Sent: Friday, February 11, 2005 10:43 AM
Subject: Request advice of intent by noon
Bob -
Thinking that yesterday morning's
responses would provide a foundation for your commitment to cooperation, I
was disappointed not to hear back from you. Please let me know by noon,
today, if you intend to continue our dialogue for constructive purposes.
As you know, the planning process for the
Restitution Fund meeting cannot be deferred. In the absence of a
commitment to the conditions you requested, or any sensible alternative
you may suggest, I will have to proceed without CA management cooperation.
I will be leaving a similar telephone
message to assure your timely awareness of my request.
GL
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Fax: 212-605-0325
Email: gl@shareholderforum.com
Bob -
Thank you for identifying the conditions
you want to address:
1. For the immediate example of a program
concerning the Restitution Fund, its purpose, as previously stated, is
to define issues that CA shareholders want the Administrator to
consider in his preparation of the required "Restitution Plan" for the
Fund's distribution. The goals of the broader CA Forum are described in
its "Forum Summary" and other information posted on the Forum web site.
2. Preliminary plans for the Restitution
Fund program are to establish a panel of experts to review and comment on
issues raised by CA shareholders, and then to present their summary and
recommendations to the Administrator. We will probably schedule an
open meeting within a couple of weeks to allow effective discussion among
shareholder representatives and panel experts, and invite the
Administrator to attend. If the panelists are able to present their
report within a week of the meeting, based on the issues that were
defined, the Administrator should be able to consider the shareholder
views without any significant delay in his schedule.
3. Guessing at the costs of the Restitution
Fund program, I would allow a $5,000 "honorarium" for each of five
participating panel experts and about $25,000 to cover meeting facilities,
webcast and/or teleconferencing, travel expenses of panelists, etc., for a
rough budget estimate of $50,000.
4. If you want my advice on how you should
respond to similar requests from specific shareholders or shareholder
groups, I would suggest that you distinguish between those that address
the interests of one shareholder or a particular shareholder faction and
those that address the broader interests of all shareholders. If
something is intended to benefit some but not all shareholders, it should
of course be paid for by those who would benefit. And, similarly, if it's
intended for the benefit of all shareholders generally, fairness suggests
that the costs be borne proportionately by all shareholders through their
corporation.
5. I have just started seeking suggestions
of appropriate panelists, but have asked
Lucian Bebchuk
to participate. He is a Professor of Law, Economics, and Finance at
Harvard and Director of their Program on Corporate Governance, and is
co-author of the new book,
Pay Without Performance, which
has been stimulating rethinking of corporate governance relationships.
I'm informing you of Mr. Bebchuk's participation since it was something
I'd expected to tell others today in the process of developing plans, but
your asking for panelist identities as a condition of program support is
inappropriate. I welcome your suggestions of suitable experts, just as I
would from any Forum participant, but in your role as a representative of
CA management you should not be in a position to influence the selection
of panelists.
6. Conditions for support of the
Restitution Fund program, considering its relatively limited range of
activities and small budget, should be simpler than what might be required
for other programs. I would suggest that CA's support should be subject
to the Administrator's approval, and consist of (a) CA's distribution of
one announcement (drafted by you) of the scheduled meeting to your email
list for investors, (b) a link from your investor relations web site for
the meeting's webcast, assuming one is arranged, and (c) provision of
$50,000 funding.
Regarding your concern that I "h[ad] conditions
in mind" that were not stated at yesterday's meeting, I assure you that I
was not then and am not now conscious of any unexpressed conditions that I
would impose on your cooperation.
Please let me know later this morning if
my responses provide a foundation for CA management cooperation, at least
in the test case for the Restitution Fund program.
- GL
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212/605-0335
Fax: 212/605-0325
Email: gl@shareholderforum.com
Gary:
I am still in NYC and
have meetings all day and into the evening, so I will not have the time to
think about and formulate additional questions. However, at a minimum we
will need the information I've already requested regarding: (1) specific
goal(s) of the program(s) (with no disrespect intended, to "assure respect
for shareholder interests" doesn't tell me much); (2) the costs involved
(for the reasons noted in my Tuesday e-mail, we cannot make a commitment
to fund at "reasonable" levels), and (2) your views on how we can respond
to any similar requests from other shareholders or groups of shareholders
- or, for that matter, any criticism we might receive for supporting what
you have in mind. I also think it would be reasonable to find out who you
have in mind to serve on the panel you mentioned.
You also mention
"conventional" conditions. I would like to know what you have in mind in
this regard. As with the term "reasonable," there might be many
disagreements as to the meaning of "conventional."
Finally, as regards what you refer to as
"undefined disagreements and differences," I think our disagreements and
differences were rather clear when we met yesterday. The point of future
constructive dialogue (again, no quotation marks on my part) is to better
understand where each of us is coming from and the extent to which we can
resolve our disagreements - or agree to accept and respect them. I cannot
tell you "what conditions seem impractical and why," because I do not have
any conditions to future discussions - other than to refrain from insults
and name-calling - and I do not want to impose any on future discussions.
I am concerned that you have conditions in mind, as I strongly believe you
did yesterday. If that is the case, future discussions are not likely to
yield the above goals and would seem fruitless.
Bob
Robert B. Lamm
Senior Vice President -
Corporate Governance and Secretary
Computer Associates International, Inc.
One Computer Associates
Plaza
Islandia, New York 11749
Telephone:
631.342.6211
Fax: 631.851.3037
(Desktop) or 631.342.4866
E-Mail: robert.lamm@ca.com
Bob -
Thank you for your response to my request
for a statement of your position that I can distribute to Forum
participants.
I appreciate your stated willingness, in
section 2 of your note, to consider support of a specific program.
Assuming you're responding to my note's suggestion of the Restitution Fund
program as a test case, I will look forward to hearing tomorrow what
additional information you need for your proposal of support.
Regarding the general concerns you
expressed, I hope nothing in my correspondence or conversations with you
suggested that I -- or CA's shareholders -- would want you to make unwise
commitments. In fact, if you review the past week's email exchanges,
you'll see that I'd encouraged reliance on conventional conditions to
assure sound practices. The essential purpose of the Forum is, after all,
to assure respect of shareholder interests.
Finally, your note's references to
undefined disagreements and differences suggest an opportunity for
constructive "dialogue." If you tell me what conditions seem impractical
and why, I'm sure we'll be able to solve the problems.
GL
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Fax: 212-605-0325
Email: gl@shareholderforum.com
Gary:
Despite our differences, Dan and I believe our meeting was useful. We
wanted to get back to you with our thoughts, as follows:
1. We are committed to continuing a dialogue with you. (And we do not put
the word in quotation marks.). We will surely disagree on various issues -
maybe on most issues - but we believe there is value in continuing to talk -
and listen.
2. We will continue to consider whether and how we might facilitate or
support the types of shareholder communications in which you are involved.
However, we cannot agree to do so without more specifics. These would
include more details as to the type of programs you have in mind, the goals
of the programs and, most particularly, the costs. As we said, we may have
very different views as to what is “reasonable,” and we believe that
committing to “reasonable” funding is not businesslike and could subject us
to criticism or worse. There are also other issues, such as remaining
independent from the process and competing demands for funding other
shareholder initiatives, that we need to resolve, and frankly, saying we
should fund them all is not acceptable - would you agree to that if you were
in our position?
As we said, you will publish what you will. However, if you are interested
in fairness, you should also state - and fairly state - our point of view as
well. To do otherwise would suggest that shareholder communication means
agreeing with one side's point of view; we think it should serve a higher
purpose.
Bob
(Sent via BlackBerry)
Robert B. Lamm
Senior Vice President --
Corporate Governance and Secretary
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11749
Telephone: 631.342.6211
Fax: 631.851.3037 (Desktop) or 631.342.4866
E-Mail: robert.lamm@ca.com
-----Original
Message-----
From: Gary Lutin <gl@shareholderforum.com>
To: Lamm, Robert B <ROBERT.LAMM@ca.com>; Kaferle, Daniel J <DANIEL.KAFERLE@ca.com>
Sent: Wed Feb 09 15:39:57 2005
Subject: Your suggested continuation of "dialogue"
Bob & Dan -
As indicated at the conclusion of this morning's meeting, I was
naturally disappointed to learn that you had not been prepared to define any
kind of commitment to the cooperation requested in my December 8, 2004
letter.
Responding to your expressed desire to "continue a dialogue," I've asked
you to consider a specific example of requested cooperation in relation to
an immediate need for shareholder attention to the Restitution Fund. Issues
concerning the allocations of the $225 million must be addressed within the
next few weeks, as discussed, if the Fund's Administrator is to consider
shareholder views. Plans for a Forum program to define the issues must
therefore be developed within a couple of days. This planning process as
well as the program itself would benefit from CA's corporate support to
facilitate shareholder communications and fund the reasonable costs. Under
the cirucumstances, I'll appreciate your response later today or tomorrow.
For purposes of preliminary consideration of this test case for
cooperation, I'd suggested assuming that the Forum program for the
Restitution Plan would involve a panel of academic and professional experts
to review and report on the issues, with expenses for the experts and a
meeting open to interested shareholders. It should of course be assumed
that the conditions of CA cooperation would be defined to avoid any actual
or apparent influence of the Restitution Plan, and would be subject to the
Administrator's approval.
On a related subject, Bob, respecting your desire to avoid confusion of
your representation of the employee retirement "CASH" Plan in the context of
its interest in the Restitution Plan, I've asked you to provide me with the
names and contact information for the members of the Plan's Committee.
Finally, I encouraged you to provide me with a statement regarding our
meeting for my distribution to Forum participants.
I hope that our continuing "dialogue" will lead to some benefit for CA
shareholders.
GL
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Fax: 212-605-0325
Email: gl@shareholderforum.com
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