As filed with the Securities and Exchange Commission on July 18, 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. 2)
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:
REVISED 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 July 16, 2002, the 2002 Annual
Meeting will be held on August 28, 2002 at 10:00 a.m., local time, at the
Wyndham Wind Watch Hotel, 1717 Motor Parkway, Islandia, New York, 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") and there
were outstanding and entitled to vote 578,101,483 shares of Common Stock as
of 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 $13.13 on July 15, 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 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, Sanjay Kumar, Charles B. Wang and Thomas H. Wyman. 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 OR VOTING INSTRUCTION FORM AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE PROMPTLY. PROPERLY VOTING THE ENCLOSED WHITE
PROXY CARD OR VOTING INSTRUCTION FORM WILL REVOKE ANY PROXY PREVIOUSLY
SIGNED BY YOU.
PLEASE DO NOT RETURN ANY PROXY CARD SENT TO YOU BY COMPUTER
ASSOCIATES. Even if you may have voted on Computer Associates' 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.
In March 2002, Ranger informed the directors of Computer
Associates that Ranger believes Computer Associates needs a new senior
management team, and Ranger 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. Ranger also informed the
Board of Directors of 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 further informed the Board of Directors that while Computer
Associates had made certain changes in its corporate governance following
the 2001 Proxy Contest, Ranger believes much remains to be done. For
example, Ranger cited the fact that, while Computer Associates had revised
its "poison pill" in certain respects, it had not eliminated the "poison
pill." Ranger requested 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:
[ ] Since August 29, 2001, the date of the 2001 Annual Meeting,
Computer Associates' stock price has dropped from $32.00 on
that date to $13.13 on July 15, 2002 - a decrease of
approximately 59% in less than eleven months.
[ ] Computer Associates' stock during its most recent fiscal year
ended March 31, 2002 substantially underperformed the S&P
Systems Software Index and the S&P 500 Index. During this
period, Computer Associates' total return was negative
(20)% while the S&P Systems Software returned a positive 4%
and the total return on the S&P 500 Index remained unchanged.
[ ] From March 31, 2002 through July 15, 2002, Computer
Associates' stock fell 38%, again underperforming the S&P 500
Index which was down 20% and the S&P Systems Software Index
which fell 18% during the same period.
[ ] Since January 26, 2000, the date when the stock closed at a
high of $74.56, the price has fallen to $13.13 as of July 15,
2002 - a decrease of 82% in two and one-half years.
[ ] Computer Associates has reported in its public filings
revenues and basic earnings (loss) per Share for its last
three fiscal years as follows:
Fiscal Year Ended March 31,
--------------------------
2000 2001 2002
---- ---- ----
Revenues $6.09 billion $4.19 billion $2.96 billion
Basic Earnings (Loss) $1.29 ($1.02) ($1.91)
Per Share
Computer Associates attributes this dramatic reduction in
revenues and basic earnings per share primarily to changes in
its revenue recognition policies under its "new Business
Model" adopted in December 2000.(1) Ranger believes that the
adoption by Computer Associates of its "new Business Model"
makes a comparison of its recent reported financial results
to those of prior years very difficult without resort to
Computer Associates' unaudited, supplemental "pro forma"
financial statements. In Ranger's view, this significantly
detracts from the transparency of Computer Associates'
financial statements, and makes it difficult to ascertain the
growth or decline in Computer Associates' underlying business.
__________________
(1) Information as to Computer Associates' revenue and basic earnings
(loss) per share for its fiscal years ended March 31, 2000, 2001
and 2002, is taken from the Computer Associates and Subsidiaries
Consolidated Statements of Operations appearing in Computer
Associates' Annual Report on Form 10-K for the fiscal year ended
March 31, 2002 (the "2002 Form 10-K"). Reference is made to Note 1
of Computer Associates' audited financial statements included in
the 2002 Form 10-K for a description of Computer Associates'
significant accounting policies, including its revenue recognition
policies, and the changes made to its revenue recognition policies
when Computer Associates adopted what it refers to as its "new
Business Model" in December 2000. According to Computer
Associates, contracts entered into in connection with the new
Business Model result in less current recognized revenue than
under the former model, although Computer Associates' recognized
revenue over the life of an individual contract would be the same.
In order "to provide comparable financial results," the 2002 Form
10-K contains pro forma financial information in the Management's
Discussion and Analysis section. The pro forma results of
operations adjust historical prior period revenue recorded under
the old business model to revenue recognized under the new
Business Model.
[ ] 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. Moreover, as discussed more fully
below under the heading "ELECTION OF DIRECTORS," the Ranger Nominees, if
elected, will owe fiduciary duties to the stockholders of Computer
Associates, and not to Ranger or to any other person or entity.
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:
[ ] Review all Computer Associates' accounting procedures and
policies in order to ensure the highest degree of credibility
and transparency.
[ ] 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.
[ ] 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.
[ ] Oversee the creation of a consistent long-term market
strategy. This market strategy would be supported by a
newly-formed 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.
[ ] 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.
[ ] 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.
[ ] Reduce the Company's $3.8 billion of outstanding debt (as of
the end of its most recent fiscal year as reported in the
2002 Form 10-K) in order to strengthen its balance sheet and
improve its liquidity. The Ranger Nominees expect to request
the Board of Directors to consider a variety of measures
typically employed by corporations to reduce debt, including,
but not limited to, disposing of non-strategic/non-core
assets, disposing of non-strategic/non-core products, and
utilizing excess working capital, including the scheduled
liquidation of installment accounts receivable.
Ranger believes that the above actions, if implemented, would be
of benefit to Computer Associates and its stockholders. In particular,
Ranger believes that such actions may increase investor confidence in the
Company's financial reporting procedures, better integrate and coordinate
the Company's portfolio of products, refocus and improve the Company's
sales efforts, and strengthen the Company's balance sheet. Ranger believes
the Company's poison pill creates an obstacle to enhancing stockholder
value by discouraging potential purchasers of the Company. Ranger believes
the poison pill places too much discretion in the hands of the Company's
directors and may possibly be used by directors to entrench themselves and
management in office instead of maximizing stockholder wealth. There may be
certain disadvantages in removing the Company's poison pill. Namely, if the
poison pill remains in place it could discourage, delay or prevent a
takeover or change of control of the Company, or could prevent a sudden
shift in corporate policy and contribute to the stability of the Company's
corporate governance. However, as discussed above, Ranger believes that the
removal of the poison pill is in the best interests of the Company's
stockholders.
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 $13.13 on July 15, 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), FOR the approval of the Company's 2002 Incentive Plan,
FOR the approval of the Company's 2002 Compensation Plan for Non-Employee
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 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. According
to the Management Preliminary Proxy Statement, there were outstanding
578,101,483 shares of Common Stock as of the Record Date. 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' 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, Sanjay Kumar, Charles B. Wang and Thomas H. Wyman. Any stockholder
who wishes to vote for one or more of the Ranger Nominees and for one or
more of Messrs. Artzt, D'Amato, Kumar, Wang and Wyman will be unable to do
so on either Ranger's WHITE proxy card or Computer Associates' 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 by striking a line through the name of
that nominee and may withhold authority to vote for 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. On July 16, 2002, Computer Associates announced
that it had added four new directors to the Board. Accordingly, the Board
of Directors is currently comprised of fifteen directors. At the same time,
Computer Associates announced that four current directors will not stand
for reelection to the Board of Directors at the 2002 Annual Meeting. As a
result, 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 be named as a Ranger Nominee in this Proxy Statement, 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.
If elected, the Ranger Nominees will owe fiduciary duties to the
stockholders of Computer Associates, and not to Ranger or to any other
person or entity. The Ranger Nominees are committed to acting in the best
interests of Computer Associates' stockholders and, subject to their
fiduciary duties as directors of Computer Associates, will, to the extent
possible, attempt to persuade the Board of Directors to implement the
various matters discussed in this Proxy Statement under the heading
"BACKGROUND; REASONS FOR THE SOLICITATION." The implementation of such
matters would be subject to events and circumstances that the Ranger
Nominees may not currently be aware of, as well as events and circumstances
that have not yet occurred and cannot readily be predicted, such as (i)
actions of the Board of Directors not known to the Ranger Nominees, (ii)
the views of the Ranger Nominees, (iii) the views of officers and other key
employees of Computer Associates, (iv) developments in Computer Associates'
business, operations and financial performance, (v) changes in the U.S. and
global economies, debt and equity markets, and (vi) any future judicial
decisions or governmental actions regarding the business of Computer
Associates, the management of Computer Associates, or the Board of
Directors.
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
8525 Ferndale Road managed personal investments through
Dallas, TX 75238 the Agnich Partners, Ltd. Family
Limited Partnership. From 1988
until 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
1950 Stemmons Freeway of Max D. Hopper Associates Inc., a
Suite 5001 Dallas-based consulting firm
Dallas, TX 75206 specializing in strategic uses for
advanced information
technologies, which he founded
in January 1995. 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. and United
Stationers, Inc.
Stephen R. Perkins..............58 Mr. Perkins has been a Managing
Ranger Governance, Ltd. Director of Ranger since June 2001
300 Crescent Court and was appointed President of
Suite 1000 Ranger and President of Ranger
Dallas, TX 75201 Governance in June 2002. He also
has been the Chief Executive
Officer of Transfinity Corp.
since November 2001 and has done
consulting work 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
Texas A&M University has been Professor and Department
College of Engineering Head of the Harold Vance Department
301 Wisenbaker of Petroleum Engineering at Texas
College Station, TX 77843 A&M University and holder of the
Albert B. Stevens Endowed Chair
in Petroleum Engineering. Prior
to this appointment, Dr.
Robinson held a 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
Phillips-Smith-Machens general partner of Phillips-Smith-
Venture Partners Machens Venture Partners, a venture
5080 Spectrum Drive capital investment firm that
Suite 805 West specializes in retail and consumer
Addison, TX 75001 investments. She currently serves
as a director of Brinker
International, Inc. and
Beautyco, Inc. She previously
served as a director of A Pea in
the Pod, Inc., BizMart, Inc.,
Cheap Tickets, Inc. 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 $13.13 on July 15, 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 will be 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
At the 2002 Annual Meeting, in addition to electing directors, the
Company is asking stockholders to approve the Company's 2002 Incentive
Plan, to approve the Company's 2002 Compensation Plan for Non-Employee
Directors and to ratify the appointment of KPMG LLP as the Company's
independent auditors for the fiscal year ending March 31, 2003.
According to the Management Preliminary Proxy Statement, on June
21, 2002, the Compensation Committee of the Computer Associates' Board of
Directors approved, and the Board of Directors adopted, the 2002 Incentive
Plan effective as of April 1, 2002, subject to approval by the stockholders
of Computer Associates. According to the Management Preliminary Proxy
Statement, the 2002 Incentive Plan is intended to replace future awards
under the Company's 1994 Annual Incentive Compensation Plan and 2001 Stock
Option Plan.
In addition, according to the Management Preliminary Proxy
Statement, the 2002 Compensation Plan for Non-Employee Directors was
adopted by the Computer Associates Board of Directors effective as of July
1, 2002, subject to approval by the stockholders of Computer Associates.
According to the Management Preliminary Proxy Statement, the 2002
Compensation Plan for Non-Employee Directors is intended to replace the
Company's 1993 Stock Option Plan for Non-Employee Directors and the 1996
Deferred Stock Plan for Non-Employee Directors.
Ranger supports the principle of offering, subject to proper
administration by the Compensation Committee and the Board of Directors,
competitive equity incentive programs to employees and non-employee
directors and, as a result, supports the adoption of the 2002 Incentive
Plan and the 2002 Compensation Plan for all Non-Employee Directors.
Copies of the 2002 Incentive Plan and the 2002 Compensation Plan
for Non-Employee Directors are attached to the Management Preliminary Proxy
Statement as Exhibits B and C, respectively, and descriptions of such Plans
are included in the Management Preliminary Proxy Statement. Reference is
hereby made to such information pursuant to Rule 14a-5(c) under the
Exchange Act.
Ranger recommends that stockholders vote "For" the approval of the
2002 Incentive Plan and the 2002 Compensation Plan for Non-Employee
Directors.
Ranger does not make any recommendation with respect to the
ratification of KPMG LLP as the Company's independent auditors for the
fiscal year ending March 31, 2003. If stockholders provide instructions
regarding the ratification of the auditors on the enclosed WHITE proxy
card, Ranger will vote the Shares as directed; if no 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
$3,000,000. Approximately $900,000 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. While Ranger may make solicitations via the
Internet, Ranger will not provide stockholders with proxy cards via the
Internet and will not provide stockholders with a means to vote their
proxies via the Internet. 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
not to exceed $850,000, plus reimbursement of reasonable out-of-pocket
expenses. Ranger has agreed to indemnify Morrow against any liabilities and
expenses relating to or arising out of Morrow's engagement by Ranger,
except for any liabilities and expenses resulting from any failure by
Morrow or its employees to comply with the agreement between Morrow and
Ranger and except for any liabilities and expenses resulting from the gross
negligence, bad faith or willful misconduct on the part of Morrow or its
employees. Morrow will utilize approximately 40 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,
the approval of the Company's 2002 Incentive Plan, the approval of the
Company's 2002 Compensation Plan for Non-Employee 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 principal of Ranger Capital Group,
a Dallas-based investment firm. Mr. Wyly's business address is: Ranger Capital
Group, 300 Crescent Court, Suite 1000, Dallas, Texas 75201.
Charles I. Frumberg
Ranger has retained 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 Governance, Ltd., 300 Crescent Court, Suite
1000, Dallas, Texas 75201.
Sophie L'Helias
Ranger has retained Sophie L'Helias as a consultant with respect
to corporate governance matters. In such capacity, Ms. L'Helias may engage
in the solicitation of proxies on behalf of Ranger but will not receive
additional compensation for such activities. Ms. L'Helias' principal
occupation is an independent corporate governance consultant. Her business
address is: c/o L'Helias Governance Advisors, 3005 P Street, N.W.,
Washington, DC 20007.
Bob R. Perry
Ranger has retained Bob R. Perry as a consultant. In such
capacity, Mr. Perry may engage in the solicitation of proxies on behalf of
Ranger but will not receive additional compensation for such activities.
Mr. Perry's principal occupation is Managing General Partner of Texas B.P.
Enterprises, LLC, a management company. His business address is: c/o Texas
B.P. Enterprises, LLC, 5750 N. Riverside Drive, Fort Worth, Texas 76137.
Susan Tiholiz
Ranger has retained Susan Tiholiz as a consultant in connection
with various administrative and financial matters. In such capacity, Ms.
Tiholiz may engage in the solicitation of proxies on behalf of Ranger but
will not receive additional compensation for such activities. Ms. Tiholiz's
principal occupation is financial manager. Her business address is: c/o
Ranger Governance, Ltd., 300 Crescent Court, Suite 1000, Dallas, Texas 75201.
Ms. Tiholiz served as Treasurer of Sterling Software, Inc. until
April 2000 when that company was acquired by Computer Associates. Ms.
Tiholiz was employed by Computer Associates after the acquisition of
Sterling Software, Inc. until June 2000. Following the termination of Ms.
Tiholiz's employment with Computer Associates, she received severance
payments of $242,999.88 in the aggregate and additional health and welfare
benefits.
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 Through Options Percent
Name and Otherwise of 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) *
Sophie L'Helias 0 -
Bob R. Perry 0 -
Ronald J. Robinson 20,000 (3) *
Cece Smith 20,000 (3) *
Susan Tiholiz - (5) *
Sam Wyly 1,479,025 (6) *
___________________
(*) 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) Susan Tiholiz is the beneficial owner of 140.041 units in the
Computer Associates Stock Fund, which is a part of a 401(k) plan
administered by Fidelity Management Trust Company. At any given time, the
Computer Associates Stock Fund is comprised of 95-99% of shares of Common
Stock and 1-5% cash.
(6) 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
Number of Shares of Computer
Date of Transaction Nature 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
Number of Shares of Computer
Date of Transaction Nature 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.
Transactions in Computer Associates Common Stock by Susan Tiholiz
Number of Shares of Computer
Date of Transaction Nature of Transaction Associates Common Stock
------------------- --------------------- ----------------------------
October 3, 2001 Purchase 2400 (1)
October 3, 2001 Sale 2400 (2)
October 4, 2001 Purchase 981 (1)
October 4, 2001 Sale 981 (2)
___________________
(1) Represents Shares purchased by Ms. Tiholiz upon the exercise of
options to purchase shares of Common Stock.
(2) Represents sales of Shares acquired upon the exercise of options.
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.
Each of Mr. Frumberg, Mr. Perry and Ms. Tiholiz has entered into a
letter agreement with Ranger that provides that Ranger will indemnify and
hold harmless each such individual 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, except to the extent that any such Losses (i) may arise out
of inaccurate written information supplied by such individual 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 such individual.
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.
REVISED PRELIMINARY COPY, SUBJECT TO COMPLETION
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 10:00 A.M.
The undersigned stockholder of Computer Associates International,
Inc. (the "Company") hereby appoints Stephen R. Perkins and Nim Hacker, 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 Ranger Governance, Ltd.
("Ranger") nominees listed in Item 1a and FOR the election of the Company's
nominees whose names are not listed in Item 1b, FOR approval of Items 2 and
3 and ABSTAIN with respect to Item 4. 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 RECOMMENDS A VOTE "FOR" THE RANGER 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,
Cece Smith
To withhold authority to vote for any individual nominee identified above,
check the "FOR" box above and strike a line through the name of such nominee.
b. Company Nominees:
The Company is nominating eleven people to serve as directors. Ranger
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 is NOT seeking authority
to vote for and WILL NOT exercise any such authority are:
Russell M. Artzt, Alfonse M. D'Amato, Sanjay Kumar, Charles B. Wang,
Thomas H. Wyman.
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 RECOMMENDS A VOTE FOR ITEMS 2 AND 3 AND MAKES NO RECOMMENDATION WITH
RESPECT TO ITEM 4
2. Approval of the 2002 Incentive Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the 2002 Compensation Plan for Non-Employee Directors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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.