<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5 TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMPUTER SCIENCES CORPORATION
(Name of Subject Company)
------------------------------
CAI COMPUTER SERVICES CORP.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
(Bidder)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS
(Title of Class of Securities)
20536310-4
(CUSIP Number of Class of Securities)
SANJAY KUMAR
PRESIDENT AND CHIEF OPERATING OFFICER
C/O COMPUTER ASSOCIATES INTERNATIONAL, INC.
ONE COMPUTER ASSOCIATES PLAZA
ISLANDIA, NEW YORK 11788-7000
TELEPHONE: (516) 342-5224
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
------------------------------
COPIES TO:
SCOTT F. SMITH, ESQ.
HOWARD, DARBY & LEVIN
1330 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 841-1000
------------------------
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<PAGE>
This Statement amends and supplements the Tender Offer Statement on Schedule
14D-1 filed with the Securities and Exchange Commission on February 17, 1998, as
amended (the "Schedule 14D-1"), relating to the offer by CAI Computer Services
Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Computer Associates International, Inc., a Delaware corporation ("Computer
Associates"), to purchase all outstanding shares of Common Stock, par value
$1.00 per Share, of Computer Sciences Corporation, a Nevada corporation,
together with (unless and until the Purchaser declares that the Rights Condition
has been satisfied) the Series A Junior Participating Preferred Stock Purchase
Rights associated therewith, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated February 17, 1998 (the "Offer to
Purchase"), and in the related Letter of Transmittal, at a purchase price of
$108 per Share (and associated Right) net to the tendering stockholder in cash,
without interest thereon. Capitalized terms used and not defined herein shall
have the meanings assigned to such terms in the Offer to Purchase and the
Schedule 14D-1.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(e) is hereby supplemented as follows:
On February 25, 1998, Computer Associates filed with the United States
District Court for the District of Nevada a Brief in Reply to Computer Sciences
Response to the Court's February 18 Order and in Support of Computer Associates'
Motion for Expedited Declaration and on the Merits of the Relief Requested in
the supplemental and amended complaint. A copy of the Brief is attached hereto
as Exhibit (g)(4) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(g)(4) Brief in Reply to Computer Sciences Response to the Court's February 18 Order and
in Support of Computer Associates' Motion for Expedited Declaration and on the
Merits of the Relief Requested filed with the United States with the United States
District Court for the District of Nevada February 25, 1998.
</TABLE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: February 26, 1998
CAI COMPUTER SERVICES CORP.
By /s/ PETER SCHWARTZ
-----------------------------------------
Name: Peter Schwartz
Title: Vice President and Treasurer
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By /s/ PETER SCHWARTZ
-----------------------------------------
Name: Peter Schwartz
Title: Senior Vice President and
Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
(g)(4) Brief in Reply to Computer Sciences Response to the Court's February 18 Order and in Support of
Computer Associates' Motion for Expedited Declaration and on the Merits of the Relief Requested filed
with the United States with the United States District Court for the District of Nevada February 25,
1998.
</TABLE>
3
<PAGE>
Exhibit (g)(4)
SCHRECK MORRIS
STEVE MORRIS
1200 Bank of America Plaza
300 South Fourth Street
Las Vegas, Nevada 89101
(702) 474-9400
HOWARD, DARBY & LEVIN
C. WILLIAM PHILLIPS
1330 Avenue of the Americas
New York, New York 10019
(212) 841-1000
Attorneys for Plaintiff
Computer Associates International, Inc.
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
COMPUTER ASSOCIATES )
INTERNATIONAL, INC., )
)
Plaintiff, )
)
v. )
) CV-S-98-00278-LDG (RLH)
COMPUTER SCIENCES )
CORPORATION, IRVING W. BAILEY, )
HOWARD P. ALLEN, JAMES R. MELLOR, )
WILLIAM P. RUTLEDGE, WARREN )
MCFARLAN, THOMAS A. MCDONNELL, )
RICHARD C. LAWTON, LEON J. LEVEL, )
WILLIAM R. HOOVER and )
VAN B. HONEYCUTT, )
)
Defendants. )
)
- --------------------------------------------- )
COMPUTER ASSOCIATES' REPLY TO COMPUTER SCIENCES RESPONSE TO
THE COURT'S FEBRUARY 18 ORDER AND
IN SUPPORT OF COMPUTER ASSOCIATES' MOTION
FOR EXPEDITED DECLARATION
AND ON THE MERITS OF THE RELIEF REQUESTED
<PAGE>
TABLE OF CONTENTS
PAGE
Table of Contents........................................................i-ii
Table of Authorities...................................................iii-iv
Introduction................................................................1
Statement of Facts..........................................................4
Argument....................................................................8
Point I By Adopting the Bylaw Amendments, the CSC
Directors Violated Their Fiduciary Duties
to the Shareholders......................................10
A. The Primary Purpose of the Board's Bylaw
Amendments Is To Disenfranchise the
CSC Shareholders...................................10
B. Nevada's "Other Constituencies" Statute Does
Not Authorize the Unreasonable Defensive
Measures Taken by the CSC Board....................18
Point II The Board Did Not Have the Power to Remove
the Shareholders' Right to Amend the Bylaws..............19
Point III The Board Did Not Have the Power To
Revoke The Shareholders' Right to
Remove Directors.........................................22
Point IV The Proposals Contained In The Proxy
Solicitation Are Consistent With The
Bylaws And Nevada Law....................................23
A. Nevada Law and the Bylaws Should be Interpreted
Consistently With the Paramount Role of the
Shareholder Franchise in Corporate Governance......23
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B. Under the Nevada Director Removal Statute,
Two-Thirds of the CSC Shareholders May
Remove Two-Thirds of the Directors.................24
C. Vacancies On the Board May Be Filled
By the Written Consent of the
Shareholder........................................25
D. CSC Lacks Statutory Authority To Set
the Record Date for Computer Associates'
Solicitations......................................26
E. The Bylaws Require Written Consent of a
Majority of Shareholders to Amend the
Bylaws.............................................26
F. The Annual Meeting Must Be Held On
August 10, 1998....................................27
Conclusion.................................................................28
-ii-
<PAGE>
TABLE OF AUTHORITIES
CASE PAGE
AETNA LIFE INS. CO. V. HAWORTH,
300 U.S. 227 (1937).......................................................9
APRAHAMIAN V. HBO & CO.,
531 A.2d 1204 (Del. Ch. 1987)............................................n.6
BLASIUS INDUS., INC. V. ATLAS CORP.
564 A.2d 651 (Del. Ch. 1988)..........................................passim
CENTAUR PARTNERS V. NATIONAL INTERGROUP, INC.,
582 A.2d 923 (Del. 1990)................................................n.7
CENTRAL MONTANA ELEC. POWER COOP., INC. V. BONNEVILLE POWER ADMIN.,
840 F. 2d 1472 (9th Cir. 1988)...........................................10
EDGAR V. MITE,
457 U.S. 624 (1982).......................................................3
FRANTZ MANUF. CO. V. EAC INDUS.,
501 A.2d 401 (Del. 1985)................................................n.9
HILTON HOTELS CORP. V. ITT CORP.,
978 F. Supp. 1342 (D. Nev. 1997).....................................passim
HILTON HOTELS CORP. V. ITT CORP.,
962 F. Supp. 1309 (D. Nev. 1997)........................................28
IBS FIN. CORP. V. SEIDMAN & ASSOCS., L.L.C,
No. 97-5056, 1998 WL 52292 (3d Cir. Feb. 11, 1998)......................16
ICN PHARMACEUTICALS, INC. V. KHAN,
2 F.3d 484 (2d Cir. 1993)................................................3
MARYLAND CAS. CO. V. PACIFIC COAL & OIL CO.,
312 U.S. 270 (1941).......................................................9
PACKER V. YAMPOL
No. 8432, 1986 WL 4748 (Del. Ch. Apr. 18, 1986)...........................17
ROVEN V. COTTER,
547 A.2d 603 (Del. Ch. 1988).............................................21
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<PAGE>
SCHNELL V. CHRIS-CRAFT INDUS., INC.,
285 A.2d 437 (Del. 1971)................................................n.9
SHOEN V. AMERCO,
885 F. Supp. 1332 (D. Nev. 1994)..........................11-17, n.4, 13-14
STROUD V. GRACE.,
606 A.2d 75 (Del. 1992).................................................n.4
UNITRIN INC. V. AMERICAN GEN. CORP.,
651 A.2d 1361 (Del. 1995)...............................................n.4
UNOCAL CORP. V. MESA PETROLEUM CO.,
493 A.2d 946 (Del. 1985)................................................n.4
STATUTES
Nev. Rev. Stat. Sec. 78.120(2).............................................n.7
Nev. Rev. Stat. Sec. 78.138.............................................15, 18
Nev. Rev. Stat. Sec. 78.335(1)(b).......................................22, 23
Nev. Rev. Stat. Sec. 78.390(1)..............................................23
28 U.S.C. Sec. 2201.........................................................19
Fed. R. Civ. P. 57..........................................................10
OTHER AUTHORITIES
Legislative History 91-4 A.B. 655 of the 66th Session of the Nevada
Legislative, 1991 (Minutes of Assembly Committee on Judiciary; May 21, 1991)19
Legislative History 93-3, A.B. 387 of the 67th Session of the Nevada
Legislature ...................................................n.10
-iv-
<PAGE>
This reply is necessary to address the points raised in
Computer Sciences Corporation's ("CSC") "Response" of February 23, which go
well beyond the issues raised in Computer Associates International, Inc.'s
("Computer Associates") motion to expedite declaratory relief. CSC's response
asserts there is nothing for the Court to declare judgment on because the day
after this suit was filed -- and on the same day the Court's order directing
CSC to file a response was entered and served -- the CSC Board met and
restructured CSC's Bylaws to entrench the Board and current management by
eliminating its shareholders' rights to consider CA's tender offer and
matters related thereto and this Court's authority to enforce those rights.
These amendments to CSC's Bylaws are void under the Bylaws, Nevada law, and
prior decisions of this Court.
INTRODUCTION
Just four months ago, in HILTON HOTELS CORP. V. ITT, this
Court struck down the efforts of ITT management to deprive its shareholders
of their basic right to decide whether to accept Hilton's tender offer. As
the Court noted, "even if an action is normally permissible, and the board
adopts it in good faith, a board cannot undertake such action if the primary
purpose is to disenfranchise the shareholders in light of a proxy contest."
HILTON HOTELS CORP. V. ITT, 978 F. Supp. 1342, 1348-49 (D.
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Nev. 1997).
Last week, the CSC Board of Directors directly violated
this holding. The day after Computer Associates announced its $9 billion
tender offer and proxy contest, the CSC Board met and gutted CSC's Bylaws,
stripping away the basic franchise rights of its shareholders. In particular,
the Board unilaterally revoked its shareholders' rights to remove directors,
call meetings, act by consent, or make bylaw amendments - precisely the
bylaws that Computer Associates relied upon in commencing its proxy campaign
and this lawsuit. Two of these amendments are invalid even without HILTON,
because the Board lacked the power to adopt them under Nevada statutes and
CSC's Bylaws.
CSC attempts to rationalize these actions by claiming that
it merely "adopted measures designed to give it more time to consider the
offer, and make a proper, well-informed recommendation to its shareholders."
CSC Response at 10. The facts give the lie to this explanation: The CSC Board
has already considered - and publicly rejected - Computer Associates' offer.
It has refused to negotiate or even to explore whether another, higher offer
is available. Indeed, the Board has stated that "any effort to combine [CSC]
and Computer Associates would not make business sense," and has engaged in
baseless attacks on Computer Associates
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<PAGE>
and its principals.
The Board's stated reasons are a pretext for its real
agenda, to kill this deal. The Board needs no more time, since it has already
rejected the Offer. Further, its bylaw changes allow the Board to delay any
shareholder vote by OVER ONE YEAR, a time period designed to preclude any
transaction. CF. HILTON, 978 F. Supp. at 1348 ("ITT shareholders will have no
choice but to accept the Comprehensive Plan and a majority of ITT's incumbent
board members for another year."). The Board betrays its agenda by purporting
to embrace "expedited consideration" for one of Computer Associates' claims,
and then proposing a four-month delay while it subjects Computer Associates
to extraordinary discovery - over 20 depositions and the production of
warehouses of documents on unrelated transactions completed years ago.
CSC argues that Computer Associates' application for
expedited treatment on its Bylaws claims has been rendered moot by the
Board's Bylaw amendments. The Board's illegal actions cannot moot Computer
Associates' claims. To the contrary, CSC's unprecedented and illegal effort
to bulldoze away its shareholders' rights underscores the urgent need for
resolution of these issues. As the United States Supreme Court has noted,
"delay can seriously impede a tender offer," permanently tilting the
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<PAGE>
playing field against the tender offer because it provides
incumbent management with a powerful tool to combat tender
offers, perhaps to the detriment of the stockholders who
will not have an offer before them during this period. These
consequences are precisely what Congress determined should
be avoided . . . .
EDGAR V. MITE, 457 U.S. 624, 635, 637 (1982). ICN PHARMACEUTICALS, INC. V. KHAN,
2 F.3d 484, 492 (2d Cir. 1993) ("Time is of the essence in these contests, and
delay can be a potent weapon favoring incumbent management.").
Computer Associates asks that the Court restore CSC
shareholders' clear rights under HILTON to exercise their franchise. The relief
is needed now: CSC management knows all too well that delay is their only
defense to the deal, and therefore seeks to stall as long as possible the
determination by the shareholders or by the Court. The resolution of these legal
issues need not be delayed: No discovery is needed to resolve the bylaw issues
raised in Computer Associates' original complaint, which the precedents of this
Court and the courts of Delaware dispositively resolve. Nor is any discovery
needed to declare that CSC's bylaw amendments are plainly unlawful, as alleged
in Computer Associates' Supplemental and Amended Complaint.
CSC shareholders should not be stripped of their right to
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<PAGE>
decide.
STATEMENT OF FACTS(1)
On February 17, 1998, Computer Associates set out to replace
the CSC Board of Directors by straightforward and democratic means. It publicly
filed a preliminary consent solicitation with the SEC, commenced a tender offer
(the "Offer"), and filed a complaint with this Court, seeking to clarify exactly
what percentage of voting shares was needed to replace CSC's directors. Computer
Associates asked this Court to interpret the CSC
________________________
(1) CSC's Response seeks to smear Computer Associates with accusations of
misconduct, including misrepresentations to the SEC, false statements to the
press, threatening statements to CSC's CEO, and undefined "unseemly" conduct.
CSC Response at 2-4. The claims are false. In the same vein, CSC's misleading
comment ("supported" by mostly outdated news articles) that Computer Associates
will mistreat CSC customers and employees after a merger is also false. CSC
Response at 4 & n.2. As CSC knows, Computer Associates has stated that no CSC
jobs will be cut as a result of the merger, a promise that Computer Associates
has made and kept before. SEE Fortune, July 21, 1997 (Cheyenne Software
structure and employees kept intact after acquisition by Computer Associates);
PC Week Online, Oct. 7, 1996 ("CA scores points with users on no-layoff
announcement").
CSC also pulls out-of-context quotes from a highly selective
sampling of articles, all apparently intended to lessen the Courts opinion of
Computer Associates. CSC Response at 4, n.2. We can just as easily counter
with positive articles about Computer Associates or with press critical about
CSC. SEE, E.G., Fortune, July 21, 1997 (Computer Associates' customers,
polled by consulting analyst, either "thrilled" with customer support or
believe it has improved); New York Times, February 4, 1997 (industry analysts
agree that "kinder, gentler" Computer Associates is focused on customer
satisfaction); USA Today, Sept. 2, 1997 (boy reunited with mother after
twelve years because of $350,000 computer system donated by CEO of Computer
Associates to National Center for Missing and Exploited Children);
Computerworld, May 19, 1997 (large corporate customer cancels contract with
CSC because of dissatisfaction with CSCs performance).
This campaign is relevant, if at all, to CSC shareholders. It serves
no purpose here.
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<PAGE>
Bylaws and to declare, INTER ALIA, that:
(a) A MAJORITY of the outstanding voting shares are sufficient to
amend the Bylaws by written consent;
(b) TWO-THIRDS of the outstanding voting shares, acting by consent,
are sufficient to remove at least a majority of the directors;
and
(c) A MAJORITY of the outstanding voting shares are sufficient to
fill vacancies caused by removal of directors by written
consent.
Computer Associates also explained that (i) if it failed to receive written
consent to replace a majority of directors, it would attempt to call a special
meeting on this question, and (ii) if it failed to remove sufficient directors
by a special meeting, it would seek to replace them at the annual meeting. The
complaint sought a declaration that the Bylaws required CSC to hold its annual
meeting on August 10, 1998.(2)
The next day, February 18, CSC's Board gutted CSC's corporate
governance structure. Without seeking shareholder comment or approval, the CSC
Board marched methodically through its Bylaws, amending each bylaw that Computer
Associates relied upon in seeking
___________________
(2) The background and specific details of the Offer already have been
described in Computer Associates' initial Brief in Support of Motion for
Expedited Declaration, dated February 17,
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shareholder approval (the "Bylaw Amendments"). The Board's clear purpose was to
prevent the CSC shareholders from voting on Computer Associates' proposals, and
to render Computer Associates' consent solicitation and this lawsuit useless.
Specifically, the CSC Board's Bylaws Amendments:
- Virtually eliminated the right of shareholders to initiate
and enact bylaw amendments, by increasing the percentage
of shareholders required from a majority to 90%, an
extreme supermajority level that, for all practical
purposes, is impossible to achieve. (Article VIII, Section
1);
- Virtually eliminated the right of shareholders to
remove directors through written consent, by increasing
the percentage of shareholders required from two-thirds to
90% (Article III, Section 2);
- Eliminated the shareholders' right to call a special
meeting of shareholders for any purpose, except as
provided by Nevada law;
- Enacted an employee severance plan under which the
current CEO may, in his discretion, give away millions
of dollars of company money to as many as 150 employees
_____________
1998 (the "Initial Brief").
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<PAGE>
only if Computer Associates acquires CSC; and
- Eliminated the requirement (observed throughout CSC's
existence) to hold its annual shareholders meeting on the
second Monday in August, giving the Board complete
discretion to decide when the annual meeting will occur
and enabling it to delay the meeting for at least a year
(Article II, Section 2).
The day after it overhauled the Company's Bylaws, the CSC
Board announced its rejection of Computer Associates' offer. In a February 19
conference call with members of the investment community, Van Honeycutt, CSC's
Chief Executive Officer, referred to Computer Associates' offer as "low ball,"
"a ridiculous number," and "a joke." In a letter sent to the CEO of Computer
Associates the same day, Honeycutt asserted that "ANY effort to combine Computer
Sciences and Computer Associates does not make business sense."(3) (Emphasis
added.)
In the meantime, CSC shareholders have had no say on whether
to sell their company. Without the Court's intervention to restore the Bylaws,
they will have none.
ARGUMENT
_________________
(3) CSC February 19, 1998 press release (attached as Exhibit 4 to
the Supplemental and Amended Complaint).
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<PAGE>
The shareholders' right to vote "underlies the concept of
corporate democracy." HILTON HOTELS V. ITT CORP., 978 F. Supp. 1342, 1347 (D.
Nev. 1997).
Interference with the shareholder franchise is especially
serious. It is not be left to the Board's business judgment,
precisely because it undercuts a primary justification for
allowing directors to rely upon their business judgment in
almost every other context.
ID. at 1351.
The Bylaw Amendments dramatically restrict the shareholder
franchise, virtually eliminating the power of CSC shareholders to remove
directors, call shareholder meetings, act by consent, or amend the Bylaws. The
purpose of the Board's amendments is as transparent as their effect: to entrench
management at the expense of the shareholder franchise. Because these amendments
were adopted for "the primary purpose . . . to disenfranchise the shareholders
in light of a proxy contest," HILTON, 978 F. Supp. at 1349 (citing BLASIUS
INDUS., INC. V. ATLAS CORP., 564 A.2d 651, 652 (Del. Ch. 1988)), and because
there is "no compelling justification" (HILTON, 978 F. Supp. at 1351) to block
the shareholder franchise, the amendments constitute a clear breach of the
Board's fiduciary duty under Nevada law and this Court's precedents.
The CSC Board's assault on shareholder democracy makes
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expedited review essential. The Bylaw Amendments, if allowed to stand, will
preclude any meaningful exercise of the shareholder franchise and effectively
kill the tender offer. SEE MARYLAND CAS. CO. V. PACIFIC COAL & OIL CO., 312
U.S. 270, 273 (1941); AETNA LIFE INS. CO. V. HAWORTH, 300 U.S. 227, 241
(1937). The Declaratory Judgment Act, 28 U.S.C. Sec. 2201, authorizes federal
courts to make prospective declarations regarding "the rights and other legal
relations of any interested party," and both the Act itself and Federal Rule
of Civil Procedure 57 permit the Court to grant expedited review of such an
action. SEE CENTRAL MONTANA ELEC. POWER COOP., INC. V. BONNEVILLE POWER
ADMIN., 840 F.2d 1472, 1475 & n.1 (9th Cir. 1988); Fed. R. Civ. P. 57
(allowing courts to "order a speedy hearing of an action for a declaratory
judgment").
Point I
BY ADOPTING THE BYLAW AMENDMENTS, THE CSC DIRECTORS
VIOLATED THEIR FIDUCIARY DUTIES TO SHAREHOLDERS.
A. THE PRIMARY PURPOSE OF THE BOARD'S BYLAW AMENDMENTS
IS TO DISENFRANCHISE THE CSC SHAREHOLDERS.
In HILTON, this Court held that Board actions that have the
"primary purpose of interfer[ing] with [the] shareholder franchise" are highly
suspect under Nevada law and must be struck down unless accompanied by a
"compelling justification":
[E]ven if an action is normally permissible, and
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the board adopts it in good faith and with proper care, a
board cannot undertake such action if the primary purpose is
to disenfranchise the shareholders in light of a proxy
contest.
978 F. Supp. at 1348-49.(4)
The reason is that "[i]nterference with shareholder voting"
undermines the essence of corporate democracy, and destroys the balance of power
between shareholders and directors. SHOEN, 885 F. Supp. at 1340-41. It is
precisely because shareholders exert control over directors that courts normally
give a great deal of deference to the Board's decisions on the day-to-day
affairs of the company. ID. at 1340. But to protect this
______________________
(4) When a Board adopts defensive measures "in response to a perceived
threat to corporate policy and effectiveness that touches upon issues of
control," the heightened scrutiny of UNOCAL CORP. V. MESA PETROLEUM CO., 493
A.2d 946 (Del. 1985), applies. UNITRIN INC. V. AMERICAN GEN. CORP., 651 A.2d
1361, 1372 n.9 (Del. 1995) (internal quotation marks omitted); HILTON, 978 F.
Supp. at 1347. That test requires the Board to show that it had reasonable
grounds for believing that such a threat existed, and that its defensive
measures were reasonable in relation to the threat. HILTON, 978 F. Supp. at
1347.
When these defensive measures interfere with the shareholder franchise, both
the BLASIUS and UNOCAL doctrines are implicated. SEE HILTON, 978 F. Supp. at
1346; STROUD V. GRACE, 606 A.2d 75, 92 n.3 (Del. 1992). Whatever doctrinal
label is applied, the test in this situation is the same: "A boards
unilateral decision to adopt a defensive measure touching upon issues of
control that purposefully disenfranchises its shareholders . . . cannot be
sustained without a compelling justification." HILTON, 978 F. Supp. at 1346;
(quoting STROUD, 606 A.2d at 92, n.3). Because the CSC Boards actions affect
stockholder voting rights and the allocation of power between directors and
stockholders, we analyze these actions under BLASIUS, as the HILTON and SHOEN
courts did. HILTON, 978 F. Supp.
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<PAGE>
dynamic, courts cannot defer to Board efforts that interfere with the free
exercise of the franchise:
[I]nterference with shareholder voting is an especially
serious matter, not to be left to the directors' business
judgment, precisely because it undercuts a primary
justification for allowing directors to rely on their judgment
in almost every other context. Put another way, "the ordinary
considerations to which the business judgment rule originally
responded are simply not present in the shareholder voting
context," because when a board interferes with shareholder
voting it interferes with the very "allocation, between
shareholders as a class and the board, of effective power with
respect to governance of the corporation."
ID. at 1340-41 (citations omitted) (quoting BLASIUS, 564 A.2d at 659, 660). SEE
ALSO HILTON, 978 F. Supp. at 1347 ("This Court fully endorses the reasoning in
SHOEN and BLASIUS regarding the importance of shareholder franchise to the
entire scheme of corporate governance.").
To determine the board's "primary purpose," HILTON relied on
"circumstantial evidence," because "a board would likely never concede that its
primary purpose was to entrench itself." HILTON, 978 F. Supp. at 1349. The
factors applied by the HILTON court, as relevant here, are (1) the timing of the
Boards actions; (2) the effect on shareholders of the actions; (3) whether the
same directors that took the actions are the ones entrenched by the actions; (4)
the benefits to the corporation of the actions; and (5) the
__________________
at 1348-50, 1351; SHOEN, 885 F. Supp. at 1340-42.
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Board's stated purpose for the actions.
The details of the Bylaw Amendments and the circumstances of
their enactment demonstrate that the Board's primary purpose and effect was to
interfere with the free exercise of the shareholder franchise. Because the
Board's Bylaw amendments - all enacted on February 18, 1998 in a coordinated
response to Computer Associates' actions the day before - are "inextricably
related," the Court need only find that a substantial portion of the amendments
violate BLASIUS in order to strike down the entire set of amendments. HILTON,
978 F. Supp at 1350.
Factor 1. TRANSPARENT TIMING. One day after Computer
Associates made public its consent solicitation and Offer, the CSC Board met and
substantially eliminated the ability of CSC shareholders to amend the bylaws, to
remove CSC directors, to act by written consent, and to call special meetings.
Because of the timing of these changes, CSC's purpose is apparent: to manipulate
the corporate election machinery to defeat Computer Associates' consent
solicitation.
Factor 2. HARMFUL EFFECT ON CSC SHAREHOLDERS. The negative
effect on the shareholders' voting rights is dramatic. On February 17, the day
Computer Associates' preliminary consent solicitation and Offer were made
public, CSC shareholders had the following voting rights:
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(a) a majority of shareholders could amend the Bylaws by written
consent;
(b) two-thirds of the shareholders could remove a sufficient number of
directors to designate a majority of the Board; and
(c) a majority of shareholders could call a special meeting.
One day later, all of these voting rights were gone. After the Board's Bylaw
Amendments, shareholders need the votes of 90% of the outstanding shares to
amend the Bylaws, to remove directors, and to take any action by written
consent.
CSC claims that by increasing the requirements for shareholder
actions to 90%, it merely "tightened, but did not eliminate" the possibility of
shareholder actions. CSC Response at 12.(5) But the new levels operate as a
complete bar. As the affidavit of former SEC Commissioner and Chief Economist
Charles C. Cox confirms, it will be impossible to clear this 90% hurdle as a
practical matter, whether to amend the Bylaws, act by written consent, or remove
the directors:
A REQUIREMENT OF 90% APPROVAL OF THE VOTING POWER OF A
CORPORATION SUCH AS CSC CANNOT BE
______________________
(5) CSC misleads the Court by repeatedly claiming that the amended version
of Article VIII, Section 1 requires only an 80% supermajority to amend the
Bylaws. SEE CSC Response at 11-12. As CSC surely knows, this is NOT what their
own amended bylaw provides. The new Article VIII, Section 1 requires a 90%
supermajority to amend the Bylaws, as the Bylaws attached to the declaration of
CSC's attorney confirm.
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MET FOR ANY PRACTICAL PURPOSE. Due to the wide distribution of
ownership of CSC shares, and the fact that many shareholders
do not vote under any circumstances, the CSC shareholders will
be unable to garner 90% of the voting power of the corporation
in support of any shareholder proposal even if the proposal
has overwhelming shareholder support. ACTIONS PREDICATED ON
APPROVAL OF 90% OF THE SHAREHOLDERS WILL BE NEVER BE TAKEN.
Affidavit of Charles C. Cox, dated February 24, 1998, Para. 10 (emphasis added),
filed herewith. SEE ALSO HILTON, 978 F. Supp. at 1344 (illegal ITT Plan
increased to 80% the shareholder vote required to (i) remove directors without
cause, (ii) repeal this 80% removal provision, and (iii) repeal classified board
provision).
The Bylaw Amendments also take away the shareholders' right
to call a special meeting, and grant the Board complete discretion to set the
annual meeting date. Even if two-thirds of CSC's shareholders believe that
CSC should accept Computer Associates' offer and therefore want to replace
CSC's Board now, the Board can refuse to schedule the annual meeting until
February 1999, thus entrenching itself and resisting for a year this
shareholder supermajority. CF. HILTON, 978 F. Supp. at 1348 ("At the very
minimum, ITT shareholders will have no choice but to accept the Comprehensive
Plan and a majority of ITT's incumbent board members for another year.
Therefore, the Comprehensive Plan is preclusive.").
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Factor 3. ENTRENCHMENT. The directors that enacted these Bylaw
Amendments are the same directors that benefit from these actions. The
amendments will ensure that they are insulated from shareholder democracy and
will preserve their positions.
Factor 4. NO CORPORATE BENEFIT. Interfering with the
shareholder franchise confers no legitimate benefits on the corporation. SEE,
E.G., HILTON, 978 F. Supp. at 1351 ("[N]othing in [Nev. Rev. Stat. Sec. 78.138]
suggests that the interests of third parties are as important as the right of
shareholder franchise.").
Factor 5. CSC'S STATED REASONS. CSC argues that these bylaw
amendments are "designed to give it time to consider the offer, and make a
proper, well-informed recommendation to its shareholders." CSC Response at 10.
This rationalization is disingenuous and hypocritical in light of the Board's
decision - to reject the Offer out of hand. Moreover, the Board's decision - to
permanently strip away the shareholder franchise in response to an already
rejected offer - is so excessive that it belies its purported rationale. CSC
shareholders do not need to be protected from themselves in deciding whether to
replace their own representatives on the Board. Their rights to decide for
themselves - rights that they had until February 18 - should be restored.
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Courts have consistently found improper interference with the
shareholder franchise in less egregious situations than the one presented here.
The Third Circuit recently held that a board of directors violated BLASIUS by
reducing the number of directors from seven to six, because the board's purpose
was to prevent dissident shareholders from gaining two seats on the board. IBS
FIN. CORP. V. SEIDMAN & ASSOCS., L.L.C., No. 97-5056, 1998 WL 52292, at *11 (3d
Cir. Feb. 11, 1998).
In SHOEN, the Board's acceleration of the annual meeting date
affected a dissident shareholder's proxy solicitation efforts and was
overturned. The court explained that this interference with the shareholder
franchise was sufficient to trigger the BLASIUS standard: "[W]hile shareholders
can still vote their shares freely, the range of choices available to them has
been narrowed by the advancement of the meeting date and [the shareholder's]
consequent inability to campaign." 885 F. Supp. at 1342. SEE ALSO PACKER V.
YAMPOL, No. 8432, 1986 WL 4748, *14-15 (Del. Ch. Apr. 18, 1986) (invalidating
issuance of preferred stock with "supervoting" features in response to proxy
contest, since it dilutes voting power of existing shares and generally makes
defeat of management more difficult).(6)
___________________
(6) In APRAHAMIAN V. HBO & CO., 531 A.2d 1204, 1206-07, 1208 (Del. Ch.
1987), the Board delayed the annual meeting, thereby changing the record date
and invalidating proxies that dissident stockholders had already solicited. This
presented the distinct possibility - but just a possibility - that the will of
the majority would be defeated. The court held that because
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As in HILTON, where the actions of ITT's Board "violate[d] the
power relationship between ITT's board and ITT's shareholders," 978 F. Supp. at
1346, the actions of CSC's Board substantially skew the allocation of power
between the shareholders and the Board. SEE ALSO Shoen, 885 F. Supp. at 1341
("[W]hen a board interferes with shareholder voting it interferes with the very
'allocation, between shareholders as a class and the board, of effective power
with respect to governance of the corporation.'") (quoting BLASIUS, 564 A.2d at
659, 660). Because there is no "compelling justification" for such serious
infringement of shareholder voting rights, the Bylaw Amendments should be
declared invalid.
B. NEVADA'S "OTHER CONSTITUENCIES" STATUTE DOES NOT AUTHORIZE
THE UNREASONABLE DEFENSIVE MEASURES TAKEN BY THE CSC BOARD.
Section 78.138 provides that directors "may consider" the
interests of other constituencies in resisting a change of control. Nev. Rev.
Stat. Sec. 78.138(3), (4). CSC invokes the statute as a pretext to justify its
actions.
This Court has already made clear in HILTON that Section
78.138 cannot justify interference with the shareholder franchise:
Other constituencies may be considered under that provision,
but nothing in that statute suggests
_____________________
fundamental rights were involved, this possibility was enough to justify strict
review, and invalidated the Board's action: "[I]n the interests of corporate
democracy, those in charge of the election machinery of a corporation must be
held to the highest standard in providing for and conducting corporate
elections."
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that the interests of third parties are as important as the
right of shareholder franchise. While the two interests are
not exclusive, neither are they equal. THE RIGHT OF
SHAREHOLDERS TO VOTE ON DIRECTORS AT AN ANNUAL MEETING IS A
FUNDAMENTAL PRINCIPLE OF CORPORATE LAW, AND IT IS NOT
OUTWEIGHED BY THE INTERESTS LISTED IN NRS SEC. 78.138.
978 F. Supp. at 1351 (Emphasis added.) Section 78.138 merely acknowledges that
non-shareholder interests may be considered by the Board in deciding whether to
oppose a tender offer. It does not authorize responses to such an offer that
subvert the shareholder franchise.
The legislative history of the statute confirms this. Contrary
to CSC's suggestion, nothing in the legislative history evidences an intent that
the statute could be used to limit the shareholder franchise as a means of
increasing directors' ability to resist a potential change in control. To the
contrary, the statute's principal drafter assured lawmakers that under NRS
Sec. 78.138, shareholders would be
protected by the same devices they had enjoyed for a long
time. . . . [S]HAREHOLDERS HAD THE POWER TO VOTE OUT
MANAGEMENT, and it was power that had not been used enough in
the past. . . . In that respect the system was self-correcting
and THE MECHANISMS WERE THERE FOR SHAREHOLDERS TO CONTROL
MANAGEMENT IF THEY CHOSE TO DO SO.
Legislative History 91-4 A.B. 655 of the 66th Session of the Nevada Legislature,
1991 (Minutes of Assembly Committee on Judiciary; May 21,
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1991, at 14 (Statement of John P. Fowler)) (emphasis added). The legislative
intent behind the statute thus directly contradicts CSC's attempt to use the
statute as a justification for its disenfranchisement of CSC's shareholders.
The Court should declare all the Board's Bylaw Amendments to
be invalid.
Point II
THE BOARD DID NOT HAVE THE POWER TO REMOVE
THE SHAREHOLDERS' RIGHT TO AMEND THE BYLAWS.
The CSC Board's actions to strip away its shareholders' right
to amend the Bylaws not only violates HILTON's prohibition against interference
with the shareholder franchise, but also exceeds the express limits placed upon
the Board's authority under the Bylaws. Until February 18, the Bylaws explicitly
subordinated the Board's power to amend them to the will of A MAJORITY of CSC's
shareholders. The previous Article VIII of the Bylaws (titled "Amendments")
reads as follows:
SECTION 1. STOCKHOLDER AMENDMENTS. Bylaws may be adopted,
amended or repealed by the affirmative vote or written consent
of a majority of the outstanding voting shares of this
corporation, except as otherwise provided by the statutes of
Nevada, the Articles of Incorporation, or elsewhere in these
Bylaws.
SECTION 2. AMENDMENTS BY BOARD OF DIRECTORS.
SUBJECT TO THE RIGHT OF STOCKHOLDERS AS PROVIDED IN
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SECTION 1 OF THIS ARTICLE VIII, Bylaws may be adopted, amended
or repealed by the Board of Directors. (Emphasis added).
The previous Article VIII is clear on its face and guaranteed
to CSC shareholders that a majority can adopt, amend, or repeal a bylaw. The
Board's right to amend the Bylaws is expressly subject to this right and cannot
be taken away by the Board. This check on the power of CSC's Board is a
fundamental, defining feature of CSC's corporate structure. Those who own CSC
stock have the security of knowing that they hold the power to block directorial
abuse by assembling a majority of their fellow shareholders, a power not enjoyed
by shareholders of all companies.(7)
If the CSC Board wishes to take away the majority's power to
amend the Bylaws, it is obligated to get the approval of that very majority.
Otherwise, the protection afforded by Article VIII is illusory and its terms
meaningless. SEE ROVEN V. COTTER, 547 A.2d 603, 608 (Del. Ch. 1988) (unilateral
attempts by directors to restrict that power "are contrary to basic principles
of corporate democracy, and the expressed will of the majority").8
____________________
(7) Indeed, Nevada law provides that the power of the Board of Directors
of a Nevada corporation to dictate the corporation's bylaws is subordinated to
the stockholders' power to do so. Nev. Rev. Stat. Sec. 78.120(2). Under this
statute, bylaws adopted by the stockholders trump any voted by the Board.
(8) Moreover, supermajority requirements are strongly disfavored by the
law and therefore the authority to impose them must be clear. SEE CENTAUR
PARTNERS V. NATIONAL INTERGROUP, INC., 582 A.2d 923, 927 (Del. 1990):
[T]he rules of corporate democracy are based in large part
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The CSC Board seeks to usurp any future vote of the
shareholder majority, barring them from amending the Bylaws unless a 90% vote
is achieved. CSC's amendment negates the explicit reservation of power to
shareholders in the Bylaws, violates fundamental precepts of shareholder
government, and is abusive.(9) Computer Associates respectfully requests that
the CSC Board's amendment to Article VIII of the Bylaws be declared invalid.
Point III
THE BOARD DID NOT HAVE THE POWER TO REVOKE THE
SHAREHOLDERS' RIGHT TO REMOVE DIRECTORS.
One of the Board's Bylaw Amendments increases the
____________________
upon the principle that a majority of the votes cast at a stockholders
meeting is sufficient to elect directors. . . . [A] charter or bylaw
provision which purports to alter this provision must be 'positive,
explicit, clear and readily understandable . . . .' This presumption
is overcome only by a clear, unambiguous and unequivocal statement, in
the charter or by-laws of a corporation, expressing the stockholders'
desire that a specific percentage of votes be required.
ID. at 927. SEE ALSO ID. ("There must be no doubt that the shareholders intended
that a supermajority would be required."). Article VIII of the Bylaws, by
contrast, is a clear statement that the Board does NOT have the power to enact
this supermajority provision.
(9) The 90% requirement for shareholder approval of bylaw amendments may
also be struck down simply because it is unreasonable. "[B]ylaws must be
reasonable in their application." FRANTZ MANUF. CO. V. EAC INDUS., 501 A.2d 401,
407 (Del. 1985) (citing SCHNELL V. CHRIS-CRAFT INDUS, INC., 285 A.2d 437 (Del.
1971)). Because less than 90% of outstanding shares actually cast votes in proxy
contests, the Board's 90% requirement is effectively impossible to reach. SEE
Affidavit of Charles C. Cox, Para.Para. 10-11, filed herewith. This bylaw is
unreasonable and void.
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shareholder percentage required to remove directors from two-thirds to 90%.
Under the plain language of Nev. Rev. Stat. Sec. 78.335(1)(b), the Board lacks
the power to make that change. The statute explicitly gives a corporation this
right to increase its removal percentage above two-thirds, but THAT CHANGE CAN
ONLY BE EFFECTIVE IF MADE TO THE ARTICLES OF INCORPORATION, not by a bylaw
amendment:
THE ARTICLES OF INCORPORATION may require the concurrence of a
larger percentage of the stock entitled to voting power in
order to remove a director.
Nev. Rev. Stat. Sec. 78.335(1)(b) (emphasis added).
CSC argues that cumulative voting always requires 90% of the
shareholders to remove directors, and that their bylaw amendment simply restates
that requirement. This is a fundamental misunderstanding of cumulative voting.
The purpose of cumulative voting is to protect the minority, not to
disenfranchise the majority. As we explain in our Initial Brief and hereafter at
Point IV B, below, two-thirds of the shareholders may remove two-thirds of the
directors under cumulative voting. Because the Board's 90% amendment cannot be
justified by the cumulative voting provision, it can only be accomplished
through an amendment to the Articles of Incorporation, which requires a vote of
shareholders. Nev. Rev. Stat. Sec. 78.390(1). The Court should therefore declare
the Board's
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amendment to Article III, Section 2 of the Bylaws invalid.
Point IV
THE PROPOSALS CONTAINED IN THE PROXY SOLICITATION
ARE CONSISTENT WITH THE BYLAWS AND NEVADA LAW.
CSC claims that, even if its Bylaw Amendments are illegal,
Computer Associates' proxy contest is not permitted under the original Bylaws.
Its reasoning is mistaken.
A. NEVADA LAW AND THE CSC BYLAWS SHOULD BE INTERPRETED CONSISTENTLY WITH
THE PARAMOUNT ROLE OF THE SHAREHOLDER FRANCHISE IN CORPORATE
GOVERNANCE.
CSC incorrectly asserts that anti-takeover policies are the "aims of
Nevada law" that should guide the Court's analysis of its Bylaws. CSC
Response at 15. To the contrary, "the importance of the shareholder
franchise" and the fact that the directors' power over a corporation "is
limited by the right of shareholders to vote for the members of the board"
are the relevant Nevada policies. HILTON, 978 F. Supp. at 1347.(10)
______________________
(10) CSC's claim that Nevada corporate law embodies an exceptional
"anti-takeover" bias is also contradicted by the Nevada Legislatures 1993
decision to amend the Nevada Business Combination Statutes by REDUCING
restrictions on corporate combinations with major shareholders. Indeed, a
spokesman for the drafters of the 1993 amendments told the Nevada Legislature
that "the climate has changed" since the passage of the 1991 provisions, and
that "major stockholders should be permitted to consummate major transactions
with their corporations with FEWER RESTRICTIONS from the business
combinations statutes." Legislative History 93-3, A.B. 387 of the 67th
Session of the Nevada Legislature, Remarks of John P. Fowler, at 3 (emphasis
added). The Legislature has never sought to give corporate boards
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B. UNDER THE NEVADA DIRECTOR REMOVAL STATUTE, TWO-THIRDS
OF THE CSC SHAREHOLDERS MAY REMOVE TWO-THIRDS OF THE DIRECTORS.
CSC mischaracterizes Computer Associates' proposal regarding
the removal of directors. The CSC Bylaws require approval of two-thirds of
outstanding shares to remove a director. Under cumulative voting, which provides
that removal requires the approval of "a sufficient number of shares to have
prevented [a director's] election in the first instance," (Article II, Section
2), such a two-thirds majority could remove six of nine directors.
If Computer Associates receives the support of 67% of the CSC
shareholders to remove the current directors, it is possible that up to 33% of
the shareholders would still support the current Board. At an election, if this
one-third minority pooled their votes and used cumulative voting, they could
elect three of CSC's nine directors. A two-thirds majority of the shareholders,
if they pooled their votes, would be able to elect six of the nine directors.
Computer Associates seeks only a declaration of this straightforward
proposition, which is wholly consistent with relevant Nevada statutes, the
Bylaws, and cumulative voting.
C. VACANCIES ON THE BOARD MAY BE FILLED
BY THE WRITTEN CONSENT OF THE SHAREHOLDERS.
CSC acknowledges that its stockholders have the authority . .
______________________
CARTE BLANCHE to prevent takeovers
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. to fill Board vacancies resulting from removals" (CSC Response at 17), but
asserts that they may not do so by written consent. Its argument is that Article
II, Section 10 of the Bylaws, which provides that action may be taken by consent
of 75% of the shares, but exempts the election of directors, deprives even 100%
of the shareholders of the right to appoint directors by consent.
Unless otherwise provided in the Bylaws, Nevada statutes
permit shareholders to accomplish by written consents what they could accomplish
at a meeting, and by the same voting requirements in effect at the meeting. SEE
Nev. Rev. Stat. Sec. 78.320. Article II, Section 10 of the Bylaws does not
prohibit the election of directors by written consent, but exempts the subject
of the election of directors from the general 75% requirement. Therefore,
directors can be elected by written consent by the vote that would be required
at a meeting. This is the only interpretation of the Bylaw that preserves the
scheme of cumulative voting in the context of written consents.
In arguing this point, CSC ignores that Computer Associates
has asked the CSC shareholders to amend the Bylaws to make clearer their right
to elect directors by written consent. The ambiguity in the exemption - which
should be read as affirming that cumulative voting provisions of
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Article II, Section 7, and not a 75% threshold apply to the election of
directors by consent - is the reason Computer Associates seeks the Court's
clarification.
D. CSC LACKS STATUTORY AUTHORITY TO SET
THE RECORD DATE FOR COMPUTER ASSOCIATES' SOLICITATIONS.
CSC seeks to set the record date for the solicitation of
written consents, but the power to do so was repealed by the legislature in
1991. The question before the Court is whether it should presume that the
legislature acted purposefully, and intended to withdraw the Board's power to
select the record date for a consent solicitation.
E. THE BYLAWS REQUIRE WRITTEN CONSENT OF A
MAJORITY OF SHAREHOLDERS TO AMEND THE BYLAWS.
Article VIII, Section 1 could hardly be clearer on the right
of a majority to amend the Bylaws by consent: "Bylaws may be adopted, amended or
repealed by the affirmative vote OR WRITTEN CONSENT of a majority of the
outstanding voting shares of this corporation, except as otherwise provided by
the statutes of Nevada, the Articles of Incorporation or elsewhere in these
Bylaws." (Emphasis added). Notwithstanding this specific authorization, CSC
argues that under the general provisions on written consent (Article II, Section
10), 75% of the voting power is required to amend the Bylaws by consent.
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The general 75% consent requirement contained in Article II,
Section 10 is not a limiting provision, but a catch-all authorization that only
applies in the absence of a more specific provision concerning the percentage of
shareholders needed to act by consent. SEE, E.G., Article II, Section 2
(providing that any director may be removed "by the vote or written consent of
shareholders of the corporation representing not less than two-thirds" of the
voting power).
CSC's interpretation of Article II, Section 10 renders the
words of Article VIII, Section 1 meaningless. Why would that Article have
explicitly referred to the amendment of the bylaws by "written consent of a
majority of the outstanding voting shares" if shareholder action by written
consent required 75% of the voting power in all cases? CSC points to the
provision permitting an exception "elsewhere in these Bylaws." What CSC seeks,
however, is not an exception in a specific bylaw, but a nullification of the
majority rule set forth in Article VIII, Section 1.
F. THE ANNUAL MEETING MUST BE HELD ON AUGUST 10, 1998.
CSC asserts that under the Bylaws, the Board has wide
discretion to set the date of the annual meeting, relying on HILTON. But the
HILTON court made clear that the ITT bylaws, unlike CSC's Bylaws, did not
indicate a specific date for the annual meeting. HILTON HOTELS CORP. V. ITT
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CORP., 962 F. Supp. 1309, 1310 (D. Nev. 1997).
Computer Associates has proposed that CSC shareholders amend
the Bylaws to clarify this obligation to hold the meeting in August. In
response, on February 18, CSC amended the Bylaws to provide discretion to the
Board to push the meeting back another six months. CSC maintains that it is
protecting the shareholders from "a quick and ill considered vote," but its
actions make clear that CSC seeks to delay the meeting and deprive CSC
shareholders of their right to accept or reject the Offer.
CONCLUSION
For the foregoing reasons, Computer Associates respectfully
requests that the Court promptly (a) declare the Bylaw Amendments invalid under
Nevada law and HILTON, and unauthorized under Nevada statutes and CSC's Bylaws,
and (b) grant the relief requested in Computer Associates' initial motion.
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Dated: February 25, 1998
Respectfully submitted,
SCHRECK MORRIS
By: ______________________
STEVE MORRIS
MATTHEW McCAUGHEY
1200 Bank of America Plaza
300 South Fourth Street
Las Vegas, Nevada 89101
(702) 382-2101
HOWARD, DARBY & LEVIN
C. WILLIAM PHILLIPS
P. BENJAMIN DUKE
ADAM B. SIEGEL
DAVID H. HOFFMAN
1330 Avenue of the Americas
New York, New York 10019
(212) 841-1000
Attorneys for
COMPUTER ASSOCIATES
INTERNATIONAL, INC.
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CERTIFICATE OF SERVICE
Pursuant to Fed.R.Civ.P. 5(b), I certify that I am an employee
of SCHRECK MORRIS, and that on this day I deposited for overnight delivery via
Federal Express and by Hand Delivery at Las Vegas, Nevada, a true copy of the
following enclosed which postage was prepaid for overnight delivery: COMPUTER
ASSOCIATES' REPLY TO COMPUTER SCIENCES RESPONSE TO THE COURT'S FEBRUARY 18 ORDER
AND IN SUPPORT OF COMPUTER ASSOCIATES' MOTION FOR EXPEDITED DECLARATION AND ON
THE MERITS OF THE RELIEF REQUESTED:
WAYNE W. SMITH VIA FEDERAL EXPRESS
JOSEPH P. BUSCH, III
THOMAS S. JONES
ELIZABETH A. WARKE
GIBSON, DUNN & CRUTCHER, LLP
4 PARK PLAZA, SUITE 1400
IRVINE, CA 92614-8557
ATTORNEYS FOR DEFENDANT,
COMPUTER SCIENCES CORP.
DAVID A. BATTAGLIA VIA FEDERAL EXPRESS
MICHELLE H. TREMAIN
ROBYN C. CROWTHER
GIBSON, DUNN & CRUTCHER LLP
333 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-3197
ATTORNEYS FOR DEFENDANT,
COMPUTER SCIENCES CORP.
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C. STANLEY HUNTERTON HAND DELIVERY
TERRY JOHN CARE
HUNTERTON & ASSOCIATES
300 S. FOURTH ST., STE. 1110
LAS VEGAS, NV 89101
ATTORNEYS FOR DEFENDANT,
COMPUTER SCIENCES CORP.
DATED this ________ day of February, 1998.
By: ___________________________________
An Employee of Schreck Morris
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