the names, backgrounds, qualifications and other
information concerning the Company's nominees. There is no assurance that
any of the Company's nominees will serve as directors if any of the Ranger
Nominees are elected to the Company's board of directors.
The Company's nominees with respect to whom Ranger Governance, Ltd. is NOT
seeking authority to vote for and WILL NOT exercise any such authority are:
Russell M. Artzt, Alfonse M. D'Amato, Willem F.P. de Vogel, Sanjay Kumar
and Charles B. Wang.
In order to withhold authority to vote for the election of a Company
nominee whose name is not listed above, write such nominee's name on the
line provided below:
________________________________
RANGER GOVERNANCE, LTD. MAKES NO RECOMMENDATION WITH RESPECT TO THE
RATIFICATION OF AUDITORS
2. Ratification of the appointment of KPMG LLP as the independent auditors of
the Company for the fiscal year ending March 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Date: _____________, 2002
____________________________________________________________
Signature (Please sign exactly as your name appears to the left)
____________________________________________________________
Additional Signature (if held jointly)
____________________________________________________________
Title of Authority
Please sign exactly as your name appears on this proxy. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.