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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
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Computer Sciences Corporation
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(Name of Registrant as Specified In Its Charter)
Computer Associates
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EXHIBIT 99.1
Letter To Computer Sciences Corporation Shareholders
February 24, 1998
Dear CSC Shareholder:
This past Tuesday Computer Associates commenced an all cash offer to buy the
shares of CSC common stock for $108 per share. Just one day later, the CSC Board
of Directors and management adopted a host of measures designed to
disenfranchise you and entrench themselves. We are committed to giving you, the
CSC shareholders, the opportunity to decide whether to accept our offer in a
fair referendum at the earliest possible date.
CA believes that it has offered full value for CSC. Just two months ago, before
our discussions with CSC management, CSC stock was trading in the low $80s. That
was an all time high. CSC stock, in fact, has increased very little since the
beginning of 1996. CA's offer is at a substantial premium over current and
historical stock prices, and we believe it should be attractive to you.
We have previously indicated to CSC's Board of Directors that we are prepared to
immediately meet and negotiate a transaction, and our financial advisors have
advised CSC's advisors that the value of CSC to CA is significantly higher ($114
per share) in a promptly negotiated transaction.
We remain prepared to do so.
Last Wednesday, however, CSC's directors adopted bylaw amendments with the
intent of entrenching themselves and disenfranchising you, the owners of CSC.
They are seeking to make it virtually impossible for shareholders to amend the
bylaws or remove a majority of the board by requiring a 90% vote to take these
actions. They have attempted to eliminate your right to call a special meeting
while, at the same time, granting to themselves a new right to delay the annual
meeting without any reason.
Since CSC's Board of Directors has clearly indicated that it has no intention of
pursuing our offer or negotiating with CA, we are proceeding with a
three-pronged approach:
CONSENT SOLICITATION
We are soliciting your written consent to remove the existing members of the
Board of Directors and to elect new directors who will allow shareholders to
decide whether to accept CA's offer.
AGENT DESIGNATIONS
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We are soliciting your signature on "agent designations" to call a special
meeting of shareholders at which we will ask you to vote to remove the existing
members of the Board of Directors and to elect new directors who will allow
shareholders to decide whether to accept CA's offer.
ANNUAL MEETING
At the next annual meeting of shareholders, we will seek to replace the
directors, all of whom come up for election at the meeting. We are also seeking
to limit the Board's power to delay the annual meeting.
Each of the strategies will result in eliminating the roadblocks imposed by CSC
management and directors and will permit you to choose freely whether to accept
our offer. Since each of the three approaches has different statutory and other
requirements applicable to it, we are pursuing all three to insure the fastest
possible elimination of the roadblocks to your exercise of your right to accept
our offer.
We view the actions of the CSC Board as an unfortunate and extreme reaction to
our offer. We are confident that it will be dismantled by the court. We are
proceeding in Federal District Court in Nevada to challenge the Board's actions
as well as to seek confirmation of our interpretation of the bylaws that were in
effect before CSC's Board's defensive and disenfranchising action. We take the
Board's action as an indication of its concern that the Nevada court will uphold
our interpretation of your rights as shareholders under the true bylaws.
We will continue to press forward with our offer and with our efforts in court
to allow you, the CSC shareholder, as promptly as possible freely to vote your
shares and to accept our offer if you choose.
We have great respect for what CSC's management has accomplished, and for its
employees and customers. We strongly believe that a combined CA/CSC organization
can accomplish even more in the future. Together, CA and CSC will become a world
class information technology solutions provider with unparalleled depth in both
software and services. The combination of CA's people and CA's software product
strength together with CSC's people and CSC's services capability would create
the perfect model for the next generation of information technology solutions
provider capable of leading our industry into the next millennium.
Very truly yours,
/s/ Charles B. Wang
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Charles B. Wang
Chairman and Chief
Executive Officer
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* * * * * * * * *
Computer Associates and the Computer Associates Nominees are
participants in the solicitation of consents and agent designations from
Computer Sciences Corporation shareholders. The Computer Associates nominees
are Charles B. Wang, Sanjay Kumar, Russell Artzt, Peter A. Schwartz, Steven
M. Woghin, Charles P. McWade, Ira Zar, Michael A. McElroy, David Kaplan,
Robert Toth, Richard Chiarello, Lisa Savino, Gary Quinn, Abraham Poznanski
and Douglas Robinson. None of the Computer Associates Nominees will receive
any additional compensation for their participation in this solicitation.
Computer Associates owns, through a wholly owned subsidiary, 170,000 shares
of common stock of Computer Sciences Corporation. None of the Computer
Associates Nominees owns any shares of Computer Sciences common stock.
Computer Associates has also retained Bear, Stearns & Co. Inc. and its
affiliates ("Bear Stearns") to provide certain financial advisory services to
Computer Associates. Bear Stearns is acting as Dealer Manager in connection
with the Offer and as financial advisor to Computer Associates and CAI
Computer Services Corp., a wholly owned subsidiary of Computer Associates, in
connection with the proposed acquisition of the Company, but Bear Stearns has
not been retained to specifically assist in this solicitation. Computer
Associates is obligated to pay to Bear Stearns, if, as more fully described
in the engagement letter relating to Bear Stearns' engagement, during the
term of the engagement or within 12 months thereafter Computer Associates
acquires the Company or more than 50% of its outstanding voting securities, a
fee of $5 million and a fee of $1 million (which will be credited against
such $5 million fee) if Computer Associates requests Bear Stearns to render a
customary fairness opinion. Bear Stearns is also entitled to act as sole lead
underwriter, placement agreement and financial advisor in connection with
certain debt and equity financings (and certain refinancings) and certain
asset sales for a specified period following the acquisition and to receive
fees in connection therewith. In addition, Computer Associates has agreed to
reimburse Bear Stearns for its reasonable expenses, including reasonable fees
and disbursements of its counsel, incurred in rendering its services under
its engagement agreement with Computer Associates and has agreed to indemnify
Bear Stearns against certain liabilities and expenses in connection with the
Offer and the Proposed Merger, including certain liabilities under the
federal securities laws. Bear Stearns from time to time renders various
investment banking services to Computer Associates and its affiliates for
which it is paid customary fees.
In connection with Bear Stearns' engagement as financial advisor, Computer
Associates anticipates that Michael J. Urfirer, Senior Managing Director of
Bear Stearns, Lisa M. Price, Senior Managing Director of Bear Stearns and
Barry J. Cohen, Senior Managing Director of Bear Stearns, 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 for the purpose of assisting in
this solicitation. Bear Stearns will not 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 Bear Stearns owns any shares of Computer Sciences
Corporation common stock.
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