<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 5
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
COMPUTER SCIENCES CORPORATION
(NAME OF SUBJECT COMPANY)
COMPUTER SCIENCES CORPORATION
(NAME OF PERSON FILING STATEMENT)
------------------------
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)
------------------------
HAYWARD D. FISK, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
COMPUTER SCIENCES CORPORATION
2100 EAST GRAND AVENUE
EL SEGUNDO, CALIFORNIA 90245
(310) 615-0311
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING THIS STATEMENT)
------------------------
Copies to:
RONALD S. BEARD, ESQ.
GIBSON, DUNN & CRUTCHER LLP
333 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-3197
(213) 229-7000
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<PAGE> 2
This Statement amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on
February 26, 1998, as amended (the "Schedule 14D-9"), relating to the offer by
CAI Computer Services Corp., a Delaware corporation and a wholly owned
subsidiary of Computer Associates International, Inc., a Delaware corporation,
to purchase all of the issued and outstanding shares of common stock, par value
$1.00 per share, including associated Series A Junior Participating Preferred
Stock Purchase Rights (the "Shares"), of Computer Sciences Corporation, a Nevada
corporation (the "Company"), for an amount equal to $108.00 per Share, net to
the seller in cash, without interest. Capitalized terms used and not defined
herein shall have the meanings ascribed to such terms in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 is hereby supplemented as follows: On March 4, 1998, the Company
disseminated copies of the materials attached hereto as Exhibit (a)(6).
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS
(a)(1) Press release issued by the Company dated February 19, 1998.+
(a)(2) Letter from Van B. Honeycutt to Charles Wang, dated February 19, 1998.+
(a)(3) Press release issued by the Company, dated March 2, 1998.+
(a)(4) Letter from Van B. Honeycutt to the Company's Stockholders dated March
2, 1998.+
(a)(5) Press release issued by the Company, dated March 4, 1998.+
(a)(6) Materials disseminated by the Company on March 4, 1998.*
(c)(1) Excerpts from the Company's Proxy Statement dated July 2, 1997.+
(c)(2) The Company's Supplemental Executive Retirement Plan, as amended and
restated effective as of February 27, 1998.+
(c)(3) The Company's Severance Plan for Senior Management and Key Employees, as
amended and restated effective as of February 18, 1998.+
(c)(4) Rights Agreement dated as of February 18, 1998 by and between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+
(c)(5) The Company's Deferred Compensation Plan, as amended and restated
effective as of February 2, 1998.+
(c)(6) The Company's Bylaws, as amended and restated February 18, 1998.+
(c)(7) Complaint for Injunctive and Declaratory Relief in Computer Associates
International, Inc. v. Computer Sciences Corporation, case no.
CV-S-98-00278-LDG.+
(c)(8) Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief
in Computer Associates International, Inc. v. Computer Sciences
Corporation.+
(c)(9) Brief in Support of Motion for Expedited Hearing on Claims for
Declaratory Relief and on the Merits of the Relief Requested in Computer
Associates International, Inc. v. Computer Sciences Corporation.+
(c)(10) Response of the Company to the Ex Parte Motion for Expedited Hearing on
Claims for Declaratory Relief in Computer Associates International, Inc.
v. Computer Sciences Corporation.+
(c)(11) Supplemental and Amended Complaint in Computer Associates International,
Inc. v. Computer Sciences Corporation.+
(c)(12) Complaint for (1) Unfair, Unlawful, and Fraudulent Business Acts and
Practices in violation of California Business and Professions Code
Sections 17200 et seq.; (2) Economic Duress; (3) Intentional
Interference with Prospective Economic Advantage and Contractual
Relations; and (4) Conspiracy in Computer Sciences Corporation v.
Computer Associates International, Inc., case no. BC186394.+
2
<PAGE> 3
(c)(13) Form of Stock Option Agreement.+
(c)(14) Form of Restricted Stock Agreement.+
(c)(15) Amended and Restated Rights Agreement dated as of December 21, 1988, as
amended and restated as of February 18, 1998, by and between the Company
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+
(c)(16) The Company's 1990 Nonemployee Director Retirement Plan, as amended and
restated effective February 2, 1998.+
(c)(17) Reply of Parent in Computer Associates International, Inc. v. Computer
Sciences Corporation.+
(c)(18) Order of the United States District Court for the District of Nevada,
dated February 26, 1998.+
(c)(19) Complaint for (1) violation of federal securities laws, (2)
misappropriation of trade secrets, (3) conspiracy to misappropriate
trade secrets, (4)interference with advantageous business relations, (5)
conspiracy to interfere with advantageous business relations, (6) breach
of fiduciary duty, (7) aiding and abetting breach of fiduciary duty and
(8) unfair competition in Computer Sciences Corporation v. Computer
Associates International, Inc., CAI Computer Services Corp., Bear,
Stearns and Co., Inc., Michael Urfirer, Charles B. Wang and Sanjay Kumar
(Case No. 98-1440 ABC)+
- ------------------------
+ Previously filed.
* Filed herewith.
3
<PAGE> 4
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
COMPUTER SCIENCES CORPORATION
By: /s/ VAN B. HONEYCUTT
------------------------------------
Van B. Honeycutt
Chairman, President and
Chief Executive Officer
Dated: March 4, 1998
4
<PAGE> 5
EXHIBIT INDEX
(a)(1) Press release issued by the Company, dated February 19, 1998.+
(a)(2) Letter from Van B. Honeycutt to Charles Wang, dated February 19, 1998.+
(a)(3) Press release issued by the Company, dated March 2, 1998.+
(a)(4) Letter from Van B. Honeycutt to the Company's Stockholders dated March
2, 1998.+
(a)(5) Press release issued by the Company, dated March 4, 1998.+
(a)(6) Materials disseminated by the Company on March 4, 1998.*
(c)(1) Excerpts from the Company's Proxy Statement dated July 2, 1997.+
(c)(2) The Company's Supplemental Executive Retirement Plan, as amended and
restated effective as of February 27, 1998.+
(c)(3) The Company's Severance Plan for Senior Management and Key Employees, as
amended and restated effective as of February 18, 1998.+
(c)(4) Rights Agreement dated as of February 18, 1998 by and between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+
(c)(5) The Company's Deferred Compensation Plan, as amended and restated
effective as of February 2, 1998.+
(c)(6) The Company's Bylaws, as amended and restated February 18, 1998.+
(c)(7) Complaint for Injunctive and Declaratory Relief in Computer Associates
International, Inc. v. Computer Sciences Corporation, case no.
CV-S-98-00278-LDG.+
(c)(8) Ex Parte Motion for Expedited Hearing on Claims for Declaratory Relief
in Computer Associates International, Inc. v. Computer Sciences
Corporation.+
(c)(9) Brief in Support of Motion for Expedited Hearing on Claims for
Declaratory Relief and on the Merits of the Relief Requested in Computer
Associates International, Inc. v. Computer Sciences Corporation.+
(c)(10) Response of the Company to the Ex Parte Motion for Expedited Hearing on
Claims for Declaratory Relief in Computer Associates International, Inc.
v. Computer Sciences Corporation.+
(c)(11) Supplemental and Amended Complaint in Computer Associates International,
Inc. v. Computer Sciences Corporation.+
(c)(12) Complaint for (1) Unfair, Unlawful, and Fraudulent Business Acts and
Practices in violation of California Business and Professions Code
Sections 17200 et seq.; (2) Economic Duress; (3) Intentional
Interference with Prospective Economic Advantage and Contractual
Relations; and (4) Conspiracy in Computer Sciences Corporation v.
Computer Associates International, Inc., case no. BC186394.+
(c)(13) Form of Stock Option Agreement.+
(c)(14) Form of Restricted Stock Agreement.+
(c)(15) Amended and Restated Rights Agreement dated as of December 21, 1988, as
amended and restated as of February 18, 1998, by and between the Company
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.+
(c)(16) The Company's 1990 Nonemployee Director Retirement Plan, as amended and
restated February 2, 1998.+
(c)(17) Reply of Parent in Computer Associates International, Inc. v. Computer
Sciences Corporation.+
(c)(18) Order of the United States District Court for the District of Nevada,
dated February 26, 1998.+
(c)(19) Complaint for (1) violation of federal securities laws, (2)
misappropriation of trade secrets, (3) conspiracy to misappropriate
trade secrets, (4)interference with advantageous business relations, (5)
conspiracy to interfere with advantageous business relations, (6) breach
of fiduciary duty, (7) aiding and abetting breach of fiduciary duty and
(8) unfair competition in Computer Sciences Corporation v. Computer
Associates International, Inc., CAI Computer Services Corp., Bear,
Stearns and Co., Inc., Michael Urfirer, Charles B. Wang and Sanjay Kumar
(Case No. 98-1440 ABC)+
- ------------------------
+ Previously filed.
* Filed herewith.
5
<PAGE> 1
CSC
COMPUTER SCIENCES CORPORATION
1998
<PAGE> 2
Computer Sciences Corporation cautions that any
statements in this presentation as to future business
results are forward looking statements and by their nature
are necessarily subject to uncertainties concerning events
beyond the Company's control, and no assurances can be
given that such results will be achieved.
<PAGE> 3
CA's Proposal of $108
Does Not Represent
Fair Value to CSC Shareholders
o CSC has far greater near-and long-term prospects
o CA'S offer does not fairly value
-- CSC'S achievements
-- CSC'S accelerating performance
Don't Tender!
<PAGE> 4
CSC's Value Proposition
Bright Prospects
o Immediate AND Long-Term
Leadership Position
o Robust I.T. Services Market
Momentum and Value
o Accelerating growth +
improving margins =
shareholder returns
<PAGE> 5
Bright Prospects
- -------------------------------------------------------------------------------
o Consulting & Systems Integration
- -------------------------------------------------------------------------------
o Outsourcing Strength
- -------------------------------------------------------------------------------
o Vital Federal Business
- -------------------------------------------------------------------------------
o Verticals & Strategic Acquisitions
- -------------------------------------------------------------------------------
o Equifax Arrangement
- -------------------------------------------------------------------------------
<PAGE> 6
Consulting & Systems Integration
Y2K & EMU Opportunities
- -------------------------------- ----------------------------------
Y2K EMU
- -------------------------------- ----------------------------------
o U.S. Market o U.S. Market
$140 to $290 billion $30 to $50 billion
o Global Market o European Market
$500 to $600 billion $100+ billion
- -------------------------------- ----------------------------------
Source: G2
Killen & Associates
Gartner Group
<PAGE> 7
OUTSOURCING STRENGTH
J.P. Morgan
DuPont [Graphic reflecting
total CSC CY97
General Dynamics outsourcing revenue
of $2.5 billion.]
Mobil Oil
CNA
British Aerospace
<PAGE> 8
Vital Federal Business
Total 26-Month Window = $18.2 Billion
[Graphic pie chart depicting FY98 $250 million, FY99 $12.77 billion (86
Programs) and FY00 $5.79 billion (28 Programs).]
<PAGE> 9
Verticals & Strategic Acquisitions
[Three-dimensional graph with "Industry," "Geography" and
"Skill Set" as axes, and examples including
"Dupont/Chemical," "APM/Healthcare," "Continuum/Financial
Services" and "Kobra".]
<PAGE> 10
Equifax Arrangement
o Service Agreement
o Put Option/Call Option
-- Pricing
o through July 31, 1998, formula based
on revenue
o after July 31, 1998, appraised value
o Strong Source of Liquidity
<PAGE> 11
Leadership Position
O Offerings
O Markets
O Demand
<PAGE> 12
Offerings
Management Consulting
- Strategy [Various Corporate Logos]
- M & A
- Industry consulting
- Business reengineering
- Digital commerce
- Organization and culture
Research And Advisory Programs
- R&D [Various Corporate Logos]
- Executive education
- Benchmarking
Systems Integration
- I/T strategy and consulting [Various Corporate Logos]
- Enterprisewide solutions architecture
- Systems development
- Program/project management
- Human dynamics
Outsourcing
- I/T
- Applications [Various Corporate Logos]
- Desktop and distributed
- Networks
- Data centers
- Facilities management
- Health care and insurance operations
- Credit services
<PAGE> 13
Offerings
Calendar 1997 Revenue = $6.3 BILLION
Consulting/Professional Services $2.4 Billion 22%
Systems Integration $1.4 Billion 17% 5-Year CAGR
Outsourcing/Operations $2.5 Billion 21%
<PAGE> 14
Markets
Calendar 92
$2.5 Billion
[Graphic Pie Chart Depicting Federal 51%, U.S.
Commercial 40% and International 9%.]
Calendar 97
$6.3 Billion
[Graphic Pie Chart Depicting Federal 25%, U.S.
Commercial 42% and International 33%.]
Global Presence
60+ Countries
<PAGE> 15
Worldwide Demand 1997 - 2002
[Bar Graph]
$ in Billions
CAGR 17.9% CAGR 19.6% CAGR 25.4%
- -----------------------------------------------------------------------------
350
------
$345
------
$271
------
$243
------
$152
------
$98 ----
$87
0
- -----------------------------------------------------------------------------
IT Professional Systems Outsourcing
Services Integration
Source: G2 Research, Inc. (Jan 1998)
<PAGE> 16
Momentum and Value
- Revenue Growth
- Margin Expansion
- EPS/EBITDA Growth
- Stock Market Out-Performance
- Financial Outlook
<PAGE> 17
Revenue Growth
[Line graph depicting annual revenue growth of 20.4% for CSC compared with 6.5%
for the S&P 500 from CY 92 to CY 97.]
<PAGE> 18
Margin Expansion
[Line graph depicting increase in margins for "Trailing 4 Quarters" from 7.0% in
FY96 to 7.8% in FY98 with note "Improvement While New Contracts Coming On Line!"
(excludes special items, includes Continuum).]
<PAGE> 19
Margin Expansion
[Line graph depicting cost structure from FY90 to CY97
(Continuum Included Since FY97).]
<PAGE> 20
Quarterly EPS*
[Bar Graph]
FY87 FY98
(Amounts in Cents)
Q1 15 65
Q2 15 74
Q3 16 87
Q4 23 97
*Excludes Special Items, Includes Continuum since FY97
<PAGE> 21
EBITDA
[Line graph depicting increase in EBITDA
from $107 million for CY87 to $811
million for CY97, constituting 22.5%
CAGR (excludes special items).]
<PAGE> 22
STOCK MARKET OUT-PERFORMANCE
S&P 500 CSC Out-Perf.
------- ----- ---------
FY98 thru 2/10/98 34.1% 48.1% 14.0%
5 Years* 128.4 255.7 127.3
10 Years** 297.0 467.3 170.3
[Bar graph depicting share price between
January 1993 ($25.54) and February 10, 1998
($92.19).]
* 5 Years from Feb 10, 1993 to Feb 10, 1998
** 10 Years from Feb 10, 1998 to Feb 10, 1998
<PAGE> 23
CSC P/E Premium to S&P 500
Daily through February 10th
[Line graph from 2/95 to 2/98.]
[Graph states that (1) CSC P/E's recent history shows a 40 to 90% premium to
the S&P 500, and (2) IT Services Sector has traded down relative to the S&P 500
P/E = 25.8, on which a 40% premium indicates a P/E of 36.]
<PAGE> 24
Financial Outlook
[Bar graph depicting revenue of $6.576 billion (up 17%) for
fiscal 1998, $7.826 billion (up 19%) for fiscal 1999 and
$9.313 billion (up 19%) for fiscal 2000.]
[Bar graph depicting EBITDA of $843 million (up 17%) for
fiscal 1998, $1,025 million (up 22%) for fiscal 1999 and
$1,276 million (up 24%) for fiscal 2000 (excludes special
items).]
[Bar graph depicting EPS of $3.43 (up 18%) for fiscal 1998,
$4.20 (up 22%) for fiscal 1999 and $5.55 (up 32%) for fiscal
2000 (excludes special items).]
<PAGE> 25
Computer Sciences Corporation cautions that any
statements in this presentation as to future business
results are forward looking statements and by their nature
are necessarily subject to uncertainties concerning events
beyond the Company's control, and no assurances can be
given that such results will be achieved.
<PAGE> 26
INFORMATION CONCERNING PARTICIPANTS
CSC, the members of its Board of Directors, and certain other employees of CSC
may be deemed to be participants in the solicitation of proxies, as such terms
are defined in the rules of the Securities and Exchange Commission. The Board of
Directors consists of the following persons, each of whom owns, directly or
indirectly, or has the right to acquire, the number of shares of CSC common
stock set forth after his or her name: Irving W. Bailey, II (2,000 shares of
common stock, 2,289 restricted stock units or options), Van B. Honeycutt (37,242
shares of common stock, 409,363 options), William R. Hoover (244,905 shares of
common stock), Richard C. Lawton (1,500 shares of common stock), Leon J. Level
(11,265 shares of common stock, 93,400 options), Thomas A. McDonnell (9,271
restricted stock units or options), F. Warren McFarlan (2,400 shares of common
stock, 2,968 restricted stock units or options), James R. Mellor (600 shares of
common stock, 3,245 restricted stock units or options) and William P. Rutledge
(200 shares of common stock, 1,371 restricted stock units or options). In
addition, the following other employees of CSC, each of whom owns, directly or
indirectly, or has the right to acquire, the number of shares of CSC common
stock set forth after his or her name, may engage in solicitations on behalf of
CSC: Edward P. Boykin (18,775 shares of common stock, 60,800 options), Milton E.
Cooper (12,372 shares of common stock, 138,000 options), J. Spencer Davis (64
shares of common stock, 800 options), Scott M. Delanty (447 shares of common
stock, 14,000 options), Gerard E. Dube (454 shares of common stock, 37,000
options), Hayward D. Fisk (276 shares of common stock, 16,400 options), J.
Douglas Gray (45 shares of common stock, 67,000 options), Ronald W. Mackintosh
(21,000 shares of common stock, 99,000 options), Thomas R. Madison Jr. (1,154
shares of common stock, 85,000 options), C. Bruce Plowman (599 shares of common
stock, 9,200 options), Lisa M. Prukop, Thomas C. Robinson (30,000 shares of
common stock, 70,000 options), James P. Saviano (1,788 shares of common stock,
40,800 options), Arthur H. Spiegel III (41 shares of common stock, 20,000
options), Paul T. Tucker (891 shares of common stock, 25,000 options), W.
Brinson Weeks (3,004 shares of common stock, 17,400 options), and Thomas
Williams (18,723 shares of common stock, 43,800 options). Share, restricted
stock unit and option data do not reflect the two-for-one stock split, in the
form of a 100 percent stock dividend, payable on March 23, 1998. In addition,
certain of the above-named directors and employees of CSC are beneficiaries of
compensation and benefit plans maintained by CSC, including certain severance
arrangements, which are described in the Company's Proxy Statement, dated July
2, 1997, and the Schedule 14D-9 filed with the Securities and Exchange
Commission on February 26, 1998, as amended, and which provide benefits in the
event of a change in control of CSC.
Goldman, Sachs & Co. ("Goldman Sachs") and J.P. Morgan & Co. ("J.P. Morgan")
have been retained by CSC to act as its financial advisors with respect to the
acquisition proposal which a wholly-owned subsidiary of Computer Associates
International, Inc. ("CAI") has made for the stock of CSC; Goldman Sachs also
has been retained as
- MORE -
<PAGE> 27
financial advisor to assist CSC in responding to any other acquisition proposals
it may receive or any other attempts to acquire control of CSC. Pursuant to the
terms of their engagement letters, Goldman Sachs and J.P. Morgan will receive
the following fees for their services: (a) a quarterly retainer fee of
$2,500,000 for Goldman Sachs and $1,000,000 for J.P Morgan, payable on the first
day of each three-month period during which they provide such services; and (b)
a fee of $10,000,000 for Goldman Sachs and $4,000,000 for J.P. Morgan (with the
quarterly retainer fees paid under clause (a) above credited on a one-time basis
against such fees), payable on February 11, 1999, and February 13, 1999,
respectively, in the event that CAI (and, in the case of J.P. Morgan, any other
person) has not, directly or indirectly, become the beneficial owner of more
than 50 percent of the outstanding Shares on or prior to such date. The Goldman
Sachs engagement letter also provides that in the event that CSC determines to
undertake a specific transaction as referred to in such letter, Goldman Sachs
will have the right to act on CSC's behalf in connection with such transaction
on customary terms and conditions, including customary fee provisions. The J.P.
Morgan engagement letter provides that in the event CSC determines to proceed
with a sale, merger, consolidation, business combination, or certain other
specified transactions, during the term of the engagement CSC will enter into an
amendment to the engagement letter providing for fees to J.P. Morgan in an
amount to be determined after taking into account the results obtained and the
custom and practice among investment bankers acting in similar transactions. CSC
has also agreed to reimburse Goldman Sachs and J.P. Morgan for their reasonable
out-of-pocket expenses, including fees and expenses of counsel, and to indemnify
Goldman Sachs and J.P. Morgan and certain related persons against certain
liabilities in connection with their engagement.
In connection with the Goldman Sachs and J.P. Morgan engagements, CSC
anticipates that Gene T. Sykes, Managing Director of Goldman Sachs, Mark
Dzialga, Vice President of Goldman Sachs, Gregg R. Lemkau, Associate of Goldman
Sachs, Joseph Walker, Managing Director of J.P. Morgan, David Courtney, Managing
Director of J.P. Morgan, Todd Marin, Managing Director of J.P. Morgan, and Dag
Skattum, Managing Director of J.P. Morgan, none of whom will receive additional
compensation for such solicitation, may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons who
are shareholders. Neither Goldman Sachs nor J.P. Morgan will receive any fee
for, or in connection with, such solicitation activities by its employees apart
from the fees it is otherwise entitled to receive as described above. None of
the above-named employees of Goldman Sachs and J.P.
Morgan owns any shares of CSC's common stock.
