Sent: Wednesday, August 22, 2001 10:57 PM
Subject: Remember shareholder interests?
Copied below is the text of a letter sent late
this afternoon to both groups of candidates, encouraging them to establish
a cooperative agreement for an orderly transition and suggesting the type
of terms which may serve the interests of CA shareholders.
The proposition in my letter is intended to
put the candidates to the test. The proposed terms should provide
a thoroughly reasonable basis for anyone who is willing to cooperate to do
so. If a candidate refuses to shake hands now, to assure an orderly
transition, you may want to question relying on him to serve shareholders
in the future.
Recent reports of threatened disruption -- such as Mr. Wang's statements
in this morning's Newsday interview -- could of course be
nothing more than posturing for votes. But it's best to find out now
rather than after the vote which of the candidates can be relied upon to
act responsibly in the interests of shareholders.
Approaching the August 29th meeting date,
there appears to be a virtual consensus that change is needed -- the
only real issue is how to implement it without disorder. Everyone,
including candidates as well as shareholders, needs to focus on the best
way to do it and not on who can do what to obstruct it.
GL - 8/22/01
Text of 8/22/01 letter from GL
to members of and candidates for CA board
[letterhead]
LUTIN & COMPANY
575 MADISON AVENUE, 10th FLOOR
NEW YORK, NEW YORK 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
August 22, 2001
Mr. Russell M. Artzt,
Mr. Linus W.L. Cheung,
Mr. Alfonse M. D'Amato,
Mr. Richard A. Grasso,
Ms. Shirley Strum Kenny,
Mr. Sanjay Kumar,
Mr. Roel Pieper,
Mr. Lewis S. Ranieri,
Mr. Willem F.P. de Vogel, and
Mr. Charles B. Wang
c/o Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11749
Mr. Richard J. Agnich,
Mr. Stephen R. Perkins,
Ms. Cece Smith, and
Ms. Elizabeth Ann VanStory
c/o Ranger Governance, Ltd.
300 Crescent Court, Suite 1000
Dallas, Texas 75201
To each member of and candidate for the board of Computer Associates:
It is my impression that both sides in the contest for CA board seats
have become focused during the past few days on legal challenges to
shareholder voting rights, public threats of disruption, and private
dealmaking for votes. This does not serve the interests of most CA
shareholders.
Under these circumstances I strongly encourage CA's existing board and
the dissident candidates to consider a practical compromise which assures
an orderly accommodation of clearly expressed shareholder interests. This
could involve agreeing to a single slate of directors and dropping all
proxy-related litigation based on some variation of the following
conditions:
1. Board candidates: The commonly adopted slate would
consist of seven incumbent directors, including Mr. Wang, and three Ranger
nominees. The Ranger nominees would be selected from the four current
Ranger candidates by a committee of current independent directors of CA
who are not members of the compensation committee.
2. Chairman: Mr. Kumar would become the board's Chairman,
and Mr. Wang would become its Vice Chairman.
3. Future board expansion: The board would continue its
efforts to recruit at least two new independent directors within six
months, increasing board size as required. The recruiting process and
selection of candidates would be the responsibility of the nominating
committee, which should consist entirely of independent directors of whom
half are selected from the Ranger candidates.
4. Poison pill: The board would take appropriate actions
to terminate the "Rights Agreement" in one year if the value of CA shares
has not by that time equaled or exceeded an average standard for its peer
group, such as a multiple of book value or revenue. The board would also
adopt a resolution confirming that Mr. Haefner will not be declared an
"Adverse Person."
5. Shareholder litigation: The board would establish a
special committee, comprised entirely of disinterested directors, to
monitor and make recommendations concerning the disposition of shareholder
litigation.
It is my impression, from public reports as well as communications
with CA Forum participants, that your efforts to negotiate this or a
similar form of cooperative plan would be widely supported by CA's
shareholders. There is an apparent consensus among shareholders regarding
the need for some change at CA. What they will be observing now, and
voting on next week, is each candidate's demonstration of responsibility
in representing the obvious interests of the company's owners.
Very truly yours,
/S/
Gary Lutin
cc: Mr. Walter Haefner
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